:00:07. > :00:09.This is Business Live from the BBC with Sally Bundock and Ben Thompson.
:00:10. > :00:15.With security and migration concerns topping the agenda for European
:00:16. > :00:18.leaders, is it now time to end free movement within the region?
:00:19. > :00:35.Live from London, that's our top story on Wednesday, 25th November.
:00:36. > :00:40.The end of passport free movement within Europe?
:00:41. > :00:45.As the threat of more terror attacks hangs over the regions capitals,
:00:46. > :00:48.many are now asking if security should take precedence over trade?
:00:49. > :00:54.The UK Government lays out how it will spend $6 trillion
:00:55. > :01:10.As trade is underway across Europe, they're following Asian shares
:01:11. > :01:13.lower amid international tension over the downing of a Russian
:01:14. > :01:17.And making a comeback, we speak to the man with a plan for
:01:18. > :01:23.And as Black Friday turns into much more than a one day retail
:01:24. > :01:53.Since the mid-1990s Europeans have enjoyed the freedom to move
:01:54. > :01:55.between EU countries without border controls or checks.
:01:56. > :01:58.In fact, the freedom of movement, goods and services is one
:01:59. > :02:00.of the founding principles of the EU's single, economic area.
:02:01. > :02:04.But the terror attacks in Paris and the current migrant crisis has cast
:02:05. > :02:08.The Schengen Agreement, as the model is formally known, abolished
:02:09. > :02:11.border controls in 1995, allowing passport-free travel for 400
:02:12. > :02:19.Germany, Austria, Denmark and other states have all
:02:20. > :02:22.tightened border security in response to the influx of
:02:23. > :02:29.And following the Paris terror attacks, France has put in place
:02:30. > :02:31.checkpoints on major routes into Belgium with drivers and passengers
:02:32. > :02:42.And that free movement within the EU boosts trade.
:02:43. > :02:45.European states will now have to decide if it's possible to preserve
:02:46. > :02:46.the benefits of the Schengen Agreement while maintaining
:02:47. > :03:01.Koen De Leus, Senior Economist at KBC Bank joins us from Brussels.
:03:02. > :03:08.Thank you for being on the programme. Ben outlining just how
:03:09. > :03:11.important Schengen is and yet it is something that's been challenged at
:03:12. > :03:16.the moment, isn't it, given what happened in Paris and the movement
:03:17. > :03:25.of those terrorists that have been found to be involved in that event?
:03:26. > :03:32.Yes. Yes, indeed. It is really very, a very endangering. The Schengen
:03:33. > :03:36.Agreement allows people passport-free travel within the
:03:37. > :03:39.European Union. That's important. If you ask politicians, they say it is
:03:40. > :03:43.the most important thing of European integration. If you ask citizens,
:03:44. > :03:48.they say as well, passport-free travel is the most important thing
:03:49. > :03:53.about European integration up to this stage. To abolish it would be a
:03:54. > :03:57.big error, I think. For European leaders who will be discussing this,
:03:58. > :04:04.I would imagine that is the very last thing that they would want to
:04:05. > :04:10.do, but is there something they can do to increase security without
:04:11. > :04:17.hampering trade within the zone? Well, that is a big challenge. The
:04:18. > :04:21.terrorist attacks, of course, they cost a lot of money, but when you
:04:22. > :04:25.are going to abolish the passport-free travel then you know
:04:26. > :04:29.that you're going to hurt business. When you have passport-free travel,
:04:30. > :04:34.you know that businesses, that goods and people are trading freely and
:04:35. > :04:39.very fast in between countries. And this is a big advantage of being
:04:40. > :04:44.member to the Schengen zone. This is a big advantage compared to goods
:04:45. > :04:50.and services that are imported from outside the Schengen zone and that's
:04:51. > :04:54.why, for example, 63% of the total value of goods, traded by the
:04:55. > :05:01.European countries is traded between them. So it is very important to
:05:02. > :05:04.abolish this thing because then we lose the competitive advantage of
:05:05. > :05:10.the Schengen zone that we have today. Is it possible to quantify
:05:11. > :05:15.the advantage? The UK is not part of the Schengen and yet Europe is its
:05:16. > :05:19.biggest trading partner and for British businesses it makes a lot of
:05:20. > :05:24.money in trade between the UK and European countries? Yes, there was
:05:25. > :05:30.some research done and research stipulates that when two countries
:05:31. > :05:35.are part of the Schengen Agreement then they increase their by lateral
:05:36. > :05:43.trade by approximately 0.1% annually. This is a huge advantage,
:05:44. > :05:47.a huge advantage compared to when you're not part of the Schengen
:05:48. > :05:58.zone. What do you think the likely outcome might be in terms of ways to
:05:59. > :06:03.improve things? Well, I think safety is a very important issue, to
:06:04. > :06:07.preserve this safety that this will cost money. This will cost money
:06:08. > :06:13.because there will be more controls. There will be more border controls
:06:14. > :06:20.and things like that and so if you ib stall the controls you know the
:06:21. > :06:26.cost of the terrorist attack is multiplied by ten-fold for example.
:06:27. > :06:30.If you look to the United States, after 9/11 the longer queues in the
:06:31. > :06:34.airports cost approximately $10 billion a year. So safety first.
:06:35. > :06:37.That's true, but we have to take into account that if you introduce
:06:38. > :06:43.border controls and everything like that, OK, it comes at a cost. All
:06:44. > :06:48.right. Thank you very much for joining us from KBC Bank.
:06:49. > :06:51.A division of Deutsche Bank will pay more than $31 million to the
:06:52. > :06:54.US Justice Department to avoid possible prosecution for helping
:06:55. > :06:57.Deutsche Bank's Swiss unit offered a number of services
:06:58. > :07:00.and permitted some practices that it knew could assist US taxpayers
:07:01. > :07:07.in concealing assets and income from the tax authorities.
:07:08. > :07:10.The price of iron ore, the key ingredient for making steel,
:07:11. > :07:18.It closed Tuesday at $43 and 40 cents a tonne.
:07:19. > :07:20.Iron ore prices have tumbled nearly 40% this year.
:07:21. > :07:23.Some say it's got much further to fall, with too much supply
:07:24. > :07:27.How about this for an accounting error?
:07:28. > :07:32.China's Securities Association says the country's biggest brokerage,
:07:33. > :07:34.Citic, overstated the size of its derivative business
:07:35. > :07:43.Citic, which is state owned, said the error occurred due to a system
:07:44. > :07:56.Probes have resulted in executives confessing to insider trading.
:07:57. > :08:05.The Business Live page is concentrating on events in the UK.
:08:06. > :08:09.George Osborne will be delivering his Spending Review for Government
:08:10. > :08:14.departments later today. He has got a budget of ?742 billion
:08:15. > :08:19.to spend, but the Chancellor has pointed out he wants to save ?20
:08:20. > :08:22.billion this year. So the graph there looking at where the money is
:08:23. > :08:26.currently spent, but the big headline will be where the big cuts
:08:27. > :08:29.come in. Some departments, of course, already ring-fenced. So
:08:30. > :08:32.there are some that are bracing themselves for cuts and we're told
:08:33. > :08:37.that agreements have been made with some of those departments. We will
:08:38. > :08:45.have more on that later on. But full details on the Business Live page.
:08:46. > :08:54.In Japan they have made a decision to increase the minimum wage by 3%.
:08:55. > :09:03.Will this boost the Japanese economy or will people just save the money?
:09:04. > :09:09.Right now, the minimum wage in Japan is $6.36 an hour. A 3% increase
:09:10. > :09:13.would take the minimum wage to $8.16 and the comparison right now is with
:09:14. > :09:16.the high cost of living in Japan, this amount would buy a little more
:09:17. > :09:21.than a bowl of noodles. But of course, the move is more a sign that
:09:22. > :09:25.the Government is trying to boost consumer sentiment in Japan at a
:09:26. > :09:31.time when the country has fallen back into a recession. Japan has
:09:32. > :09:37.been in a recession twice since the Prime Minister came into power in
:09:38. > :09:41.late 2012 and despite his economic policies, Japan's growth struggled
:09:42. > :09:45.to gain momentum, but rising wages is one of the biggest steps forward.
:09:46. > :09:48.Consumption accounts for 60% of the economy. So we're going to have to
:09:49. > :09:50.wait and see if this is going to have a lasting impact.
:09:51. > :09:57.Thank you very much. So Asian shares ended lower over
:09:58. > :10:00.worries over events in Middle East after Turkey shot down a Russian
:10:01. > :10:02.warplane. The Nikkei also ended
:10:03. > :10:04.its five-day winning streak. US markets are also contending with
:10:05. > :10:08.a short week due to the Thanksgiving holiday -
:10:09. > :10:10.that's Tuesday's close for the DOW. The rebound in energy prices did
:10:11. > :10:12.prevent US stocks In the UK today,
:10:13. > :10:22.all eyes on Chancellor, Finance Minister, George Osborne, who will
:10:23. > :10:27.deliver his Autumn Statement and Spending Review, laying out the
:10:28. > :10:31.governments tax and spending plans. It's likely to be more politically
:10:32. > :10:33.sensitive than economic, but recent events in Paris and beyond could
:10:34. > :10:39.have prompted a rethink of the planned reductions in the Defence
:10:40. > :10:42.and Home Office budgets - that could affect defence
:10:43. > :10:47.and aerospace stocks including BAE Systems, as well as those related to
:10:48. > :10:56.internet security and cyber-crime. Later today there's also a deluge
:10:57. > :11:01.of US data with the durable goods numbers for October as well as the
:11:02. > :11:10.latest inflation data as Michelle It is a packed Wednesday before the
:11:11. > :11:14.thanksgiving holiday in the US. The day is loaded with economic data
:11:15. > :11:18.including durable goods, housing and jobless claims. For many on Wall
:11:19. > :11:22.Street durable goods orders will be the highlight. These are more
:11:23. > :11:27.expensive items that last at least three years and require more
:11:28. > :11:31.planning and more investment. Like manufacturing equipment, commercial
:11:32. > :11:37.aircraft or even washing machines! Most economists are forecasting gain
:11:38. > :11:41.of 1.5%. The number of Americans filing for unemployment benefit is
:11:42. > :11:45.forecast to have slipped. The data though can sometimes be more
:11:46. > :11:49.volatile towards the end of the year given the holidays. Sales of new US
:11:50. > :11:56.homes, probably climbed in October, and on the earnings front, there is
:11:57. > :12:00.no trading on Thursday and markets close early in the US on Friday.
:12:01. > :12:02.Joining us is Nandini Ramakrishnan, Global Market Strategist at
:12:03. > :12:15.Nice to see you. Good morning. So a lot going on. We've got a shorter
:12:16. > :12:19.week in the United States because of course, of thanksgiving, but we have
:12:20. > :12:23.got geopolitical concerns affecting trade in Asia today and on the minds
:12:24. > :12:26.of Europeans, give us your thoughts? I think the geopolitical concerns we
:12:27. > :12:30.have seen yesterday and in the past few weeks have been fairly contained
:12:31. > :12:34.in terms of markets. You haven't seen massive sell-offs in terms of
:12:35. > :12:39.panic, but as Asia opens before the other markets of the world, those
:12:40. > :12:42.jitters played out a bit in the markets as we have seen. I have
:12:43. > :12:45.touched on the Spending Review that we will get later today from the UK
:12:46. > :12:48.chancellor, and it is interesting because we have seen many
:12:49. > :12:51.departments facing budget cuts over the last few years and that's been
:12:52. > :12:55.replicated elsewhere, particularly in Europe, but we could see a
:12:56. > :12:58.reversal of that, especially after events in Paris, a big boost perhaps
:12:59. > :13:05.to the defence budgets and that's good news for the stocks in defence?
:13:06. > :13:08.Sure. It is ironic almost because a few weeks ago, we saw the shares in
:13:09. > :13:14.the big UK defence manufacturers really fall due to profit warnings
:13:15. > :13:17.etcetera. So having a bit of national budget swung more towards
:13:18. > :13:21.that area might help the shares, but of course, that comes with cuts in
:13:22. > :13:25.other areas. So it is not, you know, a win, win so to speak. Briefly, we
:13:26. > :13:29.had the US growth figures out yesterday, didn't we? They were
:13:30. > :13:35.really strong, surprisingly strong? Yes, a big revision upwards from
:13:36. > :13:37.1.5% to 2.1% growth in the US. That's definitely still looking to
:13:38. > :13:42.the past few months. It is for the third quarter. So not as much
:13:43. > :13:47.forward looking, but once again, an indication to the US Federal Reserve
:13:48. > :13:49.that the US economy is in good shape for a potential rate hike in
:13:50. > :13:55.December. OK. You will be back shortly to talk
:13:56. > :13:58.about all sorts of things including Plaque Friday. Something she is
:13:59. > :14:02.familiar with. I can tell from her accent.
:14:03. > :14:07.Lots of comments coming from inn about Black Friday of the it is more
:14:08. > :14:16.than one day, in many cases it is a week. It goes on and on!
:14:17. > :14:20.Keep your messages coming in. We are talking about pod casts with
:14:21. > :14:23.the co-founder and Chief Executive of Europe's biggest podcast
:14:24. > :14:26.platform, Acast. He claims it is changing the way we
:14:27. > :14:31.listen to pre-recorded radio shows. So we will be asking him a little
:14:32. > :14:39.later in the show. You're with Business Live from BBC News.
:14:40. > :14:45.George Osborne is to set out the Government's tax and spending plans
:14:46. > :14:47.for the next five years later today, and it's expected they'll include
:14:48. > :14:51.billions of pounds in cuts, but also new money for house-building.
:14:52. > :14:53.Simon Jack is following this from our Business Newsroom.
:14:54. > :15:08.Let's look at the background this. This is what George Osborne wakes up
:15:09. > :15:12.every morning thinking about. This is how much the Government has to
:15:13. > :15:16.borrow every year to balance the books, and he wants to get that down
:15:17. > :15:22.from its current ?80 billion to zero by the end of the Parliament, maybe
:15:23. > :15:26.even a small surplus. But he has made his life difficult because he
:15:27. > :15:31.has promised no rises in income tax or national insurance or VAT. Plus
:15:32. > :15:37.he has ring fenced certain departments like health, education
:15:38. > :15:41.and defence. He has got to bring down the spending, he tried to do it
:15:42. > :15:48.with welfare and got rebuffed in the House of Lords which turned down his
:15:49. > :15:55.proposals to limit subsidies for low paid work. He has some wiggle room,
:15:56. > :16:01.this is the surplus predicted for the end of the Parliament, and he
:16:02. > :16:05.could say, I would just make it zero, that gives him ?10 billion to
:16:06. > :16:10.pay with. And because interest rates are so low, there is less money to
:16:11. > :16:14.pay an interest. But overall, he has made a rod for his own back by ring
:16:15. > :16:19.fencing and saying no rises in some of those basic taxes, a tough
:16:20. > :16:25.conundrum is the one he has to face. Thank you, Simon. When that all
:16:26. > :16:32.kicks in, the spending review and Chancellor Osborne begins to deliver
:16:33. > :16:38.his plans, we will be across it. They BBC special begins at 11:30am
:16:39. > :16:42.here on BBC news about the impact that that back and have not only on
:16:43. > :16:47.spending, day-to-day plans, council budgets, and also reaction from the
:16:48. > :16:51.City. Another business story to highlight, Thomas Cook is hailing
:16:52. > :16:56.this year, 2015, as a year of real progress. It has had allsorts of
:16:57. > :17:00.headaches of late, but the travel firm has reported a ?50 million
:17:01. > :17:04.profit for the year to September, its first full-year profit 2010. So,
:17:05. > :17:11.Thomas Cook back on track. The risk of terror attacks
:17:12. > :17:17.and a migrant crisis are putting pressure on the Schengen Agreement,
:17:18. > :17:19.which abolished the EU's internal borders, enabling passport-free
:17:20. > :17:31.movement across most of the bloc. While it is good news for business,
:17:32. > :17:36.that free movement of people and trade, it is not such good news for
:17:37. > :17:37.trying to maintain borders, and we have talked about that a lot of
:17:38. > :17:39.late. Pre-recorded radio programmes, or
:17:40. > :17:42.podcasts as they are more commonly known, have been around for a while
:17:43. > :17:45.but it's only recently that anyone has made a serious case for making
:17:46. > :17:49.money from them on a large scale. Leading the charge is one
:17:50. > :17:52.of Europe's biggest podcast Acast already hosts more than 50%
:17:53. > :18:04.of all podcasts created in the UK The free-to-use platform is
:18:05. > :18:06.attempting to cash in on the resurgence of the medium
:18:07. > :18:09.by enhancing podcasts with videos, links and images while they play
:18:10. > :18:12.on smartphones. Crucially, the firm's software also
:18:13. > :18:15.allows targeted ads to be inserted Investors are certainly impressed
:18:16. > :18:22.with the technology, and recently backed the firm with
:18:23. > :18:26.half a billion dollars in funding. The man behind
:18:27. > :18:30.the technology is Mans Ulvestam. As well as being
:18:31. > :18:33.the chief executive, he is also the co-founder of the company and has
:18:34. > :18:49.worked in the industry since 1996. Welcome to the programme. Let's just
:18:50. > :18:54.pick up on that thought. They were retro, and we are only going back to
:18:55. > :18:57.the 1990s, but people could download things to their iPods and listen
:18:58. > :19:03.anywhere, but they fell out of favour, didn't they, because you
:19:04. > :19:09.Tube videos took over. And you are building the resurgence? We are
:19:10. > :19:13.certainly helping it. People used to do tech pod casts for other tech
:19:14. > :19:17.people, and that is not a large audience. But in the last few years,
:19:18. > :19:22.we are seeing a broader type of content coming out, so more people
:19:23. > :19:31.can enjoy them. And with the advent of everyone having a smartphone and
:19:32. > :19:35.they are accessible, it is easier to find and listen to interesting
:19:36. > :19:39.content. I tend to gauge the relevance of something, if I'm using
:19:40. > :19:46.it, I am, Leeds technophobe but I do have a smart device and I do listen
:19:47. > :19:50.to podcasts on the train. It does seem a popular activity now, but the
:19:51. > :19:56.question is how are you making that into something that makes money for
:19:57. > :20:02.you as a company but also for your client? The old way of making money
:20:03. > :20:05.from a pod cast would be if you had a large enough audience, then you
:20:06. > :20:09.would get a sponsor, and you would have to talk about the sponsor. We
:20:10. > :20:14.have introduced dynamic advertising so you can target of change
:20:15. > :20:20.advertising. Now Christmas is coming, you can say Christmas is
:20:21. > :20:23.coming, get your business shopping done early when Christmas is
:20:24. > :20:29.actually coming, so that is the big invention that we bring, so we time
:20:30. > :20:32.advertising. And you have changed how traditional pod cast works,
:20:33. > :20:37.because it always used to be just the audio, some then you can listen
:20:38. > :20:42.to, and it is about adding video, picture, other content. New
:20:43. > :20:45.technology means you can do that, but that is also something you have
:20:46. > :20:51.worked hard on to make sure you can stand out in what is a crowded
:20:52. > :21:00.market. It is a proprietary technology from Acast, so it allows
:21:01. > :21:06.us to enrich the pod, a link. You can have a video in the actual feed,
:21:07. > :21:12.so that is something that will also popularise the format. And how has
:21:13. > :21:19.the advertising industry caught up with you? There has been concern
:21:20. > :21:27.about these podcasts without us as viewers realising that way -- we are
:21:28. > :21:30.being sold things. That was one of the reasons we started Acast,
:21:31. > :21:35.because the division between the commercial message and the editorial
:21:36. > :21:38.message was unclear in the old way, so what we're doing is
:21:39. > :21:42.revolutionising the podcast to make it clear to the listener that this
:21:43. > :21:46.is someone saying it because they actually think so, or are they
:21:47. > :21:52.getting paid. So we have a clear commercial break. We will have to
:21:53. > :21:57.leave it there, but we really appreciate you coming in, Mans, and
:21:58. > :22:00.we will watch that space, for sure. The start of the programme, we asked
:22:01. > :22:15.you for your comment on Black Friday. Now it is a week-long event,
:22:16. > :22:21.retailers trying to get you to shop all week so here are some new names
:22:22. > :22:31.that people have sent in Banksgiving is one, Woeful Wednesday, help us
:22:32. > :22:34.clear our unwanted stock week. A lot of comments about whether this is an
:22:35. > :22:42.awful American imported whether we should do it. Matt says, meaningless
:22:43. > :22:45.imported retail week. There is a lot of negativity! Five-day shopping
:22:46. > :22:48.binge, I could go on. In a moment we'll take
:22:49. > :22:51.a look through the Business Pages, but first,
:22:52. > :22:53.as part of a new BBC series, we have been looking at 30 entrepreneurs
:22:54. > :22:56.under the age of 30 in the world. Catherine Mahugu is the founder
:22:57. > :22:59.of Soko, an e-commerce platform based in Kenya and San Francisco,
:23:00. > :23:16.allowing local artisans to sell The team sees itself as a family
:23:17. > :23:23.rather than just workmates. It is a place that fosters innovation. Soko
:23:24. > :23:26.is a jolly fashion brand that connect global Artisans to the
:23:27. > :23:32.international market, giving them access to financial opportunities.
:23:33. > :23:35.My name is Catherine Mahugu, I am 27 years old and the co-founder of
:23:36. > :23:40.Soko, a company wasting Kenya and San Francisco. -- based in San
:23:41. > :23:42.Francisco and Kenya. You can find out more
:23:43. > :24:00.about our 30 under 30 series Nen Dini is back in the studio,
:24:01. > :24:04.where talking about a new name for Black Friday. Do you love it or hate
:24:05. > :24:07.it? I love a good bargain, but at the core of the issue, we should
:24:08. > :24:13.probably be eating pumpkin pie rather than lining up at the local
:24:14. > :24:17.mole to get the best deals. I make this assumption because you are
:24:18. > :24:21.American, is it something you participated in every year? Wasn't a
:24:22. > :24:27.big event? I have participated in it a few times when you want a big
:24:28. > :24:34.ticket item, like a big-screen TV, the discount is formidable, but it
:24:35. > :24:40.eats into time as a family, and people don't want to go when they
:24:41. > :24:45.want to spent times a family. But people are not buying more, just
:24:46. > :24:49.buying it all on one day, and those retailers suffer in the real run-up
:24:50. > :24:54.to Christmas or the holidays because people have already spent everything
:24:55. > :24:57.they are going to spend on that day. Exactly, and trying to take
:24:58. > :25:00.advantage of that frenzy, that idea that you are going to pick up a
:25:01. > :25:04.bunch of different things you might not have needed, that is something
:25:05. > :25:08.that brick and mortar retailers are really looking for, because as we
:25:09. > :25:13.know, Internet sales are taking over that territory. Briefly, the
:25:14. > :25:17.financial times looks at the UK's Premier league success barking US
:25:18. > :25:22.private equity interest. Football stateside? I think it is interesting
:25:23. > :25:29.to look at this corporate interest, these private equity firms bringing
:25:30. > :25:33.expertise and monetising the sport a bit more, but in general, this means
:25:34. > :25:38.a bigger global interest in the sport. And it is working the other
:25:39. > :25:43.way, rather than importing Black Friday from the US, we are exporting
:25:44. > :25:48.football to them. But I can already see the e-mails about the US taking
:25:49. > :25:51.over football and making it into a big show.
:25:52. > :25:56.Have you got that off your chest? Thank you for coming in. Thank you
:25:57. > :25:58.for your company. We will see you at the same time, same place tomorrow.
:25:59. > :26:02.Goodbye.