WEBVTT - Bremmer: attacks put tourism, trade on negative

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<v Speaker 1>Global business news twenty four hours a day at Bloomberg

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<v Speaker 1>dot com, the Radio Plus mobile app and on your radio.

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<v Speaker 1>This is a Broomberg Business Flash and I'm Karen Moscow.

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<v Speaker 1>This updates brought to you by marks Pan at l LP,

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<v Speaker 1>ranked among the toughs three forensic accounting firms in New

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<v Speaker 1>York by the New York Law Journal for the sixth

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<v Speaker 1>year in a row. Visit marks panet dot com. European

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<v Speaker 1>the stocks falling, government bonds rising in Germany with gold

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<v Speaker 1>and a yen after explosions rock to Brussels airport, departure

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<v Speaker 1>hall and a downtown subway station. We checked the markets

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<v Speaker 1>every fifteen minutes throughout the trading day on Bloomberg and

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<v Speaker 1>U Stock Index futures are falling as well, with SMP

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<v Speaker 1>even A futures down seven points, now EVENI futures down

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<v Speaker 1>forty and NASA documni futures down eighteen. The decks in

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<v Speaker 1>Germany's down a quarter percent, the CAC in Paris and

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<v Speaker 1>FT one hundred both down more than six tenths percent.

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<v Speaker 1>Tenure Treasury up three thirty seconds, the yield one point

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<v Speaker 1>nine zero percent yield on the two year point eight

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<v Speaker 1>four percent Nimex screw oil down four tens percent or

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<v Speaker 1>fifteen cents to already one thirty six of barrel Co

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<v Speaker 1>Mics Gold up seven ten percent or eight dollar seventy

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<v Speaker 1>cents to twelve fifty nine announced the euro a dollar

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<v Speaker 1>twelve nineteen, the yen one eleven point seven six. We're

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<v Speaker 1>also watching travel related stocks. They are moving lower in

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<v Speaker 1>early trading after flights in and out of Brussels were

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<v Speaker 1>canceled and security precautions were stepped up at travel hubs

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<v Speaker 1>around Europe. Carnival down three point six percent this morning,

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<v Speaker 1>Southwest Airlines down one point six per sound, Delta down

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<v Speaker 1>three percent, an American Airlines Group down three point four percent,

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<v Speaker 1>and as a Bloomberg business flash, Tom and Mike Karen Moscow,

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<v Speaker 1>thank you very much. Obviously, security being stepped up at

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<v Speaker 1>airports and travel destinations around the world. According to The

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<v Speaker 1>New York Times, the New York Police Department increasing its

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<v Speaker 1>police presence at airports here. It is apparently all but

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<v Speaker 1>impossible to get in or out of Brussels at the moment.

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<v Speaker 1>The only way to get there is by car. Trains

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<v Speaker 1>have been stopped and the airports have been closed, and

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<v Speaker 1>Michael Delta eight was the last plane in I believe

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<v Speaker 1>Atlanta to Brussels. It landed in Brussels, it was taken

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<v Speaker 1>to a different part of the airport away from the terminal.

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<v Speaker 1>Flights to Brussels being diverted to Amsterdam and to Frankfurt

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<v Speaker 1>Star Wars hotels. We've been talking about being unlockdown. Early

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<v Speaker 1>trading has opened its down half a per cent, Delta

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<v Speaker 1>Airlines off three percent, American Airlines off three per cent.

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<v Speaker 1>Ian Bremer is the head of the Eurasia Group. Ian

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<v Speaker 1>was on with us just yesterday. We were talking about

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<v Speaker 1>the outlook for politics in Europe and Ian, I know

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<v Speaker 1>this is very very early days. Is this, I'm wondering,

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<v Speaker 1>going to be a game changer for any of the

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<v Speaker 1>political events, the whole question of refugees, the borders in Europe,

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<v Speaker 1>the Brexit vote in Britain. Or do we become somewhat

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<v Speaker 1>as the markets appear to be today, inured to this

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<v Speaker 1>sort of thing. It's going to be part of daily life. Uh,

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<v Speaker 1>it is becoming part of daily life, and certainly for

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<v Speaker 1>the markets. But let's recognize the important trends that are

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<v Speaker 1>happening in Europe right now. The Germans have worked incredibly

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<v Speaker 1>uh incredibly strongly to try to get a deal with

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<v Speaker 1>the Turkish government that would keep refugees in Turkey and

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<v Speaker 1>would provide visa liberalization for the Turkish citizens to get

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<v Speaker 1>into Europe. That's been incredibly controversial. That will become much

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<v Speaker 1>harder to get through as a consequence of the attacks

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<v Speaker 1>that we've seen today in Brussels. We have a Brexit

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<v Speaker 1>referendum happening on June um. The one of the issues

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<v Speaker 1>the Brits aren't finding your very appealing right now. Part

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<v Speaker 1>of that is refugees in political crisis. Part of that

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<v Speaker 1>is general malaise and lack of economic growth in this

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<v Speaker 1>part of the world. That gets harder. It's going to

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<v Speaker 1>be a tougher slog to keep the Brits in Europe

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<v Speaker 1>as a consequence, and Merkele her weakness. She's been down

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<v Speaker 1>over approval rates UM in over just over the last

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<v Speaker 1>few months, in part because of the lack of support

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<v Speaker 1>for her refugee policy. She got hit hard UM in

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<v Speaker 1>state elections over the course of the past couple of weeks. UM.

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<v Speaker 1>This is yet another blow to her the most important

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<v Speaker 1>leader in Europe consistently since the two thousand and eight

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<v Speaker 1>financial crisis very much on the back foot now and

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<v Speaker 1>worse as a consequence of these attacks in Belloment. Finally, France,

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<v Speaker 1>a country that you know has had a hard time

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<v Speaker 1>meeting the deficit targets, that's basically turned their back on

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<v Speaker 1>authority measures to say we need to focus on security

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<v Speaker 1>right now. Clearly that's going to be a double down

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<v Speaker 1>message for the French as well as for many other

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<v Speaker 1>European countries. Um the impact for economic outlook for things

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<v Speaker 1>like tourism and for trade, given Shangan and the border

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<v Speaker 1>issues going to be much more negative. I look ian

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<v Speaker 1>it the language after November of last year, after thirty

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<v Speaker 1>people died in Paris, and when you look at the

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<v Speaker 1>EU websites and all that, I think of the Jean

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<v Speaker 1>Monet conference of two thousand fifteen or three worthies walk

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<v Speaker 1>in a room and pontificate about international relations. Does that

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<v Speaker 1>end with this events today? I don't know if I'd

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<v Speaker 1>say it ends. Uh, it's it's just we're going to continue.

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<v Speaker 1>We're just in the spiral where what it means to

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<v Speaker 1>be Europe isn't what it used sal right, Well, no

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<v Speaker 1>one has the will I mean that we don't have

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<v Speaker 1>leadership I mean, one thing I suppose that's thankful is

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<v Speaker 1>that the Americans aren't really very affected by terrorism in Europe,

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<v Speaker 1>so it's not going to have much of an impact

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<v Speaker 1>on what has already been an almost unprecedentedly divisive US

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<v Speaker 1>presidential election in part around precisely these issues. I mean,

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<v Speaker 1>god forbid, you have these kinds of things happening in

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<v Speaker 1>the US over the coming months, would have a much,

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<v Speaker 1>much greater impact on the way we think about two

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<v Speaker 1>thousand sixteen. But as for Europe now, I mean, the

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<v Speaker 1>trends have been support for the French Party UH, the

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<v Speaker 1>Front National supports for the Alternatives for deutsch Land in

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<v Speaker 1>Germany UM and many many other the Swedish Democrats, the

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<v Speaker 1>list goes on across all of these countries. You've had

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<v Speaker 1>very strong support UM that for for UM UH unstatus

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<v Speaker 1>non establishment parties that are on the fringe. This is

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<v Speaker 1>going to lead to a greater degree. I just saw

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<v Speaker 1>a BBC tweet, a BBC breaking news and once again

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<v Speaker 1>they're gonna light up the Eiffel Tower, and this time

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<v Speaker 1>it will be the coverage of the Belgian flag, the

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<v Speaker 1>colors of the Belgian flag and Ian It will be

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<v Speaker 1>in solidarity. What is the Ian Bremer to do list

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<v Speaker 1>for the leaders of institutions in Europe dealing with suicide terrorism. Well,

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<v Speaker 1>and one thing that you're going to see, um, will

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<v Speaker 1>be a move away from privacy and a move towards

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<v Speaker 1>much greater surveillance. I mean, after the Paris bombings, you

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<v Speaker 1>may remember that there was an enormous division within France.

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<v Speaker 1>The former president Sarkozy said that he wanted to take

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<v Speaker 1>the eleven thousand members of the French community citizens that

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<v Speaker 1>were on the watch list, the terrorists watch lists. He

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<v Speaker 1>wanted to put them under house arrest and he wanted

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<v Speaker 1>to have ankle bracelets on them. UM. In Britain right now, UM,

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<v Speaker 1>you know, if you see someone in the school system

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<v Speaker 1>that you think UM is susceptible UM to radical Islam,

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<v Speaker 1>is act in a way that you find suspicious, you know,

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<v Speaker 1>you tell the authorities and they basically give them counseling. UM.

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<v Speaker 1>You know, this is a slippery slope, as I'm sure

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<v Speaker 1>you can imagine, and overwhelmingly the push is going to

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<v Speaker 1>be away from privacy and specifically away from undifferentiated rights

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<v Speaker 1>for those that are thought to be suspect for radical

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<v Speaker 1>Islam and for joining a terrorist cause. Um, and increasingly

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<v Speaker 1>you start moving into an environment where these people are

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<v Speaker 1>treated very very differently. Um and uh and and that

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<v Speaker 1>that indeed, Um, you know there was a worry of

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<v Speaker 1>at in the US action nine eleven after the Patriot Act,

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<v Speaker 1>and you saw some of the excesses for example, that

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<v Speaker 1>ends up leading to the Snowden scandal that hasn't yet

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<v Speaker 1>occurred as much in Europe. You'll see much more of that.

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<v Speaker 1>What do we expect in terms of the political fallout

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<v Speaker 1>in in the short run from this, We're gonna see

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<v Speaker 1>heightened security. Do we see Shangon shutdown? Um? Well, Shangan

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<v Speaker 1>is effectively suspended across many of the borders at present. Um.

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<v Speaker 1>I think you're going to see again that this is incremental.

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<v Speaker 1>If if this had been a bolt from the blue,

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<v Speaker 1>then we'd be having a conversation of oh my god

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<v Speaker 1>as to the end of Shangan, it's not. We've had

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<v Speaker 1>a number of significant terrorist attacks in Turkey, one just

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<v Speaker 1>a few days ago. We've of course had significant bombings

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<v Speaker 1>twice now um in Paris that Brussels and Belgium has

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<v Speaker 1>been on higher ever since the November bombings in Paris.

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<v Speaker 1>This sadly is not a prize, and specifically coming on

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<v Speaker 1>from the heels of the arrest of one of those

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<v Speaker 1>involved in the Paris bonding, the remaining at large UM

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<v Speaker 1>in the last couple of days, I think anyone involved

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<v Speaker 1>in monitoring terrorism was aware of the fact that that

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<v Speaker 1>could lead UM to any cells that existed that were

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<v Speaker 1>connected to that individual would lead to those attacks. So

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<v Speaker 1>not not a surprise here at all, one of the

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<v Speaker 1>places that you would consider a principal target, but one

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<v Speaker 1>of many, many tipping points. I mean, is this is

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<v Speaker 1>this bigger than one thousand German women being sexually assaulted

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<v Speaker 1>on New Year's Ease. No, I would say that was

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<v Speaker 1>bigger because that was more of a tipping point that

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<v Speaker 1>really undermined the leadership you had. This is not a

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<v Speaker 1>tipping point. This is just piling off within the piling

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<v Speaker 1>honor stunning headlines. Ian Bremer, the French Prime minister, after

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<v Speaker 1>the Belgium attacks, we are at war? That from the

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<v Speaker 1>French press, who are we at war with? Well, you

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<v Speaker 1>know again that sounds like such an extraordinary headline, so

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<v Speaker 1>you realize he said the exact same thing after the

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<v Speaker 1>Paris bombings in November. So I mean, you know, we're

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<v Speaker 1>certainly at at war um with those that would deign

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<v Speaker 1>to commit terrorist acts against our fellow citizens. But what

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<v Speaker 1>we're willing to do to proselytize that war is rather

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<v Speaker 1>different than you know, sort of the wars that our

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<v Speaker 1>nations have fought in the past. UM. And and that's

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<v Speaker 1>very clear, UM. The the extant conditions that are causing um,

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<v Speaker 1>these these terrorist attacks are largely not in Europe. They're

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<v Speaker 1>largely in the Middle East. They've led they've led to

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<v Speaker 1>millions of refugees. UM. They are governments that are governed poorly. UM.

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<v Speaker 1>They do not have a lot of the economic wherewithal

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<v Speaker 1>that they used to because of the oil prices being

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<v Speaker 1>in the tank, um, I mean, and because of extraordinary corruption.

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<v Speaker 1>I mean, we know about those issues. Those fixes are

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<v Speaker 1>no closest day after the Brussels bombing than they were

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<v Speaker 1>yesterday before, and so as the consequences. But this is

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<v Speaker 1>not in Brazil. You have a crisis, political crisis that

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<v Speaker 1>is super hute that it's actually bringing down the existing system.

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<v Speaker 1>That the terrorist crisis is insufficiently we have to leave

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<v Speaker 1>it there. Ian Bremer, generous of you to be with

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<v Speaker 1>us these last two days. We continue with another hour

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<v Speaker 1>of Bloomberg's surveillance