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00:00ALSO A MEMBER OF THE GERMAN COUNCIL OF ECONOMIC ESPOO -- IN THE WAKE OF DONALD TRUMP PASSES VICTORY LAST WEEK IN THE U.S. ELECTION, REFLATION SEEMS TO BE THE BUZZWORD. HOW IS THE OUTLOOK FOR THE GLOBAL ECONOMY CHANGING IN THE WAKE OF TRUMP'S SUCCESS? IF YOU LOOK AT THE BOND MARKET, GREAT CHANGE. >> YES. I THINK THERE IS STILL A LOT OF UNCERTAINTY. AS YOU SAY OVERALL, THE EXPECTATION HAS BEEN MORE GROWTH, HIGHER INTEREST RATES. WE SEE THAT IN BOND MARKETS. MARKET: THAT IS OBVIOUSLY THE CASE FOR THE U.S.. DOES THAT NECESSARILY TRANSLATE ACROSS THE GLOBE? WHAT IS THE THINKING ACROSS ECB AND OTHER CENTRAL BANKS NOW? >> WITH THE KEY IS, THE PROTECTION IS IN THAT THE U.S. WILL STEP BACK FROM FREE TRADE, THAT WOULD BE BAD FOR EUROPE. JOURNAL -- GERMANY WOULD BE HEAVILY AFFECTED. THE U.S. WOULD ALSO NOT BENEFIT. I PERSONALLY DO NOT BELIEVE THAT WILL HAPPEN AND I THINK WE WILL SEE SOME MEASURES BUT I CANNOT IMAGINE PRESIDENT TRUMP ENGAGING IN A TRADE WAR. THAT IS WHY I AM FAIRLY OPTIMISTIC. VONNIE: YIELDS ARE RISING IN THE AFTERMATH OF THE ELECTION. COUNTERACTING ECB POLICY TO SOME EXTENT, WE KNOW THERE WILL BE SOME WHEN IT COMES TO TRADE. WHAT DOES THE ECB DO IN A SITUATION LIKE THIS? >> I THINK THE ECB WILL PRETTY MUCH CONTINUE WITH THE PLAN. THEY WILL CONTINUE THE PURCHASING PROGRAMS AND ANNOUNCE THAT IT WILL LAST LONGER. I THINK THEY SHOULD SLOW DOWN AND THAT THE MESSAGE IS THAT LONG-TERM RATES ARE RISING AND THAT IS PUTTING SOME UPWARD PRESSURE ON LONGER-TERM RATES IN GERMANY. IN THE EURO AREA. I WOULD THINK THAT IS A GOOD THING. THE BIGGER PROBLEM IN EUROPE IS THAT WE HAVE LOST ANY SENSE OF MARKET DISCIPLINE FOR GOVERNMENTS. VERY LOW AND BASIC WEEK, WE HAVE NO IMPACT FOR MARKET CONDITIONS. THEY SHOULD REALLY CONSOLIDATE AND MAKE ECONOMIES FIT FOR THE FUTURE, REFORM THEM. VONNIE: MANY GOVERNMENTS HAVE BEEN DOING THAT -- MANY GOVERNMENTS HAVE BEEN DOING THAT. >> I ASKED A QUESTION. >> MANY HAVE DONE THAT. >> IF YOU WOULD LOOK -- YES, IF YOU LOOK AT COUNTRIES SUCH AS SPAIN, THEY RESPOND EARLY AND THEY HAVE BEEN CONSOLIDATING FASTEST NOW AMONG EUROPEAN COUNTRIES. IF YOU LOOK AT ITALY, IT IS TRUE THEY ARE TIGHT -- TRYING TO REFORM NOW BUT THERE WAS NOT MUCH HAPPENING BEFORE. MOSTLY BY TAX INCREASES. MARK: HOW MUCH OF A THREAT IS THE VICTORY OF DONALD TRUMP TO THE WHOLE OF THE EUROPEAN PROJECT. IN THE NEXT 12 MONTHS? >> THE BREXIT REFERENDUM WAS THE BIGGER SHOP -- SHOCK BUT TRUMP'S'S SURPRISE IS ENCOURAGING POPULISTS AROUND EUROPE. WHAT IS KEY IS THEY LOOK MORE CLOSELY AT WHAT PEOPLE WANT. PEOPLE WANT MORE DECISIONS MADE CLOSE TO HOME, AND WHAT IS DONE ON THE EUROPEAN LEVEL DELIVERS A CLEAR WIN-WIN FOR EVERYBODY, EUROPEAN POLICIES ON COUNTER TERRORISM, ON BORDER CONTROL -- PATROL, MAYBE THIS WILL BE A PUSH TO MOVE FORWARD. MARK: WE HAVE SEEN THE BIG RALLY IN EUROPEAN BANKS SHARES. FOLLOWING THE VICTORY OF DONALD TRUMP. JUST SEEMS TO BE ON REGULATION. THE THINK HE WILL DISMANTLE DONE FAT -- DODD-FRANK OR NOT? >> I AM NOT SURE ABOUT THAT. I THINK ON BALANCE, THE MINISTRATION WILL MEAN -- IT DOES NOT HELP OR HURT EUROPE AT THIS POINT TOO MUCH. STILL FAIRLY UNSTABLE. WE NEED TO BUILD UP CAPITAL.

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Europe Assessing Trump's Global Economic Impact

Volker Wieland, endowed chair of monetary economics at Institute for Monetary and Financial Stability, discusses what changes for Europe in the aftermath of the U.S. election and the economic agenda of President-Elect Donald Trump. He speaks on "Bloomberg Markets" from a EuroFinance Week event in Frankfurt, Germany. (Source: Bloomberg)

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