22/01/2018 BBC Business Live

This is Business Live from BBC

News with Ben Thompson

and Samantha Simmonds.

Germany takes a big

step towards finally

forming a government,

four months after holding

inconclusive elections.

Live from London, that's our top

story on Monday the 22nd of January.

Angela Merkel gets the go-ahead

for coalition talks from her former

partners, what will it mean

for Europe's biggest

economy and the rest of us?

Also in the programme....

The US working week begins

with the government in shutdown,

what will it take for Republicans

and Democrats to break the deadlock?

And that will weigh on markets today

- but investors upbeat after strong

global growth forecasts and a raft

of healthy corporate earnings -

we'll have the details.

And all aboard the yacht share.

We'll hear from the man whose says

if you can't afford your own boat

the sharing economy has rigged up

all the answers.

And at Amazon opens a supermarket

with no

And at Amazon opens a supermarket

with no checkout, relying on cameras

and computers to check your

shopping, we want to know if it is a

welcome move for the rise of the

robots.

Just use the hashtag #BBCBizLive.

If it means you don't have to use

those self-service checkouts,

unexpected item in the bagging area,

type things, it is good news as far

as I am concerned!

Just use the hashtag #BBCBizLive.

Germany is creeping closer

to forming a new government

which would keep Angela Merkel

in the top job.

It comes four months

after an election that

delivered no clear winner.

Talks will begin today

after the centre-left

Social Democratic Party

changed its mind and said it

would now hold talks

with Chancellor Merkel's

conservative CDU group.

But it could mean big changes for

what is Europe's largest economy.

Over the past two years,

Germany's economy has been

growing consistently.

Rising incomes have helped

to boost tax revenue,

but Mrs Merkel's government has been

criticised for not

spending the extra money.

Germany remains the only country

in the G7, the group

of seven major economies,

that earns more tax than it spends.

In fact, Germany has the largest

budget surplus of any

country in the world.

The Social Democrats

want that to change.

They're pushing for a cut

in taxes for low earners,

and an increase in spending

on schools, pensions and housing.

Pepijn Bergsen is the Germany

Analyst at the Economist

Intelligence Unit,

which is a business advisory firm.

Thank you for coming in. We are

expecting this coalition deal to go

ahead in days, if not weeks. What is

it going to mean for the German

economy? More of the same, or all

change?

I don't think the deal will

have that much impact on the German

economy itself. There are a few

things they have agreed on so far.

There will be more talks in the

coming weeks and there might be some

changes. But these are all

relatively small, it is not a big

rejigging of the German economy that

will take place under effectively

the same government that we have had

over the last four years.

As we have

just been hearing, they have the

biggest budget surplus in the world,

the only other G7 countries do have

one. Why are they holding onto this

cash?

Part of it is the very German

preference for Alistair Burt jet,

financial prudence. They have been

spending more. -- the German

preference for budget prudence. They

want to keep that budget balanced.

It shows what a fine balance it is,

if you are in power in any country.

Clearly, good news that they have a

surplus, always better to have money

in the bank for a rainy day. But

there is criticism that they need to

start spending it? I have touched on

some of the areas where they want to

spend it. Why have they not been

doing so far?

As I said, there has

been some spending, but it has been

quite limited and enough to

counterbalance the really strong

economy. On the other hand, Germany

just really wants to run a budget

surplus. Even if they do start

spending, they have physical rules

in place, which they have had in the

last few years, saying that they

can't go too much into deficit. If

they do agree to new measures, I

would not expect big changes in

Germany.

The eurozone needs this to

go ahead, they need stability,

Angela Merkel leading the country

will someone else. Tell us how that

will impact on their ambitious

reform programme?

With Emmanuel

Macron coming in as President in

France, there has been quite an

ambitious reform agenda set out for

the EU and eurozone. There is a

really limited window of time in

which they can end of this, which is

the first half of this year. -- in

which they can implement this. They

need a government in place, not a

caretaker capacity like the moment,

but a full government in place with

a mandate to go through with

reforms.

How rare is it to have such

a surplus? I am taken by the fact

that, given everything we have seen

of the economy lately, and we

acknowledge that the growth in

Germany has been pretty strong and

consistent, how rare is that?

Extremely rare. As you said earlier,

it is the only G7 country running a

surplus. There are a few other

countries in the world running small

surpluses. None of these are the

size of Germany in terms of economy,

let alone the surplus they are

running. That is incredibly rare.

That has also come with a cost, on

one hand. Germany has arguably not

invested enough in infrastructure

over the past decade at least. There

has been a push to work on it in

that direction, and to put more

money into roads and other public

infrastructure.

Good to see you

today, thank you.

Let's

today, thank you.

Let's look

today, thank you.

Let's look at

today, thank you.

Let's look at some

today, thank you.

Let's look at some of

today, thank you.

Let's look at some of the

today, thank you.

Let's look at some of the other

today, thank you.

Let's look at some of the other

stories making the news... The

United States Senate is due to hold

a vote at noon that could end the

government shutdown. More than

500,000 federal workers are being

forced to stay away from work until

Republicans and Democrats can agree

a deal on how to fund government

spending. Essential services are

continuing, but many such as visas

and passports are being disrupted.

Facebook says it will open three new

centres in Europe to train 1 million

people in digital skills. That is

over the next two years. It wants

them to use the platform to launch

and expand businesses. The so-called

community skills hopes will be

located in Spain, Poland and Italy.

Oxfam says global inequality

increased last year with tax

evasion, the erosion of worker

rights and cost-cutting contributing

to the gap. The charity says 82% of

money generated went to the top 1%

of the global population. It

questioned how it reached the

conclusion.

Let's turn our attention to events

in Asia.

Share in the Japanese conglomerate

Toshiba have risen amid reports that

it's considering selling it's prized

memory chip business

on the stock market.

We have talked so much about it. It

could be floated on the stock

market.

The Financial Times said

it was being considered as another

way of raising the billions

of dollars it needs

because of the problems

at its US nuclear unit.

Christine Hah is in our Asia

business hub is in Singapore.

I touched on the fact we have talked

about this so many times, and

finally there might be an end in

sight?

Well, actually, there is a

hard end, the end of March, the

deadline that they are waiting for.

If you remember back in September,

Toshiba had agreed to sell the

lucrative memory chip business to a

consortium led by Bain capital. But

it was quite desperate then,

liabilities were more than asset and

it was facing a possible delisting

from the Tokyo stock exchange. Since

then, Toshiba has managed to raise

money from an equity issuance, which

let it pay down some of the

liabilities. It is in a much better

bargaining position now. So, some

shareholders are saying that the IPO

option is a much better deal and

that it should walk away from the

agreement. That is where the

anti-trust regulators are at the

moment. They have until the end of

March to approve the deal. If no

approval is granted, Toshiba can

supposedly just walk away and

consider other options. Even if

approval is granted, some people are

saying that Toshiba could still find

a better option. Toshiba still says

it is committed to the Bain sale,

but investors like the alternate

option. Shares jumped by as much as

7% today, before closing a little

bit lower.

Something tells me we

might speak about this again at some

point in the near future! That have

a look at the numbers. There is a

new trading week.

A bit more caution

amongst investors,

coming after Hong Kong hit

new all-time highs and Tokyo's

Nikkei cracked 24,000 for the first

time in 26 years last week.

All of that momentum moving markets

upwards.

Markets barely moved

across Asia by the close -

all keeping an eye on the US

where that government

shutdown continues.

In Europe, attention likely to be

on two important central bank

rate meetings this week.

Firstly the Bank of Japan meets

for the first time since that

unexpected tweak of monetary policy

this month - cutting its monthly

bond buying program.

And on Thursday the ECB meeting

will contend with the rise

in the value of the euro.

Officials there have already warned

that a strong currency isn't

particularly what they need

at the moment.

More on that shortly, but first

to the US where Samira Hussain has

the details about what's ahead

on Wall Street Today.

On Monday, streaming giant Netflix

will be reporting earnings. Its most

popular shows like The Crown,

Stranger Things, will be boosting

revenue and profit. Netflix has been

setting aside more money when it

comes to creating content, so they

can better compete with rivals. As a

result, it had to raise the price

for its servers. So, investors will

be looking for comments on how

viewers have reacted. Also

reporting, Haliburton. The renewed

drilling boom in the United States

will help the company's profits.

Halliburton, which makes about 55%

of its revenue from North America,

is benefiting from higher US

production, which is expected to

surpass 10 million barrels per day

in the month of February.

Joining us is Shaun Port,

Chief Investment Officer

at investment management company,

Nutmeg.

Good to see you. Let's talk about

the US Federal shutdown. Last time

it happened in 2013, it closed 14

days. So far we are only going a

couple of days. It cost the US

economy $2 billion in lost

productivity. That is not what few

wants to see happening?

But it is a

political stalemate, not about the

economy, it is pure politics,

particularly in the Republican

party. It's not necessarily

Republican against Democrat, it is

within the Republican Party. There

was a hit to the US economy, but not

really material when he think of the

size of the economy, and bearing in

mind the big tax cuts coming in and

potentially more infrastructure

spending. The US economy doing well,

this is a bit of a road bump.

Explain what it means for the

day-to-day, what does it mean for

people in the US?

It cuts back

nonessential spending. That might be

parts being closed, it is not

defence, not health care.

The Statue

of Liberty is shut?

The New York

mayor is trying to get it open. The

people that were not going to work

today, in theory not being paid,

they have actually been paid

historically for lost wages. It does

not necessarily produce a lasting

hit to people that have been sent

home.

I would love to see if the

people that are not at work have

gone to have lunch somewhere, you

get a weird boost?

If you have been

through this before, if you expect

to be paid, you might have a nice

day.

Win- win! We are expecting this

German deal to be signed, seemed and

delivered. What kind of knock-on

does this uncertainty?

Think it is

holding back a lot of the progress

that people want to make in the

European Union. France is pushing

the agenda to be more integrated,

more common European policies in

Germany. It can't really be involved

in those talks. It has obviously had

an impact on Brexit negotiations as

well. Germany coming back to the

table, with Angela Merkel having

firm leadership, that is really

important. Bear in mind the Italian

general election in March. Political

risk in Europe has fallen off the

agenda, but it might come back when

we get the Italian elections.

We

will see you later for the papers.

Sean is go to talk to us about

Amazon supermarkets with no

checkout. Keep your comments coming

in. A lot of you getting in touch

about whether it is good news or

robots just doing more stuff in

day-to-day lives. Jay still to come,

all aboard, if you can't afford life

on the high seas, codesharing a

yacht Didi and your prayers? One man

says it is a way to have the

lifestyle without the hefty price

tag. Stay with us.

Peugeot's boss Carlos Tavares

is to meet with the UK unions

and government officials,

to discuss the future

of Peugeot's Vauxhall plant

Mr Tavares has already warned that

250 UK jobs could go -

on top of the 400 that

were lost last year -

saying production costs in the UK

are twice as high as in France.

Theo Leggett is following

the story for us.

This is an interesting one. Clearly,

if you are affected by these job

cuts, it is very serious news. But

there is a big economic story when

it comes to wear is cheaper to

produce these cars?

Absolutely, this

is about the big picture. Ellesmere

Port currently builds the Vauxhall

Astra. Sales of the car is

declining, it is not as popular as

sport utility vehicles, and it is

getting long in the tooth. That

said, they have said that production

will remain at elms -- elms near the

top 2021. What happens after that?

There is kind of a beauty contest

going on within the entire PSA

group, about where the next

generation of cars get built. What

he has said frequently in the past

is that he looks at efficiency and

profitability. If plants can prove

they are efficient and profitable,

they stand a good chance of getting

work. If they can't be, then they

will not get the work. Now, in the

past, tells me a -- it has been

inefficient compared to other plants

in Europe. It has an old production

line, sales are declining. What

people there tell me is, with the

removal of one shift, the removal of

several hundred jobs, it is becoming

a lot more efficient and that puts

it in the ballpark so it can compete

with other plants across Europe for

the next generation of work. That is

what Len McCluskey, the chairman of

Unite, is going to be saying to them

when they meet in Paris.

Thank you very much with the details

of what's happening with Peugeot and

Vauxhall in the UK. There is a story

online about Ocado possibly having a

deal with a Canadian firm. I'm just

trying to find it. It's going to be

good news for Ocado because they've

been trying to make a deal with a

company somewhere. Plenty more

details on that and check out the

details on the website.

Our top story, the euro has risen

after Germany moved closer to

forming a new government. All of

this coming for months after an

election in the country that

delivered no clear winner. Talks

will continue later to try and form

will continue later to try and form

a coalition. A quick look at the

markets.

An interesting story, one that

markets will be watching closely.

Britain's economy should be prepared

for a more optimistic year ahead.

All of that coming from an interview

with the former Treasury Minister

Lord Jim O'Neill.

He supported Britain remaining

inside the European Union and has

been speaking to our economics

editor Kamal Ahmed.

In principle I share the views of

many that Brexit is like a really

weird things with the UK to impose

on itself from an economic

perspective. But I add at the same

time, I have felt for a good couple

of years, as important as Brexit is,

it isn't the most important thing

facing Britain's future. Things like

regional inequalities and the

underlying productivity problem are

much bigger issues.

Do you think now

with this possibility of

productivity being better, British

economy is going to do far better

than you expected a year and a half

ago?

I certainly wouldn't have

thought the UK economy would be as

robust as it currently seems. But,

that is because it looks to me like

some parts of the country led by the

Northwest are actually doing way

better than people seem to realise

or appreciate, as well as this

crucial fact the rest of the world

is doing way better than many people

would have thought a year ago. It

makes it easier for the UK.

Lord

O'Neill speaking about those

brighter than expected forecasts for

the UK economy. Markets will buy

just those and will have the details

a little later. -- markets will buy

Now, you might think owning

a yacht is the reserve

of the rich and famous.

And you're probably right.

The market for boats and yachts

is soaring, and it's good news

for British exports.

The UK industry grew by 3.4%

in the last financial year -

that's the best result

since the financial crisis And it's

largely because of the fall

in the value of the pound

after Brexit - it makes British made

goods cheaper overseas,

and means foreign

sales rose by 4.7%.

But what if you can't afford

to buy an entire boat?

Well, maybe you could

own part of one.

One company - Flexisail -

buys boats and allows between seven

and eight customers to buy a share

of it for a fraction of the price.

Boss Richard Pierrepont has been

speaking with Kim Gittleson

and she asked him how he got

the idea for Flexisail.

Flexisail started as an American

concept back in 2004. It really came

with the advent of the internet

becoming available for people to be

able to book online and we saw the

concept and brought it over to the

UK back in 2004. 2005 was our first

season and here we are 14 years

later, having built the business and

developed it to quite a big size

with training and social programme

integrated part of what we do.

How

has business been? We've heard a lot

about great in the UK in the yacht

industry, is that something you've

seen?

Our business is different from

charter in that what we are doing is

giving people the ownership

experience without buying. Of course

what that means is they are getting

the advantages of owning their own

boat, having use of it throughout

the year, having a high quality boat

and being able to treat it as their

own. We are very much an expanding

part of the market because to go out

and buy your own boat and have it

sitting there for 300 days a year

not being used is a very expensive

and exclusive thing to do. The

reality is it's better to have

access to a boat that someone else

is looking after. The time you have

available for sailing you can

actually spend it sailing and not

maintaining it and getting your

fingers frozen off in the winter

doing maintenance.

Who are your

competitors?

We don't really have

any. There are many companies out

there that have one form or another

of charter, where basically you have

a fleet of boats and anybody can

roll up and effectively charter that

boat for one day, a week or a

fortnight. To ask, the problem with

that is that you're getting a very

wide range of people using a boat.

Some are competent, some are highly

incompetent. Of course when you have

multiple uses of anything it's a bit

like an office Paul Carr, nobody

wants to take responsibility for it

and the rubbish gets left behind and

everything else -- and office pool

car. We've tried to take a boat and

spec it to a very high standard that

an owner would ideally like, and

then having a very small number of

people having exclusive use of that

yacht.

Has Brexit impacted your

business so far and are you

optimistic about the future?

Brexit

is always in the back of people's

minds. We tend to buy French bows,

so they are always bought in euros.

Generally speaking I think we are an

expanding market and there is a

realisation that this is a more

cost-effective and sensible weight

to sail.

The rise of the Sharon

economy has been one of the bigger

stories over the past five years, --

sharing economy. People more

comfortable with the idea of sharing

a boat?

I think it started with

aircraft went if a company wanted a

use of a private aircraft, they

wouldn't buy one, they would rent a

certain amount of time to have use

of it. I think that has percolated

down. There have been variations of

sharing going on for a long time but

I think we've modernised the concept

and made it more accessible and

easier to come into and out of. Our

members have nothing to purchase and

nothing to sell so after a year or

two years, they can tick that box

and say we've done that, let's move

onto something else we are

interested in. Or as many do,

they've got the bug and they are off

to buy their own boat and sail over

the horizon.

Do you fancy one? Shall

we share one? LAUGHTER What other

business stories? We've got the

story about Amazon opening a

supermarket without any checkouts.

This is about Amazon Go. You go into

the store, log in with your

smartphone and you can just walk out

of the store having charged your

credit card account.

I love the idea

of this. I sent you my quite like

this. There are a real mix of use.

One viewer says no issues, if it

works and gets rid of cues. Someone

raises the point that this means you

aren't paying someone minimum wage

to work on the till. This is about

data.

This is absolutely about data.

This is a test for a year without

employees. Seeing what people do in

the stores, what they buy. You've

got to bear in mind this is driven

by artificial intelligence and

predicting what people are going to

do. If Amazon can predict, they can

sell that information to other

providers, to the suppliers and also

make their stores more efficient.

Up

until now they've only been able to

get that data from the website. This

is taking what they've learned from

the website and putting it into a

physical store.

Absolutely. If you

have an Amazon customer with Amazon

Prime, they can use that information

in the stores. In some way it's

quite scary from a security point of

view but actually this is about

Amazon being predicted in how it

uses its data. I think you'll start

to see the these tests in giant

supermarkets, this will happen quite

a lot.

One viewer says if all

companies replace workers with

robots, no one will have any money

to buy anything in their shops. Very

good point. Another story, new cars

are safer than ever because of

driver assistance systems. Is this

all part of improving safety or

moving towards the inevitable which

will be driverless cars?

There's

already a lot of safety systems and

cars. Predicting when you are about

to have a collision and hitting the

brakes. These are quite simple but

moving on to autonomous cars, the

level of sensors will predict

accidents much more.

It's amazing.

Thank you.