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00:00Where are we. On the Brexit Ahmed Ev. According to Prof Bly doom or opportunity. In the middle. No one Oh my God. A British way of doing things right. Basically what you do is you just muddle through. So you extend things and that becomes the new permanent state of affairs. Think about it the Labour Party now says it wants to be in the Customs Union. Well you want to be in the Customs Union. Kind of in Europe but they've said we're definitely not going to go back on Brexit. This is a classic British fudge the reason it's a fudge is because they get the best deal ever. And then they find out you blew it. No they have to get bucket the comments from Mr Barnier that raised the prospect that this critical March end deadline is going to be missed. But you're saying it's not really going to matter in the way the game plan. I mean ultimately you're trying to negotiate an incredibly complex set of agreements. It's been 30 years organically grown up and you've got to replace them all with stuff you don't really know how do to. Well good luck with not one for the budget and see what happens. It's the classic British we're dealing with it honey your fame I introduce you to a man called Brexit the man that called trump. Where are we on the political spectrum. And as I look at France you got macro fine. He arrives. He's gonna change the world. They tell me yeah And change France. Would he raise wages in enough time to see Marine Le Pen in to in four years time. Probably not . Because to do that he needs not just the cooperation of the Germans which may or may not be forthcoming after all they still don't have a government. You've also got to have the global economy on your side and the global economy is over saving corporates on net savers in the developed world. All people are becoming the predominant voting bloc. They save too much . Interest rates are structurally law and you have a massive inequality skew. OK. How do you solve all that. And one presidential term the guy may be popular. He may have the right ideas but how do you change the world in six years. This goes back to the point on the wider populism trends we were talking about just before we went on air you were making the case that you know some people are writing off populism its reach its peak you're saying we might just be getting warmed up here if you look at the real events happening across continental Europe . Well the topic here was called the new normal the new normal is not interest rates of 4 percent it's two. But it's also populism is where we are combined European vote shares of left and right populist parties and a quarter of the vote. The German SPDR sitting at 17 percent outside of Labour Party which is basically an LBO by Corbyn for the dead husk of New Labour . That's the only party that stands a chance in an election. The centre's already folded. It's just that they haven't got the memo yet. Mark last year in the dying months of last year Anna Edwards myself yes said we're talking about North Korea North Korea North Korea. What's going to happen. Another explosion . It seems to have gone off. Our immediate myopic radar of risk . We're talking about tariffs in China this morning. What are we missing in the paradigm that is North Korea and the United States of America. I think we were all seduced by Canadian ice dancers. I think that that kind of took it off the boil. But the serious point is this. They're under sanctions no for fuel as well as food and everything else. Those guys are hiring the guy who was shot the trip that came over tapeworms in his body . He's frontline troops the country starving to death by the end of the summer. The Chinese reckon this is going critical at that point the leadership has to respond. They only have one tool. Get aggressive. That's going to come back. But the signals are positive. You see what's happening with the Olympics with the delegation that they sent with you know voices from South Korea and from North Korea arguably the most conciliatory we've heard in a very long time and people forget that when the last phase of reconciliation went on they took a submarine took it into a South Korean harbor and didn't detonate a torpedo into a destroyer. Yeah I mean let me just follow up here. So you're saying I need to be more concerned about North Korea and investors should be so too. More than any other geopolitical risk around the world more than Donald Trump more than rhetoric between Saudi Arabia and Iran more than anything . If the Americans are forced to respond to North Korean actions that's the biggest thing on your lunch plate for the foreseeable future. And there's an election coming up in Italy. It could be. Or could it be a disrupter. I'm going to discount this one and here's why. The way it works is kind of everything changes and then nothing changes. It's kind of the Italian predicament and you've got lots of people in there. Beppe Grillo and others who are saying the euro is bad is said to be you know what they've got a hotel California problem. Once you check in how do you get out. You stand up and say I'm gonna have a referendum on the euro every Italian with euro assets opens a German bank account boom you just blow up your banking system Congrats. Very quickly Yen's vibe and you're talking to him . What's your what you suggest. You've missed five minutes of listening. This is your weekend. This is your Xi Jinping side of this message. Are you OK. Join me until you get dumped here . If you want to go well rather than have an interest rate guidance why not just have it right in the German constitution to all savers get 4 percent real regardless of real economic conditions because that seems to be what they want .

Brown University's Blyth on Brexit, Populism, North Korea

Mark Blyth, professor of international political economy at Brown University, discusses Brexit negotiations, populism across Europe, tensions between U.S. and North Korea, geopolitical risk and the upcoming election in Italy. He speaks to Bloomberg's Manus Cranny and Yousef Gamal El-Din from the First Abu Dhabi Bank's Global Financial Markets Forum. (Source: Bloomberg)

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