tv Bloomberg Surveillance Bloomberg January 4, 2021 5:00am-6:00am EST
francine: a new year, a new order. our12 months, our lives and economies were suspended by the pandemic that would come to define 2020. we begin a new year taking stock. as developed and emerging nations look to rebuild the path forward is not without its challenges. and under the weight of strained alliances and divided agendas, globalization and space hang in the balance. in 2021, across america, there is a fractured political divide, a political depression. the honeymoon is over. america movil -- america will exit. vaccines will arrive, but with them, the frustration of a long pandemic recovery. good morning, everyone. this is our annual visit with
ian bremmer. this is eurasia group's top risk. francine: happy monday and happy new year from tom and francine from london and new york, and welcome to the special edition of bloomberg surveillance, featuring eurasia group's top risks for 2021. what a day to talk about politics, after the phone call of president trump that was released by the washington post, the phone call happened on saturday and it just changed the perception of what we can see in georgia or certainly how the president's residency will end. -- the is amazing president's presidency will end. tom: they leave their top risks with a challenge to president biden that -- that president biden will face. this is a nation this morning
transfixed by what occurred last night and yesterday afternoon with the president. it is pretty incredible. there is an opinion piece. coming up hour, we speak with the foreign german foreign affairs minister, and david navarro. we talk about the chaotic and the rollout of vaccines in europe. europe, challenges in and the tier four, tier five, and mary b tier six -- and maybe tier six. it is a market shifting and moving, no question. saw condition off what we from president trump yesterday. futures advance. they do that on dollar weakness. i focus on futures up 23, dow up 177th points. outaq 100 futures getting to a 13,000 level.
oil with a one .3% move. daniel yergin will be joining us. we talked to bremmer in the 6:00 hour. in 102.73. francine, i will let you discuss sterling, with a 136.79 pound. we will spend a lot of time looking at sterling, it's first working day of the year for brexit. ,uropean stocks are jumping energy stocks getting a gain. we talk about bitcoin and we will talk a lot more about bitcoin after we had that record 44,000, of course down from that level. but i think the weaker dollar is probably the story that we should be talking about for the rest of 2021, and crude oil futures in new york approaching $50 a barrel, a reminder that opec-plus will decide today
whether it can continue to restore crude supplies without capsizing the price recovery. there is a lot that goes on in the markets and we will have extra market checks as we talk about the top risks of eurasia. let's get to bloomberg first word news in new york city with ritika gupta. happy new year. ritika: good morning, happy new year to you as well. nancy pelosi will once again be the speaker of the house. she got two more votes than the majority of those present. the progressive and moderate wings of her democratic party talked about the need for change, but no democrat challenged her. alyssa begins the new session of covers with a smaller majority than in the last term. -- pelosi begins the new session of congress with a smaller majority than in the last term. newsauci spoke with abc about the vaccine levels picking up speed. dr. fauci: we are not where we want to be, no doubt about that, but i think we can get there if
we accelerate, get some momentum going, and see what happens as we get into the first couple of weeks of january. ritika: the u.s. missed its goals to have 20 million people vaccinated by the end of the year, but felt she says having the rate picked up to 5000 people a day. the opec-plus alliance meets today to decide whether it can keep lifting outward. oil prices rose for a fourth day despite a surging coronavirus pandemic that has hurt demand. 5000 barrels a day have been sent to the market this month. opec and its allies will decide what to do about february production levels. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, i'm ritika gupta. this is bloomberg. francine? tom? so much. thank you president trump pleaded with georgia election officials to find thousands of votes and change the state's election results. that comes from a recording of
an extraordinary phone call that her place over the weekend. the president -- that took place over the weekend. georgia officials did not back down. tos. trump: look, all i want do is this. 11,000 780 to find -- 11,780 votes, which is one more than we have, because we on won the state. francine: joining us for the hour is the eurasia group chair. congratulations on the top risks 2021, always well thought out and well put together. when you look at u.s. politics, and the risks that president trump with that phone call has done to democracy, are we still going to be talking about this or ismonths, 24 months, it just something that will die down? we are still going to be talking about this.
the main idea behind it is that this country is so polarized, at war with itself, that the system is going to be seen as increasingly illegitimate by half the population. president trump yesterday, when he -- with a recording he released, it is going to be much more biting. but doesn't a phone call like this, which is actually an audio recording, bring people more together, or is it going to be a partisan issue? what happens to the republican party now? problem -- the facts are that president trump came out of the election quite strong. president-elect biden won, but it is a very complicated thing in that 74 million votes for trump is 11 million more than he got last time. we think the senate is going to stay republican. house. up seats in the
state legislators and statehouses, moderately but significantly republican, very strong. newblican leaders with the trump coalition, some minority members, lots of top educated whites, and it is a strong coalition. he will be by far the strongest member of the republican party. number, he is supported by a lot of americans. i don't think he's going home. he has a remarkable image. tom: it is a remarkable constitutional crisis, back to 1870 six by some historians' measurement as well. 1876 by some historians' measurement as well. which party fractures, the left, or do the republicans fracture, say like the whigs of 1840 or
1850. >> i would have said the republicans before the election. i think president trump's performance in the media, contesting the election, holding the party together, it keeps them more together than i would have thought under his leadership for the foreseeable future. i think the risks to the democratic party are potentially stronger, and that is a really different take than i would have had a month ago. in that the rest of the party really is very strong and not terribly happy where they see present biden going. squabblese internal could well be stronger with the democrats. of anow does mr. biden older generation, some would say the last of the old guard -- how does he generate normalcy and moderation, given the left of his party?
here i see a little consensus in which i think president biden -- he is a very gifted guy. he has the ability to reach out, use his personality to work with republicans that he doesn't really agree with. his history has gotten him in trouble little bit with republicans, but i think if anybody can do it, this guy is well-positioned to do it. he is going to take flak from within his party, but the greater good with this guy gives cause for more than there would have been for somebody else. much,ne: thank you so cliff kupchan stays with us for the hour. coming up, we also focus on europe with the former german foreign affairs minister. we will talk of course about local diplomacy, we will talk
tom: bloomberg surveillance, good morning, everyone. it is a special edition of the show this morning. we have been doing this for a good number of years with in bremmer and cliff kupchan. -- iurasia group chairman can tell you that december of 2020 was more than unusual, which makes for must reading of the top risk. look for that top risk. it is really terse, sharp reading on climate change.
a wonderful section that i learned a lot on the hacking and cyber threats, and i really want to draw your attention to their oil and climate paragraphs. year, "the new map. -- nailed the challenges in europe. joining us now is a gentleman touchingany, really upon domestic politics of germany and his association with the length of tenure going back to the philly front among others. we are thrilled that sigmar gabriel could join us this money. will bill be the legacy of chancellor merkel -- what will be the legacy of chancellor merkel, and particularly the
legacy of her leadership? if you ask me about how germans and others will look back at the chancellorship of chancellor merkel, i would say that during her term, ending after 16 years, she will be seen as a leader which steered andany through heavy waters difficult crisis which we were faced with. i remember when we started together in the government in 2013, after a few weeks we had crisis. we had the crisis in greece, then the europe crisis, and at the end of the term the refugee crisis. so her chancellorship will be successful leading of the country and leading europe through major crisis at the
beginning of the century. francine: cliff kupchan -- tom: cliff kupchan, we have seen successful brexit negotiation. how do you and dr. bremmer see europe in 2021? is it fractured or can it coalesce around a theme from mr. macron? klitschko we think the main challenge facing europe is lack angelaership, that after merkel steps down that macron will take over as europe's up preeminent leader. he will be distracted by his own domestic politics, and we fear that if more stimulus money is needed, there is no sort of space for a creative new fiscal deal, that foreign policy could get very complicated. with the turks in the eastern mediterranean, and we could see a resurgence of populism. the scar tissue of covid really bites into the european economies. that is where we come out on
europe. doncine: sigmar gabriel, how you think europe should engage with china? depending on investments or cooperation with china, will it weaken the relationship europe has with the e.u.-biden administration? is not first of all, it a really big agreement, and europe and china negotiating about investment agreements since more than seven years, and china always asked the europeans to negotiate about a real free-trade agreement, and the europeans said no, as long as investments from european countries in china are in such difficult -- as they were in the past, we will not be able to negotiate a real free trade agreement. so the precondition was to have a better and more secure environment for european investments in china. that is first of all the
starting point of this negotiation. you are right, looking to the u.s. and the bipartisan approach to china, the new president, joe biden, will be not happy about these unilateral approaches to europe and china. there is enough room for a prominent approach to u.s., europe, south korea, japan, australia, and new zealand, of course china. although the countries like australia and others had a much more developed free trade agreement than the europeans did during the last week. as the, it may be seen , autonomousic approach from europe to china,
but on the other hand, i would say there is enough room for maneuvers to join hands. francine: mr. gabriel, cliff apchan there, talking about leadership vacuum in europe once angela merkel leaves. votee that we have a big on the cdu coming up mid-january. who is the right person to actually take on that role? sigmar: i totally agree with what cliff said. there is no person who will be .n the same position in germany germany is now in a period of transition. merkel will go out of her office -- maybe she will be more concentrated on europe, as she did during a very hot time of the pandemic. be soshe will not
involved in the german election in european more politics because there she is interested to have a long scene legacy. on the other side, france of course belongs to the new leader of europe after merkel. in a veryy is difficult economic situation, challenged in the country. so i don't think that he will be instrong to replace merkel europe. by the way, the next elections in france are on the horizon. so that is i think the difficult situation in europe, why eurasia is right to put europe at one of 2021.p risks in
francine: cliff kupchan, what does the biden administration actually need from europe? in their fight with china, is there a role that europe can play ? hasf: president-elect biden rhetorically distinguished himself from president trump by arguing the need to multilateral lies china policy. china policy.lize to bring in the e.u., japan, china to checke -- encourage china to change this policy by putting a broader screens on them -- a broader squeeze on them. result that china-u.s. tensions brought. openly encouraging this
investment agreement is going to be a setback. -- openlyways to discouraging this investment agreement is going to be a setback. we will here is that see a global trade between xi jinping and joe biden. it may be good for the allies, but it will increase tension i think between the u.s. and china. so what we really need from europe is what the united states needs from europe, a creative way that europe can still benefit from china, but stay in sync with the u.s. striving to bring them, to bring turnaround. it is going to be difficult. tom: we are looking at the top risks that eurasia sees for 2021, and of course that is an international field. but i've got to turn to the german election this year. it is a huge and important and original election. chris reiter of our berlin operation tells me very simply that this could be your
conservatives and the greens together. that is unusual, to say the least. how do you get a coalition developed in the new germany? the future germany? i would say the coalition between conservatives and the greens is something which should have happened four years ago. if you look to the german society, this is the coalition, the majority of the germans want to have. it was not able because they needed, and the liberals had the theing that they would be fifth wheel on the wagon, so they decided not to join the government, and that only was the reason that we have again a coalition between conservatives and democrats. normally four years ago we should have had a conservative green coalition, at that time with liberals. now i would say the perspective
is to have a coalition between conservatives and the greens without any party. they will need nobody, and the terms of german politics, it will look like the next grand coalition, but only the second biggest party will not be the social democrats but the greens. mr. gabriel come is a red-red-green alliance possible? cliff: of course the government, and the person responsible in the government, all the ideas that he would come out as a new candidate for the conservative party, will not be the case. he is in a tough political position. whaturse, many criticizing
was done during the last weeks and months. he is at the center of the criticism. so i would say maybe he as a person is the biggest risk to lose, not angela merkel. and not -- i would say not the conservative party as a whole. they will go down a bit when people recognize that merkel will not be the next chancellor. you must know everybody in the political arena, everybody knows that angela merkel will not be the next chancellor. but ordinary citizens are not very aware that for the first time they will have to choose between different candidates for the chancellor's office. but at the beginning of spring, people more and more were recognized, and then the conservatives, they will lose some percentage in the opinion polls. but at the end, the conservative party will stay as the biggest
party in germany. you will not have a chance at a coalition without them. so i don't think that that is any opportunity for a green-red, red coalition with the greens and the chancellor's office. francine: thank you so much for the insight. germangabriel, former foreign affairs minister. and we will have more with cliff kupchan. coming up, we speak with the former member of european parliament and stanford university international policy director at the cyber policy center. we will talk about hacking, we will talk about cybersecurity next. this is bloomberg. ♪
everyone. this is a special edition of bloomberg surveillance. i'm francine lacqua in london. tom keene is in new york. we have a jampacked show for you. the eurasia group seeing dead and cybersecurity as major battleground in the u.s. the china tech war inspecting two countries -- writing a slowdown or a halt to data across borders will disrupt business models that rely on free flows. we are delighted to be joined today to talk a lot more about these topics by cliff kupchan, the eurasia group chairman. andy international policy director. when you look at the top risks in cyber, who actually understands what kind of hacking artificial intelligence we could be facing in 2021? >> i think one of the main challenges is that companies
have a much better view of risk compared to public authorities, governments, and this has really played out clearly in the solar wind intrusions that we have seen recently, where it was a cybersecurity firm that had to disclose that this was happening, a very good step towards transparency. but i think the balance between public institutions, democratic authorities, the public interest, and private companies in the cyber and digital sphere is a challenge, and it needs to balance much more toward the public interest democratic governments. what are we most worried about? what are you most worried about? is it devices or the lack of diplomacy, which means we could see more spying, as is the case with certain russian operatives in the u.s. nuclear facilities, for example? >> i think it is two things. of what are theeliance
thresholds of, for example, when an escalation leads to war and what should be the consequences. the e.u. member states have decided on a package of sanctions to also apply when there are cyberattacks, by and large there are huge gaps in understanding the applicability of existing law or updating laws to cover the digital realm and making sure that there is accountability after violations law.rms and international
tom: professor, we are thrilled to have you with us today. you are arguably the most important person in the world dovetailing policy into all this technology. you are out at stanford and you're meeting with heavyweights like tim cook and the rest of the tech people -- bezos wanders by to give you a zillion dollars. when you speak to those tech titans, how do they respond to the policy that we all know is coming? well, i haven't seen these ceos walking by as much, but you are right that i i'm in the heart of silicon valley, and i think they are trying to strategize vis-a-vis regulation that is coming. we hear from tim cook and mark zuckerberg saying that they will embrace regulation. on the other hand, they are hiring more lobbyists and revolving door hires themselves. vis-a-vis the digital services act coming out of the e.u.
so i would say that there is going to be a need for companies to articulate which value sets they want to align with. and sure, maybe not every regulation will be one to embrace, but they cannot just say no to everything as they have in the past. tom: well said. cliff, weigh in here. we are finally at a tipping point on cyber. we have just had a massive hack which has been underplayed with all the other news flow. i get that. what is the catalyst to get from policy going back to the 50's and the idea of the military-industrial complex? how do we get to a cyber industrial complex? it would have to be what i would call sort of a split moments, such as when the -- sort of a sputnik moment, such as when the soviets lost sputnik
in the space program. unfortunately, it may take something really bad happening, and it probably will before we get there. at the very same time, you have ,his massive russian intrusion we also have a president-elect patience forless authoritarian leaders, who has a dim view for what the russians did in 2016. we will have a very tense russian-u.s. relationship, and that to me combines -- the russians are very good at this stuff. i covered russia for 30 years. this could lead to a cyber conflict between the two, which is what our other guests thinks the consequences would be. but it would not be very pleasant to watch. francine: cliff, aren't we
already in that war, a cyberwar already? what concretely could happen in 2021 between china, russia, and the u.s.? seeingwe are intelligence oriented, which it seems like this latest one was more or less. exchanges between the two. but we are not yet, again, from what i know -- we are not seeing wholesale diverse changes, a sign to bring down rigell infrastructure. we are not trying to bring down a very dangerous step -- with nuclear energy and we could see at least brush backs on those fronts. when you start a brushback, he that he risklation miscalculation. tom: what we do here with the top risks of top risk of 2021 is dovetail in breaking news. we have breaking news right now.
this is old bailey in london, where they are reading the judgment of julian assange. schaake, please weigh in as well. the government almost confusion over people that are similarly speculated or charged in the cyberspace. give us your comment, lee's, on the importance of the julian assigns case -- please, on the importance of the julian assigns -- julian assange case on the tech world. marietje: with understand -- with individuals who understand the way tech works, the confusion is over whether they an cause power disruption in unprecedented way. you could argue that an individual like edward snowden, who decided on moral grounds it was in the public interest to disclose the extent of the nsa's
surveillance capabilities did the same thing. and so i think the case of julian assange will have to show what accountability there will of talkhere is a lot about him being pardoned by donald trump. i am curious to see what this case can disclose in terms of which laws he violated in which -- it may also show where there is uncertainty in the law, as i think there is in so many instances where technology is used in new ways, and where the laws are either unclear, and clear in their international application, their cross-border application, or where there will be updates to laws in terms of where there is accountability. for thank you so much helping us, giving us perspective on the top eurasia group this year. -- withrow that she could join us today. the theme is not going to go
away on cyber hacking and all this technology. cliff kupchan with us. still with eurasia group. dr. bremmer will be with the next hour, along with dr. daniel -- dr. daniel. here is ritika gupta. ritika: president trump with georgia election officials to find thousands of votes and change the results of the election. that is from a phone call that took place over the weekend. the president ranged from flattery to threats during the course of the conversation, but georgia officials did not back down. the white house is not commenting. nancy pelosi begins another term as speaker of the house. she was reelected to the post with 216 votes, just two more than the majority of those present. there was talk at present -- that progressive and moderate democrats want a new generation of leadership, but no democrat challenged pelosi. british prime minister boris
johnson said that huff restrictions will probably be used to fight the coronavirus -- -- -- that tougher restrictions will be used to fight the coronavirus. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i'm ritikauntries, gupta. this is bloomberg. tom? tom: ritika gupta, thank you so much. there are so many stories today. and watching the georgia , astions, those two races well. and then there is the pandemic. he has joined us a number of times before. with the world health organization, special envoy david navarro will join us. a terrific way to start 2021 with eurasia group. stay with us. this is "bloomberg surveillance forurasia group's top risks
year.0 is an x in every in the face -- is an extraordinary year. in the face of the coronavirus pandemic, we wrote the story of withking the coronavirus efforts. >> how long to wash their hands, how many households can meet together. too year in which we lost many loved ones before their time. mr. biden: there has never been a single thing america has been unable to overcome, no matter how drastic it has been. pandemic hasvirus
been and continues to be a political, social, and economic challenge of the century. >> we can see that illuminated sign marking the end of the journey. more important, we can see with growing clarity exactly how we are going to get there. that is what gives me such confidence 2021. give my all to the outbreak as soon as possible and give people peace of mind. the tokyo olympics will be a testament that we overcame the coronavirus. morning, everyone. the voices of the pandemic, everyone with their spin this year. right now, not spin but signs. i want to pause and say our team all through 2020 had great leadership on speaking to science and to political experts about how to handle this pandemic. abarro will join us.
i need to turn to lift corruption right now on their take. ro,ore we get to dr. nabar help us here with the distinction of your covid risk. is that the risk lingering effects, the impact of covid, are not going to go away quickly or easily for a few reasons. we will have within every country, the so-called k curve, different groups cover at different rates. internationally, you will have different rates of recovery. based on vaccine access and other rollout factors. what will you have as a result of this? you will have instability, anti-incumbent anger with a lot of elections going on in latin america, for example. and as lenders become more discriminating, a lot of emerging markets will have trouble getting capital. that is going to create big
pressure. david, thank you for joining us, providing a voice to start the year. i want to speak not about cases, which i cannot count or deaths which i don't trust, the hospitalization surge and this insanity over the long weekend, that we cannot get fascinated -- get vaccinated fast enough. na solutionbarro -- the nabarro solution? david: there is no alternative but to make vaccines available as widely as possible as soon as they get approved. i don't want any corners to be ,ut on the approval process though each vaccine must go through their phase three trials and be properly assessed by national regulators as well as by the world health
organization. but that is the only option that we have if we are going to rely on vaccines to get this pandemic to subside. just one last point. vaccines won't be enough on their own. we will need to continue to pay attention to the rules that were set over the last few months about physical distancing, mask wearing, isolating when sick, looking after those who are frail and vulnerable, because these basic principles, backed up by strong public health work at local levels, still will be key for the coming months, even years, to enable societies to get on top of this pandemic. nabarro, there were trials with vaccines. they told us with pfizer that you take a first dose, and then
you take the second one after three or four weeks. does it make a difference? if you delay that second those by months? more: we are seeing countries, with a widespread use of a single dose of one of these vaccines may in the end be more effective at helping slow down the pandemic and reduce suffering, then making sure that everybody receives their two doses at four weeks or so intervals. i am not really at this stage able to come out in favor of one option or the other. because they are so situation dependent. the move towards a longer interval between vaccine doses reflects an anxiety in some countries that the situation is so intense, that to protect health services, getting single
shots into as many people as possible is the only right way to go. but as you picked up during the last few days, there has been quite a lot of controversy over exactly how to go down this quite experimental path. francine: there is also a lot of controversy, and a lot of citizens calling symbolic vaccinations programs because a lot of the european countries have the vaccines. they are just not administering them quickly enough. would you ask countries to be quicker to find more ways of finding pharmacies, for example, to administer these vaccines? not only hospitals? means isat this really that the administration of vaccines must be thoroughly planned. we know from so many different campaigns that if you don't have proper planning at local, state,
national, regional, and global levels, for the use of scarce vaccines, especially when you are in a crisis situation, you can end up with a lot of waste, and indeed quite a lot of potential errors being made. i really would like to appeal to , just to really slow down a bit on the rush to get the vaccine into as many arms as possible and put more time into systematic planning of what has to be a really effective global operation. tom: david, you went right to where i want to go. i what to go to you and then to cliff if we have time. it is really simple -- it is about federalism versus state distribution as well. do you have any optimism or any track record that the united states can provide a polio equivalent or a diphtheria
equivalent from 120 years ago? can we do that with a statement that we are in versus a federal application? anticipate, tom, that i am going to have to say not only should there be national and state planning that is done from the center in the united states. there has also got to be global planning. this is a global pandemic, accelerating fast. and we must have a global response. tom: just because of time, i want to let cliff in here to make sure he has a voice in this. cliff, do you see any ability of president-elect biden to create a more federal mandate in america versus a state centric mandate of president trump? cliff: i think that president-elect biden is going to have much more moral persuasion capability, much more talent to do that, much more
commitment to do that. these are state programs. we have to get the funding to them, enable the infrastructure, but i do think that the big boys, like ms. merkel has done morerope, will probably be successful. we will not get to just a good place but a much better place than we are right now. tom: we have got to leave it there. 10-our showlike a today, francine. they be we ought to do that, maybe we ought -- maybe we ought to do that, with cliff kupchan and ian bremmer. , don't be a stranger. the top risks of eurasia group, the top risks of 2020 one. markets up, futures up 21. this is bloomberg. good morning. ♪
hour. excited about speaking with ian grammar -- ian bremmer about the trump phone call. we will have plenty more on brexit as well. i wanted to check a couple of things. we look at pound, weaker dollar, and this could be the narrative for the rest of the year. i know we are looking at the inflation forecast, and of course we look at pound, 1.3694, the first monday, working day, of brexit. tom: on you on, turkish lira stronger. that is one of the top risks for eurasia group. ian bremmer in moments. this is bloomberg. good morning. ♪
francine: a new year, a new order. for 12 months, our lives and our economies were suspended by a pandemic that would come to define 2020. we begin a new year taking stock. as developed and emerging nations look to rebuild, the path forward is not without challenges. strained the weight of alliances and divided agendas, globalization and space hang in the balance. nation,s 2021 nation to and indeed across america, there is a fractured political divide, a political depression. is 2021 a changed europe? the honeymoon is over. merkel will exit. it will be macron alone, and the vaccines will arrive, but with them, and frustration of a long pandemic recovery. good morning, everyone. this is our annual vi