Exclusive: Merz Warns Europe, France Enforces Curfews, Growth Defies Gravity

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Caroline Hepker (0:09)

This is the Bloomberg Daybreak Europe Podcast. Good morning, it's Tuesday the 20th of October. I'm Caroline Hepker in London. Coming up today in an exclusive Bloomberg interview, the German Chancellor Friedrich Merz warns that Europe is underestimating the dangers from Russia. French protests die down after curfews are enacted in Paris following violence and looting. Plus war, interest rates and a global economy that doesn't seem to be breaking. Why growth is holding up, but the next downturn may be harder to fight? Let's start with a roundup of our top stories.

German Chancellor Friedrich Merz says that many in Europe are too complacent about the danger posed by Russia. Speaking exclusively to Bloomberg, the leader of Europe's largest economy says that Moscow is not only to defeat Ukraine but also to undermine democracy across the region.

Friedrich Merz (1:05)

My biggest concern is the underestimated Russian impact on our societies, which has to do with the war in Ukraine. But this is only a part of the picture.

The big picture is that Russia is on the way to destabilize the entire political order of our European continent. And this is obviously underestimated by many people in my country as well.

Caroline Hepker (1:38)

Merz's warning follows comments from Germany's foreign intelligence chief that the country has become a prime adversary in a shadow war with Russia. He also said that Germany and other non-U.S. allies are funding Ukraine's defense without Washington's help. European leaders are meanwhile trying to de-escalate tensions between President Zelensky and President Trump over strikes on Russian energy targets and intelligence sharing.

Friedrich Merz (2:05)

I'm trying to convince Donald Trump, each time I'm meeting him, that this should be in his own interest. A stable Europe, European continent, European Union as a partner in the world is something which is worthwhile for the Americans as well. So they are not alone.

Caroline Hepker (2:27)

European leaders now face the prospect of continuing to pop up Ukraine without America's help. For now, they are maintaining sanctions on Moscow and insisting that Kiev shouldn't cede territory in any peace settlement. But they also know that they can't quickly replace US air defenses or intelligence sharing as several European capitals head into an intense electoral season.

President Zelensky, meanwhile, has again accused the US of failing to provide early warnings of Russian missile and drone attacks against Ukraine. It comes as Ukrainian officials believe the Trump administration throttled back intelligence sharing of a devastating barrage on Sunday. President Trump told reporter Zelensky doesn't know what he's talking about.

Donald Trump (3:11)

Zelensky is a man that should have had this war settled a long time ago. If he would have listened to me, he would have made a much better deal a long time ago and it would have a million people living from his side. And to be honest, I don't think, I think it's time for somebody else to negotiate on behalf of Ukraine.

Caroline Hepker (3:29)

President Trump added, we've given a lot to Ukraine, they've given us nothing. Zelensky is expected to meet US Envoy Jared Kushner and Steve Witkoff in Norway this week for further talks on ending the war.

Protests in France have largely died down after authorities rolled out tighter security measures last night and 11pm curfew was put in place in a few areas of Paris alongside restrictions in other cities. Our chief Europe correspondent Oliver Crook says that further measures are expected.

Oliver Crook (4:01)

We've also heard from the interior minister, the same interior minister who handed his resignation into Emmanuel Macron over the weekend. Macron rejected that, saying that there was going to be more police presence in the coming weekend in order for the government to be better prepared for the eventuality of possible protests and indeed possible riots.

Caroline Hepker (4:19)

Bloomberg's Oliver Crook speaking from Paris. The action comes after demonstrations drew more than half a million people on Saturday across France and more than 2,000 arrests. Now, according to research from Morningstar, the overall cost of the riots is rising, but is predicted to remain below a billion euros. French bonds and stocks fell on Monday and protests are likely to extend well beyond the current week.

Sticking with France, second-hand online marketplace Vinted is taking action when it comes to looted goods. That's as the platform sees a flood of items suspected to contain items that are tied to the widespread riots in France. Bloomberg's Tiwa Adebayo has more now.

Tiwa Adebayo (5:06)

France is one of Vinted's largest markets and now it's cracking down on suspicious activity. The company says it's stepping up monitoring after an influx of listings suspected to contain looted items following recent unrest. Stores were targeted over the weekend after protests over the cost of living escalated. Videos show high-end names including Louis Vuitton and Celine being plundered.