down an aeroplane are due to appear in court in australia. both men were detained on saturday in a series of raids across sydney. they've been charged with terror offences and could be jailed for life if convicted. more pressure on president trump as a grand jury is set up to investigate allegations of russian interference in last year's elections. the special counsel investigating alleged russian involvement robert mueller is reported to have begun his inquiry in recent weeks. and this video is trending on bbc.com: hyperloop one has carried out its latest test of a futuristic high—speed transport system in america's nevada desert. the creators hope to carry passengers at speeds of up to 650mph in vacuum propelled pods. that story is popular on bbc.com. now on bbc news it's time for hardtalk. welcome to hardtalk,
with me, zeinab badawi. my guest is one of the most influential voices in global finance today. he was made governor of the central bank of france following a sting as governorfor 12 years. prior to that he was a vice president for the central bank and has worked with just about every leading financial institution. christian noyer has been tasked with making the case for paris as a financial hub following brexit. is he making too tough a sell and potentially damaging ties with the uk? christian noyer, in paris, welcome to hardtalk.
this is the fourth president that you are serving under in some senior capacity. emmanuel macron is a former banker. is he the right president at the right time for france? well, first, thank you very much for inviting me. i think, yes, absolutely. for the first time for many years, we have a president who was elected with a clear political programme for deep economic reforms, and he has a clear mandate to make difficult reforms in the labour market, in the tax regime, to have something much more business friendly, and this is going to take place quite rapidly. so, i think that comes exactly at the right moment, because we are now,
in europe in general, in the eurozone, in particular, leaving completely the negative consequences of the crisis. growth is picking up, and i think it is the appropriate time to raise the growth potential and try to size the benefits of a full recovery. we will talk about the reforms in france presently, butjust underscoring the approach, the intention to make france more competitive, is that so it can compete, for instance, in trying to pick up some of the business from the city of london post—brexit. why is paris best placed? i think there are several assets for paris, which are generally recognised by all the institutions i am talking to. the first one is probably that paris is the only big city comparable to london in size, with a range of different activities, which means that there is, first,
the whole range of financial activities, notably, banks and dealer broker activities, insurance, asset management, fintech, and there is no other comparable city in europe. that is interesting, though. you say all that, and that is your opinion, obviously. but when you look at what major financial institutions are doing, they don't necessarily back paris. for example, mufg, japan's biggest, bank has decided to set up its new eu base in amsterdam. barclays have gone to dublin. there is a lot of competition that you face, isn't there? that is absolutely true. one has to make a difference between the place where the financial institutions decide to put their legal entity, and the place where they would locate their activities.
and a number of those which said that they would choose, or have chosen, to have their legal entity, at least for the first two years in, say, frankfurt, amsterdam, or dublin, they have told me they intend to concentrate very sizeable activities in paris. it can be in a branch, it can be in another subsidiary. many have already set up a subsidiary. so it is not because the hub or the legal entity will be somewhere, that it will be a concentration of all activities there. but... so i think it is a bit misleading to just look at those news. by the way, mufg, that you just mentioned, to my knowledge has not decided on dealer broker activities, they already have a bank in amsterdam.
so they keep using their banking there. that's natural. is this what you are being told? a lot of institutions are looking at frankfurt, which, of course, germany is the biggest economy in europe. it's also home to the ecb. many banks have said that frankfurt is going to be their main eu base. is it these financial institutions telling you something behind—the—scenes? absolutely. among the assets in paris, there is in particular the talent pool. other cities are relatively small cities, and that includes frankfurt. in frankfurt, for instance, the activities are concentrated in banking. but if you want to move a big number of staff, coming with families, coming with spouses or partners, who want to find jobs in another type of activity, it is more difficult than in a big
city like london or paris. who has specifically said this to you? do you want to name some of the banks that have said this to you? many, many. the majority of international banks you mentioned, be they americans or europeans or sometimes japanese or asian in general, they tell me that, that they intend to put a sizeable part of their staff in paris. 0k. as things stand i think 30% of the european union financial... —— assets managed in the city of london, which is twice as much then london's nearest rival, paris. london is admired globally, and respected as your‘s financial centre. —— london is admired globally, and respected as europe's financial centre.
it doesn't necessarily mean that any business lost to the city of london post—brexit is going to go the way of frankfurt or paris. just to leat you know, borisjohnson, the british foreign secretary, he said, "the real rivals of the city are going to be in hong kong, singapore, and new york". he has a point, doesn't he? well, first, i don't believe that london will disappear as a major financial centre. london will continue to have very important activities, and that is a good thing. in particular, given the proximity and the facility to move between them london and paris, i see a lot of easiness in having teams working partly in london, partly in paris, if that's their choice. but more specifically to your question, if there are things that institutions have to move, and they will have to move some activities to the eu, it's because the rules will impose that those activities are done in the eu.
so, if they have to move to the eu, they cannot, by definition, move to new york or to asian places. they need to move to the eu or be given up. and all the institutions tell me, we want to continue servicing their clients, we do not want to lose their capacity to service them. they don't want to lose the business related to it. so they will do what it is necessary to continue servicing the clients. so you just said that you don't agree that the city of london would necessarily suffer. so, just broadening that point, do you think britain will suffer economically as a result of brexit? first, to the question, the city of london will lose something. there has been over the last 20 years hyper—concentration. if you go back 20 years in the past, london was the dominant financial centre, but paris was quite an important financial centre. a lot of things were done in other cities, frankfurt and so on. so, there will be some loss for the city, but not to the point that the city
would be badly damaged. if the city loses 15% or 20% of its activity, it will remain one of the biggest financial centres in the world. second, more generally, on that, that depends on agreement that can be reached or not reached on trade. and i think the most difficult part of the negotiations is indeed related to trade, manufacturing activities, agriculture and fisheries, and that will be difficult. that is the most important, in my view, for the future of the british economy. and there has been quite a controversy here in the uk. boris johnson, the foreign secretary, and liam fox, the international trade secretary, perhaps not seeing eye—to—eye with the chancellor philip hammond and the home secretary amber rudd
over the issue of freedom of movement of people post—brexit. how does this row look from your side of the channel? well, i think the basic view of the eu 27 is that if you want to continue to have full access to the market, be it for the long—term, or for a transition period, you need to, to follow all the major parts of the eu governance, and the eu governance, basically, the capacity of its institutions to regulate, the capacity of the eu court ofjustice to settle disputes, and the four freedoms, goods, services,
and financial flows, and not for people. after that, how it will be settled exactly will depend on the negotiations, of course. as the negotiations and the debate over brexit continue, as we have been discussing, other eu countries are trying to capitalise on the situation post—brexit. the french prime minister eduard phillippe has said that france will use all means to make paris the european financial capital. but is this jostling on the spoils of britain's departure a little unsavoury? especially given the strong alliance with the uk. i think you have to... i understand your question, but you have to take two things into consideration. one is that, historically, london has not been the financial centre of the eu for decades and decades.
the situation was much more balanced. the result of hyper—concentration in london is the result of the single market, which means that a single regulation meaning a single regulation issued by the same judicial system. and, bizarrely, to a point, the creation of the euro. with the trading rooms in just one place, and that could be in london because of the single market. we reached a state which is very different to 20 years ago. having the ambition to come back to what we had 20 years ago, it is not aggressive against britain, it's just coming back to a normal state of things. it's understandable that countries would be alive to the opportunities that brexit might provide to,
you know, present a different... different opportunities for countries. but the point i want to put to you is that the french seem to go farther. jeremy browne, who is now the envoy for the brexit operations in the sunday mail injuly said this: "the french are happy to see outcomes detrimental to the city of london, even if paris is not the beneficiary. they are crystal clear in their underlying objective — the weakening of britain. france sees britain as adversaries, not partners." what is your response to that? this memo, whatever has been leaked, to me, is total nonsense, if i may say so, with due respect to whoever is having this view. he is reported to have
this, i don't know. i did not check myself. but i think the report, the presentation is really not that great at all. france is in the same position as the rest of the eu. the position is embedded in a common position. the chief negotiator is michel barnier, the eu negotiator. and he is the one who clearly said, and will say what needs to be said from this side of the eu. so there is no willingness to create problems for the city of london or the uk. but one has to recognise that we have... we have eight common concern, that is an enormous concern, that is financial stability. i mean, we just went through... the world just went through an enormous financial crisis. we know it is absolutely key to have the capacity to regulate and supervise, with full capacity, and full powers, the financial sector, and the financial activities. and when you have financial
stability concerns, you have to make... to take decisions as to what is best or worse in the different options that are offered to you. and only those responsible of everything for the monetary area can do that. so it must be the eu institutions having this power. and i cannot imagine, i mean, if it was imaginable that the city of london or the part dealing with the euro, if it would be regulated by eu institutions, where the judge would be in the european court ofjustice, but the central bank, with full, 100% power, in the ecb or the euro system, and the market regulator would be established in paris, with no power for westminster, or the bank of england, orfor the uk regulator, then maybe we could have another system. but i don't believe that this is, that this is imaginable. this is why we believe that...
a rather full answer. the election of emmanuel macron in may, we are seeing france in a more assertive way than it was under francois lond. —— francois hollande. he wants to make it more market—oriented. there is a great deal of opposition within france itself from ordinary citizens. the labour market reform, the first one to be implemented, is a perfect example of something which is processed quite smoothly and very well. there have been many
discussions with the unions. there was no big opposition. can i just interrupt? the cgt is saying it is getting ready for street protests for relaxing these labour laws, to make it easierfor companies to hire and fire workers. we will have to wait and see. at the moment, things are going smoothly. the discussions have gone through all of the topics. on a number of things, it was largely consensual. at least with the majority of unions. the parliament as well has an enormous majority, well beyond a simple party supporting president macron. but there is still... can ijust say, there is still protesting going on. 800,000 students upset about cuts to allowances.
civil servants, teachers, several sectors are opposed. well, you should not mix everything. there is no big demonstration at the moment. nothing happened in paris. no one is in the streets demonstrating. yes, there was some opposition expressed about some fiscal measures taken. the government has to make cuts in spending. they tried to find ways to do that as smoothly as possible. but it... the problem exists in all countries, in many countries. i want to come back to the series of reforms, we don't have time to go into all of them, they are to make france more competitive, but they are favouring
the wealthy president macron, or at least it is perceived in that way. for example, the french economic observatory had a study injuly saying the richest 10% in france gave the most from the overhaul from income and property taxation. i cannot go into that completely but that is one example, and also it has been said that the measures hit the poorest foremost. that is a quote. when you meet the press, you don't get that feeling there is such opposition at the moment. i have never seen in many years so much consensus to support the global economic reforms in the making. i think people are ready to understand that labour market
reforms are aimed at reducing unemployment that we have not been able to reduce significantly over the last decade. it is something we have not tried until now. until the first reforms were made. it is rather consensual. they address the problem of unemployment. but you have got a huge... sorry. the tax reforms. of course, the direct taxation would be the wealth tax, income tax. it is extremely concentrated in france. 0k... 60% of... we cannot go into the details of the taxation system. but let me give you one other example as to why perhaps it is not as smooth as you suggest. president macron has seen his approval ratings plummet by ten points to 5a%, the steepest declined when compared
to predecessors, like francois hollande and nicolas sa rkozy. i don't want to comment. i am not a political commentator. that was just an example. but in general, the policy was widely supported. at least for the moment. the people still want to give a chance to this president and the government to make the economic reforms and move ahead. of course, you have to make cuts in expenditure, and it always creates opposition. i don't think it is significant. there is still the necessary support to make these reforms. it really addresses unemployment. but you are going to have, in terms of the image of france, that its reputation is still a place
that is difficult to do business. france was 29th in terms of this. the uk, seventh. injune, a report said a banker in france costs 46% more when all payroll charges are included. it takes you three years to fire someone in france compared to three months in switzerland, and three days in the uk. you have still got a long way to go to convince people that somebody such as you is trying to do this. what i can say is that the report is misleading. it does not take three months. it takes 4—6 months. it is comparable to germany, the maximum in germany, or the uk. all of those reports i made...
i am telling you... they are not... can i interrupt you to give you the source? it was the head of ubs france, who told a senate committee in febuary this year. it is a recent statement. well, it was probably taken from reports done four years ago. before 2013, yes, the situation was really different. but in the meantime, we have made four incremental reforms on the labour market. i think we already have the situation which is not so different from germany. and with new reforms, we will move somewhere between germany and the uk. hopefully closer to the uk. it will be a different situation. it won't be that far away from the uk, perhaps ireland.
it will have a more flexible labour market. christian noyer, in paris, thank you very much indeed for coming on hardtalk. thank you very much. hello. once again, this sphere is beginning to get a bit overworked. it has been one of those weeks. the reason? that area of low pressure has been thereabouts across the british isles for much of the past week. there are signs of a change, but it is going to be oh so slow. feeling that way across northern scotland from the word go.
showers, if not longer spells of rain. that is not the only area. coming away to the opposite end of the country, showers running in the bristol channel. getting up to the northern half of devon and cornwall. another feed coming in from the channel itself, perhaps towards the kent and sussex coasts. further north, some dry weather across east midlands and south—east, but generally speaking, the further north you go, the cloud fills in and some of those showers become ever more persistent. that will be the way of it for a good part of the morning across the north—east of scotland. here, that cloud beginning to break into lunchtime and the early afternoon. the wind is not as much of a feature across the british isles through friday, as was the case for some on thursday. with that combination, a bit more in the way of sunshine and showers, 22—23. not getting quite to those
heights, i don't think anyone will see another 64 at kingsbarn. the rain will not be persistent, but it could be heavier at times as it could be over the eastern borders and the north—east of england. through the evening and overnight, keeping the showers going across northern and western parts. the driest through central and eastern areas. into the weekend, low pressure dominant over scandinavia. a little ridge of high pressure trying to settle things down, and it will do across southern counties of england and wales. further north, there will be showers again. not too much in the way of breeze, but it will be noticeable. temperatures nothing spectacular for this time of year. a little ridge of high pressure will kill off some but not all of the showers and that makes for a chilly start to sunday underneath clear skies. sadly, those will fill in rapidly across western scotland and northern
ireland. rain moving in for the afternoon. the further south and east you are, the more dry your day will be. come monday, what is left of that front will gradually start to move to the south—eastern quarter of the british isles. i'm marika oi in singapore. the headlines: two men due in court, in sydney, accused of plotting to bring down an etihad plane. more pressure on president trump as a grand jury is set up to investigate allegations of russian interference in last year's collections. i'm alpa patel in london. also in the programme: one of the world's tallest building , the torch tower in dubai, is engulfed in flames for the second time in two years. and you're never too