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

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Speaker 2: This is the Bloomberg Daybak podcast, available every morning on Apple,

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Speaker 2: Spotify or wherever you listen. It's Tuesday, the twenty fourth

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Speaker 2: of June. Here in London. I'm Caroline Hepka and.

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Speaker 1: I'm Stephen Carroll. Coming up today, Iran and Israel head

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Speaker 1: toward a pause in fighting as US President Donald Trump

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Speaker 1: announces a ceasefire.

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Speaker 2: The UK will commit to spending five percent of GDP

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Speaker 2: on security by twenty thirty five, as leaders gather for

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Speaker 2: a crucial NATO summit.

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Speaker 1: Plus swallowing a bitter pill, Ireland's finance minister tells us

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Speaker 1: that US pharmaceutical tariffs could cost the economy seventy five

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Speaker 1: thousand jobs.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 1: Iran and Israel maybe nearing a pause in their twelve

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Speaker 1: day war after US President Donald Trump announced a ceasefire

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Speaker 1: on social media. Iranian Foreign Minister Abbas aradchi He said

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Speaker 1: also on social media that his country would stop firing

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Speaker 1: so long as Israel does, and that the final decision

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Speaker 1: will be made later. While Israeli officials remained silent overnight,

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Speaker 1: as senior White House official said Trump broker the cease

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Speaker 1: fire in a direct conversation with Prime Minister Benjaminetta Yaho.

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Speaker 1: Robert Jordan is the former US Ambassador to Saudi Arabia.

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Speaker 3: A lot depends on the Israelis. There is some tension,

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Speaker 3: I think between the Trump administration and Netanyahu's cabinet right now.

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Speaker 3: They may feel pressure in Israel to continue some sort

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Speaker 3: of strikes. But my hope is that we'll see an

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Speaker 3: opportunity for diplomacy.

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Speaker 4: Robert Jordan, speaking there.

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Speaker 1: Israel was still striking targets in Iran earlier today, but

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Speaker 1: according to reports, the explosions in Tehran seemed to stop

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Speaker 1: at about four am Local time. Meanwhile, Israel's military said

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Speaker 1: it identified three waves of missiles launched from Iran in

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Speaker 1: the early hours of this morning.

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Speaker 2: Well, the developments come less than twelve hours after Iran

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Speaker 2: missiles at one of its closest regional partners, Cutter, where

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Speaker 2: the United States has its Middle East headquarters. Cutter said

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Speaker 2: that the Iranian missile Barars was intercepted and that the

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Speaker 2: US Central Command base had been evacuated in advance. We

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Speaker 2: heard earlier from former NATO Supreme Allied Commander, retired General

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Speaker 2: Wesley Clark, ron.

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Speaker 5: Did sort of a minimum they could do, and the

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Speaker 5: market kind of anticipated that. You know, the market has

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Speaker 5: a lot of common sense when you look at the

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Speaker 5: collective response, and what they saw was an Israeli regime

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Speaker 5: that continuing to attack all powerful US military capacities with

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Speaker 5: a president who would use them, and an Iranian regime

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Speaker 5: on its back heels, a concerned but trying to show

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Speaker 5: that it could do something in order to impress its

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Speaker 5: domestic opponents and try to maintain itself in power.

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Speaker 2: Retired four star Army General Wesley Clark, speaking earlier to Bloomberg,

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Speaker 2: Iran's mostly symbolic response followed the US suddenly entering the

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Speaker 2: conflict directly launching a major bombing operation against Iranian nuclear facilities.

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Speaker 2: President Trump said that the strikes completely and totally obliterated

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Speaker 2: those sides, though battle damage assessments are ongoing and the

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Speaker 2: whereabouts of Iran's enriched uranium stockpiles remain unknown.

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Speaker 1: Oil prices have slumped after President Trump announced the tentative ceasefire.

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Speaker 1: The global benchmark Brent cruds led by almost five percent

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Speaker 1: in early Asian trading. Before pairing some of those losses

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Speaker 1: the Plunt briefly took prices below the level they were

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Speaker 1: before of the day before Israel attacked Iran. Bloomberg Energy

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Speaker 1: reporter Stephens Staptchinski says oil traders are seeing less risk

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Speaker 1: in the market.

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Speaker 6: The oil market is really discounting this recent flare up,

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Speaker 6: and you can see it through the prices right clearly,

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Speaker 6: oil prices are back below the June twelve level. You're

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Speaker 6: seeing the market take a large sigh of relief, and

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Speaker 6: that is largely because while we've been through potentially the

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Speaker 6: worst flare up in US Iranian conflict in decades, oil

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Speaker 6: kept flowing and trade via the Strait of Hormos was

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Speaker 6: not affected.

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Speaker 1: Renber Stevens Stepsisk, speaking after days of turmoil and oil

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Speaker 1: markets on concerns of disruption in a region that pumps

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Speaker 1: around a third of the world's crude oil.

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Speaker 2: Britain's Prime Minister Kissed Starmer, will pledge to spend five

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Speaker 2: percent of GDP on security by twenty thirty five, without

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Speaker 2: providing a path as to how to get their Starmer

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Speaker 2: will sign up to the ambitious NATO target of spending

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Speaker 2: three point five percent on defense and one point five

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Speaker 2: percent on wider security related areas. US President Donald Trump

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Speaker 2: has pushed for that new goal, saying that Europe has

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Speaker 2: taken advantage of America's security umbrella. NATO Secretary General Mark

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Speaker 2: Rutter says ramp up in spending would be a quote

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Speaker 2: quantum leap.

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Speaker 7: As the world becomes more dangerous, alive leaders will take

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Speaker 7: althosicians to strengthen our collective defense, making NATO a stronger,

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Speaker 7: a fairer, and a more lethal alliance.

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Speaker 2: Russia's new target hasn't won the approval of all NATO members.

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Speaker 2: Spain is fighting for an opt out that could derail

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Speaker 2: talks taking place in the Hague today. Another key hurdle

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Speaker 2: is the timeline, with the UK successfully pushing the deadline

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Speaker 2: back to twenty thirty five, while Germany will hit the

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Speaker 2: target before the end of this decade.

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Speaker 1: Ukraine's president has warned that Russia could attack a NATO

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Speaker 1: member within five years, echoing the assessments of German Chancellor

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Speaker 1: Friedrich Martz and several European intelligence agencies. Vlade Meo Zelenski

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Speaker 1: says plans for NATO members to increase defense spending to

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Speaker 1: five percent of GDP by twenty thirty five are too slow, stopping.

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Speaker 8: From twenty to thirty cluding can have significantly greater capabilities.

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Speaker 8: Today Ukraine is holding him up. He has no time

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Speaker 8: to drill the armies and today are all getting annihilated

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Speaker 8: and by the battlefield and ten years it's a very

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Speaker 8: long time.

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Speaker 1: By then Ukrainian President Vlasmair Zelenski, speaking there as Bloomberg

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Speaker 1: Economics is estimated that war between Russia and NATO would

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Speaker 1: result in mass immigration and lass of life, with the

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Speaker 1: cost to global GDP in the region of one point

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Speaker 1: five trillion dollars.

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Speaker 2: Now, the European Union in Canada have signed a security

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Speaker 2: pact that paves the way for joint defense contracts. The

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Speaker 2: deal sets out dozens of areas of cooperation and it

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Speaker 2: is the first step towards accessing the EU's eight hundred

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Speaker 2: billion euro procurement fond. Canada's Prime Minister Mark Karney says

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Speaker 2: that the rules based global order is under threat.

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Speaker 9: We can nostalgically look back and long for the old

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Speaker 9: order to somehow return, or we can build a new

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Speaker 9: one with purpose and partnership. And as the most European

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Speaker 9: of the non European countries, Canada looks for to the

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Speaker 9: European Union to build a better world.

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Speaker 2: The Canadian leaders. Deal marks a pivot away from the

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Speaker 2: US for Canada, where it currently spends the vast majority

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Speaker 2: of its defense dollars. The EU also signed a security

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Speaker 2: pact with the UK last month, five years after Brexits.

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Speaker 1: Well in the UK, the Prime Minister Cares Starmer has

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Speaker 1: welcomed a three year program by Amazon to invest forty

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Speaker 1: billion pounds in the UK.

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Speaker 4: Bloomberg's Ewan Parts has the details.

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Speaker 10: The Business and Trade Department says Amazon's forty billion pound

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Speaker 10: investment will create thousands of new jobs nationwide, including two

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Speaker 10: thousand at a previously announced warehouse in Hull and another

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Speaker 10: two thousand in Northamptonshire. The online retailer's plans are in

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Speaker 10: line with its pace of investment in recent years. The

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Speaker 10: company says it invested more than twelve billion pounds in

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Speaker 10: Britain in twenty twenty three. Nonetheless, the size of the

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Speaker 10: package will come as a boost to the government's the

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Speaker 10: Prime Minister calling it's a massive vote of confidence in

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Speaker 10: the UK as the best place to do business in London.

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Speaker 10: I'm youwing pots of Bloomberger.

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Speaker 2: So those are our top stories for you this morning.

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Speaker 2: Looking at the markets, we've had oil prices slumping two

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Speaker 2: point seven percent lower for brain crewed futures, so you're

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Speaker 2: currently trading at sixty nine dollars fifty five. We have

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Speaker 2: retraced over the course of this morning. Asian markets when

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Speaker 2: we were trading in early hours saw brak crew sliding

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Speaker 2: almost five percent, so we're now down back below the

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Speaker 2: levels of June the twelfth, when Israel first attacked Iran's

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Speaker 2: nuclear sites. This as we see the dollar also down

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Speaker 2: this morning on the ratching down perhaps of tensions in

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Speaker 2: the Middle East of the Blouebig Dollar spot indexes down

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Speaker 2: three tenths of one percent, US stop future surging six

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Speaker 2: tents of one percent. US eurostocks fifty futures also up

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Speaker 2: by one point three percent this morning. The ECB's at

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Speaker 2: Christine Laguard talking about being well positioned to manage the

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Speaker 2: heightened economic and political uncertainty, monitoring the oil price swings.

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Speaker 2: So that's a look at the markets. Well.

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Speaker 1: In a moment, we'll bring you the latest on the

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Speaker 1: Israel Iran conflict. Donald Trumps from posting on social media

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Speaker 1: that the ceasefire is now in effect and appealing to

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Speaker 1: parties not to violate it.

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Speaker 4: So more on that in a moment.

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Speaker 1: Plus we'll be talking about the NATO summit in the

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Speaker 1: Hague as well. But this is of course on a

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Speaker 1: day we're watching so much as happening in the Middle

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Speaker 1: East as well, and we're thinking too about how that's

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Speaker 1: affecting other parts of the global economy as well.

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Speaker 2: Yeah, indeed, so we'll get to those big conversations in

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Speaker 2: a moment. But there's another event that I would like

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Speaker 2: to mention this morning. First, Stephen, you were in Ireland

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Speaker 2: yesterday to speak the Irish Finance Minister and the Eurogroup

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Speaker 2: President Pascal Donaho.

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Speaker 1: Yeah, Pascal Dona, who was in our new offices in

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Speaker 1: Dublin for a Future of Finance event at at a

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Speaker 1: really interesting time for Ireland because it's one of the

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Speaker 1: European countries most exposed to US tariffs because of its

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Speaker 1: large technology and pharmaceutical industries, and that was a large

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Speaker 1: part of the conversation I was having with Pascal Donna,

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Speaker 1: who with his two hats, one as Ireland's finance minister,

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Speaker 1: but the other is the chairman of the meeting of

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Speaker 1: Euro Area finance ministers too, So he talked about Ireland

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Speaker 1: could be how Ireland could be affected by tars, particularly

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Speaker 1: the threat of pharmaceuticals sector specific tariffs were waiting on

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Speaker 1: news for Donald Trump has promised they'll come very soon

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Speaker 1: as well. Scenarios that the Irish government is outlined could

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Speaker 1: in a worst case scenario see up to seventy five

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Speaker 1: thousand jobs being lost if there are tariffs imposed on

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Speaker 1: the pharmaceutical industry. At a high level, Pascal done Who,

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Speaker 1: They'll pointing out that the strong economic position that Ireland

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Speaker 1: has been in will help to cushion some of those

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Speaker 1: blows and downturns as well. The course of had massive

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Speaker 1: corporate tax receipts. Who's been part of the story, partly

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Speaker 1: around stockpiling, but also in general global tax changes that

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Speaker 1: have led more companies US based companies in Ireland to

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Speaker 1: pay more corporate tax as well. Also, though, talking about

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Speaker 1: how the government would approach a big downturn in growth

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Speaker 1: and the lessons that were learned from the previous crises

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Speaker 1: in Ireland, said the Government's going to still invest in

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Speaker 1: infrastructure and housing issues that are really big and a

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Speaker 1: limit on economic growth in Ireland as well, and we're

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Speaker 1: going to bring a little bit of that conversation later on.

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Speaker 2: Yeah, absolutely, I saw some of the photographs they look

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Speaker 2: absolutely amazing and in fact, the Dublin office is now

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Speaker 2: Bloomberg's biggest in the EU almost.

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Speaker 1: They're almost there, but they're on track for running as well.

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Speaker 1: There are one hundred and fifty people working in the Upon

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Speaker 1: office actually mostly on the engineering side of things at

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Speaker 1: the technology hub for Bloomberg as well, and it's now

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Speaker 1: just slightly behind Frankfurt as one of our hubs.

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Speaker 4: That they're planning to expand more.

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Speaker 1: And that's part of the conversation that even at a

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Speaker 1: time of such uncertainty both what's happening in the Middle

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Speaker 1: East but also on the trade front as well. That

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Speaker 1: was something that we heard from a lot of the

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Speaker 1: financial industry leaders that were at this event in our

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Speaker 1: office as yesterday too. They're planning on hiring more people.

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Speaker 1: They're still seeing, despite the global uncertainty and many of

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Speaker 1: those issues, still seeing reasons to invest and to expand

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Speaker 1: as well. So an interesting time at a country that,

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Speaker 1: as I say, is sort of on the front line

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Speaker 1: of the exposure to the tariffs, how some of the

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Speaker 1: industry leaders there and politicians are thinking about those challenges

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Speaker 1: and still remaining optimistic despite it all.

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Speaker 2: Okay, yeah, and also the photographs were lovely of you

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Speaker 2: in the office, which.

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Speaker 1: I mean, bloom are always an experience to visit. I

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Speaker 1: think Pascal Dona, who actually has seen more of them

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Speaker 1: than I have. I think we establishing the conversation yesterday

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Speaker 1: he was listing off on the boombergras well.

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Speaker 2: Yeah, well he's put a focal social media with some

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Speaker 2: really great pictures. Anyway, if you want to see Stephen

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Speaker 2: in action lovely, well we very please have you back

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Speaker 2: in the London studio and interested to hear about Ireland. Well,

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Speaker 2: let's now go back to our top stories. There is

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Speaker 2: uncertainty and there isn't much d shail, but it does

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Speaker 2: appear that Iran and is well may Pau's hostilities after

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Speaker 2: Iran chose to respond to the US's bombing of its

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Speaker 2: nuclear sites by firing missiles at Cut, one of the

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Speaker 2: US's key regional partners. And we're just hearing is Stephen

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Speaker 2: mentioned the US President posting in the past few minutes

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Speaker 2: that the c SPAR is now in effect do not violated,

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Speaker 2: says President Trump. Johnny is now is Bloomberg TVs. Horizons

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Speaker 2: Mid East in Africa anchor Jumana Bassecci Jamala, thank you

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Speaker 2: so much for rushing over to the microphone to discuss this.

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Speaker 2: President Donald Trump announcing this surprise cease far between Israel

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Speaker 2: and Iran. What do we know about how this has

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Speaker 2: come about?

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Speaker 11: Yeah, well this is the second time he's announced it

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Speaker 11: in the last six hours. I've got to say at

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Speaker 11: this point, it is unclear whether the seasfire actually has

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Speaker 11: gone into effect. Donald Trump is saying that the seaesfire

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Speaker 11: is an effect, please do not violate it. But what

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Speaker 11: we're hearing from the ground contradicts that. Just in the

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Speaker 11: last couple of hours, the Idea of have have reported

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Speaker 11: that there's been a sixth wave of ballistic missiles directed

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Speaker 11: towards Israel from Iran, sirens resounding a couple of hours

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Speaker 11: ago in anticipation of those missile launchers.

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Speaker 4: AP reporting a short while ago.

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Speaker 11: That the air skies above Israel have also been closed too.

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Speaker 11: And we've also yet to hear an official comment from

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Speaker 11: Israeli officials as to whether or not they've signed up

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Speaker 11: to this ceasefire. So really uncertain at this point from

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Speaker 11: the Iranian perspective. The Foreign Minister put up a post

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Speaker 11: on x a couple of hours ago, saying that there

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Speaker 11: was no ceasfire agreement, but that his country had no

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Speaker 11: intention to keep responding to israel attacks after four am

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Speaker 11: to heround time. Obviously that was hours ago, and the

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Speaker 11: evidence would suggest otherwise, because the volley of attacks have continued,

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Speaker 11: and even over Tehran, their own air defense system has

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Speaker 11: also been activated as well. So question marks about whether

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Speaker 11: the seas fire has gone into effect as of now.

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Speaker 1: And you allude to the disjointed nature of this announcement

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Speaker 1: as well as you say we haven't heard from the

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Speaker 1: Israeli side yet. What does that tell us about the

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Speaker 1: US Israeli relationship through this crisis.

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Speaker 4: So we're trying.

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Speaker 11: To piece together the details of exactly how this ceasefire

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Speaker 11: was broken. According to our own reporting, Trump did have

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Speaker 11: a direct conversation with the Prime Minister Nataniejo on Monday.

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Speaker 11: That is also per a senior White House official, and

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Speaker 11: also our own reporting does confirm that the Vice President JD. Vance,

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Speaker 11: the Secutive State Mark Arubio, and the Special ENVOYE. Steve

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Speaker 11: Witkoff all have indirectly or directly been speaking to the

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Speaker 11: Iranians about the proposal, And then overnight President Trump also

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Speaker 11: credited Kuta remember Cutter, the site of yesterday's attacks that

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Speaker 11: the US base and Cutter for having mediated and brought

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Speaker 11: about again bringing the Iranians to the table for this

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Speaker 11: ces fire proposal as well. So it feels like there

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Speaker 11: was a three pronged approach of Trump speaking perhaps directly

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Speaker 11: to the Israelis and then via mediators in this case Cutter,

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Speaker 11: with the Iranians.

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Speaker 2: Going back to also you know the chain of events.

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Speaker 2: It looks like the US avoided around as nuclear reactors

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Speaker 2: in the recent bombing, and we still also don't know

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Speaker 2: where the rich uranium might be that it remains unaccounted for,

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Speaker 2: and so the thoughts remain around what iron is doing

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Speaker 2: with its nuclear program.

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Speaker 11: Now, yeah, I think one of the big overarching questions

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Speaker 11: is going to be what does Iran do from here?

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Speaker 11: And I'm not in terms of just signing up to

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Speaker 11: the ceasefire, but what their plans are with the nuclear program?

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Speaker 11: Do they come back to the negotiating table, And if

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Speaker 11: they do come back to the negotiating table, are they

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Speaker 11: more inclined to accept more stringent concessions that the US

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Speaker 11: will be asking for and potentially a zero enrichment policy.

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Speaker 11: In the past, they have said that that is a

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Speaker 11: complete red line. Earlier on in the show on our show,

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Speaker 11: we were speaking to an Iranian annist and he said,

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Speaker 11: even with the setbacks that the Ranian regime has faced

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Speaker 11: over the past week, it's still unlikely that they will

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Speaker 11: sign on to the zero enrichment criteria. Why because it's

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Speaker 11: about the survival of the regime. They've placed their whole

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Speaker 11: reisondete around the nuclear program, serving as a deterrent, and

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Speaker 11: therefore for them to give that up freely could put

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Speaker 11: the regime at risks. So from here onwards, it's going

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Speaker 11: to be really crucial to see how that path of

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Speaker 11: diplomacy moved forwards and what the terms are going to

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Speaker 11: be for a potential nuclear deal is if it indeed

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Speaker 11: actually does come into fruition.

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Speaker 1: Okay, Tomano versatire Horizon's Middle East and Africa an Kor,

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Speaker 1: thank you very much for joining us with the latest.

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Speaker 2: Well amid the ongoing tensions in the Middle East and uncertainties,

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Speaker 2: the leaders of the thirty two NATO countries are meeting

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Speaker 2: in the Hague. The organization is internal Sexuary General Mark

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Speaker 2: Rutter wants a new minimum spending target of five percent

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Speaker 2: of GDP on defense. President Trump's commitment to mutual defense,

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Speaker 2: though remains uncertain. Let's bring in our correspondent Oliver Crook,

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Speaker 2: who is in the Hague and covering the NATO meeting today. Ollie,

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Speaker 2: good morning. Can routta wrangle all the members to commit

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Speaker 2: to higher spending?

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Speaker 12: Listen, that is going to be the sort of base

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Speaker 12: expectation for NATO, that they're going to be able to

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Speaker 12: get everybody over the line here over that five percent.

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Speaker 12: We should say that they basically did manage to get

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Speaker 12: everybody to commit to five percent, with basically the exception

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Speaker 12: of Spain. That has been a sort of active debate

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Speaker 12: over the last few days. We were speaking with Mark

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Speaker 12: brought to yesterday in a press conference. He was asked

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Speaker 12: many times about this, about basically whether there would be

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Speaker 12: a carve out for Spain, would there'd be some fudging

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Speaker 12: for Spain, all these sort of details, And of course,

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Speaker 12: if Spain were to be given this concession, it would

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Speaker 12: of course great precedent to break ranks for other NATO

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Speaker 12: members and that is not at all what the Alliance

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Speaker 12: wants to do. Overall. With President Trump said to arrive

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Speaker 12: here in a couple of hours time, he has demanded

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Speaker 12: a five percent minimum spend for NATO allies in the

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Speaker 12: United States has said in the past that it itself

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Speaker 12: will also hit five percent, and so that is going

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Speaker 12: to be the expectation here, And of course I think

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Speaker 12: that this is part of the NATO playbook and sort

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Speaker 12: of appeasing of Trump. You know, a big, beautiful number,

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Speaker 12: easy to understand, five percent spending on defense. The reality

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Speaker 12: of that five percent number is actually only three point

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Speaker 12: five percent of that is going to be on these

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Speaker 12: sort of hard military spend guns and ammunition, that sort

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Speaker 12: of thing, and then the one point five percent is

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Speaker 12: going to be a bit of a fudge. It's going

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Speaker 12: to be things that sort of support the defense industry.

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Speaker 12: So we could be talking about infrastructure, for example, if

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Speaker 12: you need to carry tanks across Germany, you need roads

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Speaker 12: and rails that can carry that. Cybersecurity, those sorts of things.

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Speaker 12: So those are going to be kind of the conversations

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Speaker 12: over the next twenty four hours as everybody awaits Donald

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Speaker 12: Trump to arrive at later this evening.

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Speaker 1: Is it going to be enough though, to convince President

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Speaker 1: Trump to commit to collective defense and essentially the future

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Speaker 1: of NATO as an organization.

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Speaker 12: Yeah, I mean, this is something that's the sort of

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Speaker 12: a thought exercise I've been doing with myself over the

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Speaker 12: last few days and some of the people I've been

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Speaker 12: speaking to, which is, you know, what is the best

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Speaker 12: case scenario outcome here. Let's say that NATO says, Okay,

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Speaker 12: we will agree to five percent spend, we will agree

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Speaker 12: to do it over a reasonable period of time. We

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Speaker 12: will agree to do it with largely because there's no

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Speaker 12: other option buying US military kit. What is the best

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Speaker 12: case scenario? What Donald Trump is going to say to that?

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Speaker 12: Is he going to say, listen, we are very, very

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Speaker 12: thrilled about this. We recommit to NATO where you know,

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Speaker 12: intensely I'm happy with this, and you know you can

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Speaker 12: rely on us going forward. Probably not, He's going to

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Speaker 12: to see the leverage that he has over the organization. Again,

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Speaker 12: there have been moments when Marco Rubio, the Secretary of State,

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Speaker 12: has come to Europe and basically said, listen, our commitment

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Speaker 12: to NATO is still iron clad. But again, I think

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Speaker 12: that this is probably an opportunity for Trump to again

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Speaker 12: to begin to flex his muscle. And you know, as

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Speaker 12: far as NATO is concerned, he really is in the

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Speaker 12: position he likes to be in, which is basically you know,

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Speaker 12: the sort of the monarch of the organization and everybody

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Speaker 12: else that is the sort of part of it is

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Speaker 12: sort of auditioning to keep the job that they already have.

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Speaker 6: So listen, I think at the.

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Speaker 12: End of the day, if he gives any sort of

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Speaker 12: positive indication that listened that the NATO alliance is still strong.

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Speaker 12: But the reality of the situation, Steven, is the thing

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Speaker 12: that hangs over this is the potential for the United

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Speaker 12: States to draw down much of its military presence in Europe.

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Speaker 12: They're about eighty four thousand American troops that are all

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Speaker 12: over Europe. And the reality of the situation, I suppose

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Speaker 12: to the Dutch finance minister yesterday is the expectation is

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Speaker 12: that they're going to begin to draw those down in

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Speaker 12: the coming months and.

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Speaker 2: Years, okay, which would be immensely significant. Indeed, and the

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Speaker 2: Ukrainian leader of Losimzelenski also does appear to have been

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Speaker 2: somewhat sidelined at this event, despite the fourth year of

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Speaker 2: Russia's war in Ukraine. Thank you so much, surely for

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Speaker 2: being wonded. Oliver Crook there in the Hague ahead of

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Speaker 2: the NATO summit today. I will also point listeners to

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Speaker 2: Bloomberg's Big Take story this morning. If you want a

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Speaker 2: hair raising reed, this is it. It models a Russian

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Speaker 2: attack on NATO countries. It focuses on the Baltics. It

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Speaker 2: estimates that that would cost one point five trillion dollars

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Speaker 2: just in the first year were that to happen, with many,

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Speaker 2: many people killed, and it plays out a number of scenarios.

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Speaker 2: But it's been done, you know, with some in depth

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Speaker 2: reporting by Bloomberg. So look at that on the Bloomberg

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Speaker 2: terminal today.

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Speaker 1: All those debates are taking place in the Hague today.

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Speaker 1: Countries across Europe are still trying to parse what Donald

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Speaker 1: Trump's trade policies are going to mean for them. Ireland

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Speaker 1: chief among those, one of the most exposed countries in

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Speaker 1: Europe because of its large technology and pharmaceutical sectors. Narland's

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Speaker 1: Finance Minister Pascal Donna, who has said that if tariff's

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Speaker 1: in a worst case scenario, were to be applied in

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Speaker 1: the pharmaceutical sector, that could result in the potential loss

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Speaker 1: of up to seventy five thousand jobs in Ireland. I

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Speaker 1: was speaking to Pascal Dna who's also President of the

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Speaker 1: Eurogroup Forum of Euro Area Finance Ministers at Bloomberg's Future

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Speaker 1: of Finance event in Dublin, and I started by asking

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Speaker 1: him for his reaction to events in the Middle East

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Speaker 1: and the potential economic risks that could pose for Europe.

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Speaker 13: So I'm always very conscious that when we were talking

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Speaker 13: about economics, as critically as important as it is, we're

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Speaker 13: also talking about people losing their lives. We're talking about

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Speaker 13: stability is such a critical part of the world and

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Speaker 13: what that could mean for all the countries to communities

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Speaker 13: who are there. So while recognizing that, of course, I

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Speaker 13: do have to acknowledge the economic risks that are there.

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Speaker 13: There are two in particular. The first one that you've

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00:22:54,600 --> 00:22:57,879
Speaker 13: just identified there is what could happen from an energy

441
00:22:57,920 --> 00:23:00,879
Speaker 13: and trade perspective, the price of energy, the ability of

442
00:23:00,960 --> 00:23:05,720
Speaker 13: access for goods to move around the world. Two of

443
00:23:05,760 --> 00:23:09,240
Speaker 13: our more recent crisis, from the pandemic to the aftermath

444
00:23:09,280 --> 00:23:12,000
Speaker 13: of the pandemic, we've see what is the effect on

445
00:23:12,040 --> 00:23:14,479
Speaker 13: the world economy when the price of energy and supply

446
00:23:14,600 --> 00:23:18,080
Speaker 13: chains don't function. And of course, exactly at the moment

447
00:23:18,160 --> 00:23:21,800
Speaker 13: in which global sentiment would regard to trade is already

448
00:23:22,359 --> 00:23:25,640
Speaker 13: in a low place. An event like this again creates

449
00:23:25,640 --> 00:23:28,760
Speaker 13: a further risk with regard to that. But Stephen, from

450
00:23:28,800 --> 00:23:32,280
Speaker 13: a European and Irish perspective, it's important as we respond

451
00:23:32,320 --> 00:23:34,800
Speaker 13: back to that we focus in on what we can

452
00:23:34,880 --> 00:23:38,919
Speaker 13: control ourselves. We focus in on the policy instruments that

453
00:23:38,960 --> 00:23:43,000
Speaker 13: are available to us, and we've an increasingly clear understanding

454
00:23:43,040 --> 00:23:45,840
Speaker 13: of what that is within the European Union, which we're

455
00:23:45,880 --> 00:23:48,800
Speaker 13: working to deliver. And from an Irish point of view,

456
00:23:48,920 --> 00:23:51,840
Speaker 13: we can't influence what's going to happen with global trade,

457
00:23:52,080 --> 00:23:55,320
Speaker 13: but we can influence how competitive our economy is, the

458
00:23:55,400 --> 00:23:59,680
Speaker 13: investment decisions that we make, and the very qualities that

459
00:23:59,800 --> 00:24:03,320
Speaker 13: my highlighted in his address there regarding the premium and

460
00:24:03,400 --> 00:24:06,360
Speaker 13: value that we place an openness, so we can focus

461
00:24:06,400 --> 00:24:08,000
Speaker 13: on that and we can do a good job and

462
00:24:08,040 --> 00:24:09,720
Speaker 13: a better job and that in the time ahead.

463
00:24:10,960 --> 00:24:13,520
Speaker 1: This is of course a risk added on top of

464
00:24:13,560 --> 00:24:16,560
Speaker 1: the other upheaval that's happened in the global economic order

465
00:24:16,560 --> 00:24:18,639
Speaker 1: when it comes to trade. Tariff's coming out of the

466
00:24:18,760 --> 00:24:22,000
Speaker 1: United States and the response that's being formulated by the

467
00:24:22,000 --> 00:24:25,399
Speaker 1: European Union to that, with negotiations ongoing as well.

468
00:24:26,080 --> 00:24:27,400
Speaker 4: How do you see.

469
00:24:27,240 --> 00:24:32,080
Speaker 1: Ireland being particularly exposed to those risks given all of

470
00:24:32,119 --> 00:24:34,639
Speaker 1: the tries that we have to US companies and the

471
00:24:34,720 --> 00:24:36,119
Speaker 1: US companies that are based here as well.

472
00:24:36,280 --> 00:24:40,000
Speaker 13: So of course it is a benefit of the strength.

473
00:24:40,480 --> 00:24:43,400
Speaker 13: It is a consequence of the strength of the relationship

474
00:24:43,440 --> 00:24:47,040
Speaker 13: in the first place, that if that relationship from a

475
00:24:47,080 --> 00:24:50,600
Speaker 13: trade point of view changes in any way, the consequence

476
00:24:50,640 --> 00:24:52,760
Speaker 13: of what it can mean for a very open economy

477
00:24:52,840 --> 00:24:56,640
Speaker 13: like the Irish economy are very well known, and everybody

478
00:24:56,680 --> 00:24:58,480
Speaker 13: in this room will aware of what they will be

479
00:24:58,760 --> 00:25:02,520
Speaker 13: from a trade point of view, an investment perspective. They

480
00:25:02,520 --> 00:25:05,760
Speaker 13: will be aware of how that could affect us. But

481
00:25:05,840 --> 00:25:08,520
Speaker 13: again I think it's important as we look at those

482
00:25:08,640 --> 00:25:11,400
Speaker 13: risks to be aware of the strengths the Irish economy

483
00:25:11,440 --> 00:25:14,800
Speaker 13: does haven't dealing with them. We've never had more people

484
00:25:14,800 --> 00:25:16,480
Speaker 13: at work in Ireland than we do at the moment.

485
00:25:17,000 --> 00:25:20,440
Speaker 13: When I started off studying economics, we had a persistently

486
00:25:20,760 --> 00:25:25,080
Speaker 13: durable long term unemployment rate of fourteen percent.

487
00:25:25,720 --> 00:25:27,000
Speaker 4: We're now at four percent.

488
00:25:27,680 --> 00:25:31,720
Speaker 13: We've public finances that are in surplus, and we have

489
00:25:31,760 --> 00:25:36,159
Speaker 13: a foreign direct investment relationship with America that's responsible for

490
00:25:36,240 --> 00:25:39,520
Speaker 13: well over one hundred thousand jobs within America. Lots of

491
00:25:39,520 --> 00:25:43,199
Speaker 13: investment in America, and we've a very diversified set of

492
00:25:43,240 --> 00:25:46,080
Speaker 13: companies now present in Ireland here as well, and they've

493
00:25:46,119 --> 00:25:49,760
Speaker 13: been present here for decades. So there are challenges, but

494
00:25:49,840 --> 00:25:52,160
Speaker 13: we are well placed to deal with them and we will.

495
00:25:52,359 --> 00:25:54,920
Speaker 1: The pharmataris is one thing that you know, President Trump

496
00:25:54,960 --> 00:25:57,160
Speaker 1: has promised that those will come very soon.

497
00:25:57,280 --> 00:25:58,439
Speaker 4: You said that last week.

498
00:25:58,680 --> 00:26:00,880
Speaker 1: That's a sector where we know that Ireland has particular

499
00:26:00,920 --> 00:26:03,840
Speaker 1: exposure as well. How are you quantifying those risks? How

500
00:26:03,880 --> 00:26:05,920
Speaker 1: serious do you see that as being potential damage to

501
00:26:05,920 --> 00:26:06,720
Speaker 1: the Irish economy?

502
00:26:06,800 --> 00:26:09,560
Speaker 13: So it's very difficult to quantify what the risks could

503
00:26:09,600 --> 00:26:12,720
Speaker 13: be while the decision has yet to be made regarding

504
00:26:12,760 --> 00:26:16,200
Speaker 13: what America may do. From a general point of view,

505
00:26:16,320 --> 00:26:20,000
Speaker 13: the macroeconomic modeling we've done for the Irish economy would

506
00:26:20,040 --> 00:26:23,639
Speaker 13: indicate that there could be approximately seventy five thousand jobs

507
00:26:23,640 --> 00:26:26,159
Speaker 13: that could be affected by it across the medium term,

508
00:26:26,680 --> 00:26:29,880
Speaker 13: with twenty to twenty five of those affected across next year,

509
00:26:30,480 --> 00:26:33,600
Speaker 13: and it's indicated that from a growth perspective, there could

510
00:26:33,600 --> 00:26:35,719
Speaker 13: be one to one and a half points of growth

511
00:26:36,400 --> 00:26:39,399
Speaker 13: that we can lose across the medium term. But again

512
00:26:39,560 --> 00:26:41,640
Speaker 13: to put that in the context of what our strengths

513
00:26:41,680 --> 00:26:44,760
Speaker 13: are with two point seven million people at work, and

514
00:26:44,800 --> 00:26:47,560
Speaker 13: we have a growth outlook for our economy even now

515
00:26:48,400 --> 00:26:52,439
Speaker 13: to maybe even more than two percent per year, so

516
00:26:52,880 --> 00:26:55,919
Speaker 13: those risks could materialize, they will become clearer in the

517
00:26:55,960 --> 00:26:59,760
Speaker 13: time ahead. But the reason why these companies have part

518
00:26:59,800 --> 00:27:02,920
Speaker 13: of our global supply chains here in Ireland is because

519
00:27:02,960 --> 00:27:06,880
Speaker 13: we've the skill, the experience and the competitiveness built up

520
00:27:07,200 --> 00:27:09,439
Speaker 13: to keep them in our country, and we will look

521
00:27:09,480 --> 00:27:12,040
Speaker 13: down at how we can maintain that even if the

522
00:27:12,080 --> 00:27:14,399
Speaker 13: trade environment around it does begin to change.

523
00:27:14,480 --> 00:27:16,280
Speaker 1: What sort of tools would you be looking at. I mean,

524
00:27:16,320 --> 00:27:18,119
Speaker 1: if you're talking about there being a potential of seventy

525
00:27:18,119 --> 00:27:19,720
Speaker 1: five thousand job losses.

526
00:27:20,320 --> 00:27:23,359
Speaker 13: Well, in terms of the job losses, it's not really

527
00:27:23,440 --> 00:27:25,399
Speaker 13: jobs that could be lost or that could happen. It

528
00:27:25,440 --> 00:27:29,760
Speaker 13: could also be jobs that might otherwise not be creat us.

529
00:27:30,280 --> 00:27:33,080
Speaker 13: And again, looking at all of that, we still believe

530
00:27:33,480 --> 00:27:35,960
Speaker 13: if that were to happen, it will happen at a

531
00:27:36,000 --> 00:27:37,919
Speaker 13: time in which the number of people that work in

532
00:27:37,960 --> 00:27:41,480
Speaker 13: Ireland would still be by our standards, at a historic high.

533
00:27:42,160 --> 00:27:44,560
Speaker 13: In terms of the decisions that are available to us

534
00:27:44,560 --> 00:27:47,200
Speaker 13: to respond back, it is many of the matters that

535
00:27:47,280 --> 00:27:49,440
Speaker 13: are working on at the moment how we can increase

536
00:27:49,520 --> 00:27:52,840
Speaker 13: investment levels within our economy. If you look at Mike's

537
00:27:52,920 --> 00:27:56,240
Speaker 13: article in the Business Post yesterday about Ireland, he talked

538
00:27:56,280 --> 00:27:58,720
Speaker 13: about our strengths, but he also pointed to the need

539
00:27:58,800 --> 00:28:02,160
Speaker 13: to invest, also talked about the need to maintain openness

540
00:28:02,160 --> 00:28:06,520
Speaker 13: within our economy. And Minister Chambers and I, who as

541
00:28:06,520 --> 00:28:09,200
Speaker 13: you know, is the minister who focuses a lot on

542
00:28:09,280 --> 00:28:12,919
Speaker 13: our public expenditure, are looking at the investment decisions we

543
00:28:13,040 --> 00:28:16,680
Speaker 13: can make in energy, in infrastructure in the next few

544
00:28:16,760 --> 00:28:20,480
Speaker 13: years that could strengthen our economy at a moment of change.

545
00:28:20,640 --> 00:28:22,640
Speaker 13: So they're the big decisions that we're looking at at

546
00:28:22,640 --> 00:28:23,000
Speaker 13: the moment.

547
00:28:24,760 --> 00:28:27,520
Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

548
00:28:27,560 --> 00:28:30,600
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549
00:28:30,880 --> 00:28:34,080
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557
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