Latest / Trumponomics / Live From Munich: Trump Hands Europe the Bill for Ukraine

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Live From Munich: Trump Hands Europe the Bill for Ukraine · Trumponomics

• 0:02
  Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
• 0:08
  Speaker 2: I think we're on the way to getting peace.
• 0:10
  Speaker 1: I think President Putin wants peace, and President Zelensky wants peace,
• 0:16
  Speaker 1: and I want peace.
• 0:17
  Speaker 2: I just want to see people stop getting killed.
• 0:27
  Speaker 3: On Wednesday, this week, US President Donald Trump stunned European
• 0:31
  Speaker 3: leaders and the world, announcing he'd agreed with Russian President
• 0:34
  Speaker 3: Vladimir Putin to start negotiating an end to the war
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  Speaker 3: in Ukraine. And he's starting to tell leaders of the
• 0:40
  Speaker 3: block what they need to do to secure peace. And
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  Speaker 3: as the week came to an end, the President also
• 0:46
  Speaker 3: talked about reciprocal tariffs that could cost europe deer. I
• 0:57
  Speaker 3: was Stephanie Flanders, head of Government and Economics of Bloomberg,
• 1:00
  Speaker 3: and welcome to this special Trumpnomics, the Bloomberg podcast that
• 1:03
  Speaker 3: looks at the economic world of Donald Trump, how he's
• 1:07
  Speaker 3: already shaped the global economy and what on earth is
• 1:10
  Speaker 3: going to happen next. So we're recording this bonus episode
• 1:15
  Speaker 3: from the sidelines of the Munich Security Conference, which has
• 1:17
  Speaker 3: taken on enormous significance this year given the recent arrival
• 1:22
  Speaker 3: of Donald Trump back at the White House, all the
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  Speaker 3: discussions around the future of Ukraine, and indeed a high
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  Speaker 3: level US delegation coming here, led by JD Vance, who's
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  Speaker 3: making his first trip to Europe as Vice President. And
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  Speaker 3: our question this week is can foot the bill? Can
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  Speaker 3: Europe handle the financial burden that comes with the President's
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  Speaker 3: plans for ending the war in Ukraine and on top
• 1:48
  Speaker 3: of that his potentially hefty demands on trade. With me,
• 1:56
  Speaker 3: we have someone who's been to many many of these
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  Speaker 3: Alberta and our Dela, Bloomberg's correspondent at large for Europe. Alberta,
• 2:02
  Speaker 3: thanks for.
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  Speaker 2: Coming, Thank you're having me, and I've grabbed.
• 2:05
  Speaker 3: You from I know you spent most of your time
• 2:07
  Speaker 3: in the corridors getting next day's scoop. And a Donio Barosso,
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  Speaker 3: senior geoeconomics analyst for Europe for Bloomberg Economics, one of
• 2:16
  Speaker 3: the geoeconomists that we've brought into Bloomberg recently. He previously
• 2:20
  Speaker 3: launched the geopolitical risk unit of the consulting firm TENEO
• 2:24
  Speaker 3: and worked as a senior analyst at Eurasia Group. And
• 2:27
  Speaker 3: you know, for good measure has a PhD from the LSC.
• 2:30
  Speaker 3: So good to be with you. So whatever the US
• 2:35
  Speaker 3: President decides on for Ukraine. We're pretty clear on one
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  Speaker 3: thing that Europe isn't ready to shoulder a large share
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  Speaker 3: of the burden. Bloomberg Economics has calculated that protecting Ukraine
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  Speaker 3: and expanding European defense could cost the continent's major powers
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  Speaker 3: an additional three point one trillion dollars over the next
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  Speaker 3: ten years. Now, and Donio, I know you're the one
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  Speaker 3: who came up with some of these numbers, or at
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  Speaker 3: least you've been pulling them together working with your colleagues.
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  Speaker 3: So just talk us through briefly how you get to
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  Speaker 3: that three point one trillion dollars.
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  Speaker 1: Sure, so, WECA coulated that supporting Ukraine militarily for the
• 3:11
  Speaker 1: next ten years bull amount to around one hundred and
• 3:14
  Speaker 1: seventy five billion dollars. Then the second important figure is
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  Speaker 1: one hundred and thirty billion dollars, which is the gap
• 3:22
  Speaker 1: that we estimate between the estimated cost of reconstructions reconstruction
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  Speaker 1: for Ukraine and the available sources of funding that have
• 3:29
  Speaker 1: been lined up. And then two point seven trillion dollars,
• 3:32
  Speaker 1: which is the amount of debt that the five largest
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  Speaker 1: Europe and NETO member states will incur if they were
• 3:38
  Speaker 1: to increase defense spending to up to three point around
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  Speaker 1: three point five percent of GDP.
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  Speaker 3: And we should say, and that's three point five so
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  Speaker 3: the President Trump has said that everyone should get everyone
• 3:48
  Speaker 3: needs to should go to five percent. You know, even
• 3:51
  Speaker 3: this very large number is not even assuming that it's
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  Speaker 3: seeming a much smaller increase.
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  Speaker 1: Sure, because I mean, you've seen a country like Pollen
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  Speaker 1: that clearly is taking the threat that the thread of
• 4:05
  Speaker 1: the eastern front of Russia very seriously and that has
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  Speaker 1: rapidly increased defense spending. But that's very challenging for countries
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  Speaker 1: such as Spain or Italy that would start for a
• 4:16
  Speaker 1: very low level and also that you know had very
• 4:20
  Speaker 1: large debt and deficit burdens. I mean, how are you
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  Speaker 1: gonna increase spending to that level? Are you gonna cut pensions?
• 4:26
  Speaker 1: Are you gonna cut education spending? I don't think so
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  Speaker 1: It's very politically complicated to do it. So we assume
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  Speaker 1: that three point five will we are much more realistic targets,
• 4:34
  Speaker 1: so to speak.
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  Speaker 3: Realistic Yeah, in inversity comments very large number. I mean,
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  Speaker 3: Albert say, one of the things that you've heard, and
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  Speaker 3: particularly in the last day or so, as everyone was
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  Speaker 3: absorbing the news of President Trump's call with Vladimir Putin.
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  Speaker 3: The one thing in all of this which people recognize
• 4:52
  Speaker 3: Donald Trump is right about, and I guess Joe Biden
• 4:54
  Speaker 3: was right about. You know that the period where Europeans
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  Speaker 3: could rely on the US to shoulder such a share
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  Speaker 3: of the burden of defending Europe that is past. Do
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  Speaker 3: you get a sense of anyone realistically kind of grasping
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  Speaker 3: what follows next. I hear a lot of defense people
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  Speaker 3: and military people talking about what's needed. I don't hear
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  Speaker 3: so much from the politician.
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  Speaker 2: I think the mood is one of shock. Mostly if
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  Speaker 2: you speak to politicians that are not just defense politicians,
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  Speaker 2: say in Eastern Europe, they do get a sense of
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  Speaker 2: what might be coming down the road. The challenge is
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  Speaker 2: mostly in Western Europe countries like Spain, Italy, but even Germany,
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  Speaker 2: and they who still see this conflict as something also
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  Speaker 2: only far away. They want to support Ukraine, but they
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  Speaker 2: don't see the potential consequences of it unraveling hitting their
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  Speaker 2: own borders. And if we look at these numbers, they're
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  Speaker 2: big numbers. However, at the end of the day, it's
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  Speaker 2: a small percentage of their GDP so really this is
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  Speaker 2: about political will and understand what is at stake, the
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  Speaker 2: security of Ukraine, the security of Europe if Ukraine unravels,
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  Speaker 2: and ultimately trying to basically, like you said, with the
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  Speaker 2: US pulling back some of its security commitments, does Europe
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  Speaker 2: have the will to step in and understanding the consequences
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  Speaker 2: of that. I do feel that there is a fundamental difference, say,
• 6:27
  Speaker 2: with Trump's approach to Biden and presidents before him on
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  Speaker 2: Europe picking up more of the burden, which is the
• 6:34
  Speaker 2: point of Transatlantic allies. Like previous presidents, they have always
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  Speaker 2: asked Europe to do more, but they've never put into
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  Speaker 2: doubt the pillars of the world order, be it on
• 6:49
  Speaker 2: trade or on security. I think that is a big
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  Speaker 2: difference between Trump and most of his predecessors.
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  Speaker 3: We will say a little bit about trade, because you know,
• 6:57
  Speaker 3: not contemp with giving one very large bill to the
• 6:59
  Speaker 3: European There's talk in some of President Trump's announcements about
• 7:04
  Speaker 3: tariff that's obviously could also be very financially costly for Europe.
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  Speaker 3: But Antonio, just going back to this question of Europe's position,
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  Speaker 3: I mean, what are the options if we're just we're
• 7:14
  Speaker 3: going to be true to trumponomics in the sense we're
• 7:16
  Speaker 3: going to spend a little bit more time on the
• 7:17
  Speaker 3: economics of this. What are the roots for managing that
• 7:21
  Speaker 3: additional burden, which we're presuming would be through debt, But
• 7:25
  Speaker 3: how could you get there from here?
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  Speaker 1: Sure, so you have several options. The first one is
• 7:29
  Speaker 1: to give European Union member states that are subject to
• 7:32
  Speaker 1: physical flexibility to spend on defense. But the problem there,
• 7:38
  Speaker 1: as I mentioned before, is that you know, many of
• 7:40
  Speaker 1: these countries have large deficits they have been trying to reduce.
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  Speaker 1: We have seen how difficult it was to pass a
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  Speaker 1: budget in France, and you know, even if they were
• 7:50
  Speaker 1: trying to reduce the deficit and now they're.
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  Speaker 3: More France has a six percentage exactly, is.
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  Speaker 1: At all order for these countries to do them to
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  Speaker 1: do that by themselves. So the second option is, well,
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  Speaker 1: let's do it at the EU level. So let's issue
• 8:03
  Speaker 1: join debt. And we know how fractious the debate has
• 8:07
  Speaker 1: been on that issue on the path in the past.
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  Speaker 1: We managed to do it during the pandemic with an
• 8:12
  Speaker 1: next generation you facility. And there are some ideas that
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  Speaker 1: have been floated like, okay, let's do the same, but
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  Speaker 1: for defense, I think you cannot take any kind of
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  Speaker 1: decision for the moment until you have a new government
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  Speaker 1: in Germany. It's interesting though that you've seen not the
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  Speaker 1: countries that tend to be seen as more frugal, they
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  Speaker 1: have changed the tone because I think for them, as
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  Speaker 1: Alverta was describing, you know, the security threat is much
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  Speaker 1: more material for all the countries, so they're changing. Still,
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  Speaker 1: the conversations will be very, very difficult. And the third option,
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  Speaker 1: at least for Ukraine will be to use the frozen assets,
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  Speaker 1: the three hundred billion dollars that have been frozen in assets,
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  Speaker 1: but that has also political and technical complications, so there's
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  Speaker 1: noisy solution.
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  Speaker 3: And we've seen some discussion around even using those assets.
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  Speaker 3: Now I think the administration is even potentially talked about
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  Speaker 3: using them but for arms. So there's plenty of potential uses,
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  Speaker 3: and as you say, it's very legally difficult whether you
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  Speaker 3: can use them at all. There is a structural issue
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  Speaker 3: here which goes to the nature of the European Union,
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  Speaker 3: which I guess we should say, particularly those who don't
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  Speaker 3: spend all their time thinking about European institutions, God help them,
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  Speaker 3: This is an organization that was set up, and it's
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  Speaker 3: developed around economics, but also as a way of using
• 9:26
  Speaker 3: economics and trade to preserve peace within Europe. It came
• 9:31
  Speaker 3: out of a post war, post World War II environment,
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  Speaker 3: you know, at a sort of deep level, it's not
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  Speaker 3: designed as a collective defense organization to protect Europe from outside.
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  Speaker 3: So I'll ask both of you, but do you see
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  Speaker 3: any science Antonio of the European Union grappling with that
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  Speaker 3: or is it going to be more about individual countries
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  Speaker 3: deciding to produce different alliances.
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  Speaker 1: So that is indeed the challenge. So when political scientists
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  Speaker 1: look at how Europe reacts to crisis, they normally look
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  Speaker 1: at two variables. One is whether the competence to deal
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  Speaker 1: with that crisis belongs to the Opian Union, the European Commission,
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  Speaker 1: or the member states. And second, whether the shock that
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  Speaker 1: the crisis has created is asymmetric or symmetric. That means
• 10:15
  Speaker 1: if affects all member states or individual member states. I
• 10:19
  Speaker 1: think that's why you probably will see a different reaction
• 10:22
  Speaker 1: on trade issues that on defense issues. On trade, the
• 10:24
  Speaker 1: Opean Commission has the competence, and you know, at least
• 10:27
  Speaker 1: for now, the tariffs are affecting all countries, so it's
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  Speaker 1: way easier to deliver a common response on defense though,
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  Speaker 1: and exactly to what Albert was saying, the shock is
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  Speaker 1: asymmetric because you know, for some countries Ukraine is just
• 10:41
  Speaker 1: too far away. So I think the problem in the
• 10:43
  Speaker 1: defense area is that it's very difficult to come together,
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  Speaker 1: especially when the Ubian Commission doesn't have competence to deal
• 10:50
  Speaker 1: with it. So it's member states that need to come
• 10:54
  Speaker 1: together and take a decision. And the problem is that
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  Speaker 1: for years they have been very reluctant to coordinate or
• 11:01
  Speaker 1: to do closer coordination on common form and se good issues,
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  Speaker 1: and I think Europe is now paying the breast for that.
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  Speaker 3: And it's even harder because whatever you think about the UK,
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  Speaker 3: it is one of the most important defense powers and
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  Speaker 3: most experienced foreign policy powers and recognized as such and
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  Speaker 3: is not in your opinion, so you have to come
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  Speaker 3: up with a plan for the UK. Alberto, this takes
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  Speaker 3: us to just the lack of an individual to negotiate
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  Speaker 3: with Donald Trump. I think that's the one thing that
• 11:29
  Speaker 3: sort of people have been very struck by over the
• 11:31
  Speaker 3: last well a few weeks, but certainly the last forty
• 11:34
  Speaker 3: eight hours is Donald Trump's absolute insistence on talking and
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  Speaker 3: negotiating one on one with people who he considers to
• 11:42
  Speaker 3: be his peers, and the opinionion just doesn't have anyone
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  Speaker 3: like that. And what do you hear from people in
• 11:50
  Speaker 3: at the conference so far about what the answer to
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  Speaker 3: that's going to I.
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  Speaker 2: Would argue Europe doesn't have someone opinion to latch onto
• 11:58
  Speaker 2: what Antonio will say, because I think it's very relevant.
• 12:00
  Speaker 2: Is there are institutional issues that the European Union has
• 12:05
  Speaker 2: in terms of dealing with Trump. The first is that
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  Speaker 2: the EU is very good at negotiating within the rules,
• 12:13
  Speaker 2: so in the wholes of the wto, the EU often
• 12:17
  Speaker 2: gets what it wants. It's very good at doing that.
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  Speaker 3: I think it's one reason why Donald Trump does like it.
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  Speaker 2: And in this world, like in this jungle, where it's
• 12:27
  Speaker 2: I want this, what will you give me in return
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  Speaker 2: for this? The EU is not built to do that.
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  Speaker 2: And that is also linked to the fact the specific
• 12:36
  Speaker 2: point of your question, which is who speaks for Europe
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  Speaker 2: Because normally the way that you negotiate, it will have officials,
• 12:43
  Speaker 2: and you will have conversations between officials between two different parties,
• 12:46
  Speaker 2: and then eventually it floats to the top on the
• 12:49
  Speaker 2: more political issues, you do not have someone who is
• 12:54
  Speaker 2: able to negotiate in the same type of language terms
• 13:00
  Speaker 2: as Donald Trump, and it's not clear who could fill
• 13:03
  Speaker 2: those shoes. Maybe one idea they could appoint an envoy
• 13:08
  Speaker 2: for say Ukraine talks for example. They've done that with
• 13:13
  Speaker 2: sanctioned It's a lower level than the stakes there are
• 13:16
  Speaker 2: a lot lower, but that could be an option. But
• 13:17
  Speaker 2: I think there are institutional limits in terms of the
• 13:22
  Speaker 2: way that European Union has set up. And one reason
• 13:25
  Speaker 2: why when you speak to European officials in the past
• 13:27
  Speaker 2: few days you have this sense of shock is they
• 13:31
  Speaker 2: haven't fully come to the terms of this new reality.
• 13:35
  Speaker 2: That there is no point having a meeting of a
• 13:36
  Speaker 2: US official and saying, oh, this is illegal because of
• 13:39
  Speaker 2: rule whatever of the wto Trump doesn't care. You have to.
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  Speaker 2: The question for Europe is are you going to deal
• 13:47
  Speaker 2: with this administration and negotiate on his terms on how
• 13:52
  Speaker 2: reality is or how are you going to hope that
• 13:56
  Speaker 2: the world changes again?
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  Speaker 3: And it causes an example. It reflects how much the
• 14:00
  Speaker 3: sheer pace of activity coming out of the White House
• 14:03
  Speaker 3: is testing everyone's bandwidth that we're running together in this conversation.
• 14:07
  Speaker 3: We're running a whole trade argument and a trade issue
• 14:10
  Speaker 3: and how it relates to Europe alongside a really quite
• 14:13
  Speaker 3: distinct question about the future of Ukraine. And even that
• 14:18
  Speaker 3: is a test for Europe to we have to think
• 14:20
  Speaker 3: about two things at the same time. I mean, in
• 14:22
  Speaker 3: the same hour. Donald Trump is posing these enormous but
• 14:26
  Speaker 3: we should try and resist the temptation to run it
• 14:27
  Speaker 3: all together because the tariff's conversation has a particular implication
• 14:33
  Speaker 3: for Europe and maybe even makes it harder for Europe
• 14:36
  Speaker 3: to respond in the way that Donio has suggested. He
• 14:39
  Speaker 3: has talked about these reciprocal tariffs and what that means is,
• 14:43
  Speaker 3: just to be simple about it, is that the US
• 14:46
  Speaker 3: moves away from a situation where there's a very broad
• 14:49
  Speaker 3: based assessment of tariffs and by and large, for historical reasons,
• 14:54
  Speaker 3: developing countries have had higher tariffs against the US goods
• 14:59
  Speaker 3: than US has had against them. And the rule within
• 15:03
  Speaker 3: the WTO, as we know, is if you have one
• 15:04
  Speaker 3: tariff against one country, it's supposed to apply to everybody else.
• 15:07
  Speaker 3: He is overturning that and suggesting that there will be
• 15:10
  Speaker 3: individual tariffs negotiated or individual terms negotiated by country in
• 15:16
  Speaker 3: relation to not just their tariff levels, but also everything
• 15:19
  Speaker 3: else they have. And I think it's the everything else.
• 15:22
  Speaker 3: We had some research from Maivakuzar, sort of senior trade
• 15:26
  Speaker 3: expert on the Bloomberg Economics, who was just pointing up,
• 15:31
  Speaker 3: you know, if he just took tariffs, the impact of
• 15:34
  Speaker 3: this new regime would be particularly bad for developing countries
• 15:38
  Speaker 3: and emerging market economy. Is not so bad for Europe
• 15:40
  Speaker 3: because their tariffs are relatively low already. But if, as
• 15:44
  Speaker 3: Donald Trump has said quite clearly, he's going to consider
• 15:47
  Speaker 3: vat value added attacks and regulations and other things in
• 15:53
  Speaker 3: that calculation and consider them in trade barriers in the
• 15:56
  Speaker 3: same way, that could potentially be extremely costly for the EU.
• 16:01
  Speaker 3: So then you get into a mode of it would
• 16:04
  Speaker 3: be every country for himself. I mean, do you think
• 16:06
  Speaker 3: there's a possibility that France, I don't know. I'm looking
• 16:09
  Speaker 3: at you, Albert Say over Antonio as well, that France
• 16:11
  Speaker 3: will end up doing separate deals with the US, Italy,
• 16:14
  Speaker 3: Georgia Maloney maybe will think she can get a better deal.
• 16:17
  Speaker 3: Will we in a world where that's conceivable.
• 16:19
  Speaker 2: I think from the US perspective, that is probably the strategy.
• 16:23
  Speaker 2: I think you may see different tariffs for different countries
• 16:29
  Speaker 2: From the EU perspective, It's very hard to say on trade.
• 16:33
  Speaker 2: For now, they have remained united and they have stuck
• 16:37
  Speaker 2: to this position of trade as an EU competency, and
• 16:41
  Speaker 2: so far that unity has not buckled. I think if
• 16:44
  Speaker 2: you put it altogether, some countries may be tempted more.
• 16:49
  Speaker 2: I would say more countries like Hungary rather than Italy,
• 16:52
  Speaker 2: because I think there are other issues like migration where
• 16:54
  Speaker 2: it's an Italy strategic interest to be close to the EU.
• 16:56
  Speaker 2: I think one key point is this bigger picture, which
• 17:00
  Speaker 2: makes the threat to Europe kind of unique, like different
• 17:04
  Speaker 2: from let's say emerging countries or even countries like Japan
• 17:08
  Speaker 2: for example, which is Europe is facing this at the
• 17:11
  Speaker 2: same time, this economic threat and the security threat. Other
• 17:15
  Speaker 2: countries are able to say, we are going to focus
• 17:19
  Speaker 2: on the security. We want the US to provide security.
• 17:24
  Speaker 2: We are not going we're going to give him wins
• 17:27
  Speaker 2: on economic and trade. You take, for example, the UK's approach.
• 17:30
  Speaker 2: The UK has pretty much said nothing almost about the
• 17:33
  Speaker 2: steel tariffs that you issued immediately oppressed statement saying they're illegal,
• 17:37
  Speaker 2: et cetera, et cetera, so clearly the UK is thinking
• 17:40
  Speaker 2: security is more important, let's give him some economic wins.
• 17:43
  Speaker 3: Although you mentioned Japan. Actually Japan also is sort of
• 17:46
  Speaker 3: skew it on that one because they have their biggest
• 17:48
  Speaker 3: trading partners China, and their biggest source of security is
• 17:51
  Speaker 3: the US and so that for them is an extremely
• 17:53
  Speaker 3: painful conversation. And Tony, did you have any response on
• 17:58
  Speaker 3: this possibility of a country by country approach? And you know,
• 18:03
  Speaker 3: how is Europe even going to avoid that given the
• 18:06
  Speaker 3: way that Donald Trump is dealing with your Well.
• 18:08
  Speaker 1: I think you're both absolutely right. I think the risk
• 18:11
  Speaker 1: is that the more specific he goes, the higher the
• 18:15
  Speaker 1: risk that Europe with divide itself because of the opportunity
• 18:18
  Speaker 1: of offering specific deals to different countries. But it's one
• 18:22
  Speaker 1: thing that I think we need to be mine as well,
• 18:25
  Speaker 1: which is the type of justification used for the tariffs,
• 18:30
  Speaker 1: Because if he starts saying I'm going to put tariffs
• 18:33
  Speaker 1: on you because I want you to drop your digital
• 18:36
  Speaker 1: service tax, that's coersion. You are not making an argument
• 18:41
  Speaker 1: about the trade deficits. You're making an argument about the
• 18:43
  Speaker 1: fact that I'm unlike your tax, you need to get
• 18:45
  Speaker 1: rid of it. And The problem is that opens a
• 18:48
  Speaker 1: kind of worms because you created an anti correcion instrument
• 18:54
  Speaker 1: during the last European Commissions term upean parament term that
• 18:58
  Speaker 1: allows the you to impose very strong restrictions on trade
• 19:03
  Speaker 1: and other measures on the US.
• 19:05
  Speaker 3: So they do have as a sort of economic nuclear option.
• 19:08
  Speaker 1: Is a nuclear option, and I think the problem is
• 19:10
  Speaker 1: that if that question posits itself, I'm not sure how
• 19:13
  Speaker 1: many Member states will be in favor of doing that
• 19:16
  Speaker 1: because my impression is that maybe that instrument was created
• 19:20
  Speaker 1: not to be ever used nuclear it is option, So
• 19:24
  Speaker 1: I think, you know, it's a question to monitor because
• 19:27
  Speaker 1: if Trump starts doing things and it's just the first wave,
• 19:30
  Speaker 1: what about Greenland? For example, We hadn't even spoken about Greenland,
• 19:32
  Speaker 1: but it says I put times on them are because
• 19:35
  Speaker 1: of Greenland. That is a clear case of economic question,
• 19:37
  Speaker 1: and that discussion is going to passe itself very soon.
• 19:40
  Speaker 3: Probably just a quick follow up on you, because we
• 19:42
  Speaker 3: did mention the German election. I mean, there could be
• 19:44
  Speaker 3: something would say, well, it just happens to be very
• 19:46
  Speaker 3: bad timing because we have lack of clarity about the
• 19:49
  Speaker 3: future of Germany. At the same time as all of
• 19:51
  Speaker 3: this is coming to a head here in Munich. How
• 19:54
  Speaker 3: does the German election change things in this debate, particularly
• 19:59
  Speaker 3: about you Ukraine, I would argue, and the challenge of defense,
• 20:04
  Speaker 3: but the challenge of negotiating on Ukraine. Does it really
• 20:06
  Speaker 3: make a difference given the sort of choices of government
• 20:08
  Speaker 3: that we're looking at in Germany?
• 20:10
  Speaker 1: Well, I do believe it makes a difference because what
• 20:12
  Speaker 1: we had up to this point was just not working.
• 20:15
  Speaker 1: Everybody in Brussels and in different national capitals was expecting,
• 20:19
  Speaker 1: essentially for some kind of clarity because the coalition here
• 20:23
  Speaker 1: was not working together, the German coalition, Yeah, and there
• 20:27
  Speaker 1: was some sort of political paralysis, and that political paralysis
• 20:30
  Speaker 1: in Germany translates into political parties in Europe. Right, So
• 20:33
  Speaker 1: at least you're going to get some kind of clarity.
• 20:36
  Speaker 1: I think really, how fast Germany can get a coalition
• 20:41
  Speaker 1: government in place will provide a sign post of the
• 20:45
  Speaker 1: times to come. If they actually the parties that have
• 20:49
  Speaker 1: to form a coalition realize that this is a very
• 20:52
  Speaker 1: great moment and that they need to work together relatively fast,
• 20:55
  Speaker 1: then I think that's a good omen for decision making
• 20:58
  Speaker 1: in Europe. However, if you know we crunched the numbers
• 21:01
  Speaker 1: and the formulacqualition in Germany has taken longer and longer
• 21:05
  Speaker 1: in there is in recent elections. If they follow that pattern,
• 21:08
  Speaker 1: I think that will be very warring for Europe.
• 21:11
  Speaker 3: The last word to you, Alberta, I don't know. You
• 21:12
  Speaker 3: said you've been You've been to many of these summits,
• 21:17
  Speaker 3: and you know, I guess one theme that's kind of
• 21:20
  Speaker 3: running through this conversation is that one on one conversations
• 21:25
  Speaker 3: that Donald Trump has and indeed just singular statements that
• 21:29
  Speaker 3: Donald Trump makes on his own, have made a much
• 21:31
  Speaker 3: bigger difference to international affairs in the last few days
• 21:35
  Speaker 3: than any amount of talk here in Munich and potentially
• 21:38
  Speaker 3: any kind of high level summit of just of government
• 21:40
  Speaker 3: leaders that you could have. It doesn't feel like we're
• 21:43
  Speaker 3: in a multilateral or multi country universe when it comes
• 21:49
  Speaker 3: to these kind of negotiations. Does Munich feel like an
• 21:51
  Speaker 3: outdated institution, this kind of conference in a world where
• 21:55
  Speaker 3: really it's all about who Donald Trump decides to pick
• 21:57
  Speaker 3: up the phone to next.
• 22:01
  Speaker 2: I wouldn't go that far in the sense that in
• 22:04
  Speaker 2: terms of the US decision making process, it is very
• 22:08
  Speaker 2: much centered on one individual and that person's relationships with
• 22:14
  Speaker 2: his peers, which increasingly tends to be less and less
• 22:18
  Speaker 2: in Europe, for example. However, how the rest of the
• 22:22
  Speaker 2: world reacts to that, or in particular, how Europe reacts
• 22:25
  Speaker 2: to that, Lots of those conversations will be happening in
• 22:29
  Speaker 2: places like here, so there is value.
• 22:32
  Speaker 3: Better get their ducks in a row, well right.
• 22:35
  Speaker 2: Now, all over the place. I'm not sure they're going
• 22:37
  Speaker 2: to get them in a row all right.
• 22:40
  Speaker 3: Well, I guess we will find out. But thank you
• 22:43
  Speaker 3: very much to both of you, and thanks for listening
• 22:44
  Speaker 3: to this bonus episode of Trump and Nomics from Bloomberg
• 22:47
  Speaker 3: in Munich. It was hosted by me Stephanie Flanders and
• 22:50
  Speaker 3: I was joined by Albertha and Adeli and Antonio Barozzo.
• 22:53
  Speaker 3: Trumpomics is produced by Sammer, Sadi and Moses and with
• 22:57
  Speaker 3: help from Chris Martlu and sound design by Blake Maples.
• 23:01
  Speaker 3: Brendan Francis Newnham is our executive producer. To help others
• 23:05
  Speaker 3: find the show and enjoy it, please rate and review
• 23:08
  Speaker 3: it wherever you listen.