tv Bloomberg Markets European Open Bloomberg November 15, 2017 2:30am-4:00am EST
full-scale breakup, leaving --estors questioning how big how quickly she can recover. that's your bloomberg business flash. -- matt: thanks for a much for that. the president of zimbabwe is said to be step down. after a week of confrontation with the government, the forces have said action was needed to stave off a violent conflict. he is 93 years old. what's the latest? it seems the situation is extremely fluid. himself planning to step down. there's a lot of secrecy.
not a lot coming through in regards to news on a regular basis. but we are hearing news that deal fore is negotiating a he and his wife to leave the country peacefully. this is the one people are looking to to take over at this point in time. would it be -- guy: what are the southeast south africa? what would they leave behind? south africa would probably be the first destination.
politicians seek asylum enzo oblique from here as well. a would say we offered it to use so you need to offer to us as well. she would leave a situation where the former number two to helped him emerge as the leader in the 1980s, does when yoution change have a leader similar to mugabe? guy: thank you very much. let's turn to the big corporate story of the morning.
airbus with its biggest deal ever. this is a sale of neo's. those are single aisle jets. airbus now has the upper hand at the dubai air show. let's go to divide. let's bring in our managing editor for global business. the airbus management had been having a tough time of things. how significant of this is airbus in its psychology? >> it's huge in every way. it's a huge order in terms of numbers. but it's psychologically a real breakthrough.
the show had not gone the way they wanted. management was kind of invisible at the show. what are they doing? there was a lot of uncertainty going on. showsg this breakthrough you these events follow specific choreography and you can never discount john leahy. matt: it kind of pales in comparison to the order we were crazy about letting morning. how they manage to turn it around? >> he's a master salesman. he's the guy is the rainmaker for airbus. he's stepping down. this is his swan song.
he maketh the order from emma slater that has been eluding him but this is a massive breakthrough. he has the golden rolodex, the final touch. he's done it again. the events we thought boeing at the upper hand and suddenly, boom, on the last -- he does a press conference and he can change things around. what's going to be bolted onto these airplanes? the neo engine option has had problems. this is a huge order. will they have to split the -- downwn and went all the middle for the engine supply? >> it plays a big role, who was a bit?
that's the component we don't know. they said the engines we pick up a later stage. not unusual. ge and saffron is one possibility. there's also the pratt engine. they will try to get a slice of the cake. there have been massive engine issues with the flat. yesterday that they seem to have a fixed now. they have made some progress. people are not too spooked about it. they are still learning the plane. but this could go down the middle. guy: one to watch certainly. joining us out of dubai. are minutes away from the market open updates. airbus is one of those stories. oil stocks, keep an eye on them as well. there is the zimbabwe angle.
airbus is a big story. there's also the companies that make the engines. a partnership with ge. whatn't exactly know engine will be bolted onto these airplanes but there will be speculation. keep an eye on that story. could be something to watch for. is in the airplane bolted of the engine? that's kind of the inside joke but as you and all the other producers have been point out, not that funny a joke. the engines are the important technological aspect. that's what buyers really want if they want a fuel-efficient aircraft and make more money with it. i want to talk about oil.
guy: if you are along the market, it was a tough session in asia. a very similar story and commodities as well. european equities look like they are going to follow suit this morning. .5%.bex down around 100, .4%. stoxx 50, down .5%. s&p futures trading pretty close according to marc cranfield. those november lows. matt. matt: commodities will have a equityimpact on the markets today. the metals, the mining, the energy stocks, the big losers of
the nikkei and the topix this year. if you click into the metals, you can see base metals are the big -- losers here. nickel is down, copper is down, the is down. miners, want to watch out for in the london market this morning. we are just opening up now. 7414 is where we are trading. we are expecting down to be the operative word this morning. weakness expected to come in more than we have got at the moment. maybe we will get a little bit more on the downside as well. the ibex is expected to open the worst this morning, trading substantive thousand. we will see how much more weakness creeps into the market as well. opening down .7%. the cac 40 down by .3%. nejra cehic. nejra: the gilt market open here as well. n money moving into
bonds. it is a question. the 10-year gilt yields opening we are seeing that down two basis point, tracking what is happening in the 10 year treasury yield. 1.3%. we are seeing asixth day of losses -- a sixth day of losses. andrisk-off continues unsurprisingly, energy and materials are providing the biggest drag out of the industry groups on the index. as matt was saying, we have been seeing the selloff and commodities. that is the bloomberg commodity index. we are seeing weakness in oil and metals for different reasons. a selloff across the commodities space feeding into the equities space in europe as it did in asia. looking at the ftse 100. we are seeing sterling fairly steady in today's session.
one month volatility on the pound has been spiking. that captures the december e.u. summit. that probably tells you something. the ftse 100 underperforming the msci all country world index by the most since 1988. they are at their most pessimistic on u.k. equities since the financial crisis. part of that perhaps down to the theory that just because we have a weaker sterling, it is not necessarily going to be good for the ftse 100. that is how the story argues it anyway. finally, as we have been talking about, commodities i am showing oil and gas talks year. the oil and gas index in blue. estimated 12 month ats in white. oil and gas has been one of the starting t -- star industry groups. questioning if it is the end of the rally. minors, isrvices, where we are seeing the weakness
this morning on the mov screen. taking it down, you have got some of the minors trading down a little bit. rio isis tradin -- trading softer. , oil and material stocks, seem to be providing the bulk of the weakness coming into the market this morning. unsurprising given the commodity selloff we have been watching carefully. rio and a whole bunch of others. let us take a look at where the rises are this morning. is doingh stock alright. the reason the paris market is outperforming is there are individual stories that seem to be helping out. airbus trading up by 3.23%. the supply chain rising this morning by 2.44. that is the airbus supply chain story coming in as well. of french stocks that are certainly helping. it looks like the french market outperforming a little bit.
matt: very interesting market to watch today. because of the global equity selloff, overnight, amid concerns the stocks have become too expensive. willie stoxx 600 continue its longest losing streak since may of this year? joining us now is michael metcalf, global head of microstrategy at the street level markets. michael, what do you think about here? they are not as expensive as u.s. stocks. pe, welook at forward are looking at 16 on the stoxx 600. more than 19 in the u.s.. about 15 in asia. where do european stocks lost in for you -- slot in for you? michael: there are not that many things as expensive as u.s. stocks, of course. from a valuation point of view, it is probably still attractive. obviously, right now, the only
thing we're questioning, the virtuous circle of good growth, no inflation, decent earnings news is still there. it has been there for a number of months. the question we are asking ourselves in the last couple of weeks is that price action has been a little less supportive. it is want to feed through into sentiment going forward. disruptionthat much sentiment. a bit of froth off the top of the market. matt: what do you think about -- speaking of taking trough off the market -- japanese equities selling off for the fifth day in a row on the topix mother sixth day in a row on the nikkei -- in a row onh they the nikkei. they are 15 times trailing earnings. profit taking of
japanese investors, a buying opportunity, do you think? michael: when you talk about the valuation case in japan, certainly investors -- it would be dangerous to say this is the unwind of a bubble. the fact that is being led by japan tells you there is not a valuation case. the one thing we observed in japan is there has been a lot of foreign investor inflows and japan. the international investment community has certainly brought into the opportunity that they are a good value here. a slowinglways seen of inflows, so again, it does not look to us like the underlying fundamentals or sentiment has really changed. we are just seeing a correction in prices right now, and look during the other thing is that valuations are fine, but obviously, the move we saw in prices was very sharp. it is not strange to see downward connections.
guy: what about the sector story? this is usually when people are rotating in and out of. this is year-to-date, stoxx 600. what has underperformed? media. what has over blonde, industrials. performed, industrials. over the last month, technology is still outperforming. health care, financial services, basic resources, and telecoms. tech is still bid. thes a story running around world, doing really well right now. it is starting to be rotated out. classic year-end stuff. michael: i think one of the questions we have had this year, and because the returns have been so good and so smooth, because volatility has been low, the questions we have been asking is "surely it cannot continue in the current ve in?" it makes sense.
just any kind of small hesitation and the price trend, investors will be tempted to take profit. bank of america merrill lynch fund managers survey, the fund managers suggested equities are looking copy, so the valuations in aggregate are still buying. cash levels are coming down. is that because there is nothing left to buy? cash still is not a great place to hang out. or is it something else? do they believe there is a final hurrah in here? michael: he would love the sentiments. peak before the something bad happens, and actually, the university of michigan consumer sentiments had a very similar thing. it was just an all-time high. we quite often get the peaks of sentiment that look like the
market is overbought. the one thing we would say in terms of what is driving it is there is always something else to buy him a something else to buy. to buy,hing else something else to buy. being caught in this virtuous circle, where we know the economic environment is the nine. earnings have been pretty supportive. price action has been supportive, and investors are continuing to get new inflows. in the investment management industry. you have no choice but to invest, no choice at all. you are caught in this virtuous loop. matt: what are the biggest risks, michael? possiblearing a government shutdown, or at least the saga, the beginning of the next saw the in december. plus, you have got everyone kind of thinking on tax reform that may be still watered down and takes allowed to happen that it does not really matter. michael: i mean, look.
the government shutdown will obviously, onto everyone's radar and yes, it is a risk. that kind of narrative is very rarely positive for markets. if indeed, that is where we go. the tax reform, i think it is an interesting one. when markets were first mulling tax reform, you had central banks saying in particular that the last thing we need now when the economy is in this kind of gradual recovery mode is a big fiscal stimulus that might stimulate wage growth. that could be quite disruptive for fixed-income markets. that kind of environment, it is not quite clear actually how well equities do in fact. if yields have to rise. the idea that has reform is in some way watered down, but you still get a version of it, it yields is the hit to
mitigated so the knock on effects the markets are less risky. in terms of the -- if we are trying to think longer-term rather than the short-term price action we are seeing, the biggest threat to the macro environment is still the same thing, which is inflation, so we have got this really nice goldilocks narrative, which is that growth is enough to mean improvements in the labor market, improvement in corporate earnings, but not enough to generate inflation. so that is all great. if something changed in the inflation outlook, whether it the way growth or higher consumer price inflation, that changes the scenario because it means central banks have to move faster. one of the big underpinnings, remaining optimistic in times like this when market prices are correct, is monetary policy is remaining very accommodative. matt: michael, you are going to stick with us. global head of microstrategy that they treat global markets, because there is a lot going on goin today. what will the u.s. inflation gauge do later today mean for
14 minutes into the trading session today. we are seeing losses across the would havethis he known if you watched, u.s. stocks fall yesterday. japanese and asian stocks fall overnight. the celtics its hundred down as well, .6% pure the ftse is only off by .3% right now, even though the continental indexes are off by a little bit more. upon had been down this morning. it is now up. really little changed to the euro, gaining a little bit more than the pound right now, about .25%. guy: just another order coming out of the dubai air show. fly dubai, a low-cost carrier, relative short-haul, but low-cost, is going to place an order with boeing for the 737 max, which is the neo-version of the 737, the a320. a big order coming through for
airbus this morning on the new engine option, the 320 neo. a substantial order coming through for boeing on its narrowbody, the 737 max. we will look for that to come the very shortly. let me take you to the ego bloomberg.our cpi data is due to drop in the united states at 1:30 p.m. london time. tothe inflation gauge misses the downside, will the markets start to be concerned that the fed is making a policy mistake? if it beats on the upside, do we need to get closer to the dots than we currently are in terms of pricing? a bunch of questions to be asked. you have the financial stability question as well. is part oftability the mandate, something that should be focused on little bit more on now. michael mccaul is still -- michael metcalf is still with us. misss go with the
argument. cpi is expected to drop year on .22 down to .2. december should not be live. december should be a meeting we are going to move through. we don't know some the things about the u.s. economy right now. michael: i think that is right. look, the mrs. we have had on have hadthe misses we on core inflation are a reason why fed commentary has not been on the dovish side and why the market has been unwilling, even the the fed is delivering on what is that it would do this year. we know from the minutes at the balance of fomc members now, more of them see downside risks cpi than upside risks. if the data comes in on that
side, then yes, i think it will encourage that question. seene moment, december is as a music into. any downside is on the cpi or retail sales. it might not be enough to get us below 75%. -- flat on the month. seasonals would normally add .2. it might not fall quite as much as what the market is pricing if the online data is a guide. in terms of upside risks, because it is so well priced in december already, i think you need a very big upside surprise. guy: the asymmetryguy: -- michael: probably is an asymmetric risk because of pricing. on this kind of hit before, michael, but if i look at the dots, and i have got my
screen up on the bloomberg, the fed is predicting a much steeper path of increases next year than the market is. frankly, in the years ahead as well. if we get a tax reform bill, does the market have to move up to the fed? and if we don't, does the fed move down to the market? is that what we basically are looking at? michael: i don't think it is just about the tax reform. clearly, if you have got a big tax package, than the market would lift itself up pretty quickly. the mainhink that difference between the market probably in part a view on inflation and where the inflation risks are. the marketket is -- struggles with this. in 2015, 2016, the market was right to lowball the fed.
it was right. it turns out, in 2017, the fed did what it said it was going to do. the way in which the fed have delivered hate crates is interesting. at very few points this year has the market fully priced all the hikes that we are going to get. in the run-up, the six weeks before the meeting -- this was true in march -- and then again, really in june -- they talked the market up so the market is ready for the hike when it comes , but it is almost like a sort of just in time discounting, where the fed gets the market ready for the hike just before the meeting. it does beg the question. guy alluded to this before. it begs the question of what is the value of the dots if that is how the fed is going to manage policy expectations? matt: this is a conversation we were having yesterday in frankfurt at the ecb. janet yellen, of course, there with mario draghi and everyone
else. she will not be at the fed and the chair next year. do you see jerry powell running anything differently? michael: one of the factors that at the at, we look central banks commentary from a company called prattle, and we powell how this scores tossed commentary, whether he was hawkish or dovish. it would be interesting compared to yellen. much even more centrist, closer to the center of the committee on his commentary than yellen was intact. you are judged using that independent data-driven assessment, which suggests he is very much driven down the line. it is suggested he is a pragmatist. the question about the dots is an interesting one, which is what his the value of them?
should we be doing a simple form? matt: jerry powell of course has never dissented. we talk about that. if he has mohammed as his advice, do you think we'll see the fed sort of getting back to business as usual? michael: interesting question as to what -- say the fed is already currently on business as usual, and even though -- thefed effectively seems to on autopilot. they are trying to normalize policy. they had done so in a very regular fashion. they say the are going to do it in a vague you are passionate year. you just have to assume they will continue to do that. the challenge for them, how they communicate that to the market. matt: very good point. michael, thank you so much. michael metcalfe is going to stick with us. we will bring you the latest on
it is a battle of the narrow bodies at the end of the week over in dubai. michael metcalfe is still with us from state street. i have two charts for you. this is u.s. germany to your spreads. just get this up. i have got the 10 year spread. which one of those do i pay attention to? michael: it is really interesting that you throw them up, because typically, currencies are driven more by two year yield differentials, rather than the long-term yield differentials. definitely in the last three-month, euro-dollar has a benefit in the 10 year spread. -- i would say it is a little bit about long-term growth expectations, and they are better reflected in the yields. there is also a question about whether the market believes the
red.-- matt: a sea of european markets open lower. it is a new day. airbus wins its biggest ever deal. boeing counter is with a deal for 225 of its max aircraft. zimbabwe's military seizes power. the president is preparing to inp down after 37 years power. good morning, and welcome to bloomberg markets, the european open. i am matt miller in the german
capital berlin alongside guy johnson at our european headquarters. into the trading day. let us break it out. i want to get to the grr this morning and talk a little bit thet what is happening with telco sector, which is massively outperforming the rest of the market, a huge sea of red this morning. lt's is trading strongly this morning, the stock bouncing back. that is why the telcos are higher. basic resources and oil and gas that are driving things lower this morning. what is interesting as well is that the real outperform of this year in europe is technology, and that is the third biggest loser as well. i wonder as well whether what is done well -- let us sell it and book some of those gains. i wonder if that is a factor into the market this morning as
to how trade and investors are positioning themselves. here is sebastian salek. preparing tombabwe step down according to news 24, the president negotiating with his wife to leave the country. nation's armed forces seized power after a week of confrontation with the government in a televised address. he said he will guarantee the safety of him and his family and his "targeting criminals around him. " >> with which to make it abundantly clear that this is not a military takeover. pacifying the political and social economic situation in our country. in violent
conflict. sebastian: gross domestic product with an annualized rate of 1.3% on september 30 as recovery in exports is rising business investments offset to decline in consumer spending. theresa may is heading to a showdown with her own party. one member of parliament calls it her mad plan. former attorney general dominic read was cheered by several of his colleagues in the house of commons as he wanted to enshrine the data. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. guy: thank you very much indeed. zurich insurance on track to reach its financial targets. disposals andset
changes to the groups organization. exclusive for an interview from that day, mario greco, ceo of zurich insurance. thank you for your time this morning. very nice to have you on the program and to be able to speak with you. one of the things that stands out from the statements you have delivered as part of this investor day is you guys are confident you will be able to pay dividends, higher dividends. that will be a story that goes forward from here. what makes you so confident that that is going to be the reality of the situation? will come the progression can we expect? -- what kind of progression can we expect? are seeing our profitability improving in all the different businesses. life, and by geographies. we are confident that this traction will continue through
this on the back of the recent events. it will definitely have an impact on pricing, especially from property risk in the u.s. markets. that,at means to us is together with the cost reductions, our profits will continue growing, and this is an excellent support to our plans to remunerate those dividends. guy: can we expect an increase this year considering the claims story that you face? more short-term, what are we looking at? look, in november, it is always, always very difficult to talk about dividends. dividends need to be discussed with the board after the yearly numbers are closed and concluded. for is much more a matter february and march of next year.
however, we are very confident that the actions we have been taking through this year are really producing the benefits we expected, and compared with a year ago, we are confident that we will be able to deliver to shareholders what they expect us to deliver to them. matt: matt miller in berlin. i want to ask about the value chain. you said you want to own more of the customer relationship at zurich. how to you do that? are you looking to develop technology and how to deal that ordeal need to make acquisitions? mario: matt, the insurance industry is under a total transformation. this is a massive revolution of the industry after centuries when this industry has been unchanged and pretty much the same all over. now, the industry is under a profound revolution.
the revolution is customer lead. it starts with the customers now having information, having availability, and using the technology to understand and request services. a veryogy offers us interesting opportunity because conductivity is just an opportunity for us to expand the services. we will talk later with investors if that is also called for a very different i.t. manager companies. companies have to become open architectures. and the focus of the companies will be to provide services to the customers with partnerships, with the best possible solution for the customers. we are i think. vance in that. we are developing this concept, and we will keep progressing on that. matt: of course, banks face the same issue. the successful ones have dealt with it so far by buying and
integrating simtech companies. don't you need to do the same thing? he seem reluctant to talk about m&a acquisitions. it seems like it has got to be part of your strategy. mario: yeah, well we made clear that our strategy is based on traditional m&a. we don't believe it can be value in considering a transaction of multinational insurance companies, but if you look at what we have been doing in the past month, we have been buying services and platforms that allow us to connect to customers. on the services, i like to spread the word on the we did months ago by buying a traveling service platform. it allows us to bring the services to the customers. and enhance their experience when dealing with zurich. it has given us already excellent returns of customer
atisfaction, loyalty, and future of cross-selling to the customers. so we will consider doing more, entering into new spaces, and becoming service providers. as yourgeted innovation, talk about in the investor they release. as you target the innovation in the kind of spaces you have been talking about, you are changing the rest of the business as well. there are cost cuts coming through. which areas of the business to you see changing the most in terms of cost cuts you are going to make? mario: we are accelerating a theound transformation in organization for its customers. insurance companies have never been customer-centered ever before. and we think that what is new today and where is the great opportunity today is to become customer-centered.
we are shifting completely ours faces and reducing every cost of which is not focusing customer and focusing on customer targeted expenses. it is a profound transformation. it is a revolution. insurance is one of the most interesting industries these days. this revolution will completely reshape the industry. we expected direct to be able to lead this transformation. matt: we hear from john cryan and again from a lot of other bankers that much of the things employees have been doing in the past are now easily handled by computers -- i don't want to say artificial intelligence -- but other systems. as you invest in these targeted innovations, does that mean a far smaller headcount? mario: yeah, artificial
intelligence is developing its capabilities for insurance companies. we are investing in artificial intelligence, saying we consider that this will be extremely promising. let me stress a point. i don't think that this will differentiate the winners and the losers in the industry. we differentiate that, and we will make zurich a winning company in the future. will be the capability to service customers in unique ways. customer loyalty, customer satisfaction, is i think what matters the most. from that perspective, what we do in our back offices does not really matter for the customers. they just want to see the front office. so yes, this is happening. it is growing every day. once the competitive are killing arguments for success in the
markets. matt: so the market wants to know what kind of size to expect cuts areour cost achieved so far and you're looking to go 1.5 billion. can you do what you are doing today in five years with half the staff you have? with three quarters of the staff? what do you think? mario: it is a difficult question. i honestly don't know the answer yet. at the same time, i mean, we are shifting now activities towards the customer services. what we definitely need to do now is transformation of skills in the transmission of attitudes of the insurance employees towards the customer orientated activities. now what is going to be the balance at the end is very difficult to say today because computers are growing every day,
and they become smarter and can do things other humans cannot do. at the same time, they like to be satisfied by other humans. it is a balance between two different forces going opposite, and where exactly this will end up being, it is difficult to say. guy: a quick question. that as a rising factor. expectation for the impact it will have feeding back into zurich? mario: honestly, less excited about that. moving, this is very low. it is not as pronounced as he would hope to see that. insurance business does much
better. rates are on a positive traction. we got used to -- a prudent forecast for rate going forward. we are very, however, optimistic .n the economies in 2018 the u.s. is still maintaining strength in china, japan, and india continue to grow very nicely. again a good way of thinking about 2018, with some optimism, because we think that this strength will continue through next year. guy: mario greco, the ceo of zurich insurance group. thank you very much indeed for your time. it is zurich's investor day in
guy: 47 minutes into the market session in europe. nejra cehic come over to you. nejra: i know you have been talking about this stock, but it is one of the biggest gainers. announcing the biggest commercial plane deal in its history. we are talking about an order valued at nearly $50 billion for 430 planes. i'llis covering a320 neo jets. airbus moving higher end sticking in the same industry group space, up 1.3%. the company trading in the first is largely in017 line with expectations, so the full-year view is unchanged. thestrategic review of divisions is ongoing. on the downside, i am looking at lanxess. third-quarter sales were a mess. notearnings structure is
pleasant. investors reacting negatively. one of the worst performers on the stoxx 600. guy: let us break it down from a such a point of view. mining, oil, and gas being hit me hard. telecoms are being outperformed by a significant margin. theave seen some of industrial metals coming under pressure overnight, particularly out of the asian session into europe. gas, losses in wti and brent. the banks are also suffering as well this morning, down by .9%. oil and gas and banks got told off in the u.s. session yesterday. matt. matt: thanks very much. germany's party leaders struggling to find common ground. barring a minority government, if the party talks fail, the only remaining option may be to
hold a new election, something which would be unprecedented in postwarral republic's history. let us get the view of michael, who sits on the senior committee of the democratic party. the berlin here in studio. thank you so much, michael, for your time. i know you are very busy with these coalition talks right now. what are the biggest sticking points that are holding you back from getting past the preliminary stage? michael: good morning, matt. first of all, the consolation of parties is something which is new for the federal republic of germany. we have cdu, the free democrats, the greens, and the csu. we have to consider that these are four individual-owned parties with their own schedule, program, agenda, and the focus on the positive results we have.
we already agreed on quite a bit of topics, but there are still differences, and of course, the differences are more time-consuming, and it is absolutely important to clarify these points. the major discussion points there is climate issue, the right path to achieve the climate goals in germany, but also to secure the competitiveness of the german economy. and the second question, which is very much related with this, is the transport issue, especially the ban of diesel engines. matt: i assume you are talking about the ban on building new diesel engines, or new internal combustion engines, and when i will come into place. there is no disagreement on the german government doing everything in its power to stop
cities from banning existing diesel engines. is that right? michael: we have the court cases , and there is a big discussion about how the e.u. legislation can be implemented in the right way. it is not only a topic in german cities, but in other e.u. cities as well, and one option there is the ban of old diesel engines because of the exhibitions. we want to avoid these bans because the customers should have security that they can use the car they have bought, and the implementation of these bans would be very difficult. there is a dispute between dp, on, csu, cdu, and ft the other side, whether it would be an appropriate measure to
reduce the emissions, because of --is no linear output matt: it is interesting. the greens actually control your home state, where stood guard -- where it is located. they have been fairly pragmatic as far as dealing with the diesel issue, at least in that state. on a federal level, are they more are they more conservative as far as wanting to ban existing diesel engines from munich, stuttgart and berlin? michael: it is possible will pay for that. our position as free democrats is that if it is technically possible to have this upgrade, then it should be done, but it should not be paid by the taxpayer, and it should not be
paid by the consumers. so the question is, can we force the car industry to pay for that? and they argue that legally, that is not possible. this is one major issue which has to be solved. matt: let me ask you about the talks themselves. anean, if you don't come to agreement on the preliminary coalition talks, a lot of people are talking about the possibility of new elections. is that something they are comfortable forcing, new elections? michael: absolutely not. our party leader made clear that votee not afraid of a new because we don't want to enter into a federal government at any price. for us, it is very important that we get a new policy in germany, fostering investment, fostering competitiveness,
helping to create a better framework for a startup enterprise, and especially to lower the tax burden for citizens, and if we now look at mobile setting, we are still confident, but we are also self-confident that it is still possible to achieve a deal, so we hope, because we moved, and we have seen that the greens moved as well. we still hope that in this very difficult climate issue, there could be a little bit more pragmatism, especially from the greens, but we know that everybody, including the ftp, have to move there. matt: you are not afraid to force new elections. michael: absolutely, we are not afraid, because we stand as a renewed fdp. matt: really appreciate it. michael theurer, member of
germany's bundestag, and head of the party in -- guy: thank you very much indeed. an interesting bit of breaking news coming through. it looks as if he is coming out of unicredit. he is considered a lead candidate for that to happen. he currently runs unicredit german operation for the other thing to mention is the huge order coming through from the dubai airship and narrow bodies. we saw the big order coming out of indigo for airbus earlier on. in some ways, airbus has lost out as well today because we had the fly dubai order which came through at 225, including the 737 max, which is the boeing engine,of the new single aisle aircraft. there was some speculation that that order could be split. the fact that it has not is a bit of a blow for those down there. it is "surveillance" coming up
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