Greece PM Mitsotakis on Trump Zelenskiy Comments, Ukraine, Defense Spending | Bloomberg The Pulse

FOR THE CONVERSATIONS THAT MATTER AND THE INSIGHTS, LET US GET STARTED. ♪ >> NEWSMAKERS AND MARKET MOVERS, THIS IS "THE PULSE. " FRANCINE: GOOD MORNING.

WELCOME TO "THE PULSE. " HAVING ALREADY CALLED VOLODYMYR ZELENSKYY A DICTATOR, PRESIDENT TRUMP IS ESCALATING HIS PUBLIC WAR OF WORDS WITH THE UKRAINIAN LEADER AS HE PRESSURES KYIV TO ACCEPT A DEAL WITH RUSSIA. PRES.

TRUMP: I LOVE UKRAINE BUT ZELENSKYY HAS DONE A TERRIBLE JOB. HIS COUNTRY IS SHATTERED. MILLIONS OF PEOPLE HAVE UNNECESSARILY DIED.

YOU CAN BRING A WAR TO AN END IF YOU DON'T TALK TO BOTH SIDES. YOU HAVE TO TALK. THEY HAVE NOT BEEN TALKING FOR THREE YEARS.

WE HOPE TO SEE A CEASE-FIRE SOON AND TO REESTABLISH STABILITY IN EUROPE AND THE MIDDLE EAST. FRANCINE: WHEN YOU LOOK AT THE WAR OF WORDS, THIS IS A HUGE POLICY SHIPPED, PUTTING RUSSIA BEFORE THE EUROPEAN ALLIES. WHERE DOES THIS GO NEXT?

>> WE HAD THE FORMER PRESIDENT JOE BIDEN, HE WAS CALLING VLADIMIR PUTIN A DICTATOR AND NOW WE HAVE THE U. S. TALKING TO RUSSIA AND THE CURRENT U.

S. PRESIDENT CALLING THE UKRAINIAN LEADER A DICTATOR. IT IS JUST A COMPLETE SHIFT IN TONE.

AT THIS POINT, A FUNDAMENTAL BREAKDOWN IN THE RELATIONSHIP BETWEEN THE U. S. AND UKRAINE.

AND REALLY DRIVEN IN A WAY BY DONALD TRUMP OF VOLODYMYR ZELENSKYY, WHICH GOES BACK QUITE SOME WAY. IT HAS BECOME PERSONAL. A MEASURE OF NEGOTIATION AND CONVERSATION AND HOW DO YOU INVOLVE UKRAINE IN THAT?

U. S. OFFICIALS ARE SAYING YES UKRAINE WILL BE PART OF THE CONVERSATION OF GETTING A DEAL TOWARD A CEASE-FIRE, BUT IT IS VERY CLEAR THERE ARE LAYING SOME OF THOSE FIRST WITH RUSSIA TO PRESENT SOMETHING TO UKRAINE AND SAY, THIS IS THE DEAL WE THINK CAN WORK.

THE ABILITY OF UKRAINE TO NEGOTIATE HERE IN EUROPE TO BE PART OF THAT CONVERSATION IS VERY MUCH DIMINISHING. YOU CAN SEE THAT IN THE GROWING PANIC AMONGST EUROPEAN LEADERS ABOUT HOW THEY CAN GET IN THE DOOR ON THE CONVERSATION. NOW WE HAVE THE LEADERS OF FRANCE, U.

K. PLANNING TO GO TO D. C.

NEXT WEEK TO TRY TO TALK TO DONALD TRUMP ABOUT THAT. WHAT DOES THAT MEAN? IT MEANS THE WIGGLE ROOM FOR UKRAINE IS VERY MUCH DIMINISHING AND DIMINISHING QUICKLY.

FRANCINE: DONALD TRUMP IS ALSO TALKING ABOUT A NEW CHINA DEAL. WE ARE THIN ON DETAILS. WHAT DO WE KNOW?

>> BIT OF A THROWAWAY REMARK HE MADE LAST NIGHT ABOUT THE POTENTIAL FOR A TRADE DEAL WITH CHINA. CHINA IS THE ONE COUNTRY THE U. S.

HAS ENACTED TARIFFS ON AND CHINA HAS RETALIATED. THERE IS A LONG HISTORY OF TRADE TENSIONS BETWEEN THE COUNTRIES. THAT SAID, THERE SEEMS TO BE A PERSONAL RAPPORT BETWEEN DONALD TRUMP AND PRESIDENT XI JINPING.

HE HAS WARM WORDS FOR XI JINPING. HE HAS BEEN A BIT OF A LIGHT TOUCH ON CHINA EVEN THOUGH THEY HAVE IMPOSED TARIFFS AND CERTAINLY SEES ROOM TO DO BUSINESS WITH CHINA. HE IS TALKING ABOUT A GLOBAL RESET.

YOU HAVE U. S. , RUSSIA, CHINA NEXUS ESSENTIALLY AND CHINA BEING A BIG PART OF THAT.

NO SIGN OF ANY TALKS HAPPENING AT THE MOMENT ON TRADE BUT IT DOES SHOW TRUMP IS WILLING TO DO DEALS WITH CHINA IF NEEDED. FRANCINE: WHAT DO YOU MAKE OF THIS? IS THIS A SHIFT IN POLICY HE IS FRIENDLIER WITH RUSSIA AND WITH CHINA OR IS IT THAT HE WANTS A DEAL AT ALL COSTS?

>> WHAT WE ARE SITTING UNDER THE PRIOR ADMINISTRATION IS ACCEPTED NORMS ABOUT WHO YOU DEAL WITH AND WHAT YOUR RELATIONSHIPS ARE. ALL OF THAT GOES OUT THE WINDOW. NONE OF WHAT YOU WOULD RESUME TO BE BEHAVIOR SHOULD CONTINUE WHICH IS WHY YOU SEE DONALD TRUMP TALKING ABOUT WORKING WITH RUSSIA AND CHINA TO LOWER THEIR STOCKPILES OF NUCLEAR WEAPONS, TO CUT DEFENSE SPENDING.

HE IS ENGAGING WITH WHAT U. S. ALLIES IN DIFFERENT AND NEW AND CONFRONTING WAYS.

HE IS ENGAGING WHAT HAVE BEEN ADVERSARIES IN NEW AND DIFFERENT WAYS. THAT IS PART OF THIS COMPLEX, FAST SHIFTING GLOBAL POWER BALANCE MOVING IN ALWAYS. AGAIN, HOW DO PLACES LIKE EUROPE AND ALLIES LIKE AUSTRALIA AND CANADA AND OTHERS KEEP UP IN ALL OF THAT?

FRANCINE: THANK YOU, ROS MATHIESON, WITH GREAT ANALYSIS AND THE RIGHT QUESTIONS. LET'S LOOK AT THE MARKET REACTION WITH NATALIIA LIPIKHINA I'VE EMEA JP MORGAN. YOU REMAIN OPTIMISTIC ABOUT EQUITY MARKETS BUT THEY HAVE BEEN ALL OVER THE PLACE IN THE LAST THREE DAYS HAVE THEY LOOK AT TARIFFS AND WHAT IS HAPPENING WITH UKRAINE.

>> FOR US WHAT MATTERS IS EARNINGS. WHAT IS INTERESTING IS WE'RE JUST COMING OFF THE EARNINGS SEASON AND SO FAR THEY HAVE BEEN VERY STRONG IN EUROPE AND THE U. S.

IN THE U. S. , UP 17% YEAR ON YEAR GROWTH WHICH IS HIGHER THAN WHAT THE MARKET WAS EXPECTING.

THE MARKET WAS EXPECTING AROUND 11%. EUROPEAN GROWTH IS MUCH LOWER THAN THAT BUT STILL FROM DIFFERENT SECTORS. FRANCINE: WHERE YOU FIND VALUE?

IN THE U. S. , THERE SO MUCH ENCOURAGING NEWS PRICED IN A LOT OF THE STOCKS COULD ONCE AGAIN BE PRICE TO PERFECTION.

>> WE LIKE FOUR DIFFERENT SECTORS. INDUSTRIALS, FINANCIALS, TECH. TECHNOLOGY LOOKS QUITE INTERESTING.

WE THINK AI WILL BECOME EVERYONE'S LIFE IN THE FUTURE AND SOFTWARE COMPANIES BENEFIT FROM THIS. WITH COMPUTING COSTS COMING DOWN, THE ADOPTION OF A I WILL GROW. -- OF AI WILL GROW.

WE ARE QUITE OPTIMISTIC ON THAT PART OF THE MARKET. IT IS A GLOBAL THEME. FRANCINE: HOW MUCH OF THESE SOFTWARE COMPANIES CAN YOU FIND IN EUROPE?

WE HAVE ALWAYS HAD AN ISSUE ABOUT SCALABILITY. DOES IT NEED TO BE BIGGER IS BETTER? >> NOT NECESSARILY.

I THINK IT IS ABOUT INTEGRATING THE RIGHT PRODUCT. FRANCINE: WHEN YOU LOOK AT THE POSITIVE BALANCE IN THE TECHNOLOGY SECTOR, THERE IS SO MUCH CONCERNED ABOUT GROWTH IN EUROPE MOST OF HOW DO YOU MATCH THE TWO? ARE THERE ANY SECTORS YOU WANT TO STAY AWAY FROM IN EUROPE?

>> WE DON'T LIKE PARTICULAR PARTS OF STAPLES. BUT OVERALL, I WOULD SAY WE ARE QUITE SELECTIVE IN TERMS OF WHAT WE LIKE IN EUROPE IN GENERAL. ONE OF THE SECTORS WE REMAIN QUITE POSITIVE IS INDUSTRIALS.

WE SOLVE VERY STRONG NUMBERS TODAY. WHAT IS INTERESTING IS DATA CENTERS. THEY ARE VERY BIG PART OF THE INDUSTRIAL SECTORS.

WE THINK IT WILL PROBABLY BE THE THEME OVER THE NEXT YEAR. FRANCINE: WHAT IS INCREDIBLE AS THEY HAVE DONE SO WELL SO FAR. DOES IT PLATEAU AT SOME POINT OR CAN YOU STILL PILE IN?

>> GOOD QUESTION. IF YOU LOOK AT U. S.

TECH COMPANIES, THEY CONTINUE TO SPEND ON AI IN 2025. WE THINK THE DATA CENTER COMPANIES INDUSTRIAL SECTOR WILL CONTINUE TO BENEFIT FROM THIS IN 2025. FRANCINE: GOING FORWARD, DO YOU SEE MORE PRESSURE ON EARNINGS PER SHARE, MAYBE THE MARGINS GETTING SQUEEZED GIVEN THE UNCERTAINTY?

>> WE THINK OF THE U. S. IN PARTICULAR WE EXPECT 10% GROWTH IN 2025 AND 10% GROWTH IN 2026.

THESE NUMBERS ARE STAGGERING, ESPECIALLY IF YOU THINK THE LONG-TERM GROWTH AROUND 7%. WE THINK EARNINGS WILL DRIVE THE MARKETS THIS YEAR. FRANCINE: WHEN YOU LOOK AROUND THE WORLD, HOW DOES YOUR SIT NEXT TO ASIA AND THE U.

S. ? IF WE HAVE A DEAL WITH CHINA, HAS YOUR BENEFIT?

>> I WOULD SAY TARIFFS CONTINUE TO BE IN OVERHANG ON THE MARKETS AND THAT IS WHY WE ARE QUITE SELECTIVE IN TERMS OF WHAT WE LIKE IN EUROPE. WE NEED TO UNDERSTAND HOW THAT WILL UNFOLD GOING FORWARD BECAUSE SO FAR WE DON’'T HAVE ALL THE DETAILS WE NEED TO KNOW. FRANCINE: WHAT YOU DO WITH GOLD?

IT IS AT A RECORD AGAIN. DOES IT MAKE SENSE OF NOT GETTING OUT OF EQUITIES, CERTAINLY VIVID -- EITHER HAVING A PORTION IN CASH OR GOLD? >> ABSOLUTELY.

THIS HAS BEEN A TOPIC FOR US. WE ARE POSITIVE ON GOLD. WE SEE UPSIDE.

IN GENERAL OUR OUTLOOK WAS GOING FOR PORTFOLIO RESILIENCE AND GOLD PLAYS AN IMPORTANT PART IN THAT. FRANCINE: I IMAGINE THE CLIENTS LOOK AT INFLATION PROSPECTS AND WORRY IT IS MOVING TOO FAST. WHAT IS THE BEST PIECE OF ADVICE YOU GIVE THEM?

>> THIS IS ONE OF THE RISKS THAT INFLATION CAN BE A BIT STICKIER THAN WHAT THE MARKET WAS EXPECTING. FOR US, IT IS ADDING UNCORRELATED ASSETS TO THE PUBLIC EQUITIES AND BONDS IS SOMETHING. THINK ABOUT INFRASTRUCTURE.

SOMETHING THAT IS NOT RELATED WITH PUBLIC ASSETS AND CAN PROVIDE A REALLY GOOD PROTECTION WHEN INFLATION MAY BE A BIT STICKIER. FRANCINE: QUITE WORRYING INFLATION NUMBER FROM THE U. K.

YESTERDAY. TO MAKE A DIFFERENCE BETWEEN THE U. K.

AND THE REST OF EUROPE? >> AND THE U. K.

, THE ISSUE IS WE NEED TO UNDERSTAND WHAT GROWTH IT SURE LOOKS LIKE MOST OF THE INFLATION CAN BE A BIT STICKY AND THIS IS WHAT WE SEE RIGHT NOW. AT THE SAME TIME, ALL EYES ON GROWTH. WHETHER GROWTH CAN PICK UP OR NOT.

I THINK THIS IS WHAT THE BA YOU WILL HAVE TO UNDERSTAND. ONE SIDE IS PROSPECTS AND THE OTHER MAYBE STICKY INFLATION. FRANCINE: NATALIIA LIPIKHINA, HEAD OF EMA EQUITY STRATEGY JP MORGAN PRIVATE BANK.

A LITTLE LATER, THE INTERVIEW OF THE WEEK, DON'T WANT TO MISS THIS ONE, SCOTT BESSENT WILL SPEAK TO "BLOOMBERG SURVEILLANCE" MADE A LONDON TYPO STOPPED COMING UP, THE PRIME MINISTER OF ICE THAN ON GEOPOLITICS, POTENTIAL IMPACT OF U. S. TARIFFS ON THE COMPANIES ALUMINUM SECTOR.

THIS IS "BLOOMBERG. " ♪ FRANCINE: ICE THAT WAS ONE OF THE COUNTRIES THAT TOOK PART IN A SECOND MEETING THIS WEEK ON THE FUTURE OF UKRAINE HOSTED BY THE FRENCH PRESIDENT. THE PRIME MINISTER OF THE NORTH ATLANTIC ISLAND WAS ALSO AT THE MUNICH SECURITY CONFERENCE LAST WEEK.

THE TRUMP ADMINISTRATION HAS ALSO ANNOUNCED PLANS TO INTRODUCE 25% TARIFFS ON ALL U. S. IMPORTS OF STEEL AND ALUMINUM, POTENTIAL THREAT TO ISOLATE LARGE ALUMINUM INDUSTRY.

THE PRIME MINISTER JOINS US NOW. PRIME MINISTER, THANK YOU FOR GIVING US A LITTLE BIT OF YOUR VERY BUSY SCHEDULE. WHEN YOU LOOK AT THE DIFFERENT STANCE THAT DONALD TRUMP HAS ON UKRAINE TODAY, WHAT DOES THAT MEAN FOR ALLIES LIKE EUROPE?

IS THERE A SCOPE FOR EUROPE TO COME TOGETHER AND HAVE MORE OF A SAY THEN WE HAVE SEEN SO FAR? >> YES, I DO THINK SO. I FEEL LIKE THE PAST FEW DAYS -- HONESTLY, I WAS ADMITTED AND I -- I WAS IN MUNICH AND WE HAVE SEEN A BIG SHIFT IN EUROPE STEPPING UP.

EUROPE IS COMING CLOSER TOGETHER AND SOMETIMES TIMES OF CRISIS IF YOU WOULD CALL IT THAT AND PEOPLE FIND A WAY TO COME TOGETHER. I WANT TO REITERATE AND SAY THIS DOESN'T MEAN EUROPE IS GOING AGAINST THE U. S.

EUROPE IS COMING TOGETHER TO BE A STRONGER ALLY FOR THE U. S. AND THAT IS WHAT HAS WORKED FOR ICELAND AS WELL.

FRANCINE: HOW WOULD YOU DESCRIBE THE RELATIONSHIP THAT DONALD TRUMP HAS AT THE MOMENT WITH VLADIMIR PUTIN? IT SEEMS HE IS PUTTING RUSSIA BEFORE HIS EUROPEAN ALLIES. WOULD THAT BE A FAIR ASSESSMENT OF THE SITUATION?

>> LISTEN, I THINK THE MOST IMPORTANT THING NOW IS WE FOCUS ON UKRAINE AND HOW WE GET TO A POINT WHERE WE GET A PEACE DEAL AND A CEASE-FIRE THAT IS ON THE TERMS OF UKRAINE. EUROPEANS NEED TO BE INVOLVED AND THAT IS WHY EUROPE IS FOLLOWING WHAT IS GOING ON IN THESE RELATIONS BETWEEN RUSSIA AND THE U. S.

RIGHT NOW. WE HAVE BEEN VERY STRICT AND FIRM ON OUR POINT, WHICH IS THAT RUSSIA STARTED THIS WAR, YOU'RE UP STANCE WITH UKRAINE AND ICELAND STANCE WITH UKRAINE AS WELL. THE TERMS OF A POTENTIAL CEASE-FIRE, A POTENTIAL PEACE AGREEMENT IS WHAT MATTERS.

UKRAINE AT THE TABLE, EUROPE AT THE TABLE IS WHAT MATTERS. FRANCINE: WHEN WILL WE SEE THAT HAPPENING? AGAIN, THERE'S A LOT OF TALK OR CONCERNS THAT THE EU ALSO DOESN'T HAVE A GREAT OR DIRECT RELATIONSHIP WITH DONALD TRUMP.

WITH THE EU BACK ELECTIONS IN UKRAINE IF THAT WERE TO KEEP THE PRESIDENT TRUMP HAPPY? >> WE ARE AT A POINT WHERE WE ARE DISCUSSING THIS. I THINK EVERYONE IS AWARE THE SITUATION IS FRAGILE IN UKRAINE RIGHT NOW.

ELECTIONS WOULD CHANGE THE DYNAMICS IN DIVIDING AND THE WAR . WE THINK IT IS MOSTLY IMPORTANT NOW WE GET UKRAINE TO THE TABLE AND WE HAVE A DISCUSSION. THE FOCUS OF THE ELECTIONS HAS NOT BEEN WHAT HAS BEEN TAKING PLACE WITH EUROPEAN LEADERS AT THIS POINT.

FRANCINE: PRIME MINISTER, ICELAND HAS THREE LARGE ALUMINUM SMELTERS. WHAT ABOUT HIS THREAT OF TARIFFS? >> WE ARE CONCERNED IN GENERAL WE WILL SEE ESCALATION OF ANY TYPE OF TRADE WAR, WHETHER IT BE TARIFFS FROM THE S TOWARD EUROPE OR EUROPE TO THE U.

S. WE HAVE HAD A GOOD RELATIONSHIP WITH THE UNITED STATES. WE HAVE HAD WELL-FUNCTIONING TRADE AGREEMENTS.

WE HAVE BILATERAL DEFENSE AGREEMENT. WE NEED TO BE ABLE TO DO BUSINESS WITH THE U. S.

BUT ALSO WITH EUROPE. HISTORICALLY, WE HAVE FOCUSED ON MAKING SURE WE DON'T GET STUCK BETWEEN THESE TRADE WARS BECAUSE AS YOU SAY, WE HAVE HEAVY EXPORTS OF ALUMINUM. THIS IS WHY I HAVE BEEN HAVING GOOD TALKS WITH MY COLLEAGUES IN EUROPE AND ESPECIALLY LAST WEEK AND WHEN I WAS IN MUNICH WHEN IT COMES TO THE FOCUS ON MAKING SURE IF THERE IS A TRADE WAR THAT ICELAND DOES NOT GET STUCK BETWEEN.

WE HAVE NOT SEEN ANY SPECIFIC SIGNS THE U. S. IS TARGETING ICELAND.

WE WILL HAVE TO CONTINUE THESE TALKS. FRANCINE: PRIME MINISTER, HOW WORRIED ARE YOU ABOUT 25% TARIFFS? WHAT KIND OF IMPACT TO THEY HAVE ON THE IMPACT GIVEN THAT ICELAND IS QUITE RELIANT ON THE U.

S. MARKET? >> IT WOULD HAVE AN IMPACT ON US.

THIS IS WHY IT IS IMPORTANT TO KEEP THE DIALOGUE OPEN. WE DON'T SEE ANY SIGNS THAT WE ARE BEING SPECIFICALLY TARGETED. OBVIOUSLY, WE ARE WORRIED ABOUT ESCALATION.

THIS WOULD BE A GREAT CONCERN FOR US. LIKE WITH ANY NATION, BUT ESPECIALLY A SMALL OPEN ECONOMY LIKE ICELAND, FREE TRADE IS VITAL TO OUR FUNCTIONING. THIS IS SOMETHING I AM CONCERNED ABOUT.

LIKE I SAID, IT IS NOTHING SURE WE WILL BE IN THIS POSITION AND THIS IS WHAT WE HAVE TO GIVE THE DIALOGUE OPEN. FRANCINE: PRIME MINISTER COME YOUR CABINET HAS PROMISED A REFERENDUM ON RESUMING NEGOTIATIONS WITH THE EU NO LATER THAN 2027. WHAT ARE THE BENEFITS OF REENTERING THESE NEGOTIATIONS?

>> I THINK THE MAIN BENEFIT IS WE NEED TO GET CLOSURE ON THIS TOPIC. WE WENT THROUGH THIS PROCESS ABOUT A DECADE AGO WHEN MY PARTY WAS LAST TIME IN GOVERNMENT. WE MADE THE MISTAKE OF NOT ASKING THE NATION BEFOREHAND WHETHER THEY WANTED TO START PEACE TALKS.

THIS IS A BIG PROCESS THAT TAKES A BIG PART OF BUREAUCRACY, OR SYSTEM. THERE NEEDS TO BE FULL SUPPORT FROM BEHIND GOING THROUGH THIS PROCESS. WE WANT TO REFERENDUM ON RESTARTING THE AGREEMENTS, THAT WE GET AN AGREEMENT, THEN WE WOULD ALSO HAVE A REFERENDUM TOWARD THE END OF IT.

WE NEED TO CLOSE THIS DISCUSSION. WE ARE AT A GOOD TIME TO HAVE IT. WE STILL WANT TO FOCUS ON GETTING A COUPLE OF YEARS OF BREATHING ROOM SO TO SPEAK, THAT WE GET TO YEARS OF DEBATE, DISCUSSION.

THE GOVERNMENT ALSO GETS ROOM TO GET ITS DOMESTIC AGENDA THROUGH. I DON'T WANT THE MAIN MESSAGE FROM MY GOVERNMENT TO BE THE ONLY THING THAT CAN LEAD TO PROGRESS IN ICELAND IS TO JOIN THE EUROPEAN UNION. HOWEVER, WE OBVIOUSLY SEE A LOT OF POSITIVES ASSOCIATED WITH THAT AND HAVE A VERY GOOD STORY TO TELL WHEN IT COMES TO OUR EUROPEAN ECONOMIC AGREEMENT WHICH HAS LED TO A LOT OF VOTES HERE AND ICELAND.

FRANCINE: PRIME MINISTER, LET ME ASK ABOUT DEFENSE SPENDING. ICELAND HAS NO STANDING ARMY. WE KNOW PRESIDENT TRUMP HAS BEEN CALLING FOR NATO MEMBERS TO PAY MORE.

DO YOU ANTICIPATE PRESSURE FROM THE U. S. TO INCREASE YOUR DEFENSE SPENDING?

>> WE HAVE A DIFFERENT TYPE OF AGREEMENT WITH NATO THAN OTHER COUNTRIES. WE ARE A FOUNDING MEMBER OF NATO. WE HAVE A STRONG POSITION WITHIN NATO.

WE HAVE AN AIRBASE. WE ARE GEOGRAPHICALLY IMPORTANTLY SITUATED WHEN IT COMES TO THE ARCTIC AND OTHER MATTERS. WE HAVE RESPONSIBILITIES WHEN IT COMES TO AIR POLICING, SUBMARINE TRAFFICKING AND CONTROL, AND WE HAVE NUCLEAR SUBMARINES FROM THE U.

S. RUNNING THROUGH OUR WATERS TO SEE WHAT RUSSIA IS DOING HERE. SO WE HAVE A STRONG POSITION WHEN IT COMES TO NATO.

BUT WE DO FEEL PRESSURE. IT DOESN'T JUST COME FROM OUR ALLIES. WE ARE JUST AWARE OF OUR RESPONSIBILITY IN TODAY'S WORLD THAT WE NEED TO BE A PART OF AN ALLIANCE.

WE NEED TO BE A GOOD ALLY. THAT MEANS WE NEED TO LOOK AT DEFENSE SPENDING. BEFORE THE SITUATION ESCALATED, I WANT TO SAY LAST WEEK WHEN IT COMES TO UKRAINE AND THIS PUSH FOR A PIECE TALK AND A QUICK CEASE-FIRE, WE HAD ALREADY GONE THROUGH THESE DISCUSSIONS WITHIN MY GOVERNMENT THAT WE NEEDED TO REVIEW OUR DEFENSE POLICY.

SO THIS IS SOMETHING WE ARE GOING TO HAVE TO GO THROUGH OVER THE NEXT I WOULD SAY A COUPLE OF WEEKS, MONTHS. THIS IS A VERY RELEVANT TOPIC IN ICELAND. FRANCINE: PRIME MINISTER, WOULD YOU BE OPEN TO THE U.

S. REOPENED IN THE AIRBASE AND ICELAND? HAVE THERE BEEN ANY SUCH TALKS?

>> WE HAVE HAD RAMPED UP INFRASTRUCTURE IN ICELAND WHEN IT COMES TO THE AIRBASE. WE STILL HAVE A LOT OF AMERICANS COMING HERE WORKING, HELPING US. WE HAVE NATO ALLIES COMING THAT ARE DOING AIR POLICING HERE IN THE REGION.

SO WE ARE IN CONTACT WITH ALL OUR ALLIES. THERE IS NOTHING IN THE PLAINS OF HAVING A LONG-TERM, WHAT CAN I SAY, PHYSICAL PRESENCE OF THE U. S.

MILITARY HERE, BUT WE ARE OPEN TO CONTINUED INFRASTRUCTURE SPENDING TO RAMP UP MILITARY SPENDING WITHIN OUR NATO ALLIANCE ARE YET IF THIS IS JUST SOMETHING WE HAVE TO LOOK TOWARDS. FRANCINE: PRIME MINISTER, OVERALL, THESE BIG TRADE WARS BETWEEN BIG COUNTRIES OF COURSE HAVE A DISPROPORTIONATE IMPACT ON A COUNTRY SUCH AS YOURSELF WITH 400,000 PEOPLE. HOW CAN ICELAND BEST SHIELD ITSELF FROM EVERYTHING GOING ON?

>> ICELAND AND BEST SHIELD ITSELF BY HAVING AN OPEN DIALOGUE. WE NEED TO BE IN DISCUSSIONS WITH OUR ALLIES, WITH COUNTRIES THAT WE DO MOST TRADE WITH. THIS IS WHY MY FOREIGN MINISTER AND MYSELF HAVE BEEN AN OPEN DIALOGUE BOTH ON THE PHONE AND DIRECTLY ON THE GROUND IN EUROPE HAVING DISCUSSIONS THROUGH OUR EMBASSIES AROUND THE WORLD.

THIS IS CRITICAL TO ICELAND'S ECONOMY THAT WE KEEP TRADE FLOWING. LIKE I SAID, WHAT IS MOST IMPORTANT IF WE SEE AN ESCALATION OF TRADE WARS BETWEEN THE TWO CONTINENTS, WHICH WE ARE SORT OF IN BETWEEN, THAT ICELAND GETS EXEMPT FROM THOSE POSITIONS. THE SIMPLE ANSWER IS DIPLOMATIC TIES AND DIPLOMATIC DISCUSSIONS.

THIS IS WHAT WE HAVE BEEN HISTORICALLY GOOD AT AND WILL CONTINUE TO DO. FRANCINE: PRIME MINISTER, ON THE VOLCANIC ERUPTIONS, THERE HAVE BEEN A NUMBER THAT HAVE INCREASED -- I THINK YOU'VE HAD 10 SINCE 2021 NEAR THE CAPITAL CITY WHICH MEANS AIR DISRUPTION AS WELL. HOW HAS THIS CHANGED ICELAND?

>> WE MIGHT SEE ANOTHER ERUPTION. IT COULD HAPPEN TODAY, NEXT WEEK COME NEXT MONTH. WE SEE A BUILDUP OF LAVA UNDERGROUND.

HOWEVER, WE HAVE REALLY STRONG POLICIES IN PLACE NOW TO PROTECT THE REGION AND HAVE GONE THROUGH INFRASTRUCTURE SPENDING IN THE AREA SURROUNDING THE VOLCANIC ERUPTION WHERE IT HISTORICALLY TAKES PLACE TO MAKE SURE WE ARE SHIELDING THE MOST IMPORTANT ROADS, SO OBVIOUSLY, WHAT TYPE OF ERUPTION IT IS WHICH CAN DIFFER IF IT GOES INTO THE OCEAN, IT WILL CAUSE MORE DISRUPTION TO THE AIR AND AIR POLLUTION WHEN IT COMES TO AVIATION IF IT GOES OVER THE MAIN ROADS, THAT WILL BE A BLOG FOR THAT PART OF THE PENINSULA. WE HAVE MADE PLANS FOR THESE TYPES OF EVENTS COMING UP. WE FEEL PRETTY SECURE AND OK WITH HAVING THESE EMERGENCY MEASURES IN PLACE.

FRANCINE: PRIME MINISTER, THANK YOU FOR YOUR TIME. THAT IS PRIME MINISTER OF ICELAND KRISTRUN MJOLL FROSTADOTTIR JOINING US TODAY. COMING UP, OUR EXCLUSIVE CONVERSATION WITH THE GREEK PRIME MINISTER AS EUROPE RAMPED UP EFFORTS TO RESPOND TO PRESIDENT TRUMP.

THAT INTERVIEW IS NEXT. THIS IS "BLOOMBERG. " ♪ FRANCINE: GOOD MORNING AND WELCOME TO "THE PULSE.

" THESE ARE YOUR TOP STORIES. DONALD TRUMP TURNS ON VOLODYMYR ZELENSKYY CALLING HIM A DICTATOR AND WARNING HIM TO MOVE FAST TO END THE WAR. HE SAYS ARE FRESH TRADE DEAL WITH CHINA AS POSSIBLE AS HE TOUTS HIS GREAT RELATIONSHIP WITH XI JINPING.

MERCEDES WARNS OF A SHARP DROP IN EARNINGS AS GERMANY'S AUTO TROUBLES CONTINUE WHILE RENEWED TARGETS TOUGHER EUROPEAN CAR MARKET. GREECE HAS BEEN INVOLVED IN ANOTHER ROUND OF TALKS CONVENED BY THE FRENCH PRESIDENT MACRON AND HOW TO BEST RESPOND TO THE U. S.

-RUSSIA DIALOGUE ON UKRAINE. THE COUNTRY AMONG THE HIGHEST DIFFERENT SPENDERS AS A PERCENTAGE OF GDP AND NATO, TOPIC WITH PRESIDENT TRUMP OFTEN USES TO CRITICIZE WHAT HE SAYS IS A LACK OF INVESTMENT BY THE MILITARY ALLIANCE. THE GREEK PRIME MINISTER KYRIAKOS MITSOTAKIS JOINS US NOW .

PRIME MINISTER, THANK YOU FOR JOINING US. PRESIDENT TRUMP HAS CALLED PRESIDENT ZELENSKYY A DICTATOR. WHAT IS YOUR REACTION WHEN YOU HEAR THAT?

>> FRANCINE, THANK YOU FOR HAVING ME. PRESIDENT TRUMP IS A VERY SMART MAN. HE HAS HIS OWN UNIQUE WAY OF EXPRESSING HIMSELF.

I THINK IN PRINCIPLE, I THINK WE NEED TO AGREE ON CERTAIN FUNDAMENTALS AND I AM SURE THESE STATEMENTS I WILL MAKE ARE ALSO REFLECTIVE OF OUR AMERICAN FRIENDS, THAT WE NEED PEACE THROUGH STRENGTH, THAT THERE COULD BE NO SOLUTION FOR UKRAINE WITHOUT UKRAINIANS BEING INVOLVED, AND THERE CAN BE NO SECURITY ARRANGEMENT FOR EUROPE WITHOUT DUE EUROPEANS ALSO BEING INVOLVED. I THINK WE ARE AT A RELATIVELY DELICATE STATE WHEN IT COMES TO THESE DISCUSSIONS. EUROPE ALSO NEEDS TO COME UP AND MERGE WITH A UNIFIED VOICE.

WE ALSO NEED TO DO WHAT IS EXPECTED FROM US IN ORDER TO COMMIT TO OUR OWN SECURITY OF JUST UKRAINE'S SECURITY. FRANCINE: PRIME MINISTER, WHAT CAN EUROPE DO CONCRETELY? CAN THEY MOVE WITHOUT THE U.

S. OR IS THAT TALKING WITH THE U. S.

? WHAT ARE THE STEPS YOU SEE GOING FORWARD? >> FRANCINE, I HAVE ALWAYS BEEN A STRONG ADVOCATE OF EUROPE DOING MORE TO TAKE CONTROL OF ITS OWN SECURITY PRIORITIES.

AS YOU POINTED OUT, AND GREECE IS A COUNTRY THAT IS SPENDING MORE THAN 3% OF OUR GDP ON DEFENSE AND WE HAVE BEEN CONSISTENTLY EXCEEDING THE 2% THRESHOLD AT TIMES WHEN RICHER EUROPEAN COUNTRIES WERE NOT CONTRIBUTING TO OUR COMMON DEFENSE BUDGET IN THE WAY THEY SHOULD. SO THIS IS REALLY THE TIME WHEN WE NEED TO MOVE FROM WORDS TO ACTIONS. WE NEED TO SPEND MORE ON DEFENSE.

WE NEED MORE FISCAL FLEXIBILITY WHEN IT COMES TO THE EUROPEAN RULES TO ALLOW US TO SPEND MORE ON DEFENSE WITHOUT BREACHING EUROPEAN EXPENDITURE RULES. THIS IS SOMETHING THAT HAS BEEN ACKNOWLEDGED BY THE PRESIDENT OF THE COMMISSION. WE HAVE BEEN LOBBYING VERY HARD TO GET TO THAT POINT.

WE ALSO NEED SOME SORT OF JOINT EUROPEAN WARRING FACILITY THAT WILL ALLOW US TO IMPLEMENT EUROPEAN COMMON INTERESTS, SUCH AS A EUROPEAN MISSILE SHIELD WHICH WOULD BENEFIT THE ENTIRE CONTINENT. WE HAVE BEEN TALKING A LOT ABOUT THESE PRIORITIES OVER THE PAST YEARS. I THINK NOW WE ARE FACED WITH WHAT I WOULD CALL A RUDE AWAKENING IN A SENSE AND WE NEED TO MOVE FROM WORDS TO ACTIONS.

WHEN PRESIDENT TRUMP MANY YEARS AGO POINTED OUT WE DID NOT SPEND ENOUGH ON DEFENSE, IT WAS A PRINCIPAL RIGHT AND WE NEED TO MAKE SURE WE MAKE UP. FRANCINE: PRIME MINISTER, IN TERMS OF TIMELINE, WHEN WILL YOUR EXCEPT THE NEED FOR JOINT BONDS? ARE THOSE CONVERSATIONS ACCELERATING AT PACE?

WILL IT BECOME A REALITY SOON? >> WHAT I EXPECT WILL BECOME A REALITY AS SOON AS THE NEXT EUROPEAN COUNCIL IS THE FIRST SORT OF INTERVENTION WHICH I TALKED ABOUT. WE NEED MORE FISCAL FLEXIBILITY.

SO WHEN WE SPEND MORE ON DEFENSE, INCREMENTAL SPENDING SHOULD NOT COUNT TOWARD OUR EUROPEAN DEFICIT CALCULATIONS. THIS IS A DECISION WE CAN MAKE ERRATICALLY AS EARLY AS EUROPEAN COUNCIL IN MARCH. FRANKLY, WE CANNOT DELAY THIS DECISION ANY LONGER.

I DO NEED TO POINT OUT GREECE HAS BEEN SPENDING SIGNIFICANTLY MORE THAN OUR EUROPEAN ALLIES. WE NEED THE NECESSARY FISCAL FLEXIBILITY IN ORDER TO DO THAT. I COULD EXPECT A DECISION REGARDING THE FISCAL FLEXIBILITY, THE EXEMPTION FROM THE GENERAL -- ACTIVATION OF THE GENERAL ESCAPE CLAUSE TO COME AS EARLY AS MARCH.

TALKING TO MANY OF MY EUROPEAN COLLEAGUES COULD BE CLASSIFIED AS FRUGAL, THEY ALSO RECOGNIZE AT EXTRAORDINARY TIMES WE NEED TO TAKE EXTRAORDINARY MEASURES. THE DISCUSSION OF JOINT EUROPEAN BORROWING FACILITY IS CERTAINLY ON THE TABLE AREA AND I ALSO EXPECT TO PICK UP STEAM QUICKLY. FRANCINE: BLOOMBERG'S ESTIMATES AROUND $3.

1 TRILLION OVER THE NEXT 10 YEARS. CAN EUROPE FIND THAT MONEY, COME UP WITH THAT MONEY? >> I DON'T THINK THAT THE MONEY CAN COME UP EXCLUSIVELY FROM NATIONAL BUDGETS.

WE NEED A COMBINATION OF NATIONAL FINANCING AND EUROPEAN FINANCING. WE KNOW WE HAVE A SIGNIFICANT CAPABILITY SHORTCOMINGS IN DEFENSE AND MILITARY TRANSPORT. THESE ARE GAPS WE NEED TO FILL.

I WANT TO BE VERY CLEAR, THIS CHANGE CANNOT TAKE PLACE FROM ONE MOMENT TO THE NEXT. IN SPITE OF WHATEVER TENSION MAY HAVE ARISEN, I REMAIN A STRONG PROPONENT OF THE VALUE OF THE TRANSATLANTIC PARTNERSHIP. AMERICAN FRIENDS MAY EXPRESS THEMSELVES IN A DIFFERENT WAY, BUT WHEN THEY POINT THE FINGER AT US AND TELL US, YOU NEED TO DO MORE FOR YOUR OWN SECURITY -- IN PRINCIPLE, THEY ARE RIGHT.

I HAVE BEEN MAKING THE ARGUMENT FOR QUITE SOME TIME NOW. FRANCINE: WHO WILL SPEAK FOR THE EUROPEANS WOULD DONALD TRUMP AND VLADIMIR PUTIN? >> THAT IS THE DECISION WE STILL HAVE TO MAKE.

ONE OF THE TOPICS THAT WE COULD DISCUSS IS TO APPOINT A VERY HIGH LEVEL SORT OF EUROPE REPRESENTATIVE WHO COULD SPEAK ON BEHALF OF THE EUROPEAN UNION. RIGHT NOW AS YOU KNOW WE HAVE THE PRESIDENT OF THE COMMISSION, BUT WE MAY CHOOSE TO APPOINT A SPECIAL SORT OF REPRESENTATIVE WHO NEEDS TO BE SOMEONE WITH A LOT OF AUTHORITY, COULD REPRESENT THE EUROPEAN UNION. I THINK IT IS NECESSARY TO SPEAK WITH ONE VOICE.

FRANCINE: IT DOES SEEM VLADIMIR PUTIN ACHIEVED WITH A WANTED WHICH WAS SPEAKING TO THE U. S. DIRECTLY.

WHAT CAN THE EU NOW DO TO GET A SEAT AT THE TABLE FOR BRUSSELS BUT ALSO KYIV? >> FIRST OF ALL, WHEN WE TALK ABOUT SECURITY ARRANGEMENTS IN EUROPE, OBVIOUSLY, EUROPE WILL HAVE TO BE INVOLVED. ONE OF THE DISCUSSIONS IS RELATED TO FUTURE SECURITY GUARANTEES TO UKRAINE.

MANY EXPECT EUROPE WILL HAVE TO -- HAVE A ROLE TO PLAY WHEN IT COMES TO DEFINING THESE SECURITY GUARANTEES. THAT IS WHY I SPOKE ABOUT THE NEED TO DISCUSS THE NEW EUROPEAN SECURITY STRUCTURE. THE INVOLVEMENT OF EUROPE.

THE MORE COMMITTED WE ARE TO ADDRESSING CHRONIC SHORTCOMINGS OF THE EUROPEAN UNION, THE MORE CREDIBILITY WE WILL HAVE IN PLAYING AN ACTIVE ROLE IN THESE NEGOTIATIONS. THAT IS WHY I DO EXPECT AND AM CALLING FOR CONCRETE RESULTS WHICH SHOULD BE REFLECTED IN THE CONCLUSIONS OF THE NEXT EUROPEAN COUNCIL. WE DO NOT HAVE A MINUTE TO WASTE.

FRANCINE: DONALD TRUMP ALSO ANNOUNCED NEW TARIFFS ON AUTO IMPORTS AS SOON AS APRIL. IS THE EU CONSIDERING OR SHOULD I CONSIDER TO ACTUALLY LOWER ITS OWN TARIFF RATE TO AVOID SOME OF THE AMERICAN DUTIES? >> AS YOU KNOW, THIS IS AN EXCLUSIVE COMPETENCE.

WE DON'T WANT TO GET INTO A TRADE WAR WITH UNITED STATES COMMISSION BUT SHOULD IT BE NECESSARY OF COURSE THE EUROPE WILL RESPOND. IT WILL BE BAD FOR BOTH ECONOMIES, EUROPE AND AMERICA. I HAVE BEEN ADVOCATING IF THERE ARE UNILATERAL GESTURES MADE TO LEVEL THE PLAYING FIELD, IT SHOULD PROCEED WITH DOING SO SOONER RATHER THAN LATER.

AGAIN, WE SHOULD HAVE NO DOUBT THAT IN CASE EUROPE IS PUT IN A POSITION WHERE TARIFFS ARE IMPOSED UNILATERALLY ON EUROPEAN GOODS, EUROPE WILL BE FORCED TO RESPOND. I AM CAUTIOUSLY OPTIMISTIC WE WILL BE ABLE TO AVOID THIS SCENARIO. FRANCINE: DOES IT HAVE TO ADHERE TO WTO RULES?

OR WITH THE U. S. DIRECTLY?

>> TO BE HONEST, I THINK THIS ISN'T GOING TO BE A DISCUSSION -- THIS WILL BE A CONVERSATION BETWEEN EUROPE AND THE U. S. DIRECTLY.

WE SEE THE VALUE OF MAKING SURE WE HAVE A LEVEL PLAYING FIELD. IF THERE ARE GESTURES EUROPE CAN MAKE TO LEVEL THE PLAYING FIELD IN GOODS OR MAYBE WE HAVE SORT OF HIGHER TARIFFS THAN OUR AMERICAN FRIENDS RIGHT NOW, WE SHOULD HAVE THE COURAGE TO DO SO. FRANCINE: PRIME MINISTER, I WANT TO ASK ABOUT THE EARTHQUAKES THAT ARE DECREASING IN NUMBER BUT THE OUTLOOK IS QUITE UNCERTAIN.

WHAT KIND OF IMPACT COULD THAT HAVE ON THE TOURISM SEASON? >> THE PRIME MINISTER OF ICELAND BEFORE ME WAS ON THE SHOW AND SEEMS TO BE QUITE CONCERNED WITH COUNTRIES THAT ARE GEOLOGICALLY ACTIVE. YES, WE HAVE HAD MEDIUM-SIZED EARTHQUAKE ACTIVITY TAKING PLACE ON SANTORINI AND A REDUCTION OF THE ACTIVITY OVER THE PAST DAYS, WHICH IS ENCOURAGING.

WE ALWAYS LISTEN TO THE SCIENTISTS AND WE HAVE TO PREPARE FOR ALL EVENTUALITIES. GREECE IS A SAFE COUNTRY. THIS IS A MESSAGE I WANT TO COMMUNICATE.

NO ONE CAN PREDICT THE FUTURE. WE ARE CAUTIOUSLY OPTIMISTIC ABOUT WHAT IS HAPPENING IN SANTORINI. THINGS GO HOPEFULLY ACCORDING TO PLAN AND WILL RETURN TO SORT OF A NORMAL STATE SOON.

FRANCINE: PRIME MINISTER, THANK YOU FOR GIVING US A BIT OF YOUR BUSY SCHEDULE TODAY. THAT WAS THE GREECE PRIME MINISTER KYRIAKOS MITSOTAKIS. COMING UP, WE ARE LIVE IN BERLIN WITH THE LATEST FROM THE GERMAN ELECTION CAMPAIGN.

ONE OF THE FOCUS WILL BE ON DONALD TRUMP AND VLADIMIR PUTIN. THIS IS AFTER SHOALS AND MERZ CLASHED IN THEIR FINAL DEBATE LAST NIGHT. THIS IS "BLOOMBERG.

" FRANCINE: IN GERMANY, THE CONSERVATIVE FRONT RUNNER TOLD CHANCELLOR OLAF SCHOLZ HE WILL NEED MERKEL TO WIN THE ELECTION. ASKING VOTERS TO GRANT HIM A STRONG MANDATE FOR POLICY SHIFT IN EUROPE'S LARGEST ECONOMY. >> WE HAVE TO SOLVE TWO MAJOR PROBLEMS IN THIS COUNTRY OVER THE NEXT FOUR YEARS, THAT IS MIGRATION AND IT IS THE ECONOMY.

AND IF WE DON'T SOLVE THESE TWO PROBLEMS, THEY YOU AND WE AND ALL DEMOCRATIC PARTIES IN THE POLITICAL CENTER WILL NOT BE FACING A MERE CHANGE OF GOVERNMENT IN THE 2029 ELECTIONS, BUT RATHER WE WILL SLIDE INTO RIGHT WING POPULISM FOR GOOD. >> I AM CONVINCED AT THIS TIME THERE WILL BE SOME TIME THAT HAS RARELY HAPPEN TO THIS EXTENT IN PREVIOUS ELECTIONS, NAMELY, THAT SOME PEOPLE ARE GOING TO THE ELECTION COME INTO THE POLLING BOOTH AND ONLY THEN DECIDE WHICH PARTY TO VOTE FOR. I BELIEVE IN THE END, MANY PEOPLE WILL VOTE FOR THE SBD AND GIVE ME A NEW MANDATE TO LEAD THE GOVERNMENT.

FRANCINE: FOR MORE LET'S BRING IN OLIVER CROOK WHO IS IN BERLIN. THIS IS A HUGE ELECTION. THE ELECTION COULD DECIDE THE FATE OF EUROPE.

EVEN THE U. K. WHAT STOOD OUT TO YOU FROM THIS DEBATE?

>> LISTEN, I THINK I SORT OF AGREE WITH OLAF SCHOLZ'S APPRAISAL OF THE ELECTION MOST OF HER ONE PART OF IT, WHICH WAS BASICALLY A LOT OF PEOPLE GOING INTO THIS ELECTION, GOING INTO THE VOTING BOOTH ON SUNDAY ARE A BIT UNDECIDED AS TO WHO TO VOTE FOR. I'M NOT SURE I AGREE WITH THE SECOND POINT THAT IT WILL BE THE SPD, BUT THIS IS PART OF WHERE THE POLLS HAVE NOT REALLY SHIPPED IT ALL OVER THE LAST FEW MONTHS WHERE FREDERICK MERTZ IS EXPECTED TO COMMAND A MAJORITY. THERE WILL BE A QUESTION ABOUT WHAT THE COALITION LOOKS LIKE GOING FORWARD.

WE HAVE HAD A SAVAGE CAMPAIGN TRAIL WHERE THESE TWO CANDIDATES REALLY ATTACKED THEMSELVES HARD. IF THE SPD DOES END UP WITH SOMETHING LIKE 50%'S, OLAF SCHOLZ PARTY COME THAT WILL BE THERE WAS JUST RESULT BASICALLY IN HISTORY AND THAT WILL MEAN YOU WILL HAVE TO STEP ASIDE. THEY MAY BE ABLE TO PAVE THE WAY TO A MORE PRODUCTIVE WORKING RELATIONSHIP BETWEEN THE CDU AND THE SPD.

FRANCINE: WE HAVE JUST HAD MERCEDES EARNINGS THIS MORNING. WHAT DOES THAT TELL US ABOUT THE STATE OF THE AUTO SECTOR IN GERMANY? >> A DOES NOT SAY ANYTHING TERRIBLY GOOD.

I WILL GIVE YOU THE TOP LINES WHERE REVENUE IS DOWN ALMOST 5%, 4. 5%. NET PROFIT WAS DOWN 30%.

EARNINGS-PER-SHARE DOWN 25%. SOME OF THESE FACTORS WERE BEADS ON WHAT THE ANTICIPATIONS WERE SO MERCEDES DID BEAT, CAME IN A ONE POINT -- 8. 1%.

THE BIGGEST WE GOT OUT OF THE EARNINGS WAS THIS COST-CUTTING PROPOSAL THAT BASICALLY MERCEDES-BENZ IS JOINING A LOT OF THE OTHER GERMAN AUTOMAKERS IN CUTTING COSTS, TRYING TO GET 10% DOWN COSTS ACROSS THE BOARD. VOLKSWAGEN HAS BEEN IN HUGE NEGOTIATIONS WITH THEIR UNIONS, CUTTING JOBS. THAT SEEMS TO HAVE ARRIVED AT MERCEDES-BENZ.

YOU SHOULD SAY THE OUTLOOK FOR THE YEAR, THEY ARE LOOKING AT RETURN ON SALES, THE KEY MARGIN BETWEEN 6% AND 8%. THAT IS NOT COMFORTABLE. I LIKE TO GET THE MARGINS IN THE DOUBLE DIGITS.

THE OTHER THING IN TERMS OF ALEX, CAN MERCEDES-BENZ GIVEN OUTLOOK OF ANY KIND WHEN YOU HAVE DONALD TRUMP TALKING POTENTIALLY ABOUT 25% TARIFFS ON THE GERMAN AUTO INDUSTRY AS EARLY AS APRIL? I THINK WE WILL HAVE TO REAPPRAISE THESE OUTLOOKS FOR CAR COMPANIES DEPENDING ON WHAT THE TRUMP ADMINISTRATION DOES IN APRIL. FRANCINE: OLIVER CROOK IN BERLIN.

WE ARE HEARING FROM MERCEDES SAYING THERE ARE NO PLANS TO SHUT DOWN PLANTS BUT DO PLAN TO REDUCE THE GLOBAL PRODUCTION CAPACITY FOR CARS. WE WILL BRING YOU THE NEWS ANALYSIS AND MARKET MOVES AS WE CONTINUE TO BUILD UP TO THE GERMAN ELECTIONS THIS WEEK, INCLUDING A SPECIAL PROGRAM WHEN POLLS CLOSE AT SUNDAY. WE WILL BE LIVE FROM BERLIN.

AS U. S. -RUSSIAN TALKS, AFRICA IS HOSTING THE FOREIGN MINISTER SUMMIT.

SECRETARY OF STATE MARCO RUBIO WILL NOT BE IN JOHANNESBURG CITING AN AGENDA THAT INCLUDES AS HE PUTS IT CLIMATE CHANGE AND D. E. I.

. FOR MORE, LET'S GO TO JENNIFER. WHAT CAN WE EXPECT FROM THE G20 AGENDA OVER THE NEXT COUPLE OF DAYS?

>> THE EXCLUSION AT LEAST OF THE SECRETARY OF STATE MARCO RUBIO AND SCOTT BESSENT NEXT WEEK AT THE FINANCE MINISTERS MEETING IS A BIT OF A BLOW FOR THIS CONVENING. THE G20 IS A CONVENING OF THE MOST ADVANCED ECONOMIES WITH EMERGENT ECONOMIES. IT WAS AND IS AN OPPORTUNITY FOR SOUTH AFRICA TO BRING A LOT OF THE ISSUES OF THE AFRICAN CONTINENT AND THE GLOBAL SOUTH TO THE TABLE WITH A LOT OF THESE BIGGER ECONOMIES.

BUT IT MIGHT LOOK DIFFERENT WITHOUT THE INCLUSION OF THEM. WE HAVE HEARD FROM OFFICIALS SAYING THE PRIORITY IS TO DISCUSS AND DEBATE A LOT OF THE GEOPOLITICAL ISSUES THAT WE ARE SEEING RIGHT NOW ON THE GLOBAL STAGE AND SEE HOW THE G20 CAN POTENTIALLY COME TOGETHER AND HELP SOLVE THOSE. IF YOU LOOK OVER THE PAST FEW YEARS, WE'VE SEEN A LOT OF EROSION AND TERMS OF COHESION WITH THESE MEMBERS.

THE QUESTION WILL BE, WHERE CAN I FIND COMMON GROUND? ESPECIALLY WHEN YOU LOOK AT THE DIVISIONS WE SEE NOW. YOU ARE MENTIONING WHAT WE DID HEAR FROM MARCO RUBIO ABOUT SO-CALLED CLIMATE CHANGE AND D.

E. I. AND WE HAVE HEARD PRESIDENT RAMAPHOSA WHO WILL BE HERE IN A FEW HOURS TO OPEN UP THESE OFFICIAL MEETINGS SAY HE WANTS TO BRING THE TOPICS OF DEBT REALLY TO THE TABLE AND CLIMATE FINANCE HAS BEEN VERY IMPORTANT FOR HIM AND OTHERS IN THE GLOBAL SOUTH.

TALKING ABOUT REFORMS OF MULTILATERAL INSTITUTIONS. POTENTIALLY, WE SEE THE START OF THESE DISCUSSIONS HAPPENING OVER THE NEXT TWO DAYS WITH THE FOREIGN MINISTERS NEXT WEEK WE WILL SEE THEM TAKE A DIFFERENT STEP WITH THE FINANCE MINISTERS. BUT WITHOUT THE INCLUSION OF MARCO RUBIO AND SCOTT BESSENT, YOU CAN ONLY IMAGINE WE WILL SEE OTHER BIG MAJOR PLAYERS LIKE CHINA AND RUSSIA AND EVEN THE EU STEPPING IN TO FILL SOME OF THOSE GAPS.

WE DO HAVE U. S. REPRESENTATIVES THAT ARE PLANNING TO COME HERE.

FRANCINE: THANK YOU SO MUCH. AFRICA'S ROCKY RELATIONSHIP WITH THE U. S.

UNDER PRESIDENT TRUMP IS THE THEME OF THE NEXT EPISODE OF OUR SHOW "NEXT AFRICA. " COMING UP, THE FRENCH CARMAKER RENAULT IS FORECASTING ROUGHLY STABLE RETURNS THIS YEAR. WE DISCUSSED THE OUTLOOK AND EUROPE'S AUTO INDUSTRY NEXT.

THIS IS "BLOOMBERG. " ♪ FRANCINE: RENAULT IS FORECASTING ROUGHLY STABLE WITH AN OVERHAUL TO COUNTER DEMAND FOR ELECTRIC VEHICLES IN EUROPE. FOR MORE ON THIS, LET'S BRING IN OUR GLOBAL COVERAGE.

CRAIG, THANK YOU FOR JOINING US. RENAULT, IT IS NOT DOING TOO BADLY. WHAT IS THERE SUCCESS STORY LOOKING LIKE?

>> IT IS KIND OF REMARKABLE THESE ARE APPLE AND ORANGES FIGURES BUT RENAULT'S PROFIT MARGINS THIS YEAR LOOK LIKE THEY MAY BE SORT OF IN LINE WITH MERCEDES. THAT IS NOT SOMETHING WE WOULD HAVE SEEN OR ANYONE WOULD HAVE PREDICTED A FEW YEARS BACK. IT IS A COMPANY THAT HAS FLOWN UNDER THE RADAR, THE EXTENT TO WHICH THEY HAVE QUIETLY PUT TOGETHER A TANGIBLE RECOVERY AS EVERYONE AROUND THEM HAS BEEN REALLY STRUGGLING WITH THAT ELECTRIC TRANSITION THAT YOU MENTIONED, WHETHER YOU WANT TO TALK ABOUT THE GERMANS OR STELLANTIS -- WHICH PARTED WAYS LAST YEAR.

IT HAS BEEN THIS TURNAROUND STORY THAT HASN'T GOT A LOT OF ATTENTION BECAUSE OF JUST HOW TROUBLED ITS PEERS ARE IN THE REGION. FRANCINE: OVERALL, EUROPE IS TRYING TO FIGURE OUT WAYS I GUESS TO TEMPER SOME OF THE TARIFFS THE U. S.

WILL PUT ON EUROPE. THERE IS TALK ABOUT THEM BASICALLY GETTING RID OF SOME OF -- DOES IT BENEFIT U. S.

CARMAKERS? >> THAT IS A REAL QUESTION HERE. MAYBE SOME OPPORTUNITY HERE JUST BASED OFF SOME OF THE HEADLINES LAST NIGHT THAT BRUSSELS WOULD BE WILLING TO BRING DOWN ITS AUTO TARIFFS FOR THE U.

S. . AS A HEADLINE, THAT MAY BE A WIN FOR TRUMP BUT IN TERMS OF U.

S. AUTO WORKERS, THERE'S A REAL MISMATCH BETWEEN WHAT THEY BILL IN U. S.

AND WHAT EUROPEAN CONSUMERS WANT TO BUY. GM DOESN'T REALLY EXIST HERE IN EUROPE ANYMORE. HOW MUCH IS THIS GOING TO BENEFIT U.

S. WORKERS? I THINK THERE ARE SEVERAL QUESTIONS ABOUT HOW MEANINGFUL EVEN A HEADLINE WIN WOULD BE HERE FOR THE U.

S. FRANCINE: WE DON'T KNOW WHETHER HE WANTS A HEADLINE WIN OR SUPPORT U. S.

ECONOMY. CRAIG, THANK YOU WILL STOP -- CRAIG, THANK YOU. SCOTT BESSENT AT MIDDAY LONDON TIME.

THAT IS WITH "SURVEILLANCE. " UP NEXT, "BLOOMBERG BRIEF. " THIS IS "BLOOMBERG.