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