05/05/2017

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:00:00. > :00:19.Now it's time for World Business Report.

:00:20. > :00:24.Yep, the big boss of one of the world's largest banks,

:00:25. > :00:27.Goldman Sachs, tells the BBC about his preparations for a world

:00:28. > :00:34.after Brexit - that's coming up in an exclusive interview.

:00:35. > :00:48.It's a biggie for Europe, with one of them being knocked out.

:00:49. > :00:51.Yep, it's the last day of campaigning before France

:00:52. > :00:56.So we're going to look at how each one's plans to run

:00:57. > :01:11.If you don't like waving hands and high energy, I suggest you switch

:01:12. > :01:12.the channel right now. The rest of you who are staying with us, thank

:01:13. > :01:15.you. The chief Executive

:01:16. > :01:17.of Goldman Sachs has warned London "will stall"

:01:18. > :01:20.because of the risks Lloyd Blankfein told the BBC

:01:21. > :01:27.that the company was developing contingency plans to move some

:01:28. > :01:30.of its 6,500 employees out of the capital depending

:01:31. > :01:33.on the outcome of the negotiations. Mr Blankfein was talking exclusively

:01:34. > :01:47.to our economics editor, Lots of people he lacked to have

:01:48. > :01:54.their European business concentrated in a single place. -- elect to have.

:01:55. > :01:57.The UK is the easiest place to concentrate, with the culture and

:01:58. > :02:02.the language and the special relationship. We are an example of

:02:03. > :02:06.that. If you cannot benefit from access to the European Union from

:02:07. > :02:10.the UK, and nobody knows what those rules and those determinations would

:02:11. > :02:13.be, the risk is that there will be some adjustment that would cause

:02:14. > :02:18.some people to have a smaller footprint in the UK. Is written

:02:19. > :02:22.outside the single market? The Prime Minister has made clear she wants to

:02:23. > :02:28.be less attractive for a firm like yours. I would say that it is our

:02:29. > :02:35.hope that we would be able to conduct our business as close as we

:02:36. > :02:39.can to the way we conducted today. We have to be not in the forecasting

:02:40. > :02:43.business about this, we have to be in the contingency plan business,

:02:44. > :02:50.and that is the rub. Because without knowing how things will turn out, we

:02:51. > :02:53.have to plan for a number of contingencies and our hope is that

:02:54. > :02:58.we do not have to implement anything until we know what it is that we

:02:59. > :03:03.have to implement. Putt if there is no period of time to implement

:03:04. > :03:06.whatever changes are brought about in negotiation, we may have to do

:03:07. > :03:10.things prematurely and we may have to delay range of things as a

:03:11. > :03:14.precaution. Right now we are trying to avoid that. Which other cities

:03:15. > :03:19.are you looking at? We are not focused on any. We are already

:03:20. > :03:22.resident right now, we have a presence in Dublin, Frankfurt,

:03:23. > :03:27.France... So you need a clear signal on implementation period after... We

:03:28. > :03:31.would like that. And we realise that this process is not being done to

:03:32. > :03:36.our comfort or convenience. You have 7000 people in London. Surely that

:03:37. > :03:42.will still be, by far, your biggest office in Europe in ten years.

:03:43. > :03:45.Strange things happen. What I am as confident about that statement as I

:03:46. > :03:47.am about anything else, given that there are things outside our

:03:48. > :03:49.control. -- but I am. The French presidential election

:03:50. > :03:52.is entering its last days before the final round of

:03:53. > :03:54.voting at the weekend. Cadidates Marine Le Pen

:03:55. > :03:57.and Emmanuel Macron have promised One key issue throughout

:03:58. > :04:01.the campaign has been the economy. Here's a reminder of the competing

:04:02. > :04:04.visions the candidates Emmanuel Macron wants spending cuts

:04:05. > :04:10.of 60 billion euros, that's $66 billion, over five years

:04:11. > :04:14.- with a 50 billion euro stimulus He also wants to lower taxes

:04:15. > :04:18.and extend the welfare state. He says he could still keep France's

:04:19. > :04:22.deficit below the EU's limit of 3% of gross domestic product

:04:23. > :04:25.and would cut 50,000 state jobs. Marine Le Pen has been very

:04:26. > :04:27.critical of austerity. She has pledged to cut taxes

:04:28. > :04:32.for households and increase welfare She intends to pay for these

:04:33. > :04:43.measures with savings by withdrawing from the euro and

:04:44. > :04:52.reducing immigration. She says that once France is out

:04:53. > :04:55.of the euro she would get its central bank to print more money

:04:56. > :05:01.to bring down the country's debt. The French unemployment rate

:05:02. > :05:07.is stubbornly high at 10%. Emmanuel Macron wants to invest

:05:08. > :05:11.in training and apprenticeships, Mr Macron wants to introduce

:05:12. > :05:24.flexibility on overtime Marine Le Pen wants to maintain

:05:25. > :05:32.the 35-hour week and lower the retirement age from 62 to 60,

:05:33. > :05:44.and also make overtime tax-free. Lowering the retirement age, that

:05:45. > :05:49.would be nice. Joining us now is Tomasz Michalski,

:05:50. > :06:02.associate professor of economics Professor, good to see you. Thank

:06:03. > :06:08.you for joining us at this early in the morning. If Emmanuel Macron

:06:09. > :06:15.wins, and it seems like he is going to, will he be good for the French

:06:16. > :06:22.economy? Well, of course, there is another stage to be seen, what is

:06:23. > :06:24.going to happen during the parliamentary elections, because

:06:25. > :06:32.Macron needs a parliamentary majority. But it looks like if

:06:33. > :06:37.Macron's movement, or the Republicans, windows, and we will

:06:38. > :06:42.know in a few weeks, then he should be able to implement his vision. --

:06:43. > :06:46.win these. I think this is a continuation of long overdue reforms

:06:47. > :06:50.in a favourable environment. The last push, by Nicholas Sarkozy in

:06:51. > :06:56.2007, was stopped by the 2008 recession. It is mild supply-side

:06:57. > :07:03.economics coupled with deep structural changes. Retraining is

:07:04. > :07:11.key, to lower youth unemployment and also keep these changes to keep the

:07:12. > :07:17.economy more aligned with Germany. It is a realistic plan, it would be

:07:18. > :07:25.a great plan for France. What is your economic scenario if Marine Le

:07:26. > :07:28.Pen wins? It is again unclear, because the President needs a

:07:29. > :07:32.parliamentary majority to implement their reforms. And it is not clear

:07:33. > :07:40.that even if she wins, she is going to get a Front National majority. If

:07:41. > :07:45.that scenario were to happen, she was very unclear about the

:07:46. > :07:51.proposals, as became clear in the debates. For example, she is not

:07:52. > :07:55.clear about dropping the euro. She was in favour of dropping the euro,

:07:56. > :08:00.then in favour of keeping it, and now she is in favour of introducing

:08:01. > :08:03.a second currency that would be domestically used for domestic

:08:04. > :08:09.payments, and large corporations would still pay with the euro. I

:08:10. > :08:13.think it is still up in the air. It would basically be some kind of

:08:14. > :08:18.chaotic outcome. However, I do not think that is a reasonable scenario.

:08:19. > :08:22.No, although we do know another political campaigner who did a bit

:08:23. > :08:28.of Arc and forth and is now the leader of the free world. -- back

:08:29. > :08:33.and forth. Let me ask you this, when one of them wins, we talk about

:08:34. > :08:38.reform, and there is so much reform needed for the French economy, what

:08:39. > :08:45.is the first step? Is it the labour market? It will be, I think, a whole

:08:46. > :08:50.package. You will have to watch what happens in the first few months. It

:08:51. > :08:54.is going to be the supply-side tax reform and the labour reform, they

:08:55. > :08:58.should come hand in hand. And if they have a majority they will pass

:08:59. > :09:05.it quickly. I don't think there is going to be a large social movements

:09:06. > :09:10.of strikes and so on. Last year's strikes really hurt the French and

:09:11. > :09:14.turned the French opinion against them. It is going to be both tax

:09:15. > :09:18.reform and labour market reform that I hope will bring in more

:09:19. > :09:25.investments, coupled with low eurozone rates, which will give us a

:09:26. > :09:33.nice pomp in France and in the eurozone, and perhaps help in the

:09:34. > :09:38.longer run when the supply-side reforms are going to take place to

:09:39. > :09:43.lower the unemployment to 7% or even 6%, which is going to be a lot.

:09:44. > :09:47.Professor, sorry, we have to go. Thank you. I have to wrap it up,

:09:48. > :09:51.time is ticking. And look out, Boeing and Airbus,

:09:52. > :09:54.because the first made-in-China passenger jet is set to fly

:09:55. > :09:57.for the first time this morning. It's called the C919, and it's built

:09:58. > :10:00.by state-owned manufacturer Comac. It won't be delivered to airlines

:10:01. > :10:03.until at least 2020. It's been in the works for nearly

:10:04. > :10:07.a decade as China tries to rely less on those European

:10:08. > :10:13.and American rivals. The oil price has fallen

:10:14. > :10:15.to a five-month low as investor concerns resurface

:10:16. > :10:18.about a worldwide glut. Brent crude dropped by more than $2

:10:19. > :10:22.on Thursday to below $49 a barrel, hitting its lowest level since oil

:10:23. > :10:25.cartel Opec struck a landmark deal Analysts said investors were worried

:10:26. > :10:30.that oil nations would fail to ease supply fears at a

:10:31. > :10:37.meeting later in May. I'll be back later with James to

:10:38. > :10:39.look at papers from around the