 Good morning everyone. Thanks so much for joining us this morning. We are thrilled to see you once again in Davos. Welcome to this morning's panel. Hosted by the Fox Business Network, I'm Maria Bartiromo and we gather here today to talk about global markets in a fractured world. And of course we are living in a fractured world with major changes happening throughout the Middle East, Africa, Europe, the United States, Latin America. When you consider the changes taking place specifically in the Middle East as we speak from a correction crackdown in Saudi Arabia to an uprising of the people in Iran and to terrorists around now on the run. In Europe we are awaiting Brexit and the solutions and conclusions there. We are watching new leadership in places like France as well as throughout Europe as well as in the coming years and months in Latin America. And of course the United States and what new leadership means for trade, for unity across the world. We have changes in government regulation and the major impact that it is having on business as well as individuals everywhere. The uncertainty abounds and yet we are here watching global markets continue to rise at levels never seen before. It's pretty incredible. In the US the Dow Jones industrial average has hit some 80 new highs over the last year. And for the first time in a long time we are seeing synchronized global growth with expectations of 4% growth now for 2018. In Europe we are seeing growth, 2%, the emerging markets also watching for growth. So what will 2018 bring in the face of all of this? Let me welcome our distinguished panel, some of the leading voices in business across the world. Joining us right now is Adina Friedman, she is the CEO of NASDAQ, the chairman, founder and CEO of the Blackstone Group, Steve Schwarzman. Brian Moynihan, the CEO of Bank of America, Tijane Tijan, the CEO of Credit Suisse, Tijan Tiam, I'm sorry Tijans. And the CEO of Deutsche Post, Frank Appel, joining us. Great to see everybody, thank you so much for joining us. Steve, let me kick it off with you. Can you explain that, what's happening in the world today and why global markets seem to ignore some of these really big issues like North Korea and uncertainty throughout Asia as well? Well, it's a time of enormous abolience and effect, part of which is created by really good economic growth and markets have responded and people mostly look at markets. For those of us who live in the real world, the real world is doing really quite well and so people sort of surprisingly have assumed there's like no risk out there. And that's because they're looking through the lens of economics and from the perspective of just the way the world's supposed to play out. If the central banks don't raise interest rates too fast, which they won't because they're not looking to create an economic slowdown because inflation is pretty low. All these people are right. The only problem is there are these other lurking geopolitical risks all over the place and sort of tribalism and all kinds of things that nobody wants to miss the party, if you will. Because the party is really so good, they're serving wonderful food and drink and, you know, you're making money and it's not real hard work. But there will come a reckoning at some point when some of these other problems aren't fully contained. So I think that's what's going on. But what we want to really identify are some of the risks out there that we should be watching. Brian Moynihan, let's talk about what it is out there that could be lurking that could change this otherwise feel good story in terms of economic growth globally. As Steve said, you have a very constructive economic backdrop. Everybody predicts world growth to grow year over year. Everybody predicts, especially the United States, to grow at a faster pace with some of the things that have gone on with tax reform and regulatory reform. So that construct is good. And then the real question is what's going to stop the consumers in Europe and the United States and other markets from spending? And their confidence is up. The unemployment levels are touching 4% in the U.S. and are 20, 30, 40 year lows around the world in various places. And so that's really what's going to drive it. And so one is a consumer going to quit spending when they're worried about having a job and getting paid. And you don't see that right now, but it gets down to the question of when their employers or when they feel their employers are going to take a different approach. And that's going to be when you see some of those afraid of things that you talked about earlier, something break the wrong way. And right now the market shrugged off the ones that break the wrong way. What's the government shutdown, whether it's potential conflict in various parts? The markets have shrugged it off, but at some point the markets may withdraw and stop shrugging it off. And that's what we're worried about. When you think about central banks, they have no desire, as Steve said, to do anything to slow this down in a way that would be inappropriate. So I think you should expect that they'll be very accommodative far into next year. We've got headlines this morning where we're going to see new tariffs on washing machine imports into the United States as well as solar panels. We want to wait to see what the response is from China. But I know trade and interest rates and inflation are among the worries. Tijin, take us to Europe. I know you've been watching and studying and working in Europe for some time, for the first time in a long time. We're talking about growth in Europe right now. How would you characterize the situation there? I think it's one of the key changes that have happened recently. You've got the world economy. The power and the strength of the US economy are well known. That's not new. The China story is not new. I think the change in 17 and 18 has been the change in Europe with France coming back. I think we'll have President Macron here. I've always said France is the battleground of reform in Europe. Germany, again, is not new. It's a very powerful economy. The way it's done well will do well. It doesn't have a government. It hasn't had one for four months. Nobody seems to notice or care. So France is really the place where things are happening. The labor reforms there are very positive. All that backdrop is very positive. We've all worried about trade recently because in the last two or three years trade grew more slowly than GDP, which was very worrying. The good news in 17 is that again trade started growing faster than GDP. This new decision on solar panels and washing machines is a first move. We need to see how it impacts global trade, how other trading blocks react to that. I remain optimistic. I think we are in an exceptionally favorable context that we haven't had in the IMF in seven years. I think it's more than that where you have the U.S. As you said in your introduction, it's a synchronous growth with the U.S. doing well, China doing well, Europe doing well. I think the French... I just met the governor of France recently. France has kept upgrading its 2017 GDP growth expectations. It's 1.7 now at 1.9 percent. And consumer confidence to your point is very strong, which is really driving growth. It's a very, very positive backdrop. Yeah, it seems all very positive. Adina, let's talk about what you're seeing out there. Obviously, you're talking with a global population listing at NASDAQ. How do you see it? Well, there is definitely a pent up demand for companies that are looking to go public. And I think that the last couple of years have been disappointing in terms of seeing companies actually take to the public markets. I did see a nice pick up in the latter half of 2017. And right now we have a very nice pipeline of companies looking to tap the public markets in 2018. And I think it's actually very global in nature in terms of the types of companies that are coming to market. And whether they're coming to the U.S. or they're coming to other major market centers, I think that you're seeing companies that feel that they're ready. They're mature enough. The backdrop, the economic backdrop is strong enough. And the market itself is receptive to coming in and taking the risk on a public company. So we see it, we think that 2018 should shape up to be a very good year. But of course it all is dependent on this backdrop remaining benign and remaining inviting to these companies. So would trade and expectations of, I don't want to go as far as a trade war, but upsets between countries be enough to derail what we're talking about right now? I think that certainly you have to look at, at the end of the day, investors are looking at the fundamentals of a company itself. So they're saying, what could disrupt the ability for this company to grow and expand its business? And to the extent that the company is dependent on some level of trade as part of that, then obviously that could become a negative that the investors would look at. But the fact is that the investors do look at the fundamentals of the company against an overall backdrop in the economy. So they are able to discern between just a general maybe trade issue in a sector that has nothing to do with the company versus one that could impact the company. And of course inflation and interest rates are key to the story as well. So we'll get back to that. But Frank Cappella jump in here because you're looking at the world obviously through a logistics standpoint. What do you see? We should not worry too much about protectionism because there's a lot of saying for now so long. I have been in Davos more than 10 years and every time it came up, every time we felt the next year would be very difficult and politics are so important, we should put it in perspective. In 2009 we felt the world would collapse, we will never see a recovery, what happened, sharp recovery. Then we had the austerity and the euro might collapse, it didn't happen. So even these problems are nothing in comparison to what the world has seen in the last century with two global wars or world wars. So the world is in better shape. If you go to the economists and look into the statistics for last pages, this is the only case, I can remember that you see only one minus and beyond that only pluses. So that is what happening. And if you do tariffs in place who pays are the citizens of the country who puts the tariffs in place because they have to pay more for the products. And you protect a couple of employees. The only way out of that is to make your country more competitive. And my home country is a very good example. We lost country in Europe 15 years ago and now it's a powerhouse in Europe. And why? Because we did the right reforms to make the country more competitive. So I think this is just noise on the horizon. And even if the US does more protectionism, consumers will buy from different places and who pays the bill are the employees in the US finally. Interesting. Building on that, you make me feel old too. I came here the first time in 1996. And I was in a, how can I call it, a basement somewhere for discussion on Africa. And there was Jacques Attali and, sorry, Soros and I think Bill Gates and myself and I think we were four in the basement talking about Africa for an hour. I'm going somewhere with that. If you look at what's happened in the world since then and we were dreaming of spreading education in Africa, the effort for universal education that has taken place in so many emerging markets has transformed 20 years later today. You're facing a completely different situation. Take China-Africa trade. In 15 years it's gone from zero to 200 billion dollars. 200 billion dollars, as I know, US-China exports are 350. So 200 starts to become material and is growing at 15% per annum. So I think what people miss often is just the spread of prosperity, the impact of education, people being able to seize opportunity and just the extension in scale and in size of the world economy and the market economy is producing very positive effects. I'm surprised sometimes by how surprised people are. Look at global wealth. Take financial assets of people with more than one million dollars from 06. So it takes a point before the crisis, not to distort the analysis. From 06 to 16 they've grown by 26 trillion dollars. 26 trillion dollars from 06, 17 in emerging markets, nine in developed economies. And that 17 and that nine is important. And the 17 is growing faster and faster. So all that is driving the economy forward, I think. Interesting. Steve, same question for you about this trade issue and whether or not this could be seen as the start of something bigger and potentially derail all of the good news that Tijin just laid out. Well, there are a variety of trade issues around the world. The U.S. is involved with a number of them, whether it's NAFTA or China. There needs a new agreement with Europe. The U.S. is sort of action central for a lot of this. And there's also the U.A. that's got to remake all of its relationships. No small task, actually. So part of these issues come from imbalances. Some of the imbalances are somewhat structural the way things are fashioned at the moment. So, for example, China, U.S. has a really very substantial trade deficit. Trade deficit on the U.S. side. And it's $350 billion, $400 billion. So why does that happen? It happens really for a variety of reasons. But China's tariffs and taxes are about 27% compared to bringing goods into the United States from China at nine. So if you're three times higher, there's not going to be as much stuff brought in, logic would say, and that's where it stands. So that relationship over time is going to have to be changed. And that would be appropriate. China's grown up behind a tariff wall, which the United States did in the 19th century. This is how emerging countries make their way. And the only question is how long will that continue? And I think that's why you're seeing some of the tariff actions. I think the Chinese are very smart and they're aware of that. And so I'm optimistic that over the intermediate term, that issue will be addressed. NAFTA is a different thing. It's much more immediate and colorful. And there's a way of making a good NAFTA deal. If you don't do that, there'll primarily be dislocations in Mexico, which could have really adverse political impact, which would be bad for the United States, which would be bad for Mexico. And the Canadians were pretty close to even either way. And they have a trade agreement in place already that they could fall back on. So would it bring the world down? No. Would it make life uncomfortable in a variety of industries? Yes. We have to get to that place, not necessarily. So I think it's one of those stay tuned and let's see what happens. And hopefully we can negotiate our way through some of those imbalances. So is it fair to say this year we'll likely see some of these things come to a head? I mean, given that NAFTA negotiations are to begin in the next week or two, and we'll see something in terms of Mexico's response, Canada's response, as well as perhaps a response from China on the solar panel import tariffs, will this be coming to a head this year? Well, NAFTA clearly will come to a head this year, absolutely. As to China, I think it's a process. I think the Chinese typically tend to be pretty measured. There's all kinds of complexity going on with China vis-a-vis North Korea, which is sort of the main event, if you will, I think, geopolitically. I mean, if anything goes wrong, you know, the U.S. has announced they don't see the possibility of having North Korea have a ballistic missile capability that could hit the United States with a functioning nuclear warhead on top of it. I mean, the U.S. has said that numerous times. No one apparently is listening in the financial markets, because I think they think it just won't happen. If that does happen, you would have, I think, financial markets at much different levels, and that doesn't mean up. So, you know, there's real stuff out there that's worthy of concern, I think. And those are the big risks. It's not the normal things. People talk about it, Davos, which are economic issues. I think the world's in a good place economically about as good as it could be, pretty much. So all the discussions that focus on that are, I think, not particularly useful. It's these other issues that if you were underwriting risk, that's where you'd be spending your time not worrying about what a central bank is going to do to mismanage its affairs. Brian. So if you think about what Frank and Tim and Steve just talked about, you're talking about the inherent tension in the sense that the country looking its own citizens in lower-cost goods and lower-cost capabilities and employment levels. And, you know, I think 18 is going to be a little bit about the United States trying to make itself a bit more competitive from a tax rate, regulatory parameters that already had a good workforce, had substantial energy resources. And so as that changes, that dynamic is going to reverberate a little bit in the world. And so there's an attitude about, you know, that you hear from the administration about free trade, all has to be fair trade, but that has to settle back to a real question, which is how do you get those imbalances straightened out a little bit. But on the other hand, the struggle is, with this level of unemployment in the United States, the reality of bringing a lot of jobs back is difficult. When you talk to our clients and customers out there, the difficulty finding currently trained capable workers and not having population growth are two critical issues we face in our country. And so, and by the way, that's not wholly unique to us. Many major developed societies have the same issue. And so, as wonderful as Africa, the development of that, you have the equal offset of the developed countries having population declines or stagnation and also the talent of workforce is deployed. It's not that they don't have it. It's all deployed. So I think you're going to see as the United States sort of resettles the competitiveness, there'll be reverberations in the market. Even if you don't get to a geopolitical conflict, it'll be interesting to watch short out. And I think the market discounts it on the theory that it all works. But if you think about large global companies, they can go anywhere, and they're going to be looking for places to go. As I heard just last night from at a dinner with a bunch of people from outside the United States, I think the United States is now the thing to talk about for the next 12 to 18, 24 months in terms of manufacturing facilities and capabilities and selling, which isn't a trade question, which is a local manufacturing. So the local demand question. So this will be an interesting play that the United States tax rates much more competitive than other things. So they think that manufacturing in the U.S. is what is going to be interesting and exciting and growth. Because you have a consumption rate that's picking up. You have an employment rate that's full plus and going beyond. We have it going to 3.7 by year on 18. And you have an economic growth, which is increasing much faster than the economy is so big. You add all that together and you say, if I can make a thing, why don't I go there and make it as energy, talent, resources, and a regulatory pendulum swinging back. That'll be an interesting dynamic for a while. It's interesting because it dovetails on immigration as well. You have enough people to do the work. Right. Where are the people to do the work with this low unemployment? Let's talk policy coming out of the U.S. for a moment and the implications. We talked about trade and obviously that dovetails on immigration as well with regard to job creation. But tax policy, Adina, what has been the impact so far of the U.S. administration's changes in tax law? Well, I do think that you can see the markets have reacted very quickly and frankly they really were previewing it before the tax law came into effect. But certainly the impact on companies is very positive for the most part. That means that they hopefully will use that money to both provide benefits to the shareholders as well as invest in their businesses, which would then drive more interest and demand for employment, which then kind of creates that cycle again of where do you find the people? How do you make sure that you are able to attract the right talent? But it is definitely a growth driver for the United States and it's making it so that when you are looking to do business around the world, the United States doesn't get disadvantaged by having a much higher tax rate. So global companies look to come to the United States or the U.S. companies don't have to necessarily do unnatural things to take their business outside the United States because they now can kind of live in a tax policy world that's pretty, I would say even across most of the developed markets. So I actually see it as a way to kind of drive more natural behavior of a global economy, with the U.S. being highly competitive and highly, I would say, very, very attractive as a destination for business. Yeah, I want to see if there's an impact across the world. Steve, you're dealing with businesses across the world. Have you seen an impact, a trigger, as a result of the tax law in the United States, where you're seeing changes in terms of investment globally? Yeah, everyone on this panel travels around a lot. Of course. It's like a life sentence that we all have. We get to hear a lot about what's going on. And as Adina indicated, there are going to be a lot of flows into the United States. And I think this has been an underestimated to forgotten aspect of the tax reform. Certainly, as you listen to the U.S. commentators, that there are companies all around the world who are looking at the U.S. now and saying this is the place to be in the developed world. And just for all the reasons that Brian mentioned, lower taxes and reversing of regulation and workforce that's educated. And so I go to places where people in non-U.S. companies say, geez, we're going to increase our employment there. We're going to move more things there. Why? Because we're going to be able to sell more things and it's a much more hospitable environment than it used to be. That aspect of things can be a real supplement to what regular economists think is going to happen. Leave aside bringing cash back and those types of things that people talk about. Non-U.S. people view this as really a very, very big deal. Look at what China did. Like I guess it was a week or two after the tax reform was passed, they made certain types of activities from U.S. companies tax-free in China. So if they wouldn't bring the money back to the U.S., that's a major country speaking very quickly. And European governments are talking about this. And we really have a wonderful thing that was created here that's been kept virtually a total secret from economists and the media. I think we're going to find a very positive surprise. So you've seen evidence that people are changing investment plans and actually moving into the U.S. because of the change in tax law. What I'm saying is they're talking about it. I don't know if they've changed their plans. What is it a month? But I'm saying I expect this to happen because when people start talking openly in a casual way about that in many different venues where I am, not conferences but like real places. And we're sitting with people and they say we're going to do more things in the United States now. This is unprompted. I'm not asking them. I'm not an interviewer. That's a great point. I'd like to second that very much. I mean, certainly as a bank we see it. In the dialogue we have, we see it. We've absolutely seen a step up in the interest. We just announced last week something we advised on which is Ferrero both the chocolate business of Nestle, the U.S. chocolate business of Nestle, 2.8 billion dollars. And there's a whole pipeline of similar transactions building. So to your point, Steve, it's not just... I mean, in the real world that's really happening. We can see a lot of evidence of it. I think it's also good news because reflecting back on Europe and what you said, Brian, on the politics of all this, it's been very hard for Europe in the last 10 years because the demography is very challenging as we know a lot of the pension systems are unbalanced and it generated a lot of angst among, let's call it 35 to 55 in Europe. We see a future where pensions are at risk. Their children cannot buy a house because they cannot fund the initial investment to buy a house. Unemployment remaining quite high and that has produced quite a challenging political mix which has translated into the rise of a certain type of populism, etc. So the return to growth, the decrease of unemployment in Europe I think can very much be helped by structural reforms as we see in France, but also by an increase in external demand which the US is providing at the right time because I also think that we were... QE had run its course, the provision of extra liquidity to the system which drove growth post the global financial crisis had run its course and we needed a new leg to world growth and I think, I don't know if it's luck or skill but certainly the tax reform in the US has been exactly what we needed, something in the real economy, fundamental to happen at this point in time to give a new impetus to world growth. So I do believe that the positive impacts of that are underestimated. May let me jump in there here because these tax reform it's probably more positive for the world but these measures have limited short-term impact. I think we have... Government should look like companies have to do the fundamentals. So it's about infrastructure of the country, it's about education of the people in the country, it's about free trade, it's about balanced budget. We can't burn the money for the future so if a tax reform leads to higher budget deficits it might be good for the next 12 months but there will be a bill later on and then you have to balance that again. So I think that is... I'm a chemist from education, I always puzzle to say I'm looking for fundamentals, what the world needs, every country needs is productivity gains. If you don't increase productivity you will never be successful on the lower and productivity comes from better education of the people, better infrastructure, competitive pressure that means open borders and that's the recipe and you see that in Singapore. Singapore has nothing. They were in the mud 50 years ago, they invested in infrastructure, they invested in education, they are the most open market except Netherlands in the world and the success is there and that's the recipe for success and all these short-term orientation, let's reduce tax rates and this is... actually you can't reduce tax rate if you have huge deficits. Bring your balance first back to, the budget back to the balance and then you can think about tax reductions. That's my belief because you need the money to invest in education and infrastructure of the country. That's my belief so the tax reform in the US will be good short-term because it creates more purchase power and whatever but it doesn't fix the fundamental problem. You just neglected the fact that the US is a completely different economy is what we call... it's in a unique position which is that the rest of the world is willing to finance its deficits and that makes it very different from Germany or any other normal country. The rest of the world is very happy with the US deficit as we see China doing US Treasury market. The way you think about economics if you run the US economy is different from the traditional model of... I hope that you're right so we will see. It's been the case so far look at the US Treasury auctions every week. So it sounds like you're not so positive on this tax plan though because it's a short-term sugar high. I think so. But he's bringing up the structural question of debts and you have it across the world serious issues I agree with Frank we've got to deal with. The question is it comes back to your belief the private sector versus the public sector in terms of reallocating the resources and putting the work is inherently the question which is do you have governments have shifted too much in the public sector therefore they become the only source infrastructure they become the only source of education and what you're seeing corporate world and this is not a US phenomenon around the world is realizing that corporations obviously what Klaus has been driving here for years and years and years corporations have to take on more of the burden whether it's environmental, whether it's training whether it's repurposing assets whether it's development work you pick your answer and that's what we're driving that's the sustainable development goals that's what we do in our company so incumbent upon reducing the governmental burden of taxation on corporations is equal and opposite burden to actually drive some of the initiatives for infrastructure there's a ton of money it takes some structural reform on governments to make it come to bear there's a ton of money for environmental work we have our $25 billion program we're halfway through in four years it's going out the door but the government's got to be a role in activating that money as opposed to it's going to fund all those projects and I think there's some potential to get these budgets back in line which is second to none if we talk about the intellectual capital and the ability to innovate and create new wealth it is absolutely the most best performing system in the world and that is an additional factor added to the traditional ones who could foresee Facebook 15 years ago and I've seen a study recently that shows that for every job destroyed by technology there's now 2.4 jobs created in the medium term from 5 to 10 years not in the short term but in the medium term and that dynamic is something that I think if you're reasoning a static rather than a dynamic way it's easy to get wrong because that additional growth later is what's going to pay the taxes to balance your budget if you're in a static model where you're trying to budget and balance a budget in a given year I think you don't make these types of reforms which are actually I think indispensable emphasizes the starting point whether you should decrease taxes or not depends on your starting point if you take France which has a 57.5% the size of a public sector is 57.5% of GDP well there is room there to decrease tax although there is a budget deficit and if you take a negative approach with such a bad starting point of trying to balance the budget you'll never get there I would say only time will tell but if you assume that you kind of create a more competitive tax model within the United States as compared to the rest of the world so that more business comes to the United States that then drives even more employment that then drives more of a motivation to train employees and to get more production up that then drives more revenue which then obviously over time could address some of the budget issues and I agree on the private I would call private public infrastructure spending I think we do need to find much more creative ways to manage infrastructure and to try to improve our infrastructure in the United States with a lot of money ready to be put to work if it can be done efficiently the issue is the efficiency in the system or in infrastructure as opposed to the demand to get things done so I personally like this the tax policy because I think it creates a much more competitive dynamic you mentioned all the other things so we have great educated people we have a great system, we definitely need improvement in infrastructure but we have a great model to start with and if we can create a very competitive tax model globally that should drive more business into the United States and that's kind of I think the whole theory what I meant is just what a single measure doesn't help you have to do all the other things as well that's a problem and if that happens we will see exactly and time will tell because we have a lot of inefficiencies we have to take care of and there's no doubt about it I want to ask you about infrastructure in a second I'm sorry teacher it's all over time never to bet against the U.S. economy it's not been a winning strategy the thing is that what this is against a backdrop it's not against a backdrop of 2010 or 2009 or 2008 where you're trying to reset and get something going to the point that Frank was mentioning earlier it's against a backdrop of consumer spending just in our group of consumers the increase in the year of the year is $125 billion of spending and so those are just a bank America's customers so there's a lot of the other there's a substantial part of America out there that we can still get so you think about that that's the backdrop a low unemployment rate so there are some inflationary risks out there as Steve mentioned earlier there are some other issues which could reverberate off this but it's against a solid backdrop both on a worldwide level as you said in your opening in the United States and the U.S. consumer economy is 60 odd percent, 70 almost percent and that is a big economy on its own and if that's growing at that rate and the people are spending and employed that helps all these other countries and you really can't have a trade war because demand's going to be so much the U.S. can't fulfill the demand so whether it's automobiles whether it's TVs, whatever it is the U.S. consumer knows how to spend and you don't have to teach them to do that I want to ask you Frank and T. Jane about European policies because we talked a bit about U.S. policy but let's close the loop here Steve do you think an infrastructure change an infrastructure plan to be among this administration's next big policies? Well if you take the chaos that's sort of enveloped the U.S. legislative process over the last week or two and probably we'll go forward for the next three to four weeks and move that aside next up is infrastructure U.S. has a $2 trillion minimum infrastructure deficit that's a big number and requires a lot of work infrastructure breaks into two pieces the first are the approval processes where the U.S. is about as bad as any country in the world it takes us somewhere between 10 and 15 years to approve a project you know sometimes it's faster but usually it's it's not because we have so many jurisdictions no one in charge of anything legal suits all along the way and compare this with countries like Germany and Canada nobody talks about the G7 but these are G7 countries and they managed to approve things in two years how is it possible that they have a good environment and they approve projects in two years and we take 10 to 15 how is it possible? it's possible because well-meaning people over a period of 20 years 25 years have added so many different approvals to protect the environment and other things that these regulations and laws are not integrated and they work against each other along with our system but real countries do this in two years and so the administration say what you want about Donald Trump he did spend his life building things you know look at this and just shake their head and say what in the world are we doing here and they happen to be right we're not achieving the country's objectives and everybody admits that so that's the first thing which is passing some laws to make things more efficient and also changing regulations that sort of can be done that'll improve processes the second thing is money you know in our country just to bring you up to date the democrats would like to have a trillion dollars of public money spent the republicans I think feel more or less they've sort of used a lot of their money and want to put up 200 billion dollars these are 10 year numbers in total so it's 20 billion dollars a year unfortunately that doesn't do much and but the republicans want to use the private sector with sort of what's called the Australian model now the Australian model is very very successful and what happened in Australia and other countries have used this in pieces is they have an earning asset you know call it a bridge call it an airport there are all kinds of earning assets and infrastructure and they sell that asset to the private sector and the private sector pays whatever they think it's worth which is a lot typically in a world of low interest rates the federal government in Australia adds a tip to encourage the local states municipalities to do this of about 15 percent so you got 115 percent of fair value for that asset but the federal government requires the local governments to reinvest that money to build new infrastructure because interest structure comes in two types the first type generates cash income the second type is just like a road in your community doesn't generate any direct income so somebody's got to in effect finance that and that's basically a government finances the asset that doesn't yield anything and the private sector can finance it and that's something that Republicans would really like to have happen the Democrats for some reason don't want that to happen I don't know why but in any case it's one of the few areas that both Republicans and Democrats want something to happen because they know the country needs it and if you do it it's also good for overall economic growth more importantly as Frank says you must have good infrastructure and our infrastructure has fallen I guess to different people rate it we used to be one or two in the world now we're down in the mid teens in education we were number one in the world 40 years ago we're number 27 so Frank's issues that he puts on the table as the underlying fundamentals of what makes a great economy longer term are absolutely right both have to be addressed Tijian did you want to add to that no infrastructure I can only agree I chaired them I was appointed by the French and the US government I chaired a high level panel on infrastructure for a year for the G20 and we produced a report and I it's a single best investment you can make Jin Likun was the representative of China now on the panel he now runs the Asia infrastructure bank and runs the roads and belt initiative and when you see what China has achieved driving actually if you look at the Chinese success Jin Likun was person who introduced the first tall roads in China but then the Chinese government used to finance all its initial infrastructure development and the initial growth of a special economic zone so I think the case for infrastructure doesn't need to be made the benefits are huge and in particularly developed economies it's one of the few things that can help pay those famous pensions it's you know you can match those long term liabilities that will have beyond 30 years with long term income producing assets which only infrastructure provides so I think it's the challenge as Steve described is always political it's really how you get the political system and the legal system in the country that you can drive infrastructure development fast and I think all the countries that have done it well, Germany or France or Canada or Australia share a common characteristic that it's relatively easy to design a project fund it get it off the ground and get it done so whilst taking into account environmental constraints et cetera so it's a and it's great jobs I mean it's really the only kind of economy can differ but just the positive creates jobs allows you to pay your pensions generates revenue for our central government and reduces your deficits and increasing the productivity of factors in the economy because people can move because you have energy to run your factories et cetera et cetera so it's it's always a topic of wonder to see why there is not more investment in infrastructure but it's it's vital what do you want to see out of European policymakers in terms of their response I mean or continuing or to accelerate growth that we've seen begin in Europe yeah I think Europe has done in certain dimensions pretty well with bringing budgets back on track and seeing our growth I think what Europe and I have said very very often Europe has to focus on their fundamental strengths in which is higher education level and make that region more competitive so therefore what Macron does is right it will make France more competitive and that's good news because if France is in good shape and Germany is good shape that will be definitely good for your whole Eastern Europe depends on how these two countries are doing because they are producing stuff which is then finally assembled in other parts and then exported to China in other parts of the world so I think this is important that other Europeans are focusing how do they make this region more competitive and that's not different from any part of the world and I think Europe has a tremendous starting point because Europe is very strong in B2B has a lot of small companies strong in B2B on average the education level is still by far the best around the world and that is a competitive advantage if you think about digitalization if you then think you have to protect protect instead of making more competitive open it to make people more competitive I think then it's wrong and I think what Macron is now doing I think finally France is getting the place into the right place as well and making the country more competitive and if Germany and France are doing well Europe will do very well many smaller countries have done the right reforms anyway Portugal, Ireland even Spain is doing much better we see that in our businesses where the reforms are really paying back and I think therefore it is a very important moment the problem is it's all about migration and it's all about other stuff and that's a problem so that's the reason why business has to play an important role wherever I can I talk to all people and say why migration is important why competitiveness is open why free trade is open we had just a meeting in Dubai where we assembled the 200 countries of the world we are serving over 220 we are talking about why globalization is great why digitalization is good and we see as well the mood of these people who are working where the countries are in conflict but our people are doing a great service for our customers and they are friends they like each other because they belong to DHL and they feel it's found family and I think that's the role of business in the changing world the business has to explain that our people first we have half a million people we explain our people that the world is a great place the globalization is good for everybody where digitalization is even better then we can make a difference that is our job but on the other side we have to demand the politicians in Europe focus on the competitiveness and leverage the educational level we have yeah for sure ladies and gentlemen we want to open it up to questions we want to hear from you so if you have a question we have microphones walking around please just raise your hand and Steve as we do that your thoughts on European policy what do you want to see out of European I mean obviously high marks for Macron as Frank just mentioned what would you like to see because in Europe I think Europe's doing really very well and you know we're big investors in Europe and we have been over the last three years and it looks like that ship is coming to port and I think that the Europeans themselves from what we can see in the areas where we invest basically we had lost confidence in themselves and in the prospects for their countries which provided an amazing opportunity for us we were quite confident about Europe and now Europe has awakened I agree with Frank that the change in France is pretty unexpected and remarkable and more changes in terms of basic reforms in Europe is the right idea I think it's way beyond my brief but the way the European Union is organized leads it to be sort of the last major part in the world in terms of being able to react on a timely basis it's a very kludgy type of administrative structure governance structure for example central bank they're always last because they need all these countries agreeing financial policy is very difficult to do and you need to be able to move on a timely basis and quickly is no surprise that Europe was the last out of the financial crisis because everything happens last and that's a function of governance structure and you know I don't know how to change governance structure because usually once it's in place it's in somebody's interest to have it not work efficiently apparently I don't know how that works exactly but you know that's usually not the best outcome so some types of reforms in those areas are you know sort of I think will only accelerate good things that are happening in Europe I think that just go to European reforms that the principles of them I think you've seen people talk about and you're seeing France move quickly the question is can you make them last long enough that people can be dependent upon them the issue is you know you have the turnovers and governments and then you have the additional layer above it that makes it when you make a business decision you have to predict a decade or two and you need that predictability and so the constraint on investment and the constraint on infrastructure and the constraint on all this is predictability across multiple decades that allows for the concession grant or the investment of the factory and I think the key is as they make these reforms they embed them so deeply that they can't be pulled back out and there's great concern distrust that yes you start in and then two years later a new government forms and then it comes back out and that I think is the number one issue how do you embed these almost constitutionally at a level that they can't be taken back one thing I think ought to be discussed I'm not the person to do it I've talked enough anyhow but you know and how that works out if you're talking about Europe I'm surprised nobody even mentioned it anymore that you know that that could have a variety of of positive some games outcome or it can be pretty negative and so I throw that to you and to anybody who wants to dribble that ball just as a Frenchman in Federal France a long time a France bear now a France bull Macron only got elected because the French public French nation decided to change that's how it works in a democracy a program like Macron's would have led to certain electoral defeat 20 years ago in France the state of opinion has definitely and irreversibly changed so my take is that this is there to stay have gotten those votes if the nation had not decided to move on the reason why there's no explosion in September when he passed the Labour reforms you know we're very good at immobilizing the economy we know how to the reason we didn't is that everybody has now recognized that we must change and move on so I would have some confidence I think part of it is because of Brexit so I think Brexit I think a lot of continental Europe it comes on the back of Brexit if they position their economies the right way their Labour force the right way their employment practice is the right way so there's great incentive right now in my opinion that they can really capitalize on and therefore have real benefits lasting benefits to their economies if they do it right and frankly negotiate appropriately on the Brexit which isn't unknown and it's obviously the beginning just the beginning of a long negotiation I think it's great that you're seeing a lot of the other countries becoming as competitive as possible so that they become an inviting place for financial services in some of the key industries that may end up shifting some of their practices over to continental Europe Are you worried about Brexit? Teach on Brian it's uncertainty it's a lot of work you don't know where it's going to come out and there's a lot of things that Steve said earlier have to be taken care of and so you have to worry about it We have a question there in the audience and then right here Good morning, thank you so much for your comments I'm Kanika and I'm a global shaper from Mumbai in India as a young girl working in India and having heard a lot of your comments on the US and Europe I wonder if it's needed and if yes will we ever be able to shift the balance of power that currently rests between the US and Europe and if it's needed what are organizations like yours multinational organizations doing to balance this power dynamic Thoughts? We've been in India for 50 odd years and our job is to help the clients and customers grow that economy our economists have it predicted at 7.5% better next year your prime minister has done a fabulous job of reforming a place as Titchum's talked about France, you talk about a country and it's all extremely positive and I think the world's recognizing that the FDI and stuff is going so you have a huge population an emerging population, a talent base we have 20,000 teammates there I think it's all good I don't think the world has to do anything I think the country has to keep doing what it's doing and it'll just keep coming and we will continue to see we've got prime minister Modi speaking in about an hour and he will clearly lay out the growth story for India Let me have the same view of Brian the interesting thing is that if you have a prime minister who understands the fundamentals of economics he does the right reforms and Modi is doing that it takes like in India obviously a little bit longer than we hoped for but it works we have waited for the general sales tax reform for more than a decade I heard that when I was in India the first time for our business in 2005 and next year we will have the general sales tax reform and now it happens and it's right about what happened it will have positive impact and Modi understands the basic concept of economy and that's the reason why he does the right reforms and that will pay back to India and I think in a big way we have invested heavily in India for the last years and our business is growing tremendously there Thank you for raising that it's very important we appreciate that apparently apparently the growth in Europe is going to be critical for the next decade beyond US and Asia which is clear enough the critical point about the competitiveness in Europe is don't you think that this is not enough to have these two engines Germany and France leading Europe only because every system this is a fundamental principle question is as good as the periphery so how are we going to increase the competitiveness in Europe because if you keep on this model of producing for Germany and France that exporting to Asia and the rest is not enough to France basically maybe Steve has you're right but I believe many European countries have done good reforms and smaller countries as well you know they have a lot of trade with Germany and France not every country has done his homework but many and many have really taken drastic actions and that is really improving the situation of these countries so you can I said over in Portugal all the eastern European countries are doing significantly better if you go there I was there the first time before the iron curtain came down and what I see now is black and white it's amazing what has happened there you know we should be proud of that as a European saying listen you know we talk about China what they have done we have done it next door Eastern European is a different place now Southern European parts when I was the first time as a teenager in Iberia and it's black and white what you see now and that is what we have achieved and I think Europe has taken tough austerity measures and they are paying back now now we should not stop and say oh it's nice we have still challenges and that's the reason why we have to continue the gentleman is from Bulgaria sorry if I reveal something but I think Merkel and Macron the leadership of Europe is so acutely aware of this and I think they are driving Europe with that in mind to make sure that the prosperity spreads and that it's not just France and Germany. Real quick Stefano your question I'm so glad to hear so many positive comments and so much optimism but I see a divergence between the economy and the political environment in Europe at least in some part of Europe we just mentioned Brexit but Brexit is going to be certainly a drawback in terms of growth we have Southern part of Europe which is still 15, 12 to 15% unemployment and we don't see that kind of productivity happening if not in Germany which is obviously leading but as a unity I think that politics and economy in Europe will converge or will continue to see these two world basically working to different paths Real quick? This is a very interesting question because if you look into Brexit when Brexit came I said oh that's the nightmare uncertainty now for many years will be bad for business it didn't happen Brian you said uncertainty is not good but I expected the same what really now can happen if the EU and the UK create a mess from this divorce then it will have really impact so they can disrupt what is happening the uncertainty is one thing but businesses keep going and consumers keep going what really can have a significant negative impact is if that is a bad divorce if that's a hard Brexit it will have negative impact on Europe and the UK in the same way the great strength of Europe is democracy I'm a great believer in democracy populism makes people pessimistic it makes me optimistic because the social issues that are put in focus by the populism are real I mean I thought in lower income places, children those issues are now being raised and they will be addressed better to bring them out rather than try to sweep them under the rug because that's when they actually lead to very negative consequences ladies and gentlemen thank you very much thank you to our distinguished panel Steve thank you so much