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

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

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

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Speaker 2: tenth of December in London. I'm Stephen Carroll and I'm

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Speaker 2: Caroline Hepke.

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Speaker 3: Coming to you from Bloomberg's inaugural Women, Money and Power

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Speaker 3: event in London as new data reveals that the most

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Speaker 3: gender diverse companies deliver higher returns.

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Speaker 2: And another news, the Syrian rebel group the Topple thesad's

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Speaker 2: regime says it's now forming a transitional government, but questions

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Speaker 2: remain about what comes next. Plus police charge a male

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Speaker 2: suspect with murder after the fatal shooting of United Health

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Speaker 2: executive Brian Thompson in New York last week. Let's start

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Speaker 2: with a roundup of our top stories. Germany's Chancellor Olaf

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Speaker 2: Schultz will submit to a parliamentary vote of confidence today,

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Speaker 2: which he intends to lose to trigger an early election

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Speaker 2: on the twenty third of February. Schultzer's ruling coalition was

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Speaker 2: dismantled last month after he sacked the finance minister, leaving

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Speaker 2: him without a parliamentary majority.

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Speaker 1: And forcing an early election.

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Speaker 2: The latest polls show the conservative cdu CSU alliance leading,

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Speaker 2: followed by the AfD and the SPD, with Schultz's popularity

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Speaker 2: increasing in recent polls. The political collapse comes as Germany's

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Speaker 2: economy is now five percent smaller than it would have

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Speaker 2: been if the pre pandemic growth trend had been maintained.

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Speaker 2: France's new Prime Minister, Fossobayu, will meet today with far

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Speaker 2: right leader Marrying Leapenn as he begins negotiations to form

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Speaker 2: a new government. It comes after le Penn's party joined

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Speaker 2: forces with the far left to out the previous government

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Speaker 2: in a no confidence motion. By his decision to meet

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Speaker 2: the national rally leader reflects the party's growing clout in

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Speaker 2: the wake of snap elections last June that left Parliament divided.

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Speaker 2: Top of the agenda for the new prime minister this

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Speaker 2: government will be to negotiate a budget that can pass

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Speaker 2: through the National Assembly without spooking markets. Up to one

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Speaker 2: thousand people are feared dead after a powerful siclone ripped

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Speaker 2: through the French territory of Mayat in the Indian Ocean,

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Speaker 2: winds of more than one hundred and twenty miles an

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Speaker 2: hour hit the island, damaging homes, government buildings and a hospital.

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Speaker 1: Here's unis s skuy Taylor.

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Speaker 4: E damage to schools, to people's homes, to healthcare facilities.

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Speaker 4: We're also worried about the long term impacts children potentially

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Speaker 4: being cut off from learning four weeks on end, people

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Speaker 4: aren't able to get access to healthcare, and the potential

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Speaker 4: spread of water one diseases like cholera and malaria.

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Speaker 2: Unie s guy Taylor speaking there. According to the AFP

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Speaker 2: News Agency, rescue workers and supplies are being rushed to

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Speaker 2: the island by air and sea, but efforts are likely

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Speaker 2: to be hindered by damage to the territory's airports. China's

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Speaker 2: retail sales growth unexpectedly weakened in November, despite signs of

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Speaker 2: improvement in the housing market. The figures undershot even the

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Speaker 2: most bearish of forecasts, rising by just three percent from

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Speaker 2: a year ago. City Group's head of Emerging Market Economics, Johannachua,

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Speaker 2: says that says the data highlights the need for Beijing

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Speaker 2: to introduce more measures to boosting.

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Speaker 1: We really need to.

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Speaker 5: See actual consumption stimulus. I mean, what do we have

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Speaker 5: so far this year has been very small? You know,

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Speaker 5: targeted cash subsidies before the Golden Week or even the

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Speaker 5: consumer trading programs. I really expect going into twenty twenty five,

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Speaker 5: which we've already seen, the signal that we should get

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Speaker 5: a larger fiscal stimulus with a composition much more skewed

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Speaker 5: towards consumption. But having said that, it's very challenging because

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Speaker 5: the global headwinds, the uncertainty under Trump really is not

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Speaker 5: going to instill a lot of confidence in people's jobs

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Speaker 5: and income prospects.

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Speaker 2: Johanna TWA's comments come just days after Chinese policymakers elevated

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Speaker 2: boosting consumption to the top priority for economic work next

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Speaker 2: year for only the second time in.

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Speaker 1: At least a decade.

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Speaker 2: The UK's Foreign secretary has responded to claims and alleged

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Speaker 2: Chinese spy built a relationship with the British royal family.

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Speaker 2: The suspected agent he used links to Prince Andrew to

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Speaker 2: meet various Prime ministers. David Lammi says he's raised the

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Speaker 2: issue with Beijing.

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Speaker 6: When I was in China, I raised with them the

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Speaker 6: very serious issues of Chinese espionage in our country. All

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Speaker 6: are dealt with by our security services and by our

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Speaker 6: courts if necessary.

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Speaker 2: Lammie was not involved in the suspect's case. The Businessman

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Speaker 2: and Suspect that spy was banned from the UK in

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Speaker 2: twenty twenty one. Story raises questions, though about any raprushma

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Speaker 2: between Britain and China. In the UK, the Chancellor Rachel

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Speaker 2: Reeves as resistant calls to devolve tax powers to local mayors.

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Speaker 2: It's a power struggle that comes right as the government

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Speaker 2: puts the local leaders at the heart of their growth plan.

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Speaker 2: Bloomberg's James Wilcock has more. If you're a labor mayor,

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Speaker 2: you may feel a bit annoyed. You have more power

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Speaker 2: than any local leader in decades, and you're about to

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Speaker 2: be on the hook for meeting Labour's big housing, education

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Speaker 2: and growth targets in your area. But you can't raise

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Speaker 2: any money. The Chancellor's keen to keep a tight grip

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Speaker 2: on taxes after promising no more hikes after her budget

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Speaker 2: this autumn. This is not just a clash between increasingly

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Speaker 2: vocal mayors in the national government. It's also one about

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Speaker 2: what labours are of growth actually is, do local people

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Speaker 2: know best or should the center be in charge?

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Speaker 1: In London?

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Speaker 2: James Wilcock Bloomberg Radio the French TV neck where Canal

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Speaker 2: Plus is set to become the largest listing on London

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Speaker 2: stock market in two years. Analysts expect the company will

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Speaker 2: float with a five billion pound valuation when the market opens.

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Speaker 2: Cana's listing comes from the breakup of French company Vivendi

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Speaker 2: and is a much needed win for London after a

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Speaker 2: drought of IPOs in recent years. And those are your

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Speaker 2: top stories on the markets on Wall Street. On Friday,

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Speaker 2: the Nastak climbed for a fourth week in a row,

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Speaker 2: finishing at another all time high, Broadcom shares jumping by

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Speaker 2: twenty four percent after reporting strong AI demand. In treasury

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Speaker 2: markets ahead of this week's Federal Reserve meeting, we did

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Speaker 2: see ten year the worst week of the year for treasuries,

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Speaker 2: in fact, tenure years, rising only twenty five basis points

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Speaker 2: on the week. We're starting the week at four point

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Speaker 2: three to eight percent on the ten year. The US dollar,

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Speaker 2: capping a second week of gains, rowse ber point eight

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Speaker 2: percent on the week this morning, down by a tenth

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Speaker 2: of one percent. In Asia, after those that retail sales data,

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Speaker 2: we have Chinese stocks lower. The CSI three hundred down

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Speaker 2: by six tenths of one percent. Bitcoin cross a fresh

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Speaker 2: record of one hundred and six thousand dollars, down slightly

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Speaker 2: on that at the moment, just over one hundred and

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Speaker 2: five thousand dollars. And we have rate decisions to look

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Speaker 2: forward to from the Fed, the BOJ and the BOE

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Speaker 2: this week.

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Speaker 1: That's news when you want it.

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Speaker 2: With Bloomberg News Now, I'm Stephen Carroll and this is Bloomberg.

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Speaker 2: In a moment, we'll look at the role the economy

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Speaker 2: is going to play in Germany's election campaign. Plus we'll

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Speaker 2: bring you a story about the role of private equity

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Speaker 2: in children's homes in the UK. But first, one of

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Speaker 2: the story that I've been reading this morning, the economist

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Speaker 2: me Here Dessa has been writing for Bloomberg about the

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Speaker 2: trends of people taking on extra jobs on top of

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Speaker 2: their main job, be it their own business, part time consulting,

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Speaker 2: or perhaps other kinds of work as well. Now he says,

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Speaker 2: this is a trend that we're seeing mostly with people

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Speaker 2: in their late thirty early forties or are doing well

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Speaker 2: and their corporate investing, legal, those sorts of careers, but

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Speaker 2: they have a bit of an itch they feel they

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Speaker 2: need to scratch. Professionally, and he says that it's interesting

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Speaker 2: because the language that we use to talk about these

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Speaker 2: things is the same language borrowed essentially from the world

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Speaker 2: of finance, portfolio careers, diversifying. But his argument is that

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Speaker 2: although those strategies might work for financial capital, they don't

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Speaker 2: work in the same way for human capital, and portfolio

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Speaker 2: careers often become an assortment of lower return activities. Now,

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Speaker 2: he says it's also worth looking at what motivates people

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Speaker 2: to find a second job, and perhaps people could look

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Speaker 2: outside of their professional life for more fulfillment from things

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Speaker 2: like community activities or family and friendships. And while diversifying

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Speaker 2: careers might not be the way to achieve the kind

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Speaker 2: of goal of having a well lived life, even if

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Speaker 2: it might require some of the same skills that you

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Speaker 2: use in your professional life. So a fascinating read from

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Speaker 2: Bloomberg's weekend edition for me here Decai. You'll find it

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Speaker 2: on bloomberg dot com and on the terminal That's good

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Speaker 2: at Germany Now, where the Bundestagle today held a confidence

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Speaker 2: vote that's likely to trigger an election in February. This

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Speaker 2: as the country's growth heatlook is getting weaker with consequences

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Speaker 2: for the rest of Europe. Our correspondent Oliver Crook is

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Speaker 2: in Berlin for US this morning. Oliver talk us through

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Speaker 2: what happens today then and how it sets us up

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Speaker 2: for this election.

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Speaker 7: Yeah, so listen.

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Speaker 8: This all began on November the six, really hours after

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Speaker 8: Donald Trump was elected President of the United States, and

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Speaker 8: basically Ola Schultz fired the finance minister after their sort

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Speaker 8: of issues on the budget became irreconcilable, and that has

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Speaker 8: been sort of setting up this whole dynamic where last

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Speaker 8: week Schultz asked for the confidence vote and he got it.

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Speaker 7: He got it today.

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Speaker 8: So what will happen is at one pm here in

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Speaker 8: Berlin at the Bundestag, Chancellor Shortz will speak before the

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Speaker 8: Bundesagi will give a twenty five minute speech that will

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Speaker 8: be followed by two hours of debate, then a roll

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Speaker 8: call vote. Then we get the result by about four pm,

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Speaker 8: which he is widely anticipated to lose, which he is

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Speaker 8: intending in fact to lose in order to set up

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Speaker 8: basically the election on February twenty third.

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Speaker 7: Sort of some interesting dynasm mix here.

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Speaker 8: There was actually at one point the AfD was threatening

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Speaker 8: to basically to vote in favor of confidence of Olaf

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Speaker 8: Schultz in order to sort of disrupt the proceedings. This

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Speaker 8: is not actually what Schultz wants, but really right now

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Speaker 8: we're still expecting him to basically lose his confidence vote.

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Speaker 7: That's us up for the election.

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Speaker 8: As you were mentioning a little bit earlier, the polls

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Speaker 8: have really maintained more or less sort of a kind

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Speaker 8: of the spread that we've seen with the CDU leading

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Speaker 8: AfD following and then the spay Day just a point

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Speaker 8: or two after the FPD or sorry, the AfD. But

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Speaker 8: that really sets up for a grand coalition right now

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Speaker 8: of the CDU and SPD when we get that vote

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Speaker 8: back over in February twenty third.

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Speaker 2: Look, the economy is essential to this, as so many

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Speaker 2: election campaigns this year, and the stagnation in Germany a

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Speaker 2: big issue. Who is seen to be bearing the brunt

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Speaker 2: of that and how should we expect it to be

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Speaker 2: discussed in the campaign.

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Speaker 7: Yeah, I mean this is fundamental.

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Speaker 8: I mean, generally you don't have massive budget problems in

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Speaker 8: economies that are growing at a rapid pace. Right We've

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Speaker 8: seen it in France, we've seen it in Germany. There's

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Speaker 8: no exception to that. And you know some of the

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Speaker 8: big the big take we put out this week on

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Speaker 8: the Terminal, which is really worth a wead looking at

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Speaker 8: these sort of pre prandemic trend growth a growth trend

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Speaker 8: rather and that being lost being losing five percentage points

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Speaker 8: of growth that is basically unrecoverable since the beginning of

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Speaker 8: the pandemic. That is absolutely huge, and it's very different

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Speaker 8: from what we've seen in Germany.

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Speaker 7: Over the last few decades.

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Speaker 8: If you translate the sort of loss of national competitiveness

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Speaker 8: as Bloomberg Intelligence has done, into what that actually means

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Speaker 8: for households, we're talking about twenty five hundred euros basically

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Speaker 8: worse off every year as a consequence of this. And

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Speaker 8: you really feel that we saw it really at the

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Speaker 8: beginning with the energy crisis, really with the heavy industry,

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Speaker 8: the chemical units, but we've been talking about for the

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Speaker 8: last few months it's really gone over to the auto sector.

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Speaker 8: And when you look at the sum of jobs, because

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Speaker 8: this was sort of in the abstract for a couple

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Speaker 8: of years, this is becoming reality this year in the

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Speaker 8: Fortune five hundred companies that are in Germany, sixty thousand

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Speaker 8: job cuts so far this year, So this is absolutely

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Speaker 8: a huge part of feature of this and no one

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Speaker 8: likes getting poorer, particularly rich countries.

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Speaker 2: Oliver, Does anyone have a recipe to fix this problem

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Speaker 2: of the poliscope parties that are talking about it and

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Speaker 2: is it a real conversation about perhaps easing up on

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Speaker 2: the debt break.

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Speaker 8: Yeah, I think the interesting debate over the debt break

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Speaker 8: has been you know, it was the CDU and Frederick

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Speaker 8: Mertz the sort of lead candidate there, and obviously the

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Speaker 8: CDU is the party that brought the debt break into

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Speaker 8: existence back in two thousand and nine, with Angelo Merkel

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Speaker 8: after the financial crisis sort of indicating that he might

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Speaker 8: be open to looking at the debt break to sort

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Speaker 8: of negotiating about it. But it seems now because we've

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Speaker 8: got to look at the sort of the party platform,

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Speaker 8: the draft hasn't been published yet from the CDU, and

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Speaker 8: that seems to say that basically, no, they're backtracking on

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Speaker 8: that they're not really looking at altering the debt break.

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Speaker 7: Certainly not sort of early on.

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Speaker 8: I mean, the CDU formula is always kind of the same, right,

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Speaker 8: it's lower taxes, limit regulation cut, basically social warfare. And

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Speaker 8: the problem with the German economy, though, is that the

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Speaker 8: sort of decline is that it goes out with a

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Speaker 8: whimper and not a bang, so everything feels kind of,

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Speaker 8: you know, bad in a sort of general sense, but

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Speaker 8: not bad enough probably to get the radical action that

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Speaker 8: is required to sort of turn this economy around and

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Speaker 8: to really find new engines for growth because they don't

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Speaker 8: have the export markets that they want died. They have

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Speaker 8: this structural cost problem in terms of energy and labor

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Speaker 8: costs making their manufacturing less competitive, and that is frankly

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Speaker 8: a conversation that they don't really know how to address.

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Speaker 8: And you know, they have these sort of small companies,

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Speaker 8: the middlestan, these ms ME companies that have been around

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Speaker 8: for hundreds of years. What they almost need is another

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Speaker 8: sort of generation of that that goes into the twenty

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Speaker 8: first century and the needs of the economies of the

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Speaker 8: twenty first century.

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Speaker 7: And right now that's just not there.

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Speaker 1: Okay, Oliver Crook in Berlin, Thank you very much.

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Speaker 2: Our next story is from the UK, where critics are

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Speaker 2: debating the cost of private capitals inroads into many corners

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Speaker 2: of the economy and public services. But children's homes have

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Speaker 2: become a particular flashpoint. Our UK business supporters. Sabahm Attings

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Speaker 2: joins us now for more on this story. It's about

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Speaker 2: there are almost three and a half thousand children's homes

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Speaker 2: across the UK. How involved is private capital in this sector?

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Speaker 7: Well, the answer is increasingly increasingly so.

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Speaker 9: I mean a lot of these smaller operators are owned

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Speaker 9: by sort of private very small companies. But and with

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Speaker 9: eighty percent of the children homes in the UK run

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Speaker 9: by the private sector, what we're seeing is sovereign wealth funds,

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Speaker 9: private equity funds, entrepreneurs with backing from some of the

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Speaker 9: biggest private credit firms, all plowing into the sector and

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Speaker 9: it is causing quite a lot of concern and lots

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Speaker 9: of quarters.

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Speaker 2: How has the ownership of these homes changed in recent years?

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Speaker 2: Is it something that we've seen more consolidation in this area?

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Speaker 9: Definitely, I mean since the early two thousands there were

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Speaker 9: some quite high profile cases involving children in care and

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Speaker 9: what you saw was this kind of push towards privatization,

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Speaker 9: was it was encouraged and you saw sort of investors

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Speaker 9: and companies sort of buying each other. There was a

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Speaker 9: lot of consolidation and you sort of it led to

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Speaker 9: big companies ones like Caretech, which ultimately went public, brought

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Speaker 9: up a lot of homes and then went private in

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Speaker 9: a deal worth over a billion pounds and backed by

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Speaker 9: lenders at Areas Management, the private credit firm, and you know,

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Speaker 9: and the list goes on. There's sort of Moubi dollars involved.

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Speaker 9: There's sort of big private equity from overseas. So there's

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Speaker 9: been a lot of consolidation in the sector and it

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Speaker 9: sort of looks like it could continue.

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Speaker 1: Now.

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Speaker 2: Who is raising concerns about the private money in this

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Speaker 2: sector and what are they saying?

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Speaker 7: Well, I mean everyone really.

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Speaker 9: You've got the Education Secretary Bridget Phillipson, she's called out,

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Speaker 9: what she says, with excessive profits by these biggest operators.

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Speaker 9: The reports say they're sort of making profit margins of

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Speaker 9: twenty twenty three percent. You've got local authorities responsible for

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Speaker 9: housing these children who are saying, we actually just can't

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Speaker 9: afford to pay it. You know, it's really causing problems

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Speaker 9: for their own budgets. And the real crux of it,

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Speaker 9: and the sort of the story that we pulled out

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Speaker 9: today is the fact that young people are not necessarily

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Speaker 9: being homed where they actually live. You know, they want

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Speaker 9: to maybe maintain links with friends and family. We spoke

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Speaker 9: to one young person, Jane Barnett.

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Speaker 7: She was from London.

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Speaker 9: She ultimately ended up all the way in Blackpool. She's

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Speaker 9: never been there before. She said it was harder to

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Speaker 9: see her family. But the real issue is around is

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Speaker 9: around profits. The price has risen. Local authorities are under

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Speaker 9: pressure and there's a real push to kind of get

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Speaker 9: more sort of public owned homes where people perceive they

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Speaker 9: might be better suited to young people.

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Speaker 2: You mentioned the Education secretary. They're raising concerns about this.

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Speaker 2: What does her government want to do about it?

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Speaker 9: Well, they want more transparency over profits. They want to

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Speaker 9: hand more powers to offset the regulator. The issue finds

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Speaker 9: for poor quality, you know, and these homes could face

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Speaker 9: legal limits on how much they could make if they don't.

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Speaker 9: They're not happy to sort of reveal how much they're making.

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Speaker 9: But the main point is just a lot more transparency,

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Speaker 9: being able to see who where these homes are, what

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Speaker 9: the quality is, and how much money is being made.

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