Latest / Trumponomics / America's Economic Recovery Isn't Roaring For Everyone

Transcript

America's Economic Recovery Isn't Roaring For Everyone · Trumponomics

0:04
Speaker 1: Hello, and welcome to Stephanomics, the podcast that brings the
0:07
Speaker 1: global economy to you. We have a packed episode this week,
0:10
Speaker 1: including a report from Johannesburg on the economic costs of
0:14
Speaker 1: not vaccinating Africa, sit down with the German finance Minister,
0:17
Speaker 1: Olaf Scholtz, who's running to succeed Angela Merkel as German
0:21
Speaker 1: Chancellor in the autumn, and a plan to save the
0:23
Speaker 1: world for a mere fifty billion dollars. First, Bloomberg Senior
0:28
Speaker 1: economy reporter Sean Donnan has been on the road again
0:31
Speaker 1: to a city in the American rust belt which is
0:34
Speaker 1: being promised a bright future again here Northeastern high Before
0:49
Speaker 1: we go any further, let's get this out of the way.
0:52
Speaker 1: This is, of course, Bruce Springsteen here. And then there
1:02
Speaker 1: is this guy who you may remember. I am thrilled
1:06
Speaker 1: to be back into great state of Ohio right here
1:09
Speaker 1: with the incredible men and women of Youngstown. That is,
1:16
Speaker 1: of course Donald Trump, and both he and Bruce Springsteen
1:19
Speaker 1: are riffing on a place they have in common. If
1:22
Speaker 1: you want to find an emblem of American industrial decline,
1:26
Speaker 1: then Youngstown, Ohio is probably as good as it gets.
1:31
Speaker 1: The steel mills started shutting down in the nineties seventies,
1:35
Speaker 1: and nothing has been the same since. That story of
1:39
Speaker 1: industrial turmoil and its economic and political consequences from inequality
1:45
Speaker 1: to populism is by now a familiar one, but for
1:49
Speaker 1: a place like Youngstown and a new US President, Joe Biden,
1:54
Speaker 1: it's one entering a fresh chapter. Biden, like Trump, has
1:59
Speaker 1: promised to bring all paid factory jobs back to the US.
2:03
Speaker 1: He wants to do that by investing in infrastructure and
2:06
Speaker 1: new energy technologies, and to have the government support an
2:11
Speaker 1: enormous industrial pivot in the auto industry from combustion engines
2:15
Speaker 1: to electric vehicles. In fact, so largest American jobs investments
2:21
Speaker 1: since World War Two will create millions of jobs. Good
2:26
Speaker 1: paying jobs, will grow the economy, make us more competitive
2:30
Speaker 1: around the world, promote our national security interest, and put
2:33
Speaker 1: us in a position to win the global competition with
2:36
Speaker 1: China in the upcoming years. The challenge facing Biden is
2:41
Speaker 1: that this isn't the first time in recent history that
2:44
Speaker 1: it's been attempted, and that's so far the efforts haven't
2:47
Speaker 1: ever really generated the jobs promised, which is where Youngstown
2:52
Speaker 1: and a part of its story that hasn't been told
2:54
Speaker 1: very often comes in. In two thousand twelve, when Joe
2:58
Speaker 1: Biden was Vice Press, the Obama administration set up a
3:02
Speaker 1: three D printing institute in Youngstown. It was part of
3:05
Speaker 1: a broader manufacturing policy, and yes, it was aimed at
3:09
Speaker 1: bringing back factory jobs. Our first priority is making America
3:14
Speaker 1: a magnet for new jobs and manufacturer. That's President Barack
3:18
Speaker 1: Obama speaking to Congress for his two thousand thirteen State
3:21
Speaker 1: of the Union address. There are things we can do
3:24
Speaker 1: right now to accelerate this trend. Last year, we created
3:29
Speaker 1: our first manufacturing innovation institute in Youngstown, Ohio. Once shuttered
3:34
Speaker 1: warehouse is now a state of the art lab where
3:37
Speaker 1: new workers are mastering the three D printing that has
3:39
Speaker 1: the potential to revolutionize the way we make almost everything.
3:43
Speaker 1: There's no reason this can't happen in other towns. Almost
3:47
Speaker 1: a decade on, almost two hundred million dollars has been
3:51
Speaker 1: invested in that institute. It is now known as America Makes.
3:55
Speaker 1: It has thirteen employees in Youngstown and counts about two
3:58
Speaker 1: D companies, and it's now work nationally, including about a
4:02
Speaker 1: dozen in the Youngstown area. Local officials and educators are
4:06
Speaker 1: also trying to establish Youngstown as a training center for
4:09
Speaker 1: manufacturing workers of the future. The goal is to create
4:12
Speaker 1: a business ecosystem that will attract new investment and jobs
4:17
Speaker 1: in industries like additive manufacturing and electric vehicles, all funded
4:22
Speaker 1: by millions in government investment. But it's slow work and
4:27
Speaker 1: it's hard to declare that the institute has fueled the
4:29
Speaker 1: manufacturing jobs renaissance in Youngstown. In more than sixty one
4:35
Speaker 1: thousand people worked in manufacturing in the Youngstown metropolitan area.
4:39
Speaker 1: When Obama gave that address to Congress in January, the
4:44
Speaker 1: number was just below thirty thousand. By March of this year,
4:48
Speaker 1: it was a little over twenty three thousand. Among the
4:52
Speaker 1: success stories as Juggerbot three D, which makes industrial scale
4:56
Speaker 1: three D printers out of a subsidized space run by
4:59
Speaker 1: America makes Zach Defenchenzo is a Youngstown area native and
5:05
Speaker 1: the company's co founder and president. He showed me around
5:08
Speaker 1: recently that humming you here in the background. That's his machines.
5:12
Speaker 1: Most people think you think I'm trying to understand what
5:15
Speaker 1: you print. I could show you parts with the pilot.
5:18
Speaker 1: You will understand is it can also print tooling that
5:20
Speaker 1: you were used to make parts. Government help is meaningful
5:24
Speaker 1: for jugger bout. It helps seed the company. Half its
5:27
Speaker 1: two point two million dollars in revenues this year will
5:30
Speaker 1: come from government projects. Juggerbot has access to Defense Department
5:34
Speaker 1: laboratories and government contracts that would make most startups salivate.
5:38
Speaker 1: But it's also not a huge jobs creator. Jugger Bot
5:42
Speaker 1: has six full time employees. Defencenzo has plans to grow,
5:46
Speaker 1: but when he talks about his dream for his business
5:49
Speaker 1: five years from now, he's talking about employing forty to
5:53
Speaker 1: sixty people. The job's a company like jugger Bot provides
5:57
Speaker 1: are skilled and well paid. The company provides good benefits
6:01
Speaker 1: like health insurance. That's something Defencenzo is proud of. When
6:05
Speaker 1: the sprawling GM planted nearby Lordstown shutdown in twenty one,
6:10
Speaker 1: idea he had was to hire machinists being laid off,
6:13
Speaker 1: and his benefits were part of the pitch. He's actually
6:16
Speaker 1: an idea that he just has funny to do so
6:20
Speaker 1: get healthcare regilit to get healthcare. Plant things here. But
6:25
Speaker 1: companies like jugger Bot operate on a different scale from
6:28
Speaker 1: giants like GM. When GM shut down in Lordstown, people
6:34
Speaker 1: were working at the plant a new electric vehicle company
6:37
Speaker 1: has taken over the facility, but it's only promising to
6:40
Speaker 1: employ fifteen hundred people. A new battery joint venture between
6:44
Speaker 1: GM and South Korean conglomerate LG nearby is pledging to
6:48
Speaker 1: hire a little over a thousand people. In other words,
6:51
Speaker 1: just getting back to where you started looks challenging. The
6:55
Speaker 1: story of the three D printing pushing Youngstown also illustrates
6:59
Speaker 1: another long running issue facing manufacturing workers. Economists love rising productivity,
7:05
Speaker 1: but that by its very definition, means producing more with less,
7:09
Speaker 1: which is America's manufacturing jobs problem. In a nutshell, the
7:13
Speaker 1: US has for decades been producing more industrial goods than
7:17
Speaker 1: it did with steadily fewer workers, and that's not about
7:21
Speaker 1: to stop. That's evident in Latonia, twenty five minutes south
7:27
Speaker 1: of Youngstown, where Mark la Mancha is plotting the three
7:31
Speaker 1: D printing future of his own company, Hometown Products. Actually
7:36
Speaker 1: we're going through now almost two railroad cars of sand
7:39
Speaker 1: a month, which were additive. That's huge. In a former
7:44
Speaker 1: Mistsubishi tire mold factory, five German made three D printers
7:48
Speaker 1: were away twenty four hours a day printing sand moles
7:52
Speaker 1: for foundries that will use them to manufacture engine blocks
7:55
Speaker 1: and other cast metal components. La Mancha is an evangelist
8:00
Speaker 1: for three D printing and new productivity driven management techniques.
8:04
Speaker 1: He has rebranded his employees industrial athletes. On his business card,
8:08
Speaker 1: La Mancha has the title head coach, but that doesn't
8:12
Speaker 1: mean more jobs. When the last recession hit in two
8:16
Speaker 1: thousand and eight, Homptown employed two people. Today it employs
8:21
Speaker 1: forty eight. At the new tol Toonia plant are just
8:24
Speaker 1: eight of those people. It is a cavernous and quiet place.
8:30
Speaker 1: So now this is the print room and I'm trying
8:36
Speaker 1: to think it will be the one on the end.
8:41
Speaker 1: La Mancha is also exploring three D printing metal components
8:45
Speaker 1: directly and venturing into other materials, which presages an even
8:49
Speaker 1: bigger disruption of the local industrial economy. What is this Okay,
9:00
Speaker 1: comes out about the size of a laser? Okay, until
9:03
Speaker 1: you act, until you ask one of one of them,
9:07
Speaker 1: can you make me Polly at the lane sand? So
9:11
Speaker 1: I asked X on mobile if they can make me
9:13
Speaker 1: Polly at the lane sand? Yeah? You know what. We're
9:16
Speaker 1: in front of their naps for friend and Polly affline Friend,
9:19
Speaker 1: think Polly uplane. Wow, it's a trial to see if
9:23
Speaker 1: a relatively old school mold maker like Hometown can be
9:27
Speaker 1: a high speed producer of plastic components and find another future.
9:33
Speaker 1: Now it's a it's a science experiment, but what the
9:38
Speaker 1: power of what is? What if it work? And if
9:40
Speaker 1: it works it gets you into what what kind of products?
9:43
Speaker 1: Then if that experiment succeeds, it will of course be
9:46
Speaker 1: good for Hometown and La Mancha. It might even be
9:49
Speaker 1: good for the US economy as a whole. I think
9:52
Speaker 1: of it as a sign of a new industrial dynamism.
9:56
Speaker 1: But it's also unlikely to mean more jobs for a
10:00
Speaker 1: place like well what if turns to it is now
10:04
Speaker 1: or whatever the words would be, or want it actual
10:06
Speaker 1: work for Bloomberg News charm dining, Yeah, it's m thore.
10:30
Speaker 1: The long term problems for the economy have definitely not
10:33
Speaker 1: gone away. The short term news has been a bit
10:35
Speaker 1: brighter for many of us recently, shops and bars opening again,
10:40
Speaker 1: roads filling up. My children were even told this week
10:42
Speaker 1: they didn't need to wear masks in the classroom anymore.
10:46
Speaker 1: But that feeling of reawakening many of us might be
10:49
Speaker 1: feeling is far from universal. In fact, globally, there are
10:53
Speaker 1: nearly as many people dying now of COVID nineteen than
10:57
Speaker 1: at the peak earlier in the year, twice as many
11:00
Speaker 1: as when the first wave got going in the US
11:02
Speaker 1: and Europe the year ago. For large parts of the world,
11:06
Speaker 1: COVID nineteen has probably never looked more threatening, and the
11:10
Speaker 1: stakes for Sub Saharan Africa are especially high. Here's Bloomberg's
11:15
Speaker 1: Economy and Government reporter in Johannesburg, Prunesia Nadu. There should
11:26
Speaker 1: have been a promising year for Africa. Instead, a shortage
11:29
Speaker 1: of coronavirus vaccines threatens to stall output, increase inequality, and
11:35
Speaker 1: reverse the gains made against poverty. Most countries on the
11:39
Speaker 1: world's least inoculated continent are depending on KOVACS, a global
11:44
Speaker 1: initiative creator, to provide equitable access to vaccines, but African
11:49
Speaker 1: nations won't receive the bulk of their orders until the
11:52
Speaker 1: second half of the year, and those will only cover
11:55
Speaker 1: a fifth of their populations. Others are cash strapped and
11:59
Speaker 1: relying donations from China, Russia and even India. We're a
12:04
Speaker 1: devastating disease outbreak and temporary bound on exports have already
12:08
Speaker 1: curbed shipments. That leaves Africa vulnerable to new waves of
12:14
Speaker 1: infection and extended lockdowns. The United Nations Economic Commission for
12:20
Speaker 1: Africa is warning of potentially dire consequences. The slow vaccine
12:25
Speaker 1: rollout and lack of funding to bridge the gap between
12:28
Speaker 1: poor and rich countries could set Africa back two to
12:32
Speaker 1: five years. Na gopaled Us is a director at Africa
12:37
Speaker 1: focused risk management firm Signal Risk. The slow vaccine rollout
12:42
Speaker 1: in Africa is deeply concerning because it really runs the
12:44
Speaker 1: risk of making US a prior continent. If we do
12:47
Speaker 1: not vaccinate our people in Africa, we are going to
12:51
Speaker 1: be locked out of the global economic recovery, which is
12:54
Speaker 1: going to compromise our ability to achieve growth, to trade
12:57
Speaker 1: with the rest of the world, to unlock investment, and
13:01
Speaker 1: which is going to see US remain a lagged continent.
13:04
Speaker 1: The International Monetary Fund already sees the economic activity, particularly
13:08
Speaker 1: in the Sub Saharan region, falling behind world output. Rich
13:13
Speaker 1: countries with access to vaccines I expected to recover more
13:17
Speaker 1: strongly from the pandemic and poorer nations struggling under the
13:22
Speaker 1: dual burdens of disease and debt. COVID nineteen plunged thirty
13:27
Speaker 1: million Africans into extreme poverty last year, meaning they live
13:32
Speaker 1: on less than a dollar ninety a day and without
13:36
Speaker 1: adequate support. As many as thirty nine million more could
13:40
Speaker 1: follow in one according to the African Development Bank. While
13:45
Speaker 1: advanced economies can afford to extend stimulus measures for many months,
13:50
Speaker 1: African policymakers were already burdened by budget deficits and high
13:55
Speaker 1: levels of debt even before the pandemic struck. They're on
14:00
Speaker 1: a pressure to restore public finances. Some African countries will
14:06
Speaker 1: get relief after the Group of Twenty Nations extended its
14:09
Speaker 1: death service suspension initiative to the end of one and
14:14
Speaker 1: others will receive a portion of the thirty three billion
14:17
Speaker 1: dollars in special drawing rights that the IMF plans to
14:20
Speaker 1: provide to African countries. Well, that's unlikely to be enough.
14:26
Speaker 1: There are some silver linings. According to Gopaldas, accommodative global
14:30
Speaker 1: monetary and fiscal conditions should allow African countries to attract
14:35
Speaker 1: capital and reduce their costs of funding, and higher commodity
14:39
Speaker 1: prices should also benefit governments in resource rich nations. We
14:44
Speaker 1: would do well not to squander this opportunity. You'll remember
14:47
Speaker 1: that at the turn of the last decade we were
14:49
Speaker 1: in this position as well, but both economic governance and
14:52
Speaker 1: political governance has regressed over that period um. So I
14:57
Speaker 1: think it's important that we take some of these lessons board.
15:00
Speaker 1: We need to diversify our economies, we need to integrate regionally,
15:04
Speaker 1: and this is where I think the continental free traded
15:06
Speaker 1: movement becomes important. And then also we need to really
15:09
Speaker 1: improve our governance, both from an economic and political perspective,
15:14
Speaker 1: and I think if we do that, we'll have a
15:16
Speaker 1: fighting charge chance of coming out of this this pandemic
15:20
Speaker 1: um in a in a reasonable manner. So the distribution
15:27
Speaker 1: of vaccines around the world is shockingly unequal, but everything
15:32
Speaker 1: about this pandemic has been distributed unequally and globally. As
15:36
Speaker 1: we can hear very clearly in that piece, the gap
15:38
Speaker 1: between rich and poor countries seems to be getting wider
15:41
Speaker 1: every day, with advanced economies now getting pretty spirited highly
15:47
Speaker 1: vaccinated economic recoveries, and the developing world continuing potentially to
15:52
Speaker 1: suffer further ways of disease and economic pain. But this
15:56
Speaker 1: could all end very differently for not very much more money.
16:00
Speaker 1: According to a proposal to end the COVID nineteen pandemic,
16:04
Speaker 1: which was published this week by the chief economist of
16:07
Speaker 1: the I m F. Peter Gopinath and her co author Russia.
16:10
Speaker 1: I go, well, Tom Alick, for once we're talking about
16:13
Speaker 1: something that wasn't a piece of your research, our Bloomberg
16:17
Speaker 1: chief economist. But tell us a little about what this
16:20
Speaker 1: plan is. Yeah. So great to be here, Stephanie, and
16:23
Speaker 1: hopefully in the interests of equity, you'll also be inviting
16:26
Speaker 1: Geter Gopinath on the podcast to discuss one of my
16:28
Speaker 1: pieces of research on a on a future episode. She
16:32
Speaker 1: has been She's been on, but I'm afraid I forgot
16:34
Speaker 1: to talk about you next time. I will um so
16:38
Speaker 1: um so. An ingenious smart proposal from the leading lights
16:42
Speaker 1: of the International Monetary Fund UM. They say that if
16:45
Speaker 1: we can spend fifty billion dollars today to boost the
16:49
Speaker 1: vaccination effort, especially in low and middle income countries, that's
16:54
Speaker 1: going to deliver enormous benefits. Enormous health benefits, of course,
16:58
Speaker 1: but by spurring the recovery in those countries also enormous
17:02
Speaker 1: economic benefits. They put a number on it, fifty billion
17:06
Speaker 1: dollars to boost vaccination efforts could deliver nine trillion dollars
17:11
Speaker 1: in enhancements increases in global GDP as the global economy accelerates.
17:17
Speaker 1: So that's a ratio of a hundred and eighty two one,
17:19
Speaker 1: which does seem like quite a good cost cost benefit ratio,
17:23
Speaker 1: and quite a lot of those benefits. I think they
17:25
Speaker 1: say forty of that would go to the high income countries.
17:30
Speaker 1: So this isn't just altruism. There's there are there are
17:34
Speaker 1: benefits to all economies. And how does this proposal differ
17:38
Speaker 1: to what they think would otherwise happen, because we obviously
17:41
Speaker 1: have seen some we have covacs, we have quite big
17:45
Speaker 1: global efforts to vaccinate the poorest economies. So I think
17:49
Speaker 1: there's a few dimensions. The first is that this accelerates
17:53
Speaker 1: and amplifies the effort to vaccinate low and middle income countries.
17:59
Speaker 1: The second is it expands the resources that we have
18:03
Speaker 1: to go into vaccination, freeing up the cross border flow
18:07
Speaker 1: of raw materials necessary for vaccinations, for example. And the
18:11
Speaker 1: third is that it puts what the authors describe as
18:15
Speaker 1: kind of risk mitigation efforts in place. They suggest we
18:19
Speaker 1: need to diversify the sources of vaccine supply. They suggest
18:24
Speaker 1: very sensibly that as we wait for those new vaccines
18:27
Speaker 1: to come online, we need to prep the distribution mechanisms
18:31
Speaker 1: so that when the additional shots are available, they can
18:33
Speaker 1: quickly go into people's arms. It's very eye catching to
18:37
Speaker 1: have put the costs of benefits in these terms, and
18:41
Speaker 1: there is such a very large gap between the two.
18:44
Speaker 1: It just seems like an easy wind for the for
18:48
Speaker 1: the international community. When we've done so well at getting
18:51
Speaker 1: these vaccines developed so fast, any chance is going to happen?
18:54
Speaker 1: Do you think? I mean, the world has faced an
18:58
Speaker 1: enormous collective act action problem over the course of the
19:02
Speaker 1: COVID pandemic. Right, the right response back at the start
19:06
Speaker 1: of was a global lockdown to contain the virus. The
19:13
Speaker 1: right response after the virus got out of control was
19:16
Speaker 1: a global vaccination effort. Those things haven't happened. Why is that?
19:22
Speaker 1: I think it's because systems are sticky. Right. We like freedom,
19:26
Speaker 1: we like liberty, we like democracy, we like capitalism, and
19:30
Speaker 1: these things make it harder to solve collective action problems
19:34
Speaker 1: at a national level, even harder to solve them at
19:38
Speaker 1: a global level. If we think outside of the COVID crisis,
19:42
Speaker 1: things like returns to increasing education for women in emerging markets,
19:49
Speaker 1: moves to eradicate other diseases. These would also generate absolutely
19:54
Speaker 1: enormous global benefits. We've not been able to solve the
19:57
Speaker 1: collective action problem we need to solve to address those problems.
20:02
Speaker 1: I would love to think that this Gopinath and Aggarawil
20:05
Speaker 1: paper provides a catalyst for more rapid action on the
20:09
Speaker 1: COVID crisis. We'll have to wait and see whether that happens.
20:13
Speaker 1: So a lot of dimensions to this, not just the
20:16
Speaker 1: lack of vaccination, but that's at least we can see
20:18
Speaker 1: in that I m F proposal that there's something concrete
20:21
Speaker 1: that the world could do, and maybe maybe they'll do it.
20:24
Speaker 1: Tom Alick, thanks very much, Thanks Stephanie. Finally, I couldn't
20:33
Speaker 1: resist playing you just a small chunk of a long
20:36
Speaker 1: interview I had earlier in the week with Olaf Schultz,
20:39
Speaker 1: the German finance minister who's the Social Democratic Party's candidate
20:43
Speaker 1: for chancellor in the autumn elections. He's currently running third
20:47
Speaker 1: in the polls to the Green Party candidate and the
20:49
Speaker 1: new leader of the Christian Democrats, the party of Angelo Merkele.
20:53
Speaker 1: He was just coming from a meeting of G seven
20:55
Speaker 1: finance ministers. So I started by asking him about the
20:58
Speaker 1: European unions. Sank on. Belarus agreed very rapidly at a
21:03
Speaker 1: meeting of government leaders on Monday. There's also a few
21:06
Speaker 1: snippets on those global tax negotiations that I know Stephanomics
21:10
Speaker 1: listeners have been very interested in. We also had a
21:14
Speaker 1: conversation about him and his party's prospects in the election.
21:23
Speaker 1: You should see that I'm coming from a city of
21:26
Speaker 1: seafarer as that was the mayor of Hamburg time my goal,
21:30
Speaker 1: and we were always fighting against piracy. You could understand
21:34
Speaker 1: that I'm really really angry about what happened, and we
21:37
Speaker 1: cannot accept activities like this in Europe. This is against
21:41
Speaker 1: any agreement we had and have, and it is necessary
21:45
Speaker 1: that we are that we are strict, and that we
21:48
Speaker 1: continue to be strict. It isn't that an inevitable corollary?
21:52
Speaker 1: How can we have this response to the to Belarus
21:55
Speaker 1: and not also have it affect the broader relations with Russia,
21:58
Speaker 1: which has been so supportive of this regime. We are
22:02
Speaker 1: reacting to what we see, and this is the case
22:04
Speaker 1: with Belarus. I'm absolutely absolutely sure that it is necessary
22:10
Speaker 1: to be clear about what we are thinking about the
22:13
Speaker 1: future and to use it for a new development in
22:17
Speaker 1: European Russian relations. And this is I think an activity
22:23
Speaker 1: that should be done by all member states together. It
22:26
Speaker 1: is not necessary that we ask always for new steps.
22:30
Speaker 1: It is necessary to be clear. Well, you say we
22:35
Speaker 1: need to be clear, I mean many people on the outside,
22:37
Speaker 1: and indeed many in the EU feel that there is
22:41
Speaker 1: a There isn't clarity in the position as long as
22:44
Speaker 1: Germany is going ahead with a pipeline that would increase
22:50
Speaker 1: the Europe's dependence on Russia and actually undermine some of
22:55
Speaker 1: the EU s allies and even members closest closest to
23:00
Speaker 1: Can we have that clarity when we're still going ahead
23:03
Speaker 1: with a major project like that. It is a private
23:06
Speaker 1: project that has been developed for a very long time
23:09
Speaker 1: and it's nearly finished now. So the important question is
23:13
Speaker 1: whether the idea behind your question is correct that there
23:17
Speaker 1: it is increasing the dependency of Europe or Germany in
23:22
Speaker 1: uh support from Russia. If we look at gas, and
23:26
Speaker 1: this is not the case. We already have a lot
23:29
Speaker 1: of gas from Russia, but we also have gas gas
23:32
Speaker 1: from Scandinavia and from other places. We are not just
23:36
Speaker 1: relying on gas. My view is that many of those
23:40
Speaker 1: complaining about this fact should look at their own inputs
23:43
Speaker 1: of fossil resources from other places and also from Russia.
23:49
Speaker 1: The question is not whether we will have this pipeline.
23:51
Speaker 1: The question is how we invest into the future, and
23:55
Speaker 1: there is Germany in intensely acting. Just a final question
23:59
Speaker 1: on the North Stream pipeline. Last year, when Alexei Navalley
24:04
Speaker 1: was poisoned and detained, there was a round of pressure
24:09
Speaker 1: and questioning around that pipeline. Is there anything that the
24:13
Speaker 1: Russian government could do at this point in terms of
24:15
Speaker 1: violating basic norms of European behavior that would cause you
24:20
Speaker 1: to have a second thought about the pipeline. Our view
24:25
Speaker 1: must be at the development in European Russian relations, and
24:30
Speaker 1: for that it is necessary that we are strict in
24:33
Speaker 1: when there are conflicts with all the agreements we already have,
24:39
Speaker 1: and we were strict in the debate about CRIMEA. We
24:44
Speaker 1: were very strict. But they can support piracy. No one
24:49
Speaker 1: can support piracy without getting a strict answer from the
24:53
Speaker 1: European Union and will not. And this is from my
24:57
Speaker 1: point of view, the real question how we act cautiously
25:02
Speaker 1: and strict and clear, And this is what is the
25:05
Speaker 1: task for all of us when we want to keep
25:07
Speaker 1: peace in Europe. One other area in which there have
25:11
Speaker 1: been developments in the last day or two is these
25:14
Speaker 1: negotiations over global tax and the so called the sort
25:18
Speaker 1: of the two pillars that are now subject of conversation
25:22
Speaker 1: at the O E C, d G seven and elsewhere.
25:25
Speaker 1: You are very positive about President Biden sort of compromised
25:29
Speaker 1: proposal for a fifteen percent minimum corporate tax rate. Do
25:33
Speaker 1: you see a practical solution to that? The other pillar
25:38
Speaker 1: of the talks, this idea of where companies, not just
25:41
Speaker 1: how much, but where particularly the digital companies are taxed.
25:46
Speaker 1: We worked now for a very long time, all the
25:50
Speaker 1: four years when I'm in office, for getting a solution
25:53
Speaker 1: in the two aspects of the necessary agreements on taxation
25:58
Speaker 1: on the global level. One is the minimum taxation of corporates,
26:03
Speaker 1: and we are we were nearly ready with all the
26:07
Speaker 1: work in the end of the last year. There were
26:11
Speaker 1: some very small questions open. One was the one of
26:14
Speaker 1: the tax rate. And now with the new United States administration,
26:18
Speaker 1: it's absolutely um promising that we will have a solution
26:24
Speaker 1: very soon, and I'm expecting it to have it this
26:27
Speaker 1: summer and This is also the case with the question
26:31
Speaker 1: how we could better tax the big global active corporates,
26:36
Speaker 1: especially those in the digital sector, the global digicultal platforms.
26:40
Speaker 1: And there are new proposals on the table and I'm
26:44
Speaker 1: quite optimistic that we also will be able to finish
26:47
Speaker 1: this project. I'm going to ask you a few of
26:55
Speaker 1: the sort of rapid fire questions that we are getting.
26:58
Speaker 1: Are you able to rule out a coalition government with
27:01
Speaker 1: the left wing party Delinker following the elections. This will
27:06
Speaker 1: be a very different election to the ones we had
27:10
Speaker 1: before the first time since the beginning of democracy of
27:15
Speaker 1: the Second World War. It is it is the case
27:17
Speaker 1: that no one is already the chancellor running for chancellery.
27:22
Speaker 1: It is also knew that the three parties that will
27:26
Speaker 1: be successful in the end will get a bit more
27:30
Speaker 1: as twenty and that it is quite difficult to see
27:34
Speaker 1: how a government could be built. My view is that
27:37
Speaker 1: I want to get the necessary popular support for being
27:41
Speaker 1: able to build a government, and there will be a
27:44
Speaker 1: lot of options. Which one of them is successful also
27:47
Speaker 1: depends on those that could be partners, because it is
27:51
Speaker 1: absolutely clear for me that we have to establish a
27:55
Speaker 1: government that is looking for growth, that is able to
28:00
Speaker 1: support a good fiscal strategy for the future that is
28:05
Speaker 1: able to developed the Open Union. But listening to that,
28:10
Speaker 1: it sounds like you would not rule out any partner,
28:14
Speaker 1: or certainly not the Left Wing Party, because when you
28:16
Speaker 1: talk about options at the moment, if you look at
28:19
Speaker 1: the polls, there aren't very many clausible options for an
28:24
Speaker 1: SPD being a member of the coalition, littleone you being chancellor,
28:28
Speaker 1: but they would at least one of them would involve
28:30
Speaker 1: the Left Party. It is clear that there are there
28:35
Speaker 1: are good reasons why no one is now arguing about
28:40
Speaker 1: how exactly the next government will be built, because it
28:43
Speaker 1: is depending on what the people decide, and what I
28:46
Speaker 1: asked them for is giving me a popular vote making
28:50
Speaker 1: it possible to find to build a government that is
28:54
Speaker 1: good for the future of our country and good for Europe.
28:58
Speaker 1: How are you going to cut through what's your when
28:59
Speaker 1: you're having your campaign meetings about how you're going to
29:03
Speaker 1: turn things around in the polls. Yeah, First, there are
29:07
Speaker 1: some very positive aspects that could be seen in many polls.
29:11
Speaker 1: We could understand that most of the people would think
29:15
Speaker 1: could think that I could be a very good chancellor
29:18
Speaker 1: and if they could choose directly the chancellor. They would
29:22
Speaker 1: elect me. So this is the basis for the support
29:25
Speaker 1: for my party as well, because I am the candidate
29:27
Speaker 1: of the Social Democratic Party. Realistically, though, does your party
29:32
Speaker 1: need a time out of government to show people that
29:35
Speaker 1: it is a distinct that it has a distinctive identity.
29:38
Speaker 1: Center left parties all over Europe are trying to establish
29:43
Speaker 1: to find common ground on the key issues with voters
29:47
Speaker 1: and they're struggling. Uh, your party has had the unique
29:52
Speaker 1: situation of having that happen while often being in government.
29:55
Speaker 1: Do you need a time out of power? No, we
29:57
Speaker 1: don't need a time out of power. We needed I'm
30:00
Speaker 1: in power where we are having the lete. So the
30:03
Speaker 1: biggest problem for Germany is that since tell two thousand
30:07
Speaker 1: five we haven't been in the chancellery and there's no
30:10
Speaker 1: realistic chance of you having that. This time around, I
30:15
Speaker 1: think we will have a good chance to get the
30:17
Speaker 1: bolt off the people and to form a coalition, and
30:20
Speaker 1: this is what I'm running for. Sures, thank you very
30:23
Speaker 1: much for joining us again. Thank you. That really is
30:32
Speaker 1: it for this episode of Stephonomics. I'll be back next
30:34
Speaker 1: week with a lot more from around the world. And
30:36
Speaker 1: should you feel the need. You can always get more
30:39
Speaker 1: from Bloomberg Economics by following at Economics on Twitter. This
30:43
Speaker 1: episode was produced by Magnus Henrison, with special thanks to
30:47
Speaker 1: Sean Donnan, premicition a do, Tom Morlick, and the German
30:51
Speaker 1: Vice Chancellor and Minister of Finance or Left Schotz. The
30:54
Speaker 1: executive producer Stephonomics is Mike Sasso and the head of
30:58
Speaker 1: Bloomberg Podcasts franchise Can Eat mm hmmmm.