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

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Speaker 1: Big DAYBAK podcast, available every morning on Apple, Spotify or

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Speaker 1: wherever you listen. It's Friday, the twelfth of July in London.

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Speaker 1: I'm Caroline Hepki.

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Speaker 2: And I'm Stephen Carroll. Coming up today, Joe Biden confuses

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Speaker 2: his vice president for rival Donald Trump at a vital

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Speaker 2: moment for his embattled reelection bid.

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Speaker 1: NATO allies thought a Russian plot to kill the CEO

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Speaker 1: of a key German defense company.

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Speaker 2: Plus France's fiscal constraints, Macron's vision of a centrist alliance

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Speaker 2: falters as the EU pressures the country to reduce its deficit.

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Speaker 1: Let's start with a found up of our top stories.

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Speaker 2: Joe Biden's re election campaign is under renewed pressure after

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Speaker 2: he made two critical errors in a closely scrutinized NATO

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Speaker 2: news conference over a bilateral meeting with Ukrainian President Vladimir

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Speaker 2: Zelenski and a nearly hour long news conference. The eighty

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Speaker 2: one year old US president spoke confidently on a range

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Speaker 2: of issues, but those interactions were overshadowed by Biden mistaking

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Speaker 2: two of his biggest allies for his greatest enemies, firstly

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Speaker 2: mixing up the Ukrainian leader and the Russian president.

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Speaker 3: Ladies, gentlemen, President Putin.

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Speaker 4: Present, You've got big president, President Lenski. I'm so focused

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Speaker 4: on being putin we gotta worry about it. Anyways, President,

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Speaker 4: you are.

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Speaker 2: He And that was followed later by Biden confusing his

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Speaker 2: vice president with his Republican rival for reelection, following this question.

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Speaker 5: What concerns do you have about Vice President Harris's ability

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Speaker 5: to beat Donald Trump if she were at the top

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Speaker 5: of the ticket.

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Speaker 4: Look, I wouldn't have picked Vice President Trump to be

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Speaker 4: vice president? Do I think she was not qualified to

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Speaker 4: be president? So let's start there.

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Speaker 2: The gas when Biden came as, he vowed to stay

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Speaker 2: in the twenty twenty four residential race, saying he's the

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Speaker 2: best qualified person to do the job. But almost immediately

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Speaker 2: after the press conference ended, at least three more House Democrats,

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Speaker 2: including the top member from his party on the Intelligence Committee,

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Speaker 2: joins the growing list of lawmakers calling on him to

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Speaker 2: step aside.

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Speaker 1: President Biden's mistakes followed reporting by The New York Times

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Speaker 1: that several longtime advisers were discussing ways to persuade him

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Speaker 1: to exit the race. Spokespeople for the president insist his

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Speaker 1: team remained behind him. Bloomberg political contributor Jen Zeino says

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Speaker 1: that the press conference did little to allay Democrat fears

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Speaker 1: about Biden's campaign.

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Speaker 6: What is going to stick in people's minds are the

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Speaker 6: gaffes Zelenski putin, Donald Trump, Harris and a few others,

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Speaker 6: the repetitions he made, the way he trailed off in questions.

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Speaker 6: He is good on national security, he knows this business.

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Speaker 6: It's a comfort zone for him, and yet I'm not

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Speaker 6: sure it's going to have any impact. And those people

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Speaker 6: who are calling for him to drop out.

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Speaker 1: Gen Zeno's analysis came after top White House and campaign

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Speaker 1: officials were sent to Capitol Hill on Thursday to shore

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Speaker 1: up support of concerned lawmakers. Meanwhile, Trump seized on Biden's

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Speaker 1: error in naming him, posting on his social media site

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Speaker 1: that Biden had done quote a great job.

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Speaker 2: European allies have uncovered a plot to assassinate the CEO

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Speaker 2: of a major German defense company. It marks a significant

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Speaker 2: escalation in what the US and Europe say is hybrid

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Speaker 2: warfare by Russia. Bloombrook's tewa Adebayo has more.

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Speaker 7: A plan to kill the CEO of Rhein Mattol was

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Speaker 7: thwarted by German security services thanks to US intelligence. According

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Speaker 7: to CNN, the attempt is linked to a series of

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Speaker 7: Russian plots to kill defense executives in Europe whose companies

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Speaker 7: produce weapons for Ukraine. US officials declined to comment on

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Speaker 7: the specifics of the scheme or confirm its existence. German

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Speaker 7: Foreign Minister and Alina Baerbock has to reporters Russia is

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Speaker 7: leading a hybrid war of aggression and Rae Mattal CEO

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Speaker 7: Armen Papuger was given special protection as a result. The

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Speaker 7: move comes as the US and its allies say President

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Speaker 7: Putin has stepped up the number of coordinated assassinations, cyber

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Speaker 7: attacks and other actions since the outbreak of the war

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Speaker 7: with Ukraine. In London, to what Adibayo Bloomberg Radio.

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Speaker 1: Now, Emmanuel Macom is trying to ease concern about his

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Speaker 1: country's political turmoil among his NATO colleagues and that it

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Speaker 1: won't affect his ability to support the alliance's goals, especially

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Speaker 1: on Ukraine. In conversations under speech, the French president has

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Speaker 1: tried to allay worries over the snap election result in France,

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Speaker 1: but Macroll's calls for a centrist parliamentary alliance have been

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Speaker 1: met with considerable pushback from lawmakers. Parties across the political

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Speaker 1: spectrum rejected Macrol's appeal for quote Republican forces to form

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Speaker 1: a coalition, leaving no clear way forwards to forming a

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Speaker 1: stable government well.

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Speaker 2: France's next government will need to find more than fifteen

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Speaker 2: billion euros in extra revenue or savings a year to

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Speaker 2: meet European Union demands. Bloomberg understands the figure was included

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Speaker 2: in a proposal that the European Commission sent to Paris

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Speaker 2: last month. The adjustment equates to around zero point five

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Speaker 2: to five percent of annual GDP over seven years. But

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Speaker 2: agreeing to spending cuts may prove difficult for President Macron

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Speaker 2: after snap elections left the country with a hung parliament

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Speaker 2: divided on budget policy.

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Speaker 1: US inflation called to the slowest pace in three years,

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Speaker 1: sending the strongest signal yet that rate cuts are on

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Speaker 1: the horizon. The consumer price index climbed zero point one

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Speaker 1: percent in May on a call basis. The Chicago Fed

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Speaker 1: chief Austin Goulesby described the data as the evidence that

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Speaker 1: he'd been waiting for. Bloombag's Charlie Pellett has more.

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Speaker 3: In a conversation with reporters, gouls Be added that the

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Speaker 3: numbers provided the evidence he has been waiting for to

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Speaker 3: be confident, but the Central Bank is on a path

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Speaker 3: to its two percent goal. Goolsby declined to offer guidance

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Speaker 3: on the timing of the first interest rate cut. Still,

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Speaker 3: he emphasized the importance of the deceleration and shelter inflation

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Speaker 3: in recent months, calling it profoundly encouraging. The Chicago Fed

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Speaker 3: chief has been closely watching that category to determine when

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Speaker 3: the Central Bank should lower borrowing costs in New York.

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Speaker 3: Charlie Pellett, Bloomberg Radio.

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Speaker 2: Britain's mortgage holders were behind some of the Labour Party's

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Speaker 2: gains in last week's general election. Analysis of the results

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Speaker 2: by Hampton suggests those hit by high mortgages were some

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Speaker 2: of those most likely to vote Labor. James Wilcock has

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Speaker 2: the story.

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Speaker 5: Labour won seats across the country in their landslide election. Now,

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Speaker 5: property firm Hampton's has looked at house ownership trends in

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Speaker 5: those seats that the party has taken over. They found

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Speaker 5: those with mortgages were most likely to have swapped from

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Speaker 5: Conservatives to Labour, and those who had homes outright were

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Speaker 5: more likely to move from the Tories to other parties.

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Speaker 5: The data doesn't suggest where voters switched, but Labor have

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Speaker 5: promised to turbocharge house building after jumps in both mortgages

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Speaker 5: and house prices in recent years in London. James Wilcock

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Speaker 5: Blinder Radio and.

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Speaker 2: A Moment will bring you more on Joe Biden's performance

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Speaker 2: in that NATO summit press conference, plus the latest on

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Speaker 2: government formation talks in Paris and some of the financial

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Speaker 2: challenges that France is facing. But first, a great read

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Speaker 2: on the terminal this morning around Kirris Damer and what

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Speaker 2: England winning the Euros could mean for him.

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Speaker 1: Absolutely, I am a fair weather football fan. I will

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Speaker 1: say that outright. Kirs Darmer is not the new UK

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Speaker 1: Prime Minister, of course, says he's played football basically every

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Speaker 1: weekend since the age of ten. He's a total die

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Speaker 1: hard fan. And of course the England men's football team

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Speaker 1: is on the brink, has got this one final now

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Speaker 1: perhaps this would be England winning the first major tournament

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Speaker 1: in six decades. And this piece is all about actually

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Speaker 1: how this could give a lift of the labor prime

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Speaker 1: minister because he is such an authentic footage fact.

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Speaker 2: But that's it. I mean, there's so many gaffes if

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Speaker 2: you go back through previous prime ministers of those pretending

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Speaker 2: to like football who don't really. I mean during the

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Speaker 2: election campaign, Richly seen asking people in Wales they're looking

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Speaker 2: forward to the Euros and Wales haven't even qualified for

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Speaker 2: the Euros. So I mean, look, this is a chance

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Speaker 2: for a prime minister who was a genuine fan to

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Speaker 2: have his moment a sort of a reminder of you know,

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Speaker 2: the picture of Emmanual macrom or France and in the

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Speaker 2: State of France when Frantz were winning as well. You know,

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Speaker 2: this is kind of incredible picture of him as well.

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Speaker 2: Perhaps they'll be a clere Starmer moment and in Berlin

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Speaker 2: as well this weekend.

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Speaker 1: Oh well, let's hope. So you're certainly for GAA. Southgate

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Speaker 1: and his team. Anyway, it's a very nice piece on

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Speaker 1: the Blueberg terminal for you this morning. Let's also they

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Speaker 1: think a little bit more about well, what was happening

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Speaker 1: in the US President Biden. You heard some snippets of it.

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Speaker 1: The audience was hanging on every word of President Biden's

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Speaker 1: first solo press confidence of this year. He vowed to

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Speaker 1: say in the president or race, but he made some

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Speaker 1: critical errors. He mistakenly introduced the Ukrainian President vlosom Is

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Speaker 1: Zelensky as Russia's president, and he also fumbled a question

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Speaker 1: about Vice President Kamala Harris. Joining us now to discuss

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Speaker 1: this is Ben Sills, our managing editor for European Government

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Speaker 1: and Economics. Ben, good morning, Thank you for being with us.

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Speaker 1: I mean, it was a critical moment, wasn't it what emerged.

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Speaker 8: Yeah, the trouble is for Biden is that every time

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Speaker 8: he speaks publicly like this, it's going to be it's

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Speaker 8: going to be a critical moment, and it's just it's

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Speaker 8: completely distracting from the business of governing, from what message

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Speaker 8: you might want to get out, and it's distracting for

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Speaker 8: the for the leaders around him. The mood that we

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Speaker 8: were picking up from the other NATO leaders. I was

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Speaker 8: kind of checking in with some of our reporters overnight

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Speaker 8: and the other the rest of the delegation is kind

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Speaker 8: of just feeling pretty sad about it.

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Speaker 9: You know.

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Speaker 8: They they are they like him, they respect him, they

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Speaker 8: have a lot of gratitude, I think for what he's

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Speaker 8: achieved in this term. But it's very difficult to watch

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Speaker 8: and you can't even really listen to what he's saying

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Speaker 8: because you're just kind of so worried that the next

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Speaker 8: thing that comes out of his mouth is going to

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Speaker 8: be going to it's going to involve some some kind

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Speaker 8: of mistake.

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Speaker 2: How much of a concern is this for those other

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Speaker 2: NATO countries as well? I mean, this was an event

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Speaker 2: where Joe Biden was front and center. There were big

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Speaker 2: and serious issues to be discussed. Are they concerned about,

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Speaker 2: you know, I suppose what happens next.

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Speaker 8: I think that they are probably concerned about how the

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Speaker 8: Democrats are going to deal with this. You know, we're

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Speaker 8: seeing increasing reports, there's a kind of steady drip over

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Speaker 8: the last several weeks of pressure on Biden to step aside.

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Speaker 8: There has to be concerned about the way it will

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Speaker 8: affect the race if that, you know, if if that,

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Speaker 8: if that process drags on, how how the Democrats will

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Speaker 8: execute that pivot to another another candidate, if indeed they do,

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Speaker 8: that will affect the race. They're obviously, you know, in

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Speaker 8: the background, you have Donald Trump and another Donald Trump

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Speaker 8: presidency would obviously be uncomfortable for the Europeans, although they

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Speaker 8: have to a certain extent resigned themselves to to to

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Speaker 8: that to that to that possibility. I wouldn't say I

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Speaker 8: think it's a done deal, but they're very realistic about

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Speaker 8: the fact that it might happen. So it's there are

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Speaker 8: lots of dimensions that make this really really awkward for

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Speaker 8: the Europeans. But you know, final fundamentally is awkward thing

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Speaker 8: for Team Biden and his family and his advisers to

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Speaker 8: try and navigate.

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Speaker 1: Yeah, it is, and so yes, I mean if you

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Speaker 1: delve into the issues of what happens next, you know,

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Speaker 1: can the president stay in the re election race, and

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Speaker 1: what happens next in terms of the Democrats. I thought

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Speaker 1: the most interesting line, and I didn't understand this about

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Speaker 1: US politics, but the money that President Biden has raised,

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Speaker 1: that two hundred and thirty million dollars of cash, it

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Speaker 1: would only automatically be transferred to the vice president. It

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Speaker 1: would take longer to transfer that money to another candidate.

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Speaker 1: So partly it's about the funding for the US presidential race.

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Speaker 1: What do you think might happen next?

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Speaker 8: I think that's one of the reasons why Kamala Harris

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Speaker 8: is the favorite to take over. I think that there

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Speaker 8: are also there's a lot I mean, there's a lot

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Speaker 8: of discussion about the prospects of her candidacy. At the

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Speaker 8: moment she has coulddition in the U. You speak to

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Speaker 8: colleagues in the US and they always say that that

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Speaker 8: Harris's is flawed, that there's some there's something missing in

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Speaker 8: the way that she approaches voters, and that she she

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Speaker 8: struggles to connect with them. I think that, however, if

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Speaker 8: she were to become the actual candidate, there is clearly

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Speaker 8: an opportunity for a reset there. It would be a risk,

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Speaker 8: but that you know that every option here is risky

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Speaker 8: for the Democrats because of the problem that the situation

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Speaker 8: they've got themselves into. I think, yeah, I think Harris

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Speaker 8: is the top name that you have to consider.

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Speaker 2: Okay, Ben Sales, thanks very much for joining us this morning,

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Speaker 2: our manager Gager for European Economics and Governments Now. After

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Speaker 2: a snap election in France resulted in a hung parliament,

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Speaker 2: President Macran's called to build a majority from the center

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Speaker 2: left and center right parties based to have been rejected.

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Speaker 2: The left wing alliance in the Popular Front and says

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Speaker 2: they have the mandate to nominate a prime minister. Mean,

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Speaker 2: while Bloomberg has learned the France we'll need to find

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Speaker 2: fifteen billion euros and savings or revenue to meet EU

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Speaker 2: budget demands. Joining us now for more from Paris is

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Speaker 2: rb OR chief Alan katz Allan, Good morning. So Macron's

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Speaker 2: idea of a centrist alliance has floundered. Where are we

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Speaker 2: this Friday morning in negotiations to former government?

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Speaker 10: Well, we're really not any further than we were before.

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Speaker 10: I mean, as you said, President de Mendel, Macom made

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Speaker 10: this call.

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Speaker 9: For parties to come together to create essentially a big,

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Speaker 9: mostly centrist alliance to foreign majority, and nobody's really heeded

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Speaker 9: that call, which is not particularly surprisingly given that he's

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Speaker 9: tried to do this before, whether it was first when

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Speaker 9: he called the election, you know, a bit more than

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Speaker 9: a month ago, or in twenty twenty two when you've

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Speaker 9: lost his absolute majority in parliament, and at that time

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Speaker 9: too also called for a big party, you know, people

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Speaker 9: of goodwill on the LA Left.

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Speaker 11: And the right to join him, and no one ever has.

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Speaker 11: So really it's it hasn't progressed. Each each side has

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Speaker 11: sort of camped in its position, or they refused to

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Speaker 11: have any sort of deal with sort of people are

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Speaker 11: more further away from them on the political.

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Speaker 10: Spectrum, and it's not really clear how that's going to progress.

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Speaker 9: So unfortunately, it's yeah, it's really it doesn't really appear

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Speaker 9: to be getting far.

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Speaker 1: Give us a flavor though of the reactions, because you know,

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Speaker 1: the New Popular Front it includes Fants und Baud, also

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Speaker 1: the Socialists, the Greens and the Communists. They have a

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Speaker 1: strong view and so too does Marie la Pen. It seems.

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Speaker 10: So they do.

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Speaker 9: They do have a strong use of the left, as

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Speaker 9: you pointed out, the New Popular Front, which is that

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Speaker 9: mix of of the parties that you just mentioned, the

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Speaker 9: first four that you just mentioned. They are trying to

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Speaker 9: come up with one name of a person to sort

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Speaker 9: of at least put forward as saying, this is the

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Speaker 9: person that we would nominate to be prime minister. Or

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Speaker 9: the way it works in France is that McCall himself

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Speaker 9: has the right to name whomever he wants as prime minister,

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Speaker 9: but it has to be someone who can survive in Parliament,

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Speaker 9: could survive a no confidence vach, who does need to

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Speaker 9: have the support of at least a big proportion of parliament,

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Speaker 9: even if not necessarily an absolute majority. So they're still

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Speaker 9: working on that. They haven't come up with a name yet.

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Speaker 9: They might have one.

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Speaker 10: They originally said they aim to have one.

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Speaker 11: By the end of this week, which had been today

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Speaker 11: or potentially the beginning of next week.

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Speaker 9: And they don't want to work with people on the

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Speaker 9: right now if you look at the right, and even

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Speaker 9: before you get to Marie Lepenz or the Republicans or

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Speaker 9: more the center right, they don't want to work with

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Speaker 9: anyone from France on Bout, which, as you mentioned, is

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Speaker 9: that far far left group that's part of the New

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Speaker 9: Popular Front and Maline lepenn similarly, though there's been some

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Speaker 9: mixed signals from the National Rally, there was an interview

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Speaker 9: by one of her deputies in the Figeo last night.

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Speaker 9: You said that they wouldn't necessarily immediately try to try

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Speaker 9: to go to a no confidence vote if there was

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Speaker 9: the left was running things in the pen then.

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Speaker 10: Backtracked on that. So it's not quite clear actually if

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Speaker 10: the far right, if the National.

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Speaker 9: Rally, would immediately try to put in a vote of

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Speaker 9: no confidence if there was a leftist government or not.

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Speaker 10: But they're really no one is aligned at this moment.

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Speaker 2: So and that's where we are in the politics and

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Speaker 2: not very far is what we're reducing from what you're

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Speaker 2: telling us this morning. The financials, though, are looking pretty intimidating.

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Speaker 2: Bloomberg reporting yesterday that the European Commission has told France

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Speaker 2: it's going to need to find savings or new revenue

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Speaker 2: of fifteen billion euros a year to be able to

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Speaker 2: be in compliance with EU budget rules. I mean, how

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Speaker 2: difficult is it going to be for the next government

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Speaker 2: to find that money?

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Speaker 9: Well, finding fifteen billion dollars of fifteen billion euros a

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Speaker 9: year would be quite difficult.

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Speaker 10: That's exactly what's going to happen.

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Speaker 9: And so the fifteen billion a year that you described,

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Speaker 9: that's what the EU or the Commission is saying that

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Speaker 9: France needs to do in order to comply with deficit

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Speaker 9: reduction procedures France, but essentially an opening negotiation and.

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Speaker 10: France is going to come back with its own responses.

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Speaker 9: The current finance minister is Buno La Maier has been

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Speaker 9: the finance minister for seven years. He continues to try

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Speaker 9: to push for big deficit reductions in France, essentially to

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Speaker 9: meet that target in part because there is the European

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Speaker 9: Union excessive deficit procedure, but also in part to reassure

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Speaker 9: bond markets that Frances is cutting its.

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Speaker 11: And it's deficit. But he's not going to be finance

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Speaker 11: minister for much longer. And it's really not clear how

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Speaker 11: France is actually going to respond to this, how it's

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Speaker 11: going to respond to the to the excessive deficit procedure.

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Speaker 9: Is it going to try to comply with EU rules?

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Speaker 9: Is it going to try to get the EU to

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Speaker 9: reduce its sort of demands. Is it going to just

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Speaker 9: ignore it EU rules? In part it, I suppose it

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Speaker 9: depends on who on what government has formed and sort

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Speaker 9: of what political color it has, So that too is

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Speaker 9: really not obvious yet sort of exactly how that's going

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Speaker 9: to play out. There's almost sure to be some conflict

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Speaker 9: with the you, because there always is in these kinds

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Speaker 9: of negotiations, but whether it's sort of a traditional negotiation

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Speaker 9: between a big European country and the Commission over this

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Speaker 9: kind of death super something that's more more of a

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Speaker 9: real frontal conflict is yet to be seen.

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Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 2: stories making news from London to Wall Street and beyond.

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Speaker 2: You can also listen live each morning on London DAB Radio,

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Speaker 1: I'm Caroline Hepka.

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Speaker 2: And I'm Stephen Carroll. Join us again tomorrow morning for

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Speaker 2: all the news you need to start your day right

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Speaker 2: here on Bloomberg Daybreak Europe.

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Speaker 1: M m

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Speaker 9: Mm hmm