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

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Speaker 2: They say is the Bloomberg Daybreak You're Up podcast, available

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

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

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Speaker 3: I'm Caroline Hepka.

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Speaker 2: Coming up today.

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Speaker 3: France's government could collapse as soon as tomorrow after opposition

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Speaker 3: parties found no confidence motions over the country's budgets.

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Speaker 2: As SpaceX's valuation heads for the Moon, Elon Musk's one

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Speaker 2: hundred billion dollar Tesla paypack at crash Lands thanks to

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Speaker 2: a Delaware judge.

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Speaker 3: Plus a special report on the chronic financial and technical

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Speaker 3: problems that have repeatedly delayed the EU's biometric border system.

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Speaker 3: Let's start with a roundup of our top stories.

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Speaker 2: France's government is on the brink of collapse after opposition

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Speaker 2: lawmakers filed two motions of no confidence in the administration

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Speaker 2: of Prime Minister Michelle Barnier. Mary Lapenn's National Rally and

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Speaker 2: a Leftis to Lion have both called votes, which could

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Speaker 2: happen as early as tomorrow evening. Together, they have enough

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Speaker 2: members of the National Assembly to topple the government. Barnier

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Speaker 2: appeals to his fellow politicians for their support.

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Speaker 4: Fix this bill is now here. Now is the time

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Speaker 4: to act implement. I believe we've now reached a moment

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Speaker 4: of truth which confronts everyone with their responsibilities. It's now

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Speaker 4: up to you, members of the Parliament of the Nation,

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Speaker 4: to decide whether our country adopts responsible financial texts essential

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Speaker 4: and useful to our fellows citizens.

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Speaker 2: Michelle Vargnier speaking there in the National Assembly, invoking a

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Speaker 2: constitutional override to force his social security budget through Parliament,

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Speaker 2: which then triggered the confidence votes. The government must adopt

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Speaker 2: a budget by the end of the year or use

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Speaker 2: an untested emergency law to avoid a shutdown.

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Speaker 3: Well, France's political uncertainty is putting French bonds and stocks

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Speaker 3: under renewed selling pressure. The spread between French and German

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Speaker 3: borrowing costs widened to eighty nine basis points on Monday.

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Speaker 3: That's close to the most since twenty twelve. In Steely

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Speaker 3: International Fixed Income CIO at JP Morgan Asset Management says

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Speaker 3: the risk is too high.

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Speaker 5: I think at the moment you've got to be probably

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Speaker 5: probably standing on the sidelines, because ultimately what we're seeing

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Speaker 5: is unprecedented. It looks like we're going to have a

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Speaker 5: collapse of the government.

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Speaker 4: You know.

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Speaker 5: It calls in questions about what budget is likely to

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Speaker 5: be able to occur next year. Yes, the spreads are

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Speaker 5: very wide at the moment, and the hitting levels that

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Speaker 5: we saw back in the peripheral Eurozone crisis. But actually,

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Speaker 5: when I look at just European debt in general, I

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Speaker 5: think there's just some much better stories out there.

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Speaker 3: In Steely they're speaking to Billimbag television. The French budget bill,

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Speaker 3: initially presented by the Prime Minister Michelle Barnier's government, sought

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Speaker 3: to reduce France's deficit to five percent of economic output

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Speaker 3: in twenty twenty five through sixty billion euros of tax

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Speaker 3: increases and spending cuts, but the Budget Minister, Laurence Saint

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Speaker 3: Martin told Laparisia newspaper over the weekend that the national

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Speaker 3: rallies demands to amend the budget would cost nearly ten

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Speaker 3: billion euros.

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Speaker 2: The UK can have a close relationship with both the

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Speaker 2: US and the EU, according to the Prime Minister. In

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Speaker 2: a keynote speech on foreign affairs of the Lord Mayor's

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Speaker 2: annual Banquet in Central London, Kirs Starmer emphasized the importance

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Speaker 2: of working with both to serve the UK's national interest.

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Speaker 6: Against the backdrop of these dangerous times. The idea that

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Speaker 6: we must choose between our allies so somehow we're with

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Speaker 6: either America or Europe is plain wrong. I reject it utterly.

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Speaker 2: Kirs Starmer also used his speech to express support for

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Speaker 2: Ukraine in its conflict with Russia and suggest the UK

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Speaker 2: should engage with the wider range of countries, including China.

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Speaker 2: The comments from the British Prime Minister come as some

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Speaker 2: have voiced concern that President elect Donald try Trump's plans

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Speaker 2: to ramp up tariffs will drive a wedge between the allies. Overnight,

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Speaker 2: Trump said that he would nominate investment banker Warren Stevens

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Speaker 2: to be the US ambassador to the UK, tapping a

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Speaker 2: prominent Republican donor and businessman for a prime diplomatic post.

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Speaker 3: Fed policymakers say that they expect to continue cutting interest

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Speaker 3: rates over the next year, but won't commit to a

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Speaker 3: cut this month. Three Federal Reserve officials shared their thoughts

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Speaker 3: on the path ahead on Monday. Here is Governor Christopher

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Speaker 3: Waller at present.

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Speaker 7: I lean towards supporting a cut to the policy rate at.

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Speaker 8: Our December meeting.

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Speaker 2: That decision will depend on whether data that we received

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Speaker 2: before then surprises to the upside and alters my forecast

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Speaker 2: for the path of inflation.

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Speaker 3: Governor Christopher Waller's comments were echoed by New York FED

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Speaker 3: President John Williams and his counterpart from Atlanta, Raphael Bostig,

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Speaker 3: who said that economic conditions merit more cuts, but stop

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Speaker 3: short of saying that they favor a December. FED officials

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Speaker 3: will gather for their next meeting on the seventeenth and

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Speaker 3: eighteenth of this month.

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Speaker 2: Israel's military says the country remains obligated to a US

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Speaker 2: backed ceasefire after carrying out airstrikes in Lebanon on Monday.

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Speaker 2: The strike came after Hisbellah fired a rocket at an

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Speaker 2: Israeli military site in a disputed area near the borders

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Speaker 2: with Lebanon and Syria. The fragile ceasefire between the two

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Speaker 2: sides has been in place for less than a week

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Speaker 2: and suspended more than a year of hostilities that had

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Speaker 2: raged in parallel to the Israel Hamas war in Gaza.

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Speaker 3: SpaceX is in discussions to sell insider shares that could

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Speaker 3: boost the value of Elon Musk's rocket and satellite company

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Speaker 3: to around three hundred and fifty billion dollars, according to

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Speaker 3: people familiar with the matter, Conversations are ongoing and the

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Speaker 3: details of a potential transaction could change depending on interest

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Speaker 3: from sellers and buyers. However, if it moves forwards, it

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Speaker 3: would cement SpaceX's status is the most vaidvaluable private startup

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Speaker 3: in the world. The potential valuation surge underscores the enormous

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Speaker 3: gains that Musk's empire has seen since the US presidential election.

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Speaker 3: Tesla shares are up by more than forty percent since

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Speaker 3: the fifth of November, with the Bloomberg Billionaires Index now

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Speaker 3: putting Elon Musk's wealth at more than three hundred and

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Speaker 3: fifty billion US dollars.

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Speaker 8: But it's not all good news.

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Speaker 2: The world's richest person, Elon Musk's record setting multi billion

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Speaker 2: dollar Tesla pay package has again been rejected by a

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Speaker 2: Delaware course. That's despite shareholders supporting its reinstatement.

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Speaker 8: More from Bloomberg's Charlie Palace, Tesla says that will appeal.

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Speaker 8: Despite the June thirteenth shareholder vote at the company's annual meeting,

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Speaker 8: a Delaware chance re Court judge decided to stick with

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Speaker 8: her original finding in January that the company's board was

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Speaker 8: too much under the influence of a billionaire entrepreneur when

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Speaker 8: it adopted the plan in twenty eighteen, the stock options

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Speaker 8: package was initially worth two point six billion, in spite

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Speaker 8: of fifty six billion by the time the judge canceled it.

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Speaker 8: McCormick's ruling, striking down the largest ever pay arrangement for

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Speaker 8: a US corporate executive, could take a giant bite out

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Speaker 8: of Musk's wealth. In New York, Charlie Pellet, Bloomberg Radio.

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Speaker 3: And those are our top stories for you this morning.

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Speaker 3: Let's check on the markets then, after the S and

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Speaker 3: P five hundred yesterday notched up another record close, Yes,

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Speaker 3: another one fifty fourth record closed, just shy of six

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Speaker 3: thousand and fifty. US stop futures this morning are a

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Speaker 3: little bit brighter, up by about a tenth of one percent.

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Speaker 3: US stock fifty futures. They're gaining four tenths this morning.

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Speaker 3: You also do have gains in Asian equity trading, so

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Speaker 3: the NICKK TY two five up by two percent, heading

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Speaker 3: for the best day in a month. This is II

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Speaker 3: three hundred. They're only seeing again of three tenths of

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Speaker 3: one percent. As for the dollar, again, we are back

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Speaker 3: on the front foot for the green back, up a

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Speaker 3: tenth of one percent. As for the euro this morning

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Speaker 3: trading slightly softer, but of course heightened likelihood of a

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Speaker 3: government collapse in France. Weighing on that and brain Crude

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Speaker 3: futures currently has three tenths of one percent seventy two

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Speaker 3: dollars zero nine.

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Speaker 2: Those are the markets and the moment. We'll bring you

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Speaker 2: more in the political turmoil in France, plus new documents

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Speaker 2: seen by Bloomberg that reveal the problems behind the scenes

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Speaker 2: of the EU's new biometric border system. The story that

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Speaker 2: caught her eye this morning. We're counting down to the

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Speaker 2: official reopening of Notre Dame Cathedral in Paris this weekend.

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Speaker 2: Donald Trump says that he's going to be traveling to attend.

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Speaker 2: He had been invited, so that's not entirely a surprise,

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Speaker 2: but nonetheless it's going to be quite the big international affair.

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Speaker 8: We are going to be.

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Speaker 2: Seeing, you know, quite quite a lot of famous names

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Speaker 2: and faces.

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Speaker 3: Apparently fifty heads of state or government are going to

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Speaker 3: be at the official reopening of Notre Dame. Of course,

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Speaker 3: five years after the devastating far in twenty nineteen. I'm

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Speaker 3: sure you were living in Paris at the time, you

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Speaker 3: must have been, you know, thinking about that in terms

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Speaker 3: of the restoration though. Actually it's President of Menu in

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Speaker 3: Macont who was one of the to enter not to

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Speaker 3: dam and they've been already pictures of this bright light

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Speaker 3: cathedral that's been brought back to life, in part by

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Speaker 3: huge amounts of money that were raised from some of

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Speaker 3: the richest, wealthiest and best known French citizens.

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Speaker 2: Yeah, indeed, the amount of money that's been poured into

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Speaker 2: this kind of around eight hundred million euros and fact

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Speaker 2: of donations to restore the cathedral. The pictures inside it

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Speaker 2: do look pretty impressive to see how much has been

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Speaker 2: done to restore it. And I'm sure many people in

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Speaker 2: that part of the city and those visiting as well

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Speaker 2: will be happy to be able to get a look

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Speaker 2: inside it again after it's been under construction. But in

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Speaker 2: many ways it's remarkable how quickly they've been able to

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Speaker 2: restore such a historic building to its former glory in

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Speaker 2: the five years since the fire.

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Speaker 3: Yeah, absolutely going to be a whole series of big

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Speaker 3: events before actually visitors and worshippers can get back into

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Speaker 3: the cathedral starting at the weekend.

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Speaker 8: Now we're going to stay in France.

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Speaker 2: Now, Michelle Bonnier has tried to bypass Parliament to pass

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Speaker 2: his social security finale and saying bail. Two no confidence

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Speaker 2: votes are now on the books. That could happen as

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Speaker 2: early as tomorrow. Let's get the latest from Paris. Our

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Speaker 2: French Ackey market supporter Julian Pontius joins us for more. Julian,

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Speaker 2: good morning. What more timing involved here? When might these

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Speaker 2: votes happen and how likely are there to be passed?

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Speaker 7: We're thinking probably Wednesday night, Wednesday evening, maybe on Thursday.

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Speaker 8: That's not set yet.

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Speaker 7: There is very, very very little hope that Bana's government

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Speaker 7: will survive these votes. When you look at the number

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Speaker 7: of MPs from the opposition, you're over three hundred, well

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Speaker 7: over three hundred. So it's really hard to see how

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Speaker 7: he could escape the feet on that one.

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Speaker 3: Okay, what happens if the French government falls, Julia, If

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Speaker 3: that happens this week and then there's no budget in

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Speaker 3: place until January.

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Speaker 7: Well, there's a number of options. There's nothing that prevents

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Speaker 7: President Marcon of reappointing. Could also leave Bangne as a

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Speaker 7: caretaker government looking for a new prime minister, a new government.

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Speaker 7: There are provisions in the French constitution that you allow

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Speaker 7: the government to keep on spending, paying the civil servants,

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Speaker 7: paying social welfare pensions, et cetera. But at the end

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Speaker 7: of the day, eventually a solution, sustainable solution will need

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Speaker 7: to be found. But there's no risk of a shutdown,

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Speaker 7: a US style shutdown. But that doesn't mean there's no

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Speaker 7: tension on the bond market, on the euro, on the

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Speaker 7: stock market. We're really in unsharted territory here.

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Speaker 2: Talk us through what we've seen so far on markets

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Speaker 2: and why are the risks lie in this uncertain period

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Speaker 2: for markets.

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Speaker 7: Well, yesterday a bit of a surprise was the French

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Speaker 7: stock market ended in the green in positive territory. You

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Speaker 7: would have expected more stress, but then again a lot

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Speaker 7: of it has been priced. The French stock market has

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Speaker 7: done really horribly this year. It's down roughly five percent

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Speaker 7: when the stock six hundred is like up five six

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Speaker 7: Percent's ten percent gap, which is quite used. It's the

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Speaker 7: worst year of the French market since the twenty twelve crisis.

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Speaker 7: I mean in comparison to its European Peers. The main

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Speaker 7: reaction yesterday was on the euro. The euro lost about

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Speaker 7: one percent, so that was really where the market action was.

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Speaker 7: In terms of the bond market, the spread is high,

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Speaker 7: that's true with Germany, it's close to ninety and it's

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Speaker 7: like also more or less at the levels it was

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Speaker 7: during the sovereign crisis. But a good news if this

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Speaker 7: year has good news. The tenure the French ten years

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Speaker 7: is under three percent on a great scheme of things

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Speaker 7: is not much so in terms of refinancing cost of

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Speaker 7: like really like a financial crisis, you're still at a

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Speaker 7: level which is not you know, worrying. The spread is worrying.

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Speaker 7: The fact that ten year traits at the same level

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Speaker 7: as Greece is worrying. But all in all it's less

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Speaker 7: than three percent. It's it's still reasonable.

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Speaker 3: So Jerdian, do you think it's becoming a Eurozone crisis?

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Speaker 3: What would the best outcome now be for markets as

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Speaker 3: we think about twenty twenty five.

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Speaker 7: Well, the best upcome right now is by you know,

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Speaker 7: Barnier or Marcon being able to convince the little group

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Speaker 7: of socialists you know, like sixty of them not to

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Speaker 7: vote to abstain and to save the Baalnie government seems unlikely,

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Speaker 7: but it's one of the only ways for Balnie to

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Speaker 7: survive this. Then there are a lot of options, but

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Speaker 7: the main problem is that you cannot have elections general

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Speaker 7: elections for the summer. So whatever you do, you're stuck

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Speaker 7: with a parliament that is divided in three fiercely of

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Speaker 7: botes factions that left the center and the far right,

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Speaker 7: and it's really hard to see how they, you know,

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Speaker 7: you can pull out a coalition from there. So I

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Speaker 7: would think maybe a caretaker government, maybe a technical government

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Speaker 7: with you know, someone like equivalent of Dragy, what Prime

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Speaker 7: Minister drag he did in Italy, and then wait it

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Speaker 7: out till you can have fresh elections in the summer.

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Speaker 7: Of course, there's one taboo at the moment it is

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Speaker 7: you know Macon. You know, no one is really thinking

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Speaker 7: he will resign at this point, but you know, after

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Speaker 7: a while, if the financial conditions really do would deteriorate,

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Speaker 7: maybe people will start thinking, well, maybe the solution would

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Speaker 7: be for him to resign.

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Speaker 2: Okay, well, certainly an interesting few days ahead for you.

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Speaker 2: Thank you very much for joining us Udian Pontous for

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Speaker 2: our French equity reporter. There joining US from Paris. Another

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Speaker 2: story from Europe.

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Speaker 3: Now, the European Union has pushed back the start of

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Speaker 3: its smart border system until next year.

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Speaker 9: Now.

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Speaker 3: This is the fourth delay in five years. New documents

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Speaker 3: seen by Bloomberg show a consortium involving the French tech

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Speaker 3: firm at US is at the center of many of

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Speaker 3: the problems. Joining US now is Bloomberg Technology edit via

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Speaker 3: Solon to explain great to have you on Olivia. What

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Speaker 3: is the Entry Exit System supposed to do in Europe?

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Speaker 1: It's supposed to be a large scale life t project

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Speaker 1: that's meant to make border control an EU issue rather

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Speaker 1: than a national issue. At the moment, like, the EU

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Speaker 1: has no good kind of automated way of tracking how

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Speaker 1: long people from outside the EU without visas stay inside

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Speaker 1: the block. You know, when someone comes into a country

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Speaker 1: within the EU, the individual country will stamp their passport

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Speaker 1: when they arrive, but then they have no way of

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Speaker 1: knowing whether people travel to other EU countries and when

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Speaker 1: or if they leave. So what EES does is integrates

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Speaker 1: the immigration systems of every EU country and then registers

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Speaker 1: and checks the biometric data of people, their faces and

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Speaker 1: their fingerprints as they go in and out of the

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Speaker 1: EU and so in theory, this is supposed to better

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Speaker 1: measure irregular migration, reduce identity fraud, and ultimately help secure

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Speaker 1: the EU's borders.

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Speaker 2: Has the launch date been delayed so many times?

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Speaker 1: Well, you know, is a complex IT project, and public

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Speaker 1: IT projects are often delayed. But the documents that we've

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Speaker 1: seen do show that the consortium involving ATOS was a

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Speaker 1: bit of a mess. You know, ATOS itself is going

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Speaker 1: through a lot of challenges at the moment. It's got

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Speaker 1: a lot of debt, it's had to be effectively bailed

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Speaker 1: out by its creditors. And according to the documents and

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Speaker 1: the people we spoke to over the years, ATOS and

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Speaker 1: the other consortium members missed pretty much every deadline. At

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Speaker 1: the beginning, they partially installed equipment, misplaced part they took

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Speaker 1: weeks to fix bugs in software, and they were sending

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Speaker 1: teams with just little experience, at least according to the

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Speaker 1: documents we've seen. And then the consortium itself just couldn't

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Speaker 1: get along. The other members were IBM and Italian firm

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Speaker 1: Defense firm Leonardo, who was doing the the security that

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Speaker 1: the EU agency responsible for project called EU Lisa had

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Speaker 1: to set up like emergency daily meetings to try and

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Speaker 1: move the project along, and what would happen was the

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Speaker 1: consortium members would just argue among themselves in front of

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Speaker 1: their client. So yeah, it just seemed to be a

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Speaker 1: sort of comedy of errors of a public procurement project.

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Speaker 3: Oh dear the knock on effects though, what have those

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Speaker 3: been in terms of you know, what the delays have done?

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Speaker 1: Well, it's supposed to be a kind of backbone system

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Speaker 1: onto which they can kind of peg other immigration systems.

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Speaker 1: So every delay to ES means delays to all these

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Speaker 1: other systems. For example, there's like a two hundred million

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Speaker 1: euro visa waiver system called there's a bit like the

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Speaker 1: Esther when you go into the US, and that can't

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Speaker 1: launch until ES is launched. And the agency responsible for

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Speaker 1: that system, called Frontechs, had hired like one hundred and

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Speaker 1: thirty people ready and raring to work on this project

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Speaker 1: and they've now had to be reassigned. And that seems

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Speaker 1: to be happening at borders in Member states as well,

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Speaker 1: where they've hired a bunch of people ready to deploy

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Speaker 1: the system, which was last scheduled to launch in November,

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Speaker 1: and then in October they suddenly changed their mind and said, actually,

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Speaker 1: we're not going to launch until twenty twenty five.

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Speaker 2: Is there any recourse for the EU agency that's paying

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Speaker 2: for all of this given the delays?

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Speaker 1: The contract does allow the agency to charge damages for

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Speaker 1: missed milestones, and there's lots of discussion about that in

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Speaker 1: the documents we've seen. And there are also additional costs

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Speaker 1: that were incurred because of the delays, for extra fees

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Speaker 1: for software licenses that had to be extended longer than expected,

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Speaker 1: and the agency could sue for compensation for these costs,

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Speaker 1: and that again is discussed in the documents. But so

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Speaker 1: far I don't think either of those things have happened.

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Speaker 2: This is Bloomberg Daybreak Europe. You're 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 8: Europe