:00:08. > :00:09.This is Business Live from BBC News with Rachel Horne
:00:10. > :00:13.European Council President Donald Tusk will shortly issue draft
:00:14. > :00:16.guidelines on how the EU intends to negotiate the UK's
:00:17. > :00:37.Live from London, that's our top story on Friday 31st March.
:00:38. > :00:40.Terms of disengagement - the EU sets out its stall on Brexit.
:00:41. > :00:43.We'll hear live from Donald Tusk shortly.
:00:44. > :00:46.And the bank with half a billion customers -
:00:47. > :00:54.five banks are to merge with India's largest bank to create a super-bank.
:00:55. > :01:01.And the markets in Europe have opened, it is a bit muted, we will
:01:02. > :01:03.follow the figures later in the programme.
:01:04. > :01:08.And we'll be getting the inside track on Brexit
:01:09. > :01:10.with our very own economics correspondent, Andrew Walker.
:01:11. > :01:12.And on that note, this week we've been asking
:01:13. > :01:15.for your questions about Brexit - we plan to answer them
:01:16. > :01:34.With Article 50 now triggered, negotiations on the UK's departure
:01:35. > :01:39.But this is not just about what Britain wants -
:01:40. > :01:43.the Brexit deal depends significantly on what the EU
:01:44. > :01:47.In the next few minutes EU Council President Donald Tusk
:01:48. > :01:51.will present the European guidelines for the Brexit negotiations.
:01:52. > :01:59.So, what kind of terms can we expect from the EU?
:02:00. > :02:00.National parliaments of the EU's 27 member
:02:01. > :02:02.states will have a say in any
:02:03. > :02:04.future EU-UK free trade deal, plus consent by the
:02:05. > :02:12.Any future free trade deal between the European Union
:02:13. > :02:14.and the UK is highly unlikely until the United Kingdom
:02:15. > :02:19.There are three million EU citizens currently in the UK.
:02:20. > :02:22.The EU will want them to stay, keep their jobs
:02:23. > :02:28.In return, the EU is expected to guarantee the same
:02:29. > :02:31.for the approximately 1 million Britons in EU member states.
:02:32. > :02:34.Questions remain over what kind of deal the City of London can
:02:35. > :02:40.At stake are so-called passporting rights that allow banks with a base
:02:41. > :02:44.in the UK to access customers and financial markets in the EU.
:02:45. > :02:46.The loss of passporting rights could see US or Japanese
:02:47. > :02:52.Then there's the issue of whether Britain will pay an exit
:02:53. > :02:57.One figure that's already been talked about is 60 billion euros -
:02:58. > :03:09.something that the UK has said it won't sign up to.
:03:10. > :03:15.Before I introduce our guest, we are getting some lines in from Malta.
:03:16. > :03:19.EU-UK free-trade deal cannot offer partial single market access and
:03:20. > :03:23.must prevent physical, social, environmental dumping, these are
:03:24. > :03:26.some of the EU guidelines we are hearing at the moment. Most
:03:27. > :03:32.importantly, EU-UK free trade deal cannot offer partial single market
:03:33. > :03:34.access. Let's get more on all of this.
:03:35. > :03:37.Claude Moraes MEP is Labour Member of the European
:03:38. > :03:47.Maria Demertzis is the deputy director of Bruegel,
:03:48. > :04:02.Hello to both of you. Claude, let's start with this, I guess no matter
:04:03. > :04:07.what side you are sitting on on this fence, a trade deal needs to be
:04:08. > :04:12.done. Can it be done in that two-year time frame? No, that is the
:04:13. > :04:17.simple answer. From the inside, I chair a committee in Parliament, we
:04:18. > :04:22.have a say in this, a yes or no vote at the end, and we know this is
:04:23. > :04:28.about the divorce deal first and what you will hear from Donald Tusk
:04:29. > :04:32.is interesting, that initial leak that you got from Malta indicates
:04:33. > :04:37.that there will be more on trade than we thought, that is
:04:38. > :04:44.interesting. It is interesting they are talking about the single market.
:04:45. > :04:50.What I expected was more on the sequencing, the timetable. Quite
:04:51. > :04:54.disappointing, drive response to Theresa May's letter, really talking
:04:55. > :04:59.about the fact that it would be the divorce deal first, 18 months, five
:05:00. > :05:03.months of messing around preparing for Parliamentary votes, the yes or
:05:04. > :05:07.no, dealing with all of the ratifications from parliaments
:05:08. > :05:12.around the EU, but in fact it looks like there will be a little bit more
:05:13. > :05:15.about what happens to the trade deal after the divorce settlement,
:05:16. > :05:19.partial access, how we have access to the single market. That is
:05:20. > :05:24.critical to the United Kingdom because the divorce deal will be
:05:25. > :05:28.tough and painful, a bit more complicated than people think, but
:05:29. > :05:33.what will happen afterwards will be this critical thing off, what kind
:05:34. > :05:37.of deal do we have with the rest of the single market? All this rubbish
:05:38. > :05:41.before in the referendum about, we will have a trade deal with Germany,
:05:42. > :05:45.people realise now it is a trade deal with the rest of the EU, that
:05:46. > :05:49.means the rest of the single market. That will be hugely complex and it
:05:50. > :05:53.looks like from this initial leak, if you'd like, that there will be
:05:54. > :06:01.something said about that from Donald Tusk. More lines coming out,
:06:02. > :06:04.the EU will do all it can to reach a constructive Brexit settlement with
:06:05. > :06:15.Britain, but will also prepare for a possible failure to reach a deal,
:06:16. > :06:19.this again is from the draft. Again, very interesting, very interesting.
:06:20. > :06:24.Looks like it will be a much more frank response than try, because of
:06:25. > :06:28.course there is a whole spectrum of responses that this could have been.
:06:29. > :06:33.Donald Tusk has a whole range of emotions, and it looks like it will
:06:34. > :06:36.be a bit more frank and honest, and that is good because we need to hear
:06:37. > :06:46.that, because the letter in itself from Theresa May, the tone was a bit
:06:47. > :06:50.more conciliatory, international security in that letter was probably
:06:51. > :06:54.unwise for many reasons, we could go into that but probably don't have
:06:55. > :06:58.the time, but in many ways the response from Donald Tusk needs to
:06:59. > :07:02.have more information, it seems to have more light. The British public
:07:03. > :07:07.need to hear more about what the 27th think. Claude, we appreciate
:07:08. > :07:14.your time. No doubt we will speak to you soon, this is bound to go on!
:07:15. > :07:22.The deputy director of Bruegel is backed joining us now from Brussels.
:07:23. > :07:24.We are hearing that the EU wants to do all it can to reach a
:07:25. > :07:28.constructive settlement but will also prepare for a possible failure
:07:29. > :07:33.to reach a deal. How realistic do you think it is that we will reach a
:07:34. > :07:37.deal in two years' time? I think we will reach a deal but two years is
:07:38. > :07:41.really pushing it. Typically trade deals take longer than that, and
:07:42. > :07:45.this is a complicated one, and before we even begin to discuss a
:07:46. > :07:51.trade deal we have to discuss a divorce. As we expected here this
:07:52. > :07:56.morning, first we will have to discuss the terms of the divorce
:07:57. > :08:01.before we can begin the long-running relationship between the two. The
:08:02. > :08:05.relationship needs to be constructed so I think once we go past that
:08:06. > :08:09.first hurdle, that first hurdle of disappointment that we are doing
:08:10. > :08:12.this, I think in the longer run logic will prevail and we will
:08:13. > :08:16.eventually reach a deal. The question is whether we can do it in
:08:17. > :08:21.two years or not, I think that is difficult but by that time everybody
:08:22. > :08:25.will see it is in everybody's benefit to arrange a good deal and
:08:26. > :08:33.prolong the process for as long as it takes. There are two issues at
:08:34. > :08:36.stake, the exit bill which needs to be negotiated and the trade
:08:37. > :08:39.agreement the EU and UK will have. The UK wants to negotiate both
:08:40. > :08:42.concurrently, it has been made clear by EU members that they want to sort
:08:43. > :08:47.out the exit bill first and trade will come after. Do you think the UK
:08:48. > :08:51.will get what it wants? I don't think so, the most important hurdle
:08:52. > :08:55.for that is because France and Germany are now in electoral mode so
:08:56. > :08:58.the biggest countries are not really engaging in the process. They will
:08:59. > :09:04.only start engaging and providing more direction on where we are to go
:09:05. > :09:07.at the end of September when the elections are behind us. Right now I
:09:08. > :09:11.think the European Commission is really in the driving seat and that
:09:12. > :09:16.implies they will have to follow the sequential approach which is first
:09:17. > :09:20.the Brexit Bill and then the future relationship. OK, Maria, thank you
:09:21. > :09:25.very much for joining us this morning from Brussels.
:09:26. > :09:31.Are you tired of Brexit already? Never!
:09:32. > :09:33.I am! Let's look at other headlines from around the world.
:09:34. > :09:36.South Africa's Finance Minister Pravin Gordhan has been sacked
:09:37. > :09:38.by President Jacob Zuma after days of speculation that rocked
:09:39. > :09:50.Mr Gordhan will be replaced by Malusi Gigaba.
:09:51. > :09:53.Mr Gordhan has been seen as standing up to President Zuma in Cabinet
:09:54. > :09:57.and has warned against corruption becoming rampant.
:09:58. > :10:00.HSBC is to let customers choose more non-gender specific titles
:10:01. > :10:11.Instead of Mr, Mrs, Ms or the gender neutral Mx,
:10:12. > :10:13.customers can choose from nine titles including "M" and "misc".
:10:14. > :10:16.The prefixes are designed to give non-binary people more choices
:10:17. > :10:27.if they don't want to be identified by gender.
:10:28. > :10:29.Dutch prosecutors have announced they've launched an international
:10:30. > :10:32.hunt for people seeking to hide assets and evade taxes
:10:33. > :10:33.after receiving a tip-off about undisclosed accounts
:10:34. > :10:41.Coordinated raids began on Thursday across Europe.
:10:42. > :10:43.Millions of euros worth of paintings, gold bars,
:10:44. > :10:50.cash and other assets had been seized from holders of several
:10:51. > :10:52.of the 3800 accounts at the Swiss bank,
:10:53. > :10:59.To Asia now, where there's more evidence China's
:11:00. > :11:16.Happy Friday! This is interesting, because the several years Beijing
:11:17. > :11:22.has been working hard to rebalance the economy, not to be the world's
:11:23. > :11:26.factory floor and sort of become more service driven, but we are
:11:27. > :11:30.seeing activity, good activity, on both of those sides?
:11:31. > :11:36.Indeed, factory activity coming did a lot stronger than economists were
:11:37. > :11:41.expecting, and in recent months we have had strong data from China, all
:11:42. > :11:46.because of the housing boom that China is seeing, as well as a strong
:11:47. > :11:51.investment in infrastructure by the Government, that is why we are
:11:52. > :11:55.seeing a lot of activity not just in factories but also construction, as
:11:56. > :11:59.you mentioned. But there are major cities implementing cooling measures
:12:00. > :12:03.to calm the property market because there are concerns that an asset
:12:04. > :12:07.bubble might be forming, and of course on the export front, the
:12:08. > :12:12.trade front, the US president, Donald Trump, has been repeatedly
:12:13. > :12:17.criticising China, overnight he tweeted about it again and head of
:12:18. > :12:19.his meeting with the Chinese president Shi Jim Payne, so there
:12:20. > :12:26.are concerns about whether this current growth is sustainable.
:12:27. > :12:31.Thank you very much. Let's see how the markets have been getting on.
:12:32. > :12:37.The McKay and the Hang Seng closed down ever so slightly, a bit of a
:12:38. > :12:41.rally on Wall Street, inspired by better than expected UK economic
:12:42. > :12:45.growth figures. Asian investors waiting to see what will happen now
:12:46. > :12:52.at Donald Trump's Summit in China next week.
:12:53. > :12:54.South Africa's brand plunged after Jacob Zuma sacked his finance
:12:55. > :12:59.minister. Looking at the European markets, we
:13:00. > :13:06.should be able to see, I can tell you they are a bit down, some
:13:07. > :13:09.figures coming out in Europe today, fourth-quarter UK GDP figures, the
:13:10. > :13:13.last revision for those out, we will be waiting to see those, European
:13:14. > :13:19.market waiting to hear, like the rest of us, what Donald Tusk has to
:13:20. > :13:24.say. Dom was laughing at you!
:13:25. > :13:37.Good to see you. We have just finished the third
:13:38. > :13:39.period, and what is stonking period it was.
:13:40. > :13:44.Today is the last day of the quarter, global stock markets will
:13:45. > :13:47.be up by about 6%, the US stock market, about half of the global
:13:48. > :13:52.total, is up just a little bit less than that, but it has been a pretty
:13:53. > :13:56.good quarter, it has ended with people being a bit worried about
:13:57. > :13:59.delivery in America but fundamentally things are growing
:14:00. > :14:05.pretty nicely, we expect earnings growth in this first quarter of
:14:06. > :14:09.about 10% in America, that is twice the earnings growth that we had in
:14:10. > :14:14.the fourth quarter of last year. Briefly, because I know Rachel wants
:14:15. > :14:18.to talk about the pound, but is this also a case of people throwing money
:14:19. > :14:24.into the markets because it has the best returns? I think you are right,
:14:25. > :14:29.in an environment where interest rates are beginning to edge higher,
:14:30. > :14:32.fixed income bonds don't look so attractive, cash certainly doesn't
:14:33. > :14:36.look attractive, where else would you put your money? You are right, I
:14:37. > :14:41.do want to talk about sterling. A lot of traders this week have said
:14:42. > :14:46.sterling will be the barometer for Brexit, that is where we look, if
:14:47. > :14:50.the UK is perceived at getting what it wants, sterling will rise, if not
:14:51. > :14:54.it will fall, but it has a range at the moment. The currency market is
:14:55. > :14:57.always where uncertainty emerges, we saw that last summer after the
:14:58. > :15:02.Brexit vote and throughout the second half of the last year. So I
:15:03. > :15:08.think the next two years are clearly going to be very uncertain, very
:15:09. > :15:13.difficult for Britain and for all UK assets, so if you are thinking about
:15:14. > :15:17.which way does the pound go, it is more likely to fall a bit than rise
:15:18. > :15:21.a bit, but the announcement, the implementation of article 50 this
:15:22. > :15:26.week had no effect on the pound at all. It feels like it is in a
:15:27. > :15:30.range... A bit overdone, do you think? The fundamentals haven't
:15:31. > :15:35.changed, good economic numbers, the fifth biggest economy in the world.
:15:36. > :15:39.That is absolutely right, the fundamentals haven't changed but you
:15:40. > :15:49.ask any economist, they look over the next two years, growth is
:15:50. > :15:50.probably going to slow, inflation is probably going to rise, that is not
:15:51. > :15:53.a brilliant environment. We've been looking for your Brexit
:15:54. > :15:56.questions this week - and our economics correspondent
:15:57. > :15:58.Andrew Walker will be You're with Business
:15:59. > :16:06.Live from BBC News. The hospitality sector has warned it
:16:07. > :16:09.faces a shortfall of 60,000 workers a year if immigration
:16:10. > :16:10.from the European Union Staff from the EU make up nearly
:16:11. > :16:20.a quarter of all jobs in the sector. The British Hospitality Association
:16:21. > :16:22.said that thousands of businesses are facing having to drastically
:16:23. > :16:24.reduce their dependence Ufi Ibrahim, chief executive
:16:25. > :16:52.of the British Hospitality Great to have you with us. I was
:16:53. > :16:57.rather astonished at this, I read a report that 75% of waiters and
:16:58. > :17:02.waitresses, certainly in London, from the EU?! Yes, actually the
:17:03. > :17:07.figures show some very important figure is not just for London and
:17:08. > :17:11.urban environments in the UK but across the country. The dependence
:17:12. > :17:17.of our industry on EU workers and the contribution they have made a
:17:18. > :17:21.very significant. Where are the English workers, the
:17:22. > :17:25.British workers? Is it the type of work that they don't want to do?
:17:26. > :17:31.Lots of people, especially young, are out of work but not choosing to
:17:32. > :17:34.go into that sector? We have record levels of low unemployment in the UK
:17:35. > :17:39.at the competition for what is becoming a scarce resource is
:17:40. > :17:43.intense. As we go forward as an industry we have said publicly that
:17:44. > :17:49.we will up our game, rump of all existing efforts. One thing we have
:17:50. > :17:53.to do in the UK is to tackle the perception of careers in our
:17:54. > :17:57.industry, which is not necessarily the same as it is in France,
:17:58. > :18:03.Switzerland, Austria or Germany where hospitality careers are seen
:18:04. > :18:06.as a career of choice. How can you change those perceptions if people
:18:07. > :18:13.don't see it as a progressive career path? We will have to focus
:18:14. > :18:19.particularly on the next generation, talking about going to 11-year-olds,
:18:20. > :18:23.children. What we want is, when asked, the child to say... As many
:18:24. > :18:28.times as a child says they want to be a doctor, firemen or teacher, we
:18:29. > :18:33.want them to say I want to run a bar, I want to be a hotel manager,
:18:34. > :18:39.restaurant manager or nightclub manager. I am sorry, we are out of
:18:40. > :18:42.time, Ufi Ibrahim, the chief executive of the British Hospitality
:18:43. > :18:46.Association. Thank you for your time.
:18:47. > :19:00.You can't escape it! The EU has published draft guidelines on how it
:19:01. > :19:03.intends to negotiate Britain's departure from the blog. There is an
:19:04. > :19:07.indication that the EU was ready to talk to Britain on a future trade
:19:08. > :19:11.deal before the two sides agree that final terms on Brexit.
:19:12. > :19:15.It said Britain would have to show sufficient progress on its departure
:19:16. > :19:18.settlement in a first phase of negotiations and EU states could
:19:19. > :19:20.launch trade talks in a second phase.
:19:21. > :19:23.Five Indian banks are to merge with the country's largest bank -
:19:24. > :19:27.the State Bank of India, or SBI - to create a super-bank.
:19:28. > :19:28.The government expects the merger to create
:19:29. > :19:31.But is consolidation the answer for India's
:19:32. > :19:49.HSBC, Bank of China, BNP Paribas, JP Morgan. They are some of the largest
:19:50. > :19:53.banks in the world. Now when Indian bank will join their ranks. The
:19:54. > :19:57.State Bank of India, India's largest public sector banks, is merging with
:19:58. > :20:06.five subsidiaries to create a mammoth bank with 24,000 branches
:20:07. > :20:10.and 500 million customers. Banks are often measured by the
:20:11. > :20:16.value of their assets. This merged bank will have assets worth $550
:20:17. > :20:20.billion. To put that into perspective, the new merged entity
:20:21. > :20:24.will be five times bigger than India's next largest bank. The
:20:25. > :20:30.problem in India if there are lots of small banks. Far too small to
:20:31. > :20:34.break even, let alone become profitable. For too long many have
:20:35. > :20:39.been weighed down by not performing assets and bad loans, which has
:20:40. > :20:44.hampered the banks' ability to give loans to other businesses, which in
:20:45. > :20:48.turn affects the economy. By coming together, these five smaller banks
:20:49. > :20:52.will be able to serve customers of the growing economy better. They
:20:53. > :20:57.will be able to give credit easily while trimming costs and cutting
:20:58. > :21:01.losses. Consolidation looks like a big option to clean up India's
:21:02. > :21:08.banking system. There you go.
:21:09. > :21:10.And now let's get the inside track on Brexit.
:21:11. > :21:13.This week the UK triggered Article 50, starting the process
:21:14. > :21:21.Two years now to, as they keep calling it, talk about the divorce.
:21:22. > :21:22.Negotiate the divorce. Yesterday the British government
:21:23. > :21:24.outlined how it plans to transfer thousands of pieces
:21:25. > :21:26.of European Union legislation The Great Repeal Bill
:21:27. > :21:29.will give Parliament - or the devolved Assemblies -
:21:30. > :21:31.the power to scrap, Let's get more with our economics
:21:32. > :21:42.correspondent Andrew Walker. You are all over this?
:21:43. > :21:46.You will be in a minute! We have the questions we have been asking you
:21:47. > :21:53.all this week. Let's get straight into these, and thank you for those.
:21:54. > :21:58.Let's start with David who says what happens if there is no agreement two
:21:59. > :22:02.years after Article 50 is triggered? One of two things, there is an
:22:03. > :22:07.option in Article 50 for this two year period to be expanded, it has
:22:08. > :22:11.to be agreed unanimously by the departing country, Britain, and by
:22:12. > :22:14.all the remaining ones. If at the end of that stage they think it is
:22:15. > :22:20.in their interest to extend the negotiations they can do that. What
:22:21. > :22:24.it would mean would be that, for about what that extension is, the
:22:25. > :22:28.European treaties would continue to apply to Britain for the extended
:22:29. > :22:31.period. The other possibility is specified in that article is simply
:22:32. > :22:36.that the treaties cease to apply and Britain would cease to become a
:22:37. > :22:39.member. What would that mean in terms of international trade? If
:22:40. > :22:43.there is no agreement it simply means that Britain falls back on
:22:44. > :22:48.what is called World Trade Organisation relationship with the
:22:49. > :22:52.European Union, meaning that British exporters would place exactly the
:22:53. > :22:56.same kinds of barriers, including tariffs, that are faced by exporters
:22:57. > :23:01.in the United States, China or whatever -- British exporters would
:23:02. > :23:05.face. The average EU tariffs is right below but they are pretty high
:23:06. > :23:12.in some areas, particularly agriculture, dairy produce, meat.
:23:13. > :23:18.There are some very high terror in meat. And relatively high is the
:23:19. > :23:24.motor industry, 10% is the figure. There is also the flip side, Europe
:23:25. > :23:29.would have the terrific as well? Germany would be hit hard? That
:23:30. > :23:35.would be a decision for the British Government, wooded copy, paste and
:23:36. > :23:41.applied the same tariffs currently applied to third parties stuff? --
:23:42. > :23:45.would it copy, paste and apply? But they could charge lower turrets,
:23:46. > :23:48.which would go down well with third parties but perhaps not so well with
:23:49. > :23:53.some of the affected businesses in the UK, but it is an option.
:23:54. > :23:58.Another question from David Wright about access to health care, will
:23:59. > :24:03.the European health insurance cuts still be valid, post-Brexit? Those
:24:04. > :24:08.cards we are told to bring with us. This is a theme that comes up in
:24:09. > :24:12.quite a lot of the questions, it depends on the outcome of the
:24:13. > :24:16.negotiations. That is certainly something to be looked at in the
:24:17. > :24:22.course of these talks. I would note that the card currently applies to a
:24:23. > :24:26.number of non-European Union countries, those in the European
:24:27. > :24:30.Economic Area, and also Switzerland. I will stick my own personal neck
:24:31. > :24:34.out and say I would be pretty surprised if it does not end up
:24:35. > :24:43.providing coverage to British citizens, but you never know. What
:24:44. > :24:48.about Danish bacon?! Trine from Copenhagen said if there was no
:24:49. > :24:51.trade deal, no more English breakfast, which was invented to
:24:52. > :24:55.sell more break in to the UK exclamation mark -- sell more bacon
:24:56. > :24:59.excavation at the blog there is a British breakfast of which Bacon is
:25:00. > :25:03.a very important part, the short answer is it will not mean the end
:25:04. > :25:08.for the British breakfast. But in that scenario of crashing out onto
:25:09. > :25:13.so-called word -- World Trade Organisation terms, there would
:25:14. > :25:16.conceivably be a tariff on imports of Danish and, indeed, bacon from
:25:17. > :25:19.other parts of the EU which might mean that traditional English
:25:20. > :25:24.breakfast was a touch more expensive.
:25:25. > :25:33.Filler in Liverpool says Will UK students averages traits to work in
:25:34. > :25:39.EU countries -- Fionnuala in Liverpool. Again, it depends. One of
:25:40. > :25:43.the key red lines in these because the Asians is increased control over
:25:44. > :25:48.the labour market restrictions, tickly on the rights of EU workers
:25:49. > :25:53.to work here, it would not be surprising if ever corresponding
:25:54. > :25:56.restrictions -- one of the key red lines in these negotiations. We do
:25:57. > :25:58.not know until the negotiations are done.
:25:59. > :26:00.Andrew Walker, thank you. There will be more business news
:26:01. > :26:06.throughout the day on the BBC Live