Live on Bloomberg TV

00:00From the world of politics to the world of business this is balance of power with David Westin. From Bloomberg World Headquarters in New York to our TV and radio audiences worldwide. Welcome to Balance of Power. I'm Joe Matthew in for David Westin. We begin today in Washington where a stronger than expected February jobs report came in this morning overshadowed by the war in Ukraine. For the latest there let's go to Bloomberg Washington correspondent Annmarie Horden at the White House. And Marie thanks for being here. There are calls that are growing louder on Capitol Hill going all the way up to Speaker Nancy Pelosi to ban Russian oil imports. The White House says they're not onboard with this idea because it would send oil and gas prices higher. How long can they hold that position though with so much pressure on the administration. Boards have to wait to see how long they're willing as you say to go this far in not going after the lifeblood of the Russian economy which is oil and gas. Now we should note the United States is about 8 percent when you consider all fossil fuel coming in from Russia. Not just crude. Crude is about 3 percent. It's still a fair amount when you look at the rankings. Mexico Canada above Russia. But it's well before Saudi Arabia. But Speaker Pelosi was pretty direct. She said ban and ban it now. And Press Secretary Jen Psaki says strategically it just doesn't make sense. They need more supply in the market to make sure they keep these prices down. And of course the administration has been working in lockstep with their European partners. This would be incredibly difficult for Europe to do especially when it comes to natural gas. But the calls are going to get louder especially considering what we saw last night with the biggest nuclear power plant in Europe was on fire. Now we should know there was only a training building and that entire facility that went on fire. But it definitely increased the risk that we have Anthony Blinken over in Europe right now discussing this all of these risks as well. At the same time Joe here at the White House the president will be sitting down with Finland's president. Now this is a very interesting story because over the growing course of the weeks Finland has had a resurgence in their polls about individuals who actually want to join NATO. We haven't seen these types of numbers since 2014 when Russia annexed Crimea. And this individual particularly especially since we had the exit of Angela Merkel has become really something of an interlocutor between world leaders and President Putin and very hard during on the North Lawn of the White House. We thank you as always here in the U.S. jobs growth. In February a big boom as the pace of wage increases slowed. Joining us to pick through some of this report is Betsey Stevenson University of Michigan professor of public policy and economics former chief economist of the U.S. Department of Labor. Great to have you here. Betsy this report as I mentioned much stronger than expected. And that's the case for the second straight month. Is it becoming impossible to forecast data in such a volatile period. Well certainly there is a lot of uncertainty in the world and that uncertainty is not about just forecasting data but it's about what's going to happen next. In foreign policy and we don't know how many people are ready to go back to work and when they're going to be ready to get back to work. And I think there's been a lot of concern that maybe there would be a slowdown in people willing to return to the labor force. And this report showed us that maybe that concern was a little misplaced. People are coming back. They know we saw a lot of jobs added and we saw employment grow. So I mean across the board this is a really strong report. And it shows not only that the labor market is healing but that there's more space for it to grow and for the economy to continue to improve. Well to your point participation went up especially among 25 to 54 year olds. A very good sign after waiting so long to see this happen. I wonder if you see this because of Covid infection slowing down or better your people starting to run out of savings. You know it's true that people built up a lot of savings during the pandemic. And then there was a lot of government support last year. But I would know I can't know for sure. If we look at the data doesn't really tell us what people are thinking emotionally. Sure. But I think a lot of it is people are getting ready. They're feeling ready to go back to work. We're seeing people ready to start to open up their lives again socially and professionally. We're seeing schools and the child care situation stabilize a little bit. But you know there's still challenges out there. You know one of the things that worries me as I look at employment in the childcare sector it's still down 12 percent compared to pre pandemic levels. So we have some room to grow and to continue to improve the labor market situation for parents and for everybody. We're not there yet. But what we're seeing is that particularly as the Armstrong cases are coming down you know people are willing to keep coming back into the labor force and more employers are telling them to get back in the office as we've been seeing recently average hourly earnings essentially unchanged in February. So a big slowdown from the month earlier that that means a pay cut for a lot of people when you factor in inflation. Have we seen the end of the massive wage growth that we've been seeing the past year. Well I'm not going to get in the business of telling you what's going to happen in wages in the future because I'll surely be wrong or be lucky. But what I will tell you is that what we've seen throughout the recovery is that we've seen wages grow at the bottom end of the income distribution and we've seen wages grow for people who are willing to change jobs. So you know I describe it as the young and the restless. I've gotten the wage gains and everybody else is kind of losing out. I think we're going to continue to see high levels of quits as people seek better opportunities. Quit talking about people leaving the labor force and they're not even necessarily about people being frustrated with their jobs. They're just this is a great time to make an improvement in your job situation. And I think a lot of people are making that choice. Those are the people who are getting the wage gains. Everybody else is getting a little bit left behind. So stepping back from all the data here does this report this this trend do anything to change the Federal Reserve's trajectory for tightening this year. What does it mean for interest rates. You know the Fed has a really really tough road to travel right now. You know we've got disruption going on around the globe. We're still coming out of this recovery. And what the Fed has said all along was they didn't want to pull the brakes too soon. They wanted everybody to be able to get back to work. We're not even fully there yet but they need to start pulling the brakes. I don't think anything in this report changes their path. What they need to do is get us to a soft landing. And I think they need to stay on the trajectory that they've outlined in order to do that. Stronger than expected is the headline. Betsey Stevenson helping us look under the hood a bit here. We thank you. That's it for your time today. Coming up we'll have more on the jobs report the state of the economy and inflation. We'll be speaking with Council of Economic Advisers Chair Cecilia Rouse. So join us from the White House. This is balance of power on Bloomberg TV and radio. This is balance of power on Bloomberg TV and radio. I'm Joe Matthews. Keep you up to date now with news from around the world and First World News with Mark Crumpton. Joe thank you. The United Nations Security Council is holding an emergency meeting as the war in Ukraine rages on. Ukrainian officials say Russian forces have occupied the site of the largest nuclear power plant in Europe following a fire there. Officials in Kiev say Russian shelling caused that blaze which was a training complex at the Zafer rewrite plant. The blaze was extinguished and there were no casualties reported. Many businesses in the United States and many allied nations in Europe and Asia have been cutting their commercial ties with Russia as governments look to punish the country for President Vladimir Putin's invasion of Ukraine. U.S. Labor Secretary Marty Walsh tells Bloomberg he expects that to continue. I think a lot of countries and a lot of companies are doing what they need to do. I think that as we continue to move as that as the conflict continues to move forward I think that there'll be a lot more companies in America and not just America around the world. We'll be taking steps like this against Russia. Secretary Walsh says quote We have to do whatever we can in as many places as we can to support the Ukrainian people end quote. Hong Kong is battling its worst ever Covid-19 outbreak. The city reported more than fifty two thousand new confirmed cases today. There were also 136 new deaths. Officials are stepping up their efforts to get the elderly vaccinated as the virus has spread to more than 750 senior care homes there. The U.S. Supreme Court has reinstated the death sentence for convicted Boston Marathon bomber Dzhokhar Tsarnaev. The justices voting 6 to 3 today said Tsarnaev was not deprived of a fair trial when a judge limited questioning to prospective jurors about pretrial media coverage. The 2013 bombing killed three people near the finish line of the race. Global news 24 hours a day on air and on Bloomberg Quicktake powered by more than twenty seven hundred journalists and analysts in over 120 countries. I'm Mark Crumpton. This is Bloomberg. Mark thanks. Slowing U.S. wage growth in the spotlight today after the release of the February jobs report even as the speed of hiring topped expectations much stronger than expected. And we're joined right now by Cecilia Rouse chair of the White House Council of Economic Advisers. Joining us on balance of power from the White House. It's great to have you with us. Chair race I'd like to ask you about the jobs report today. Clearly stronger than expected payrolls. But what do you attribute. Do you have a theory on this higher participation rate or people feeling more comfortable getting back into the office. Or are they forced to look for work because of higher prices. Yes. So the jobs report that we had got today from the Bureau of Labor Statistics suggested that the economy continues a strong recovery that we saw an additional 670000 jobs in both the private sector in the public sector. And as you noted what we saw a decrease in the unemployment rate that was accompanied by an increase in labor force participation. I attribute this to that. Basically the phase we're in with the pandemic that we in prior months we had seen that people were not looking for work. They were not taking work due to fears of Omicron or childcare concerns. And we saw less of that being reported this month. So I think overall what we're seeing is that with the pandemic starting to become under control and manageable as we work through it and with employers eager to hire workers that we are seeing historic recovery in our labor market is can we say the pandemic then is essentially over for workers in this country. I would never say that until the pandemic is over. Your top four you noted that in Hong Kong they've got the most severe outbreak that they've had. But what I think what we do know is that we're in a different phase. We are two years in. We've got a very different set of tools. We've got over 70 percent of adults are vaccinated. We have many are boosted. We've got therapeutics. We know the mask. And so we just have a different set of tools to allow us to both live and get back to our normal lives while we endure the rest of the pandemic more safely. We did see a slowdown in wage growth. We know real earnings have been down since early last year. When you tie this into inflation. Will this phenomenon get worse before it gets better this year. What's your estimation. Well look I think what what we actually saw was month on month there wasn't a change in nominal wage growth but we we don't like to focus on any one month in particular. We like to look at trends because months can be noisy. We've seen real wage growth at the bottom part in lower paid jobs in industries. But you noted on average that inflation has been higher than nominal wage growth. We will get a new CPI print next week. Look that is not what we hope. This president is focused on growing this economy from the bottom up middle out. He's looking for economic policies that generate sustained economic growth that that generates wage increases that are powered by increases in productivity. And so that is why he is doing all that he can to both reduce prices and costs for families to increase economic capacity so that we do have a very healthy economic recovery for and where everybody benefits as we have some economic growth. You know the Federal Reserve is set to begin hiking interest rates. The next meeting is this month. Jay Powell has indicated a quarter point is likely. That historically means when you get into a tightening regime that higher unemployment rates are going to be coming here. What's your team modeling. What is your expectation here for how high that number might go as interest rates climb. So most economic forecasters predict that unemployment will continue to fall through this year. You know obviously the federal right price stability is part of the mandate of the Federal Reserve and we know we need a full team. Senate needs to confirm the five nominees that the president has nominated. So we are optimistic and we we have faith and confidence in the Federal Reserve. And we certainly hope that we can achieve both price stability and maximum employment. What happens to the six million job openings in this country once the Fed starts to hike. Well we will see that. We'll see how employers are responding. You know as we work through this pandemic and supply chain start to ease and consumers get back to the typical patterns of consumption. So one thing we observed in this pandemic is people are consuming more goods and services. So as people feel more comfortable being out and about and being closer contact with individuals and they start to consumer services and we see a rebalancing of where consumption is we will see what that does to job openings and how that changes are our labor market. A couple of things popped out to us. Looking through this report share rose we did see a drop in black unemployment in February. It's still much higher than the overall number though it's been very stubborn in the unemployment rate for women was unchanged. Women participation fell though for the first time since September. I know this is partly why the administration is calling for an expanded child tax credit paid leave among other issues but without Congress to get that done. Is there anything you can do to help get women back to work this year. Well I think that first of all it's important to not focus on any one month because we have to look at trends and the data can be noisy. Yes we are. We celebrate that the unemployment rate for all races and ethnicities fell. But those data can be noisy and we have to look at trends. You know similarly for women's unemployment that last month they were looking good better. This month it looks like their labor force participation ticked down. But again it's one month for women and caretakers in general. What's most important is that we get our children back into school. ISE stabilize so that they can count on their children being in school in daycare so that they know that if they take a job they're not going to be called out in order to take care of a loved one. So that kind of stability I think will be very important for women's continued reentry back into our labor market. Of course having this conversation share us against the backdrop of a war in Ukraine right now. And I'd like to just ask you if I could about the potential impact of sanctions coming back on us springing back on the U.S. I understand as the president has said it's difficult to contain the impact of sanctions like this. And we spoke earlier this morning with deputy treasury secretary while the idea. Here's what he said. If President Putin continues to escalate his war in Ukraine we will continue to increase the sanctions that we've put on Russia. It's important to see what's happening in the Russian economy today because of the sanctions we've put on. Inflation is likely north of 20 percent. Russian markets have been shut down for days. How much of a wild card are sanctions in your economic modelling. We're looking at WTI crude oil at one hundred eleven dollars a barrel right now. Chair Ross what should Americans be prepared for. Well so the president as the president has said these sanctions were designed to maximize impact on the Russian economy and to minimize the reverberations back to the U.S. economy and to the economies of our partners and allies. But that said as you noted we're in a global economy and there may be some costs for Americans but we are focused on trying to impose sanctions that will be really targeted at Russia. And we will have to see we are working with partners and allies in terms and we're coordinating our response accordingly. But we know that there is some uncertainty as we go forward that the Russian economy is in shambles. And the question is how long will Putin continue this war. Are people's expectations on inflation simply unrealistic as the conversation right now unrealistic chair round. When you start talking about combating inflation in the near term most of the efforts that this administration is making as you well know are in the long term dealing with the supply chain dealing with the the matter of energy and so forth. But in terms of the next weeks and couple of months ahead is there anything. Are there tools that the administration can use to try to get to this. Well the president is trying to use all tools that are at his disposal. He coordinated a response from Putin's UK petroleum reserves with our allies. Sixty million barrels. I believe that having the tools to get our lives back to normal with a pandemic is going to be key because that again allows people to join the labor market. It can help with some of our supply chain challenges. I think that helps in the near term. But we know that in the medium term we need to help families address costs in prescription child care costs. That will help. But you know you're right. We face some uncertainty as we go into this. But I do remain optimistic that the pandemic will ease. That will help the Federal Reserve. I believe we'll be recalibrating its policy stance. The big the big wildcard here which is generating some uncertainty is the war of Russia grants Ukraine. Cecilia Rouse to the White House Council of Economic Advisors. We always appreciate your insights. Thank you for coming back to see us today on Bloomberg TV and radio. I should note by the way that President Biden is scheduled to speak about today's jobs report a bit later on this hour. We'll have an ear on that. Coming up U.S. equities on track for their fourth session of losses in five days. We're gonna break down the market reaction to the latest political developments coming up next. This is balance of power on Bloomberg TV and radio. Russia invades Ukraine. We've proven our strength. The nature of this war changed yesterday turned to Bloomberg for up to the minute reporting from all around the world. Ground troops are closing in on the Ukrainian capital with abandon neutrality and analysis of what it all means to you. Energy is on the table. Consumer prices moving closer to 220. There is a lot of interest to offload Russian assets look to see more companies announce their exits from Russia and doing to Bloomberg television and radio. This is balance of power on Bloomberg TV and radio. I'm Joe Matthew. Thanks for joining us. It's been another volatile week here for market says the Russian invasion of Ukraine continues. And we get more now from Bloomberg's greedy Gupta who is with us. This program is special greedy because it's the intersection of Wall Street and Washington. Right. It's sort of a unique place here at Bloomberg. And so we're going to try to connect some of the dots today in what has been the most significant downturn in stocks for some time. Right as we watch geopolitics play against the markets. You want to start with the S & P 500. Yeah let's start with the S & P 500. Remember just a couple months ago we were saying the first quarter of 2022 is going to be volatile. Get ready for it. We're going to talk about decelerating growth. We're going to be talking about a hawkish Fed. A lot of support has really been driving the S & P 500 really since the Covid-19 kind of crash in March of 2020. A lot of that support is going to go away from Washington from the Fed. And then of course from earnings as well. Consumers just aren't going to be spending that much. That's going to show up in corporate profits. Nobody expected a war. All right. On the outskirts of Europe essentially. And that has really been the game changer here because it's created this very different kind of dynamic in terms of who's actually buying the dips essentially for the stock market. I mean this is crucial in 2021. We have this pattern where we only saw these very shallow pullbacks 2 3 percent dips every couple of weeks. It wasn't that significant because retail buyers hopped in other people hopped in. It wasn't something that was going to turn into a technical correction which is a 10 percent drop from its peak. Then we hit 2022. And that pattern gets completely torn apart to the point where even a 10 percent drop from its peak doesn't attract buyers. And that's really where you see that geopolitical risk get piled on. Has retail been washed out of the market then. It hasn't been washed out the market cause they have been buying this entire time. But it's certainly not with the same conviction and the same force that you saw at the start of 2021 where they have literally kind of moved the market in a particular stock. And that's a different story right. They haven't been able to do it on a macro basis yet. Do you really only see it in individual stocks even back in 2021 dating. Of course you've been following this with commodities as well oil and several others even wheat is making news this week. Last time we talked about a bushel of wheat. Yeah. I mean hoard your cereal. Hoard your beer. That's really the consequences of what's crucial here. This is the most bullish week. Wheat has had the best week since history shows really since data goes all the way back. And that really speaks. This idea of this rush towards getting your hands on commodities before some of these sanctions perhaps hit energy markets or energy payments or even commodity payments broadly. We haven't gotten there yet. But one of the concerns when it comes to commodity market is get your hands on it while you can. And while the supply is there especially at a time when demand is voracious honestly coming off of really hit kind of demand off the pandemic. Great work. Great reporting as always from critic Gupta. Thank you Kitty. Coming up Dale Buckner CEO of Global Guardian. This is balance of power on Bloomberg TV and radio. This balance of power on Bloomberg TV and radio. I'm Jill Matthew now keeping you up to date with news from around the world. We turn to first word Mark Crumpton Mark. Joe thank you. European foreign ministers met again today in Brussels. On the agenda is the war in Ukraine. U.S. Secretary of State Anthony Blinken says Washington is committed to doing everything it can to stop the war. Unprovoked unjustified and a war that is having horrific horrific consequences for real people for mothers fathers children. We see the images on on TV. And it has to stop. And the United Nations Security Council is holding an emergency meeting today. Ukrainian President Vladimir Zelinsky is urging Europe to quote wake up and quote. He issued a video message this morning after Ukrainian and Russian forces occupied the site of the largest nuclear power plant in Europe. Yes it would have been more if there is an explosion. That's the end for everyone. The end for Europe. The evacuation of Europe. Only urgent action by Europe can stop. The Russian troops do not allow the death of Europe from a catastrophe at a nuclear power station. The head of Ukraine's nuclear operator has said the plant's reactors which are protected with thick metal and cement shells are designed to withstand the force of an aircraft crash. Former President Bill Clinton plans to convene his signature gathering for business government and philanthropic leaders in New York this September. That's according to a letter sent to supporters. The Clinton Global Initiative hosted annual meetings from 2005 to 2016. Overall fundraising for the Clinton Foundation has dropped since Hillary Clinton's loss to Donald Trump. Global news 24 hours a day on air and on Bloomberg Quicktake powered by more than twenty seven hundred journalists and analysts in over 120 countries. I'm Mark Crumpton. This is Bloomberg. Mark thank you. For more on Ukraine we go now to Dale Buckner the CEO of Global Guardian a private security firm with clients in Ukraine right now. Dale thank you for being with us. As we just heard from Mark NATO foreign ministers meeting in Brussels condemning what Ukraine describes as an assault on a nuclear facility in southeastern Ukraine. It's actually the largest atomic generator in Europe. We don't know what Russia was intending here if that was part of the plan if it was hit accidentally. But they say that at this point radiation levels at the site are normal. But how dangerous is this situation. So Joe it's dangerous. It's an indication that the Russian military has always had two major problems. The first is command and control of its forces. You see that today where the synchronization of the Navy the Air Force and the ground forces is not great. You're seeing that they're stalled and this is a symptom where you have potentially an accident where there is a misfire into a an area that clearly should not be a target. And I think that's where you have these kinds of risks with a military that is not capable of synchronizing itself and coordinating. So these kinds of accidents don't happen. You have private security forces in Ukraine in country right now. Dale what are they telling you. Sarah I think obviously you're seeing in real time in open source the encroachment from the north the east and now the south. We're being told from the teams on the ground. Simple example we have a headquarters in Odessa. They've now been bombed three days in a row. There are naval forces postured. We don't know if that's a faint or it's real but we're moving our headquarters because it is visceral. It's more violent and things are tightening. And we have to be prepared to move as these Russian forces come in from three different sites. What is involved in moving your headquarters right now. Dahlan And where do you move it to. That would be considered safe. Yeah. So as you look at the country and I know the maps are up every day and I'm already seeing it online. The central corridor of the country. Still there's complete freedom of maneuver. There's not a lot of bombing. There's no troops. There's no tanks. So as you look at that as we watch this unfold in real time our current assumption is that the Russian military is not large enough. It's not powerful enough. And even if they take leave and the capital and expand the Donbas there in the east they expand up from the south out of Crimea. They're they're not capable of controlling the central to western side of the country. They just don't have enough forces. That could change though. Dale as we see this column of tanks coming from the north and to your point we could see amphibious troops landing on the coast of the Black Sea at any time near a place like Odessa. If Russia completes the encirclement of Ukraine and begins to tighten the noose you're stuck in the middle to a degree. I would just simply say as you look at what happened in Iraq and Afghanistan with both U.S. and NATO forces we never you know I served in Iraq and Afghanistan. We never control either country completely. It's an impossible task. EGAN Even during the surge of 2006 to 2008 in Iraq where we had our highest troop levels of teetering past two hundred thousand with contractors we still can only control maybe 35 or 40 percent of the country. I think the Russian space the exact same problems that we did in both of those conflicts. What do you see in the near term here. Dale I know it's difficult to tell how this all comes to an end but if Russia begins to drop bombs or worse maybe move tanks into the city of kief if the capital falls then what. What are the next couple of days look like. So the first the easy answer here is if key falls. Putin will put in friendly government. He'll declare victory. They'll expand from Crimea in the south or expand in the Donbas to the east. No expand from the north. But again I think as this plays out he'll now you know it's the adage you broke it you now own it. Yeah I think that applies here. And I think that with what you're seeing with the level of nationalism and the level of pushback from the Ukrainian forces and population in general that you'll quickly see there's going to be an insurgency. And we've seen this in our recent history. Insurgencies are costly from a perspective of personnel and equipment and insurgencies are incredibly expensive neither of which Putin in Russia can afford in the short term. Can he take Kiev if Putin decides he wants it. He has a large enough force with enough equipment. I do not believe the Ukrainian can stop them. But I think ultimately you have a follow on problem in the long term. Well you mentioned you served in Iraq sir. Does this start to sound like Fallujah with street to street house to house fighting in caves. Should Russia take over the capital. It does. And you're already seeing just the increasing level of violence and bombing in the non precision of what we're starting to see. We're in the initial five days there. The target sets we're focused on government targets. Now that's changing and that's where this gets very dangerous for the population and anyone operating in it. How concerned are you about this spilling over the border. We have thousands of troops daily as you know on the border of Poland for instance in other Eastern European allies to stand in a defensive posture. But sometimes these conflicts can be difficult to contain. So I would start with I don't believe Russia or Putin want to spill over into Poland Romania or any of the other Hungary Slovakia any of those countries. That being said I'll go back to my original point that the number one weakness in the Russian military is its ability to command and control. Its number two greatest weakness is its inability to supply itself. In both cases this is where you have incredible risk where if there is a unit that gets a Miss Courtney it doesn't quite know where it's at or they fired artillery around an errant round. And now we cross a border. That's the danger. So do I think that's their intent. I don't I don't think anyone wants to start World War 3. Yeah. The issue is all it takes is one and you know one mistake from an individual or a system. And now we're facing potentially world wars. Yeah it's a terrifying thought to consider that a mistake. Things are so delicate right now. A mistake could trigger a third world war. Dale what would it take for you to have to evacuate your security team from Ukraine. Yeah I think we will monitor every day what's happening. I think the trigger for us is if we get we do get a sense that if some of the Russian troops withdraw. If we see that and there is a sense that there is truly an escalation potentially if something nuke your even if it's just a tactical nuke that is hard to keep. We get that sense that that probability is real. What makes you say that. What makes me say what makes you think that this talk of a nuclear blast is something that Vladimir Putin is actually planning or capable of. I don't think he's planning it. I'll be clear. I think it's in the realm of possible. And this has entered the conversation in the last few days because he's forecasting it as is his defense minister. I don't think they're planning it. I don't think that is their intent. I think if this went so horribly and Putin felt that he was now caged that in order to save face because he cannot lose and most Americans and Westerners can't quite grasp this mentality. But he has to be able to claim victory here in order to stay in power. That if that was the only option left. Do I think he would never say yes to that. I don't I think he would consider it to think we're having this conversation today. Our thanks to Dale Buckner. Dale thank you for your expertise. Coming up former U.S. Treasury Secretary Larry Summers on the effectiveness of the sanctions on Ukraine. Will has his view next. This is balance of power on Bloomberg TV and radio. This is balance of power on Bloomberg TV and radio. I'm Joe Matthew. As the Russian invasion of Ukraine enters now its ninth day nearby countries are raising concerns about Vladimir Putin's behavior and what his next move might be in the region. We're joined now by Salameh Zehra peacefully the president of the Republic of Georgia. Madam President thank you so much for being with us today on Bloomberg. We wanted to speak with you because you have a unique view here of what's going on in this war. You know what it's like to be targeted by Vladimir Putin by way of separatist regions. You had a front row seat to Russia's invasion of Georgia in 2008. Will Vladimir Putin continue this aggression. Do you believe until he achieves regime change in Ukraine. Well unfortunately I'm not or fortunately I'm not in Vladimir Putin's mind to know when and where he will stop. Sure. I have the double experience in my life for the 2008 war with Russia that you mention which ended with the two regions 20 percent of Georgia's territory being occupied by Russia. I had also another experience in 2005 of negotiating with Russia and the withdrawal of Russian military bases. Yes. Through negotiations. So everything can happen in this world where nothing is predictable. I think what is important is to support Ukraine today which is really showing an exemplary resistance to these extremely unjust war. And that's what is something to be remembered that it is unjust. And it was just today and just a few minutes ago when on a front of the parliament where thousands of Georgians were gathered the president Zaleski addressed the Georgian people together with a few other capitals of Europe. And I addressed to my people right after that to saying that we need to support Ukraine because that's at ISE. The value is that Georgia has been defending freedom and independence. And I think that those are the values that do hold democratic word that it has been defending and should be defended. We don't own means that we are not lawyers. We are not those that are destroying countries. And we the democratic countries that are those that are defending freedom is a pretty hands. But we see very strong determination within ourselves against what Ukraine is Shery Ahn. Are you concerned about this spilling over into Georgia. Madam President our listeners and viewers should know that you're right on the Black Sea where Russia has warships and has in fact been staging some attacks against the south of Ukraine. And you share a long border with Russia. What is the risk of a more broad regional conflict. You know we have been occupied in 2008. We have been at war with Russia right after independence. Nineteen ninety one nineteen ninety two we have been occupied in nineteen twenty one. Our kingdom has been annexed by Russia in 18 0 1. So we have all reasons to be wary. But we also have all the reasons to be confident that Georgia's resistance and Georgia's strong belief in independence and freedom is something that is stronger than these attacks on independent states. And I think that the sanctions that the European Union and the United States have decided are very united and firm way are they to show to Russia and to Russian people because they exist. We sometimes forget that they exist. He's going to show to them that you cannot do anything anytime as you want to ask you about my impression. Membership in the European Union. Madam President forgive me for interrupting you. You said the EU should welcome your country Ukraine and Moldova. How would that improve your security. I won't necessarily improve the security at least at first but those are our values. This is our family and this is a place where we should be for all kinds of reasons because we share with the peoples of Europe our past our civilization our Christian civilization and our future. So a security will be ensured because nobody would dare to confront this. Now I think strong Europe is stronger and stronger and I think a new Europe has been emerging. These last days. Which was probably not in the plans of Vladimir Putin but a Europe that he will have to counter. Yes you are. That is not talking with arms which is talking with economy was development with prosperity with the democratic values of human rights. And that's something that he will have to reckon with one day or the other. Well as you look west Poland and other countries that border Ukraine are seeing massive influx of refugees from Ukraine hundreds of thousands of them. Madam President I understand you're also seeing thousands of Russians cross the border into your country. Why are they going there. And does that present a security challenge. I don't think that there are security challenges that you don't agree with that vision. I think that the Russians that cross the border to come to Georgia and that from those that are satisfied with. The image that they get from their own government today and that probably are more attracted to a neighboring country which by the way has always been a very tolerant country. That was one of the main values of our history. So if they come with peaceful intentions and not some distant intentions they will be welcome because I think that if I was a Russian today I would be very proud and I would not maybe want to continue living in Russia. Understood. So they are welcome in the Republic of Georgia. Our thanks to President Stella Mazer obese really for being with us. Madam President thank you for your insights today on Bloomberg. Coming up former U.S. treasury secretary as we mentioned Larry Summers talking sanctions. We'll have that next. On balance of power. Bloomberg TV and radio. Sanctions from the US and European countries have hit Russia hard. Former Treasury Secretary Larry Summers shared his thoughts. I think they're taking constructive and appropriate steps. I think they've done more damage to the Russian economy more quickly than most people would have expected. You've got pervasive bank run type phenomena going on in Russia. So they're delivering a real jolt to the Russian economy and they're delivering a real jolt especially to those close to President Putin. What that's going to mean for the orders President Putin is giving is anyone's guess that we would see the kind of attacks on nuclear power plants. Risking a church overall style meltdown that we've seen over the last 24 hours is shocking. And I don't think anybody can be certain what is in President Putin's mind and that makes this such a dangerous situation. But I think we have to be proud of the way the United States has been able to mobilize an alliance across Europe indeed in alliance across the world to respond to this situation more quickly and more vigorously and with more unity than almost anyone would have expected. And that's the response now coming out of the U.S. Of course this does make the job a little bit harder for Jerome Powell and the policymakers at the Federal Reserve. We heard from Jerome Powell this week on Capitol Hill. He did basically say that they're keeping an eye on the situation in Ukraine. But at least in his words he doesn't think that that's going to derail the playbook that the Fed has already laid out. Do you anticipate that. Look I'm not going to speak for the Federal Reserve. I think the Fed had a very hard problem because it was behind the curve on inflation beforehand and now this major adverse supply shock in the form of higher oil higher commodity prices generally which by the way should not be blamed on what we are doing. It should be blamed on what President Putin is doing. That's going to make the task of engineering a soft landing that much more difficult for the American economy. So I think the employment risks and the inflation risks are very grave right right now. And it's going to be a very delicate task of policy to try to contain inflation while maintaining stable economic growth. That was Larry Summers. This is.

No schedule data available.

Balance of Power Full Show (03/04/2022)

On Balance of Power, Cecilia Rouse, Council of Economic Advisers Chairman and Dale Buckner, Global Guardian CEO on the U.S. jobs report and Republic of Georgia President Salome Zourabichvili, discusses war in Ukraine and how it influences Georgia and the region. (Source: Bloomberg)

Bloomberg Technology
The only daily news program focused exclusively on technology, innovation and the future of business from San Francisco. Hosted by Emily Chang.
More episodes and clips