Can Big Tech calm investors' AI jitters?

Marc Filippino (0:02)

Good morning from the Financial Times. Today is Tuesday, October 20th, and this is your FT News Briefing.

Unrest continues across France, and we'll tell you what to watch as tech earnings kick off this week. Plus, can one of India's richest men pull off the country's largest public listing? I'm Marc Filippino, and here's the news you need to start your day.

France is burning across the country hundreds of thousands of people, many of them students, are demonstrating against the high cost of living and the declining conditions in French schools. Those protests descended into riots and looting over the weekend, and with some of the worst street violence the country has seen in years. And now there's even more unrest happening in other parts of Europe. The FT's Ben Hall is here to talk about all that. Hey, Ben.

Ben Hall (1:01)

Hi.

Marc Filippino (1:02)

So what kind of pressure have these protests been putting on President Emmanuel Macron's government?

Ben Hall (1:07)

Enormous pressure because I think the protests unfortunately show that this government is weak and out of steam because the inability of the police to anticipate and then to handle protests on this scale suggests that this is a government that's lost control of the streets, which is a bit excessive, but it plays well into the hands of France's extremist parties. Yeah.

Marc Filippino (1:32)

Talk about what this does as we head toward an election in the spring, April, to be exact.

Ben Hall (1:38)

Well, the protests are very much a gift, I would say, to the two extremist parties, the far-right Rassemblement National, led by Marine Le Pen, and the far-left led by Jean-Luc Mélenchon. Start with Mélenchon, he's surfed on these protests, very much encouraged them, and he's actually climbed in the polls over the last few weeks. For Marine Le Pen, it's a gift because it speaks to her narrative of a government that has lost its way, that is too weak, and that you need a firm hand back in control, i.e. her.

And unfortunately, I think from a centrist's point of view, their sort of warning that if Marine Le Pen were to be elected, France would descend into disorder, she now has a response ready at hand, which is to say, well, look, the country is already at disorder. So this argument of a primoire le déluge, after me it's all chaos, doesn't really apply.

Marc Filippino (2:36)

Right, and let's talk about what's driving the protests. People are upset about the cost of living, and like I said, the conditions of schools. You know, this has been going on for weeks now, Ben. Has the government addressed those things?

Ben Hall (2:48)

Well, they have said that they're holding talks with student representatives and teacher representatives about improving conditions in schools.

But the reality is, is this government has no money, and in the past, this government and previous governments, whenever faced with social grievance or protests, have sought to diffuse that tension by throwing money at the problem. That is just a pipe dream right now because the government has no money, and if it were to try and throw money at the problem, I think the markets will freak out and will dump French debt again and push up borrowing costs, which will only add to their agony.

Marc Filippino (3:25)

We did see a bit of that worsening on Monday as investors continued to sell off French bonds.

Ben, like I mentioned earlier, there have also been protests in other European countries, notably Italy and Belgium. What does this tell you about what's going on in Europe right now, especially given that several major countries are heading to the polls in the next year?

Ben Hall (3:45)

I think they are interconnected in the sense that we are seeing protests about falling living standards, concerns about employment, and I think we're also seeing a bit of an anti-incumbency mood in the air, and it could sprout up in many other places. I suppose across Europe, there's just a generalized trend in Europe now to a much more volatile electorate, an electorate that is likely to switch candidates, switch parties very, very quickly, depending on what other contenders are offering, and you're certainly seeing that in France, where you've now got the extremes that have the upper hand, it seems, by offering fairly unrealistic policies, but voters seem to believe in them and have lost faith in the mainstream, and I think that is the danger in the election supercycle that's coming up over the next 12 months.

Marc Filippino (4:39)

That's the FT's Europe Editor, Ben Hall. Thank you so much for your time, Ben.

Ben Hall (4:42)