1
00:00:02,400 --> 00:00:09,920
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

2
00:00:10,000 --> 00:00:13,159
Speaker 1: Day BAQ podcast, available every morning on Apple, Spotify or

3
00:00:13,200 --> 00:00:16,520
Speaker 1: wherever you listen. It's Monday, the eighteenth of November in London.

4
00:00:16,560 --> 00:00:19,640
Speaker 2: I'm Caroline Hepkin and I'm Stephen Carroll. Coming up today,

5
00:00:19,760 --> 00:00:23,720
Speaker 2: the US authorizes Ukraine's use of Western made weapons to

6
00:00:23,800 --> 00:00:25,800
Speaker 2: strike targets inside Russia.

7
00:00:26,280 --> 00:00:29,680
Speaker 1: In fighting grows as contenders tassel for support to be

8
00:00:29,800 --> 00:00:31,880
Speaker 1: Donald Trump's Treasury secretary.

9
00:00:32,120 --> 00:00:37,199
Speaker 2: Plus dwindling support could Germany's Social Democrats replace Chancellor Schultz

10
00:00:37,320 --> 00:00:39,240
Speaker 2: as their leader for the upcoming election.

11
00:00:39,600 --> 00:00:41,599
Speaker 1: Let's start with a round up of our top stories.

12
00:00:41,840 --> 00:00:45,160
Speaker 1: Joe Biden has given Ukraine the green light to use

13
00:00:45,240 --> 00:00:49,040
Speaker 1: Western made missiles for long range strikes on Russian territory.

14
00:00:49,200 --> 00:00:52,400
Speaker 1: It's understood that the US thinking shifted on the issue

15
00:00:52,440 --> 00:00:56,360
Speaker 1: after North Korean troops appeared on the battlefield. Assessments by

16
00:00:56,400 --> 00:00:59,520
Speaker 1: some G twenty countries suggest Peon Yang could eventually send

17
00:00:59,720 --> 00:01:02,760
Speaker 1: Russi as many as one hundred thousand troops. In his

18
00:01:02,840 --> 00:01:06,640
Speaker 1: Sunday evening address, Ukraine's President Zolenski said that any strikes

19
00:01:06,640 --> 00:01:09,720
Speaker 1: on Russia would not be telegraphed in advance.

20
00:01:10,000 --> 00:01:12,520
Speaker 3: Blank posul and ungreen. It's a blank Permont.

21
00:01:12,840 --> 00:01:13,200
Speaker 4: Today.

22
00:01:13,400 --> 00:01:15,720
Speaker 5: There's a lot of talk in the media about US

23
00:01:15,760 --> 00:01:20,280
Speaker 5: receiving permission for respective actions, but strikes are not carried

24
00:01:20,319 --> 00:01:24,440
Speaker 5: out with words. Such things are not announced. Missiles will

25
00:01:24,480 --> 00:01:25,440
Speaker 5: speak for themselves.

26
00:01:26,600 --> 00:01:30,120
Speaker 1: Zelenski's words, spoken there by a translator, came after a

27
00:01:30,120 --> 00:01:34,040
Speaker 1: massive Russian aerial attack on Ukraine's energy infrastructure. About one

28
00:01:34,120 --> 00:01:37,840
Speaker 1: hundred and twenty missiles and ninety drones were reportedly fired

29
00:01:37,880 --> 00:01:41,559
Speaker 1: at the country. In response, Kiev has powered out most

30
00:01:41,600 --> 00:01:43,840
Speaker 1: of its operational nuclear reactors.

31
00:01:44,959 --> 00:01:47,680
Speaker 2: China's leader says the country is ready for a fight

32
00:01:47,760 --> 00:01:51,440
Speaker 2: with America. There would rather be friends shooting. Pain told

33
00:01:51,440 --> 00:01:55,920
Speaker 2: outgoing President Joe Biden that China sees four red lines

34
00:01:55,920 --> 00:01:59,520
Speaker 2: and its relationship with the US. Poenberg's executive editor for

35
00:01:59,560 --> 00:02:03,600
Speaker 2: Greater John Leu explains these red lines are targeted at Trump.

36
00:02:04,280 --> 00:02:07,840
Speaker 3: One, that the US should not seek to contest the

37
00:02:07,840 --> 00:02:10,680
Speaker 3: Communist Party's grip on power in China. That the United

38
00:02:10,720 --> 00:02:13,519
Speaker 3: States should not try to push China to become a democracy.

39
00:02:13,919 --> 00:02:16,640
Speaker 3: That the United States should not try to contain China's

40
00:02:16,639 --> 00:02:20,400
Speaker 3: economic rise. And lastly, and probably most importantly that the

41
00:02:20,480 --> 00:02:23,680
Speaker 3: United States should not support Taiwanese independence, and so it

42
00:02:23,720 --> 00:02:27,440
Speaker 3: did seem President she ahead of a new Trump administration,

43
00:02:27,639 --> 00:02:32,560
Speaker 3: trying to put some guardrails bumpers around where this relationship

44
00:02:32,560 --> 00:02:32,880
Speaker 3: could go.

45
00:02:34,160 --> 00:02:36,160
Speaker 2: John k new there. Trump has threatened to hit Beijing

46
00:02:36,240 --> 00:02:40,239
Speaker 2: mc tariff's of sixty percent, untapped several hardliners on China

47
00:02:40,320 --> 00:02:42,480
Speaker 2: to lead his foreign policy team.

48
00:02:42,919 --> 00:02:46,400
Speaker 1: Well. The search of Donald Trump's chief economic policy maker

49
00:02:46,440 --> 00:02:51,480
Speaker 1: evolved into tussling over the weekend the Treasury Secretary position overseas,

50
00:02:51,560 --> 00:02:55,600
Speaker 1: the twenty eight twillion dollar treasuries market, and economic sanctions.

51
00:02:56,000 --> 00:02:59,320
Speaker 1: So also say that billionaire Chump confident Elon Musk has

52
00:02:59,360 --> 00:03:03,840
Speaker 1: now spoken to potential pick Scott Bessent after publicly endorsing

53
00:03:03,840 --> 00:03:07,800
Speaker 1: another candidate, Howard Lutnikscent declined to comment on the reports,

54
00:03:07,840 --> 00:03:11,920
Speaker 1: whilst Musk did not immediately respond. Chumps staff, though, have

55
00:03:12,160 --> 00:03:17,480
Speaker 1: also been considering alternatives, including former US Trade Representative Robert Leittheiser,

56
00:03:17,600 --> 00:03:21,200
Speaker 1: Apollo CEO Mark Rowan, the former Fed Governor Kevin Walsh,

57
00:03:21,280 --> 00:03:26,200
Speaker 1: and Senator Bill Haggerty. On Saturday, Trump picked Chris Wright,

58
00:03:26,240 --> 00:03:30,320
Speaker 1: who runs a Colorado, Brek based fracking services company, to

59
00:03:30,440 --> 00:03:32,360
Speaker 1: lead the US Energy Department.

60
00:03:33,639 --> 00:03:37,160
Speaker 2: Germany's Chancellor Olaf Schultz is facing dwindling support in his

61
00:03:37,240 --> 00:03:40,840
Speaker 2: own party. Bloomberg understands that some members of Schultz's Social

62
00:03:40,880 --> 00:03:44,720
Speaker 2: Democrats would rather see Defense Minister Boris Pistorius as their leader.

63
00:03:44,960 --> 00:03:48,360
Speaker 2: Our correspondent Oliver Crook says Schultz is also facing pressure

64
00:03:48,720 --> 00:03:50,680
Speaker 2: from opposition leader Friedrich.

65
00:03:50,400 --> 00:03:53,160
Speaker 6: Martz Frederick Mert saying that basically he will not be

66
00:03:53,320 --> 00:03:55,240
Speaker 6: supporting a lot of legislations, so we're going to get

67
00:03:55,240 --> 00:03:57,800
Speaker 6: a bit of paralysis as far as actually more things

68
00:03:57,840 --> 00:04:00,320
Speaker 6: getting done by government over the next couple of months,

69
00:04:00,360 --> 00:04:02,760
Speaker 6: in what could be really another few last months in

70
00:04:02,840 --> 00:04:05,080
Speaker 6: a sort of economy that desperately needs some action.

71
00:04:05,880 --> 00:04:08,280
Speaker 2: Brimberg's Oliver Croke speaking there. The party is set to

72
00:04:08,320 --> 00:04:11,480
Speaker 2: pick a chancellor of candidate at a party congress in January,

73
00:04:11,760 --> 00:04:14,920
Speaker 2: as they trail third in national polls ahead of Germany's

74
00:04:15,000 --> 00:04:17,000
Speaker 2: election in February.

75
00:04:17,400 --> 00:04:20,320
Speaker 1: UK inflation data due out this week is expected to

76
00:04:20,360 --> 00:04:23,760
Speaker 1: show the pace of price rises back above two percent.

77
00:04:24,160 --> 00:04:26,720
Speaker 1: That might support the Bank of England's slow approach on

78
00:04:26,839 --> 00:04:31,080
Speaker 1: interest rate cuts. Economists forecast October CPI will rise to

79
00:04:31,200 --> 00:04:34,280
Speaker 1: two point two percent, half a percentage point half than

80
00:04:34,279 --> 00:04:37,160
Speaker 1: in September. Blomberg's James Wilcock has more.

81
00:04:37,920 --> 00:04:40,880
Speaker 4: After three years of being well above its two percent

82
00:04:40,960 --> 00:04:44,080
Speaker 4: inflation target. Most experts think the Bank of England will

83
00:04:44,080 --> 00:04:47,280
Speaker 4: only have one month beneath it. Higher energy costs are

84
00:04:47,360 --> 00:04:50,960
Speaker 4: likely to drive a surge in prices in Wednesday's figures,

85
00:04:51,400 --> 00:04:54,880
Speaker 4: but Serves inflation is expected to weaken as recent data

86
00:04:54,960 --> 00:04:58,200
Speaker 4: suggests firms are raising wages but are struggling to pass

87
00:04:58,240 --> 00:05:01,799
Speaker 4: on price increases. If the forecasts are right, it could

88
00:05:01,839 --> 00:05:04,800
Speaker 4: firm up the Central Bank's slow but steady approach to

89
00:05:04,880 --> 00:05:08,360
Speaker 4: rate cuts. In London James Orcock Bloomberg Radio.

90
00:05:08,640 --> 00:05:11,360
Speaker 2: UK home sellers are offering their houses and a discount

91
00:05:11,400 --> 00:05:15,159
Speaker 2: after the government opped taxes. Asking prices fell by one

92
00:05:15,160 --> 00:05:17,920
Speaker 2: point four percent in November in the wake of Chancellor

93
00:05:18,000 --> 00:05:21,479
Speaker 2: Rachel Reeves's budget. House prices often drop in the UK

94
00:05:21,520 --> 00:05:23,240
Speaker 2: at this time of year, but this is twice the

95
00:05:23,320 --> 00:05:26,719
Speaker 2: normal full right move. Collect of the data the property

96
00:05:26,720 --> 00:05:29,520
Speaker 2: websites put the move down to an increase in stamp

97
00:05:29,640 --> 00:05:30,560
Speaker 2: duty charges.

98
00:05:31,200 --> 00:05:33,840
Speaker 1: And those are your top stories on the markets this morning.

99
00:05:33,920 --> 00:05:38,440
Speaker 1: After Friday's close, US equities had erased half of their

100
00:05:38,480 --> 00:05:41,839
Speaker 1: post election gains this morning s and P five hundred

101
00:05:41,960 --> 00:05:44,680
Speaker 1: evening futures are gaining three tenths of one percent. NOWS

102
00:05:44,720 --> 00:05:47,800
Speaker 1: that future is also bouncing back seven tenths of one

103
00:05:47,839 --> 00:05:50,159
Speaker 1: percent high. I remember then as back on Friday closed

104
00:05:50,160 --> 00:05:53,240
Speaker 1: down by two point four percent after ten year treasury

105
00:05:53,320 --> 00:05:55,880
Speaker 1: yields hit four and a half percent on Friday. Yields

106
00:05:56,040 --> 00:05:59,479
Speaker 1: this morning begin trading at four forty three, down a

107
00:05:59,560 --> 00:06:02,360
Speaker 1: basis point right now. In Asia, commentary from the Bank

108
00:06:02,360 --> 00:06:05,599
Speaker 1: of Japan governor failed to boost the Japanese yen, which

109
00:06:05,720 --> 00:06:08,159
Speaker 1: is trading this morning down two tents of one percent

110
00:06:08,160 --> 00:06:11,839
Speaker 1: against the US dollar, and Europeans stop futures, which begin

111
00:06:12,080 --> 00:06:14,479
Speaker 1: cash trading in and out, are up currently a tenth

112
00:06:14,520 --> 00:06:16,279
Speaker 1: of one percent. Those are the markets.

113
00:06:16,800 --> 00:06:19,719
Speaker 2: In a moment, we'll discuss the war in Ukraine after

114
00:06:19,800 --> 00:06:22,080
Speaker 2: Joe Biden agreed to the use of long range missiles

115
00:06:22,080 --> 00:06:24,719
Speaker 2: against Russia. And we'll also have the latest time pological

116
00:06:24,760 --> 00:06:26,880
Speaker 2: rumblings in Germany too as we look ahead to the

117
00:06:26,880 --> 00:06:29,760
Speaker 2: election do there in February. But another story that caught

118
00:06:29,920 --> 00:06:34,520
Speaker 2: our eye this morning is about how economists are preparing

119
00:06:34,600 --> 00:06:38,960
Speaker 2: for a second Trump presidency. Our colleagues have been speaking

120
00:06:39,000 --> 00:06:43,279
Speaker 2: to some economists in leading positions in various big finance

121
00:06:43,279 --> 00:06:45,760
Speaker 2: houses around the world about how they're you know, signing

122
00:06:45,839 --> 00:06:49,800
Speaker 2: up to truth Social for example, and essentially preparing for

123
00:06:50,080 --> 00:06:53,520
Speaker 2: them having to remodel very quickly. Their forecasts based on

124
00:06:53,640 --> 00:06:55,680
Speaker 2: decisions that could be made in a policy front by

125
00:06:55,760 --> 00:06:56,359
Speaker 2: Donald Trump.

126
00:06:56,440 --> 00:06:59,640
Speaker 1: Yeah, absolutely upheavals in the area of trade and house

127
00:06:59,680 --> 00:07:03,119
Speaker 1: as you say, but also taxation and immigration and many

128
00:07:03,200 --> 00:07:07,520
Speaker 1: other policy areas. Besides, they're particularly focused, for example, on

129
00:07:07,560 --> 00:07:11,000
Speaker 1: the impact of tariffs on the world's to biggest economies,

130
00:07:11,000 --> 00:07:14,560
Speaker 1: obviously on the US and China. Most agree that the

131
00:07:14,680 --> 00:07:17,560
Speaker 1: levees are likely to come in the second half of

132
00:07:17,600 --> 00:07:20,840
Speaker 1: twenty twenty five, that they will probably be lower than

133
00:07:20,840 --> 00:07:23,920
Speaker 1: the announced sixty percent on Chinese goods, so there is

134
00:07:23,960 --> 00:07:27,200
Speaker 1: a sort of consensus view amongst an analysts on that front.

135
00:07:27,360 --> 00:07:31,560
Speaker 1: But yes, UBS apparently has spent five months, for example,

136
00:07:31,600 --> 00:07:35,560
Speaker 1: developing a global tariff model, So there's going to have

137
00:07:35,640 --> 00:07:38,120
Speaker 1: to be quite a lot of kind of nimble thinking.

138
00:07:38,880 --> 00:07:42,400
Speaker 1: Trump is going to inject a lot of uncertainty effectively

139
00:07:42,440 --> 00:07:46,360
Speaker 1: into forecasts, which are used to basically help traders, businesses,

140
00:07:46,440 --> 00:07:50,080
Speaker 1: governments to navigate the world economically. But it's one of

141
00:07:50,080 --> 00:07:53,360
Speaker 1: the good pieces on the Blueberg terminal. Katia Dimitriefa has

142
00:07:53,360 --> 00:07:55,520
Speaker 1: written that today, well.

143
00:07:55,360 --> 00:07:58,640
Speaker 2: As we look elsewhere to the start of the G twenty,

144
00:07:58,720 --> 00:08:01,840
Speaker 2: the US deciding to author Ukraine to use long range

145
00:08:01,880 --> 00:08:04,880
Speaker 2: missile strikes on Russian territory, it comes as as a

146
00:08:04,880 --> 00:08:08,200
Speaker 2: sudden clamor for settlement between Ukraine and Russia ahead of

147
00:08:08,240 --> 00:08:11,320
Speaker 2: Trump's return and the possibility of drastic cuts in US

148
00:08:11,360 --> 00:08:14,840
Speaker 2: support joining US now for more. Stuart Livingston Wallaspinberg's ahead

149
00:08:14,840 --> 00:08:18,360
Speaker 2: of Middle East, North Africa and Russia coverage, Stuart, good Morning,

150
00:08:18,640 --> 00:08:22,120
Speaker 2: This is a major decision by Joe Biden. What changed?

151
00:08:23,960 --> 00:08:26,240
Speaker 7: Good morning? So, I mean, I think it's probably several things.

152
00:08:26,320 --> 00:08:28,040
Speaker 7: And again, you know, we're not privy to read the

153
00:08:28,040 --> 00:08:30,240
Speaker 7: discussions that are taking place inside the White House, but

154
00:08:30,280 --> 00:08:32,600
Speaker 7: we can have an educated guess, and they are in

155
00:08:32,640 --> 00:08:36,160
Speaker 7: no particular order. We've got the Trump presidency returning in January,

156
00:08:36,679 --> 00:08:39,280
Speaker 7: and I think it is widely acknowledged that he would

157
00:08:39,440 --> 00:08:42,079
Speaker 7: like an end to this war as soon as possible.

158
00:08:42,120 --> 00:08:45,880
Speaker 7: Then therefore there is a short window in which, effectively

159
00:08:45,960 --> 00:08:49,160
Speaker 7: both sides will have an opportunity to sort of establish

160
00:08:49,240 --> 00:08:52,880
Speaker 7: their weight in those negotiations if they come. So that

161
00:08:53,240 --> 00:08:55,520
Speaker 7: in turn has sort of spurred this decision to allow

162
00:08:55,559 --> 00:08:58,800
Speaker 7: them to use some of these longer range missiles inside Russia.

163
00:08:58,880 --> 00:09:03,439
Speaker 7: Now again and just for context, we're talking about something missiles,

164
00:09:03,440 --> 00:09:06,720
Speaker 7: but the arrange for about three hundred klometers or something

165
00:09:06,760 --> 00:09:10,440
Speaker 7: around that order two hundred miles, so you know, again

166
00:09:10,520 --> 00:09:13,280
Speaker 7: it is reasonably limited. And what's not clear to us

167
00:09:13,400 --> 00:09:15,360
Speaker 7: one of the terms of conditions though, is what targets

168
00:09:15,360 --> 00:09:17,120
Speaker 7: can they go after and when can that happen and

169
00:09:17,160 --> 00:09:19,440
Speaker 7: on what sort of scale can they happen. And then

170
00:09:19,480 --> 00:09:21,560
Speaker 7: I think that can be the arrival of these these

171
00:09:21,600 --> 00:09:25,679
Speaker 7: North Korean troops in Russia, particularly around this incursion that

172
00:09:25,720 --> 00:09:29,160
Speaker 7: the Ukrainians have made into sort of the Curse area. Again,

173
00:09:29,200 --> 00:09:31,000
Speaker 7: that sort of changed the balance of power, and it

174
00:09:31,080 --> 00:09:33,600
Speaker 7: sort of changed the red lines that both sides thought

175
00:09:33,600 --> 00:09:36,840
Speaker 7: they had established. And then I think, you know, thirdy,

176
00:09:36,880 --> 00:09:41,000
Speaker 7: there's been obviously these changes on this enormously long frontline

177
00:09:41,040 --> 00:09:43,360
Speaker 7: that you've seen in the east and the south of Ukraine.

178
00:09:43,400 --> 00:09:45,680
Speaker 7: So this is something like a thousand kilometers as long,

179
00:09:46,160 --> 00:09:48,720
Speaker 7: and the Russians had been making sort of steady gains,

180
00:09:48,760 --> 00:09:50,320
Speaker 7: you know, it's a few meters at a time, and

181
00:09:50,400 --> 00:09:53,360
Speaker 7: a great cost but that is changing the dynamics. And

182
00:09:53,400 --> 00:09:55,959
Speaker 7: if we get into a situation where there are negotiations

183
00:09:55,960 --> 00:09:59,520
Speaker 7: going into January February, you know, something in that timeframe,

184
00:10:00,160 --> 00:10:03,400
Speaker 7: then again that will be the basis of those negotiations.

185
00:10:03,600 --> 00:10:07,200
Speaker 7: So it's really I think about establishing what are the

186
00:10:07,240 --> 00:10:10,160
Speaker 7: realities on the ground around which a negotiation can happen.

187
00:10:11,760 --> 00:10:14,680
Speaker 1: What do you think it means then tactically for Ukraine?

188
00:10:14,760 --> 00:10:17,240
Speaker 1: Does it actually alter the fight? As you say, there

189
00:10:17,240 --> 00:10:20,400
Speaker 1: are lots of sort of caveats around this issue.

190
00:10:21,520 --> 00:10:23,520
Speaker 7: Yeah, I mean, we don't really know at the station,

191
00:10:23,720 --> 00:10:25,840
Speaker 7: and I think, you know, a Valencias come out and

192
00:10:25,880 --> 00:10:28,960
Speaker 7: said that you know, these will occur in the next

193
00:10:29,000 --> 00:10:32,120
Speaker 7: several days, and nothing more precise than that. And he's

194
00:10:32,120 --> 00:10:35,240
Speaker 7: certainly not spoken about the doggets, and he has said

195
00:10:36,400 --> 00:10:39,199
Speaker 7: you know that he won't be issuing a public warning

196
00:10:39,200 --> 00:10:41,800
Speaker 7: about when they're going to come. So I think we'll

197
00:10:41,800 --> 00:10:43,920
Speaker 7: watch for those and that maybe will give us a

198
00:10:43,920 --> 00:10:46,559
Speaker 7: better idea of what exactly the terms and conditions are

199
00:10:46,679 --> 00:10:50,760
Speaker 7: around the use of those longer range missiles. You know, if,

200
00:10:50,800 --> 00:10:53,000
Speaker 7: for instance, will they be in kind to what we

201
00:10:53,040 --> 00:10:55,480
Speaker 7: saw over the weekend we had Russia attacking sort of

202
00:10:55,600 --> 00:10:58,960
Speaker 7: multiple sites across Ukraine, particularly in the center and in

203
00:10:59,000 --> 00:11:01,120
Speaker 7: the west, which was you know, somewhat different to what

204
00:11:01,120 --> 00:11:05,400
Speaker 7: we've seen before, going after the energy assets again, something

205
00:11:05,640 --> 00:11:08,600
Speaker 7: different than we hadn't seen for a while. You know

206
00:11:08,679 --> 00:11:11,920
Speaker 7: what exactly what the targets in Russia be. I think

207
00:11:12,000 --> 00:11:14,199
Speaker 7: that then gives us a fair idea of the discussions

208
00:11:14,200 --> 00:11:16,240
Speaker 7: that have taken place on the details of the discussions

209
00:11:16,240 --> 00:11:20,400
Speaker 7: that have taken place between the US and the Ukrainians.

210
00:11:20,559 --> 00:11:23,679
Speaker 2: In September of Latimir Putin have described allowing these missiles

211
00:11:23,679 --> 00:11:25,760
Speaker 2: to be used in this way as tantament to an

212
00:11:25,800 --> 00:11:29,920
Speaker 2: active war and NATO participation in the conflicts. Should we

213
00:11:30,000 --> 00:11:33,679
Speaker 2: be expecting a major reaction from Vlasimir Putin.

214
00:11:34,640 --> 00:11:37,280
Speaker 7: I mean, something we'll have to see. We have had

215
00:11:38,400 --> 00:11:40,520
Speaker 7: one Russian law maker came out this morning and sort

216
00:11:40,520 --> 00:11:43,440
Speaker 7: of said, look this, you know, gen the edges US

217
00:11:43,440 --> 00:11:46,080
Speaker 7: towards World War three. I wouldn't necessarily pay too much

218
00:11:46,080 --> 00:11:48,760
Speaker 7: attention to that now. I mean, you know, if you

219
00:11:49,040 --> 00:11:52,319
Speaker 7: recollect over this conflict that's gone on for almost a

220
00:11:52,400 --> 00:11:55,920
Speaker 7: thousand days, you know, both sides, in particular the Russians

221
00:11:55,920 --> 00:11:58,080
Speaker 7: have come out and sort of set a series of

222
00:11:58,080 --> 00:12:02,280
Speaker 7: red lines which have then been can you know, reasonably quickly?

223
00:12:02,840 --> 00:12:05,839
Speaker 7: So I wouldn't necessarily pay too much attention to the

224
00:12:05,920 --> 00:12:07,840
Speaker 7: rustoric and the short term, look at the actions that

225
00:12:07,880 --> 00:12:10,440
Speaker 7: happen in the medium in the long term, and it's

226
00:12:10,520 --> 00:12:14,520
Speaker 7: clear that already it appears clear that you know, Russia

227
00:12:15,280 --> 00:12:17,920
Speaker 7: is having to contend with some pretty heavy costs for

228
00:12:18,080 --> 00:12:20,599
Speaker 7: this war, both in terms of personnel but also in

229
00:12:20,679 --> 00:12:22,839
Speaker 7: terms of equipment, and again also in terms of his

230
00:12:23,000 --> 00:12:27,120
Speaker 7: access to the financial system to trade, the supply lines

231
00:12:27,440 --> 00:12:30,040
Speaker 7: and who it can trade with, and a raft of

232
00:12:30,120 --> 00:12:32,600
Speaker 7: very heavy sanctions. So there is a very heavy price

233
00:12:32,679 --> 00:12:36,680
Speaker 7: being paid. And it's not entirely clear what would be

234
00:12:36,800 --> 00:12:39,640
Speaker 7: in it for Russia to escalate and escalate and escalate.

235
00:12:40,760 --> 00:12:44,080
Speaker 7: You know, at some stage the economy will give and

236
00:12:44,160 --> 00:12:46,920
Speaker 7: at some stage the population is going to get fed

237
00:12:46,960 --> 00:12:49,960
Speaker 7: up with supporting this war. So it's a delicate balancing act,

238
00:12:50,000 --> 00:12:52,480
Speaker 7: I think, for both sides. But it's also clear at

239
00:12:52,559 --> 00:12:55,280
Speaker 7: least looking at the European side, and the European leadership

240
00:12:55,280 --> 00:12:59,280
Speaker 7: in particular, I think is quite concerned at this stage

241
00:12:59,320 --> 00:13:03,880
Speaker 7: that when Trump comes into office, usaid to Ukraine is

242
00:13:03,960 --> 00:13:08,800
Speaker 7: definitely in question. And if you remove that from the equation. Yes,

243
00:13:08,880 --> 00:13:12,160
Speaker 7: the Europeans have been giving their own aid on quite

244
00:13:12,200 --> 00:13:14,240
Speaker 7: a large scale as well, but that would be all

245
00:13:14,240 --> 00:13:18,600
Speaker 7: the insufficient for Ukraine to continue the conflict in the

246
00:13:18,600 --> 00:13:19,640
Speaker 7: way that it has so far.

247
00:13:21,200 --> 00:13:23,319
Speaker 1: Stuart, thank you so much for being with us this morning.

248
00:13:23,360 --> 00:13:25,840
Speaker 1: Stuart Livingston Wallace has been the best head of Middle East,

249
00:13:25,840 --> 00:13:29,679
Speaker 1: North Africa and Russia coverage well, speaking of that European perspective,

250
00:13:29,679 --> 00:13:32,960
Speaker 1: European foreign ministers are meeting in busses later today.

251
00:13:33,120 --> 00:13:36,080
Speaker 2: Yeah, and indeed Germany's I love Schultz spoke to Latimir

252
00:13:36,080 --> 00:13:38,760
Speaker 2: Putin on Friday, which was the first direct communication between

253
00:13:38,760 --> 00:13:41,720
Speaker 2: the two leaders in almost two years. This is Schultz

254
00:13:41,800 --> 00:13:44,760
Speaker 2: is facing into his own election campaign where his support

255
00:13:45,040 --> 00:13:47,959
Speaker 2: appears to be crumbling. Our Germany correspondent Oliver Croker's live

256
00:13:47,960 --> 00:13:51,680
Speaker 2: in Berlin for US this morning. What was Schultz trying

257
00:13:51,760 --> 00:13:54,559
Speaker 2: to achieve by speaking to Vlasimir Putin?

258
00:13:54,600 --> 00:13:56,439
Speaker 6: Oliver in Terestine, I think it's a little bit of

259
00:13:56,480 --> 00:13:58,480
Speaker 6: a mystery to a number of people. I think that

260
00:13:58,559 --> 00:14:00,800
Speaker 6: you didn't get that much blowback for doing it, and

261
00:14:00,840 --> 00:14:02,760
Speaker 6: it's because in part he had sort of warned a

262
00:14:02,760 --> 00:14:05,640
Speaker 6: lot of these sort of other leaders and the key partners,

263
00:14:05,679 --> 00:14:08,880
Speaker 6: whether it's Starmer, Biden and Macol. But there's obviously been

264
00:14:08,880 --> 00:14:11,360
Speaker 6: a negative reaction from Zelenski, who would liken this to

265
00:14:11,440 --> 00:14:14,520
Speaker 6: opening Pandora's box. I think there's some question because Schultz

266
00:14:14,559 --> 00:14:17,760
Speaker 6: himself is not in a very strong position politically. There

267
00:14:17,800 --> 00:14:19,800
Speaker 6: is a question of where has this Schultz been for

268
00:14:19,840 --> 00:14:21,760
Speaker 6: the last three years, the one who wants to play

269
00:14:22,000 --> 00:14:23,960
Speaker 6: an active role on the global stage, wants to be

270
00:14:23,960 --> 00:14:26,840
Speaker 6: a real protagonist, a leading character, rather than sort of

271
00:14:26,880 --> 00:14:28,760
Speaker 6: in the background. I mean, there is the question of

272
00:14:28,760 --> 00:14:30,960
Speaker 6: the election. He has been trying to slate himself in

273
00:14:31,040 --> 00:14:34,280
Speaker 6: this election in Germany domestically as somebody who has not

274
00:14:34,360 --> 00:14:36,720
Speaker 6: created escalation with Russia, as someone who is something of

275
00:14:36,760 --> 00:14:39,040
Speaker 6: a peacemaker. But it also speaks to the sort of

276
00:14:39,080 --> 00:14:41,240
Speaker 6: contradiction I think that a lot of these European countries

277
00:14:41,240 --> 00:14:43,200
Speaker 6: are facing now when you have Trump heading into the

278
00:14:43,200 --> 00:14:45,600
Speaker 6: White House, that there is this sort of coming to

279
00:14:45,640 --> 00:14:47,800
Speaker 6: the consciousness of that if you do not re engage

280
00:14:47,800 --> 00:14:50,600
Speaker 6: with Putin, potentially this is something that could be agreed

281
00:14:50,640 --> 00:14:53,480
Speaker 6: without a single European at the table, So potentially useful

282
00:14:53,480 --> 00:14:56,080
Speaker 6: for somebody to get the temperature. Not clear exactly why

283
00:14:56,160 --> 00:14:57,760
Speaker 6: Schultz would be the right person to do that.

284
00:14:58,440 --> 00:15:01,240
Speaker 1: Yeah, I mean, while the parties themselves in Germany are

285
00:15:01,280 --> 00:15:04,840
Speaker 1: giving up for an election next year, Schultz's own leadership

286
00:15:04,960 --> 00:15:07,040
Speaker 1: it looks to bit in question exactly.

287
00:15:07,080 --> 00:15:08,760
Speaker 6: I mean, listen, if you're the SPD and you're looking

288
00:15:08,760 --> 00:15:10,920
Speaker 6: at the situation. You have a vote on February twenty

289
00:15:10,960 --> 00:15:13,360
Speaker 6: third in your party, you have two candidates. You have

290
00:15:13,440 --> 00:15:15,720
Speaker 6: one which is the official candidate. He is the chancellor.

291
00:15:15,760 --> 00:15:18,520
Speaker 6: He is Elef Schultz, one of the least popular politicians

292
00:15:18,520 --> 00:15:20,400
Speaker 6: in Germany right now, in a party that is not

293
00:15:20,440 --> 00:15:23,440
Speaker 6: particularly popular right now, and you have Boris Pistorius, the

294
00:15:23,440 --> 00:15:25,960
Speaker 6: Defense Minister, who is the most one of the most

295
00:15:26,000 --> 00:15:28,960
Speaker 6: popular politicians within Germany. So looking into it, they did

296
00:15:29,000 --> 00:15:31,800
Speaker 6: a poll of sort of across Germany. Sixty six percent

297
00:15:31,840 --> 00:15:34,320
Speaker 6: of people think that Boris Pistorius should lead the SPD

298
00:15:34,400 --> 00:15:37,400
Speaker 6: into this election. Only eighteen percent think that Schultz should.

299
00:15:37,520 --> 00:15:39,080
Speaker 6: There is a bit of a question about could this

300
00:15:39,160 --> 00:15:41,160
Speaker 6: be something of the Biden effect. We saw what happened

301
00:15:41,160 --> 00:15:44,400
Speaker 6: in the United States. An incumbent president or a candidate

302
00:15:44,440 --> 00:15:46,440
Speaker 6: who held on for a little too long, maybe cause

303
00:15:46,440 --> 00:15:48,840
Speaker 6: a little bit of distraction and disarray and maybe did

304
00:15:48,880 --> 00:15:51,160
Speaker 6: not have the best result on the outcome. But again,

305
00:15:51,240 --> 00:15:53,040
Speaker 6: this is not a strong party, so you might you

306
00:15:53,080 --> 00:15:55,280
Speaker 6: might as well at least have a strong candidate. Right now,

307
00:15:55,280 --> 00:15:57,920
Speaker 6: we should say the SPD still supports Schultz, but there's

308
00:15:57,920 --> 00:15:59,600
Speaker 6: a non zero chance that he is not the candidate

309
00:15:59,640 --> 00:16:00,520
Speaker 6: going into this election.

310
00:16:01,080 --> 00:16:03,840
Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

311
00:16:03,880 --> 00:16:06,960
Speaker 2: stories making news from London to Wall Street and beyond.

312
00:16:07,200 --> 00:16:11,200
Speaker 1: Look for us on your podcast feed every morning, on Apple, Spotify,

313
00:16:11,280 --> 00:16:13,240
Speaker 1: and anywhere else you get your podcasts.

314
00:16:13,280 --> 00:16:16,320
Speaker 2: You can also listen live each morning on London DAB Radio,

315
00:16:16,360 --> 00:16:20,120
Speaker 2: the Bloomberg Business app, and Bloomberg dot Com.

316
00:16:20,120 --> 00:16:22,920
Speaker 1: Our flagship New York station is also available on your

317
00:16:22,920 --> 00:16:27,640
Speaker 1: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

318
00:16:27,880 --> 00:16:29,200
Speaker 1: I'm Caroline Hipka and.

319
00:16:29,120 --> 00:16:31,800
Speaker 2: I'm Stephen Carroll. Join us again tomorrow morning for all

320
00:16:31,840 --> 00:16:34,240
Speaker 2: the news you need to start your day right here

321
00:16:34,280 --> 00:16:38,760
Speaker 2: on Bloomberg Daybreak Europe.