16/09/2016 BBC Business Live

This is Business Live from BBC News with Victoria Fritz

EU leaders gather for a summit as they face up

to a future without Britain - and the financial fallout.

Live from London, that's our top story on Friday

The European Council President Donald Tusk has called on EU leaders

to take a "sober and brutally honest" look at the bloc's problems.

Shares in one of Europe's most important financial institutions

The US Department of Justice has asked Deutsche Bank to pay $14bn

dollars to settle an investigation into mortgage-backed securities.

And European stock markets head lower despite a solid

lead from Japanese and Australian shares on Friday.

Trading was light today in Asia, with key markets such as China,

Hong Kong, South Korea, Malaysia and Taiwan are all closed

And we'll be getting the inside track on two of the big

business stories of the week the German pharmaceutical giant

Bayer's move to buy Monsanto of the US, and green

light from the UK government to go ahead with the Hinkley Point nuclear

We start in the Slovakian capital, Bratislava, where leaders

of the European Union member states are about to start

Notably absent from the guest list is UK Prime Minister Theresa May.

And top of the agenda of course - the reason why she's not there:

Critics have warned that the EU faces disintegration if it does not

address the problems that led to the Brexit vote.

But in the shorter term there will also be an impact

Here's why - The EU's budget could shrink by at least 10 billion

Last year Britain was the second biggest contributor

And it's Germany that may have to pick up much of the bill

Brexit could mean Germany ends up funding a quarter

of the EU's budget - compared to the 21 per cent

That's according to calculations made by the German government.

It's a figure that will further anger Eurosceptics in Germany.

Will the EU survive the tumult, and the bill?

Well - the European Council president, Donald Tusk,

In this particular moment in the history of our community,

after the vote in the UK, the only thing that makes sense

is to have sober and brutally honest assessment of the situation.

What we need today is an optimistic scenario

But, it requires a realistic diagnosis of the causes of Brexit

and its political consequences for all Europe.

Our Europe Correspondent, Damian Grammaticas, joins us

live from Bratislava - where the meeting is

Damian, hearing from Donald Tusk, talking about a sober, honest look

at the European Union and the problem it is is facing, A few days

ago, the state of union address, give us a take on what they will

grapple with today? The leaders are arriving up on the castle up on the

hill behind me. They will be grappling with some of the

underlying causes of the Brexit vote in the UK.

Also they will be laying out a vision for the future, things that

they can do, to tackle some of the problems. We have heard from the

Slovak Foreign Minister, Slovakia are the host country, they are

setting some of the tone for this. He said this will not be a technical

discussion, it will be about laying out a vision. As he put it,

Eurosceptics around Europe are gaining momentum and they are

gaining, he said, the upper hand, the EU is losing popularity and the

leaders need to lay out a positive vision, one that can win back

popularity for the EU, one that can show, that he believes, that this is

a fantastic project that delivers benefits.

What will that involve? More security, more border control, that

is a direct response to the concerns about migration and to terror

attacks in the EU. On the other side, economy, jobs, what to do

about that. There we have interesting situations, they are

addressing, we know that Donald Tusk wants to lay out a plan in October,

more focus on trade policy, reaping the benefits of open markets, while

taking into the account the concerns of citizens. That is a message to

the UK, that the EU, a huge trading block, wants to move forward with

reaping trade benefits and delivering growth for its citizens.

And looking forward, more milestones to tackle youth unemployment and

investment in the EU. Some very lofty ambitions and a very

wide-ranging vision for Europe. Is there practical? -- is this

practical? The difficulty that the leaders face is two-fold, one is the

divisions between themselves, so agreeing things. Here we have a root

cause if you like of some of the difficulties of the situation, the

strains and the tensions. And in the economics sphere, the divisions

between the north and south. We know the situation in Greece but

countries in the south of Europe, Italy, Spain, they want less

austerity, countries in the north want more budget rigour. That is a

trade-off to balance. Also the other difficulty, they have been talking

about this but trying to deliver benefits felt and seen by the

European citizens. So the investment plan is a big part of that. 500

billion Euros worth by 2020 is the European Commission's idea.

Jean-Claude Juncker has been talking about that in his State of the Union

address, and he wants the leaders to put in more money. That is the

problem that they face. Thank you very much Damian.

Keeping us up-to-date with the summit.

The US Department of Justice is asking Deutsche Bank to pay $14bn

to settle an investigation into mortgage-backed securities.

Deutsche Bank says it "has no intention to settle these potential

civil claims anywhere near the figure cited."

The claim against Deutsche, which is likely to be

negotiated for several months, far outstrips investor

More bad news for Volkswagen, asset manager Blackrock and a group

of institutional shareholders are to sue car maker Volkswagen

They are to claim that VW failed to disclose its use of software

defeat devices on diesel cars in a timely way.

A quick look at the live page. This story has come in about Unilever. In

talks to buy Honest. You may not have heard of this company, it is an

organic baby and personal business in the US, founded by Jessica Alba.

She does not often appear on the Business Page! If is a company with

a start-up value of over $is. So it seems that the organic baby goods is

big business and she is a Big Ben fishery.

More woes for Samsung as the US Consumer Product Safety Commission

has announced a recall of around one million

These are the smartphones that have been plagued by incidents

The move by the US safety agency formalises the recall underway in 10

countries after reports of faulty batteries that caused some handsets

He has been following the story. They must be really upset about

this, the recall coming at a time when Apple has released the new

iPhone 7. They are upset indeed. It is

interesting, this is a formal recall, as opposed to the voluntary

recall after the user complaints started about the exploding phones.

The problem affects 1.5 million devices, including 1 million in the

US. And according to the safety commission, Samsung should not be

conducting the recall by itself, the product is such a fire hazard.

So far there have been 26 reports of burns, 55 of property damage and

last week Samsung started to advise people to stop using the device and

limit the batteries of the Note.to 60% cap as whity by a software

update and airlines have orderedariline passengers no to

bring the phones on planes, unless they are turned off and not charged

on the flights. This is all impacting Samsung negatively. The

share prices have taken a tumble since the news broke.

Thank you very much. And now the markets.

Trading was light today in Asia, with key markets such as China,

Hong Kong, South Korea, Malaysia and Taiwan closed for the mid-autumn

European stocks are trading in the red -

despite a solid lead coming from Japanese and Australian

In the FTSE 100 it is lower. The big falls are the banks. RBS

Samira Hussain has the details about what's ahead on Wall Street Today.

Although it's the end of the week, it won't end without some

The consumer price index for the month of August

It was flat in the month of July, but analysts

CPI is the last bit of economic data before the Federal Reserve,

the US central bank, meets next week.

Early consumer sentiment numbers are also out on Friday.

How Americans are feeling about the state of the US

economy is important - the more confident, the more likely

they are to spend money, and that's crucial for an economy

that depends so heavily on consumer spending.

And finally, Apple's new iPhone 7 goes on sale in US stores.

Despite the mixed reviews, Apple's newest edition

to the iPhone family is very popular with consumers.

Initial quantities of the iPhone 7 Plus have sold out globally.

Joining us is Justin Urquhart-Stewart, Co-Founder

Director of Seven Investment Management.

Good morning, have you got the Friday feeling? No, it is raining

and I am feeling damp! And did you get involved in the storms? Well, I

was out late, and then up early this morning, I was straight off to

sleep. Then off to here.

So the markets, a damp start to Europe? It is in every single way.

You can see what is happening, dominated by the news. You can hear

what was happening with the Deutshe Bank. The numbers involved are

significant. It is more than the entire capital

of the bank with those numbers. But it is interesting when you look

at what is happening in the markets, it is nervous.

The Deutshe Bank is important in Europe. But it has had an awful

year. At the beginning of the year, Schaeuble Chanel was telling the

world that Deutshe Bank was OK. It was the big bang that would be

fine but over the past few years we have seen the big banks suffer.

But the market is nervous. Here we are in September, and real trading

and the trading is concerned. It is a stormy September. That is what you

will see, concerns over the rates rising and the figures to growth.

This is a situation. Anything to get our teeth into? The

information coming from the Fed. Are the rates going up? Yes, they are

going to go up but slow and steady. They want to make sure that the

story is not scaring the horses, that everyone knows where they are

going. But the impact is a concern. People, it is strange, you look at

the general commentary, you think that the economy is not doing well

in the States but the statistics say it is doing OK.

So I think unless we get figures that shake us off that, we should be

looking through it. But the mar Cabinets are nervous, prepare for

volatility. So forwise investors, with cash left over, maybe the time

to use it in September. Thank you.

The Inside Track on Hinkley Point and the merger between Bayer

and Monsanto with our economics correspondent, Theo Leggett.

You're with Business Live from BBC News.

The amount of whiskey sold overseas has increased

But industry bosses have warned the "uncertainties" caused

by the Brexit vote will pose challenges for exporters.

David Frost is the Chief Executive of the Scotch Whiskey Association

Encouraging news today that sales have gone up, presumably whiskey is

cheaper overseas because of the pound right now? That is right, the

devaluation will eventually help but it will take time to feed through

the system. I think the story for Scott W is a great one, we export

90% of what is produced -- for Scotch whiskey. It is one of the

biggest contributors to Britain's trade performance at the moment and

we have doubled exports, it dipped a few percent in the last couple of

years but what we are seeing now is returning to that strong growth

pattern that we saw over the last Al-Qaeda, and we should all be

excited and encouraged by that. One of the headwinds is Brexit and the

negotiations when it comes to trade and what that will look like for

your industry. How concerned are you buy things like tariffs? There are

challenges and opportunities for Brexit. We know we will not face a

tariff into the European market because of the rules so we are

confident that will not change. There will be some changes around

the world, perhaps for about 10% of the market, but there are also big

opportunities. If the UK Government can get out there and negotiate its

own trade agreements quicker than the EU is able to then it will be a

great success and good for us. India is an example where the EU has not

succeeded in negotiating a deal and maybe the UK can do better.

Interesting. David Frost, thank you for joining us.

This is a story that has caught our attention, Reuters has saying the

general electorate will receive eight -- that general electric will

receive a ?1.9 billion contract to supply steam turbines, generators

and other equipment to the Hinkley Point C project.

You're watching Business Live - our top story:

EU leaders gather for a summit as they face up

to a future without Britain, and the financial fallout.

All in practice larva except Theresa May. Let's look at the markets.

European markets, pretty flat, which is unusual because they had quite a

big game in the Mackay overnight. A lot of the Asian markets are closed

for a public holiday, bank stocks across Europe taking a battering

this morning. We were talking about which of bank shares down, which is

being felt across the UK market as well with RBS and Barclays down 2%

and 5% respectively. It has been quite a week for

business stories. The breaking news this time yesterday that the UK

Government has approved the ?18 billion nuclear power station in the

UK after imposing significant safeguards to protect national

security on that. And chemical giant Bayer's

$66 billion all-cash deal to acquire Here to talk about it,

we are joined by our economics correspondent,

Theo Leggett. You are part of the business Live

family! Let's start with the Bayer Monsanto deal, it has been mooted

for a while and finally they have said, we are dubbing ahead, but

there is a long way to go? There is, a deal like this will need

approval from shareholders. In Germany, Bayer is an national

champion company but there is also a strong green movement in Germany and

don't forget Monsanto is something of a bete noir because of its

involvement in genetically modified products. But this is a major deal,

worth $66 billion, and then maybe regulators in the United States and

European Union who want to look at it on competition grounds, so it is

not yet a done deal. I wonder whether it is in consumer

interests to have these mega companies in every single industry,

we are finding, that are dominating various consumer spaces?

Let's not forget they don't always work and big mergers are often taken

apart again further down the line, DaimlerChrysler is a good example of

that. The companies in this case would the it is great for consumers

because it will mean a wider range of products, crops can be grown more

cheaply, the pesticides will be readily available and so on and so

forth. On the other side of the coin, this major company will

control a quarter of the global market for seeds and pesticides and

some people think that is bad news because it reduces competition and

put a lot of power in the hands of one company and prices could go up

as a result. Let's talk about the other big story

that broke yesterday, Hinkley Point getting the green light from the

Government, it had been put on hold for a few months while Theresa May

and her cabinet as tested to see if it was the right fit for the UK and

they decided it is with some changes in the conditions?

Yes, and the changes were not as big as some expected. It was approved on

the condition that EDF, the French contractor which is paying the bulk

of the costs and will be building and operating the power station,

notifies the Government and gets formal approval before

selling any of its stake. The question is why would EDF want to

sell its stake and Hutu? The obvious candidate is China general nuclear

Corporation which owns one third of the initial project and the idea

that China might have a substantial influence over an essential piece of

British infrastructure have raised concerns so it is clearly aimed at

addressing that concern. Is this a triumph of political

considerations above economic ones? Certainly the political risks of not

going through with this would be quite high now. If you look at what

is being planned here, the building of a new, very large, very

complicated, unproven reactor design. The electricity it produces

will be expensive, ?92 50 per megawatt hour, about $120, roughly

double the current wholesale price of electricity, guaranteed for a 35

year period, so many people say it is too expensive. On the other side

of the coin, Britain needs new power stations. A number of old-fashioned

ones, including some nuclear ones, will be decommissioned over the next

ten years or so and the power they produce will need to be replaced.

This one power station will provide 70% of the power needs and so there

is enormous incentive to get it done now.

And Q, fear, for joining us this week.

In a moment we will take a look through the business pages, but a

quick reminder of how to get in touch with us.

The Business Live pages where you can stay ahead with all of the day's

breaking business news. We will keep you up-to-date with the latest

details, insight and analysis from the BBC's team of editors around the

world, and we want to hear from you, as well. Get involved on the web

page. You can find us on Twitter and Facebook. Business Live on TV and

online, whenever you need to know. Justin is here.

What is your Twitter handle? The other border was real thing, he

did exist! Mine is boring.

You should be on a cruise ship. UK bonus is soaring to ?44 billion,

beating the pre-crash did for the first time.

Flash people in red braces, I am pleased to say it is not the case!

When you go through the article, it is interesting to compare what is

going on here. Yes, bonuses have gone up but in terms of the

percentages of the financial sector as opposed to PR, marketing... And

legal, as well, the lawyers are getting richer by the day. What you

find there, the percentage interest is 5.4% as opposed to financial

services, 2.2%. Of the 44 billion, those honourable professions are

taking 30 billion, so it is not necessarily the city fat cats.

Bonuses are nowhere near the same scale as before and there are some

leading companies, quite rightly, saying they will get rid of bonuses

altogether because they should be paid clearly on simple

performance-based salaries and probably shares in terms of longer

term performances, and I think that is how it should always have been

done, and good firms have always done so. You finished right on time,

Justin, which is superb. Thank you for coming in today, enjoy your

weekend. That is it from Business Live, more

business news throughout the day and on the life page in world business

report. Have a lovely weekend, goodbye.