Skip to main content

tv   HAR Dtalk  BBC News  August 3, 2017 4:30am-5:01am BST

4:30 am
the headlines: scientists have successfully repaired a faulty gene in human embryos for the first time. the us and south korean team used "gene editing" to correct dna that caused a deadly heart condition. the breakthrough could help eradicate inherited diseases, but critics fear it could lead to the creation of so—called designer babies. venezuela has delayed swearing—in members of a controversial new assembly which would replace parliament and rewrite the constitution. president nicolas maduro has been accused of pushing the country towards dictatorship. meanwhile, the firm which helped organise sunday's election says the results can't be trusted. president trump has reluctantly signed off on new sanctions against russia, saying that the law was "significa ntly flawed." russian prime minister dmitry medvedev said the move was tantamount to declaring a full—scale trade war. now on bbc news: hardtalk. welcome to hardtalk,
4:31 am
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 governor for 12 yea rs. before that, he was the vice president of the european central bank and has worked with 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
4:32 am
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, and 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,
4:33 am
because we are now in, in europe in general, in the eurozone, 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 in picking 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
4:34 am
of different activities, which means that there is a whole range of financial activities, notably banks and dealer broker activities, insurance asset management, financial technology, 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. japan's biggest bank has decided to set up its new based in amsterdam. barclays have gone elsewhere. there is a lot of competition, is in there? that is absolutely true. one is 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
4:35 am
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 sizeable activities in paris. it can be in a branch, another subsidiary. many have already done that. so it is not because the hub or the legal entity will be somewhere that it will be a concentration of all activities there. so i think it is a bit misleading to just look at those news. by the way, mufg, that you just mentioned, they already had a bank in amsterdam. so they keep using their banking there.
4:36 am
that's natural. is this what you are being told? a lot of institutions are looking at frankfurt, and of course germany is the biggest economy in europe. it's home to the ecb. many banks have said that frankfurt is going to be their main eu base. are these the ones telling you something behind—the—scenes? absolutely. among the assets in paris, there is a 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, spouses or partners, and want to find jobs in other activities, it is more difficult than in a big city like london or paris. who has specifically
4:37 am
said this to you? do you want to name some of the banks? 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 it stands, the figure is like 30% of the european union's 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. it doesn't necessarily mean that any business lost to the city of london post—brexit is going to go
4:38 am
the way of frankfurt or paris. just to leat you know, borisjohnson, the british foreign secretary, he said the real rivals of the city of london 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 a very important role and 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 in london and teams working in paris. 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 move to new york or to asian places.
4:39 am
they need to move to the eu or be given up. all the institutions say they want to continue servicing their clients, they do 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, the concentration of something. there has been over the last 20 years, hyper—concentration. 20 years in the past, london was the dominant financial centre, but paris was an important financial centre. a lot was done in other cities, frankfurt and so on. so, there will be some loss
4:40 am
for the city of london, but not to the point that the city would be badly damaged. if the city of london loses 15 or 20% of its activity, it will remain one of the biggest financial centres in the world. second, more generally, on that — it depends on agreement that can be reached or not reached on trade. 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 philip hammond and 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
4:41 am
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 of basically the capacity of its institutions to regulate, the capacity to reconcile disputes, and powers that are in the eu rules, freedom for goods and 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,
4:42 am
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 its power to make paris the european financial capital. but is this trying to capitalise on the spoils are 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 result of hyper
4:43 am
concentration in london is the result of the single market, which means that a single regulation and a single judicial system. bizarrely, or to a point, the creation of the euro. 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 in any way. coming back to a normal state of things. it is understandable that countries would be alive to the opportunities that brexit might provide to, you know, present a different — different opportunities for countries. but what i want to put to you is that the french seem to go farther.
4:44 am
jeremy browne, who is now the envoy for the brexit operations of the city of london, in a leaked memo 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 anniversaries, not partners." what is your response about? france sees britain as adversaries, not partners." what is your response about? this memo, whatever has been leaked, to me, is absolute nonsense. if i may say so. with all due respect to whoever. he is reported to have this you, 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
4:45 am
as the rest of the eu. the position is embedded in a common position. the chief negotiator is michel barnier. and he is the one who clearly said, and will say it what needs to be said from this site, from the eu. so there is no willingness to create problems for the city of london or the uk. so there is no willingness to create problems for the city of london or the uk. but one is to recognise that we have, we have eight common concern, that is an enormous concern, and that is financial stability. i mean, wejust 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,
4:46 am
and full powers, the financial sector, and a 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 for the monetary area can do that. so it must be the eu institutions having this power. and i cannot imagine — if it was imaginable that the city of london or the part that is dealing with the euro, would be regulated by eu institutions, where the judge would be in the european court ofjustice, but the central bank, with full, 100% power, would be the ecb, or the euro system, and the market regulator would be established in paris, with no powerful westminster, or the bank of england, or for the uk regulator, then maybe we could have another system. but i do believe that this is, that this is imaginable. this is why we believe that...
4:47 am
0k. you've give a very full answer to the quote from jeremy browne, that i gave you. the election of emmanuel macron in may, we are seeing france in a more assertive way than it was under 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?
4:48 am
the cgt is saying it is preparing for street protests for relaxing these labour laws, to make it easier 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. for a number of things, it was largely consensual. 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. you've got 800,000 students
4:49 am
very upset about cuts to social security allowances. civil servants, teachers, several sectors are opposed. no, well, you shouldn't mix everything. there was no big demonstration at the moment. nothing happens, you can come to 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. it's not easy. no, but it... the problem exists in all countries, in many countries. of course, but i want to come back to the series of reforms, and we don't have time to go
4:50 am
into the details of all of them, they are to make france more comfortable for the rich, but 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, the measures hit the poorest foremost. that is a quote. so that's the perception. 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.
4:51 am
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 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 best declined when compared to predecessors, like francois hollande and nicolas sa rkozy. —— the steepest decline.
4:52 am
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 so want to give a chance to be president and the government to make the economic reforms and move ahead. of course, you have to make cuts in expenditure, it always creates reactions, but i don't think it is so significant, and i think 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. in 2017, france was 29th in terms
4:53 am
of its global position, the uk, seventh. injune, a report said a banker in france costs 54% 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. so you've 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 it is misleading. to take your last example, it does not take three months. it takes 4—6 months. it is comparable to germany, or maximum to germany, or the uk. the matters going to courts
4:54 am
is slightly lower than 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 committee earlier 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.
4:55 am
thank you very much. hello. the area of low pressure that brought wednesday's rain is still close enough during thursday to produce showers across the uk, making it quite windy too. it is gradually edging its way north—eastwards. not quickly enough for many of us before it gets to scandinavia and our weather improves. plenty of showers from the word go across many parts of the uk.
4:56 am
the north and west in particular. some of these will be heavy. the risk of a rumble of thunder and perhaps some hail too. a look at the picture. eight o'clock in the morning, showers scattered in south—west england. much of central and eastern england will be dry at this stage. some sunny spells around. but you will notice through england and wales it is a windy day, unseasonably for the time of year. gusty winds at that. plenty of showers in northern england and northern ireland, beginning to pull away actually. showers in scotland initially to the west. longer spells of rain in the northern isles. here we have easterly winds. brisk south—westerly gusts of wind in england and wales will be noticeable during the day. some sunny spells. showers fading in the afternoon, especially in england and wales. they linger on through the afternoon in scotland. slow—moving with lighter winds here. thundery downpours especially in eastern scotland into the afternoon. temperatures, high teens, low 20s. the first day of the women's british 0pen golf at kingsbarn, not far from st andrews on thursday.
4:57 am
we have the threat of some heavy showers moving through. some will fade thursday night into friday. could well see some spells of rain in ireland and scotland. edging southwards here for a time around the area of low pressure which hasn't quite yet got to scandinavia yet. the breeze is a notch down. more in the way of sunshine. feeling pleasant between showers. and in fact, for the bulk of the uk, the showers away from scotland will be few and far between. those temperatures, well, into the low 20s in east anglia and south—east england. though most of us still pegged back into the high teens. the big picture going into the weekend, a ridge of high pressure trying to come in. we will still see showers on saturday, perhaps for a time in northern england, north wales, scotland,
4:58 am
more numerous in those areas. temperatures in high teens, low 20s. after a chilly night on saturday, sunday delivers drier weather. though there is a weather system poised to come in from the west later in the day. hello. this is bbc news. i'm ben bland. president trump reluctantly signs off new sanctions against russia. moscow says the move amounts to a "full—scale trade war." following condemnation at home and abroad, venezuela's president nicolas maduro postpones the launch of a controversial new assembly to replace parliament and rewrite the constitution. weather warnings across europe as several countries are hit by potentially dangerous heatwaves. and will he become the world's most expensive footballer? neymar could cost paris st germain a quarter of a billion dollars. he'll earn one dollar every second. and i'm sally bundock. the business
4:59 am
stories. charged up!
5:00 am


info Stream Only

Uploaded by TV Archive on