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Chapter 1: How do heatwaves impact global economies?
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Siksi Vaasan Sähköllä on asiakkaita joka ikisessä Suomen kaupungissa.
Ai Vaasan Sähköllä.
Just niin. Pitkä historia ja yli hyvä hinta vetää puoleensa.
Siis näinköhän. Kurkkaan sopparit osoitteesta. Siis onko Rovaniemellä?
Siellä ollaan myös.
Tampere?
Kyllä. Kurkkaan osoitteesta. Siis Oulussakin. On, on.
Ja osoite on.
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Chapter 2: What are Germany's plans for pension reform?
So it's indeed a nice theme. No, I've never seen these kind of algae problems before, or the paint job too, which seems to be another issue there in DC.
Yeah. Yeah, that's a very, very famous, very common problem, actually, in Hanoi. Because we have two big lakes in Hanoi. It turns so green every summer. Yeah, and when I was growing up, they used to send lots of workers just to jump in the lakes to clean them. I think they have more sophisticated methods, like using chemicals and stuff.
Well, maybe that's the answer for Mr. Trump and the team at the White House to get it clean this time around. That's the voice of Nga Pham, journalist in Hanoi, Vietnam, as she mentions, joining us today alongside Karsten Bresky from the multinational bank ING, joining us from Frankfurt in Germany.
Thank you.
Let's get into the week, then. And it feels like one story has kind of been the talk of it, hasn't it, in many parts of the world?
Oh, it's awful. It is absolutely awful.
It's unbearable. You cannot breathe. You've got your head turning. You sweat all the time. I think we're going to shut early tomorrow. If it gets too hot, we might shut, actually, because... You know, sometimes you just can't take it. You know, it's too hot.
The heat, Carsten. We've had record temperatures here in Europe. Now, I know you've had them in Asia as well. It's not just a weather thing. Carsten, I'm looking at Le Monde, the French newspaper here, saying steel impacts from previous heat waves, 1.5% on sort of productivity because of the hit to lots of people's working conditions.
Serious kind of economic impact to this, as well as it being perhaps just uncomfortable for people. No, obviously, I think, well, maybe the 1.5% is more for the French people. Just kidding. No, it's obvious. Productivity will go down in all of Europe, clearly, though it might bring people back to the office if they're sweating at home without air conditioning. I think that's one thing.
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Chapter 3: How is the fruit import dispute affecting China and Taiwan?
The main thing for us now is power cuts because electricity consumption jumps something like 15% and is overwhelmed.
So that's people putting their AC on and things like that?
That's right. You know, if I remember right, the late Lee Kuan Yew said that the air con is the greatest invention of all time. But air cons can't cope with this heat. So we suffer from it. And hospitals actually getting really, really crowded with sick people. So I think it is a major impact on the society and economy.
And we've seen this, Carsten, too, haven't we? In Europe, France, again, somewhere where they've had rolling kind of power cuts in the west of the country, too, that those infrastructure systems, not just the sort of physical transport ones you were talking about, but also, you know, power so key to how all of the modern economy works now and getting enough of it also having an impact.
Definitely. And the French are, to some extent, lucky because they do have nuclear energy. But indeed, now we will, like Nam said, we will see more and more people also investing getting an AC, which also means more sucking off energy over the summer.
And the final thing, and that's also, you mentioned France, is that a couple of years ago, we also saw more elderly people actually passing away due to these heat waves. So there is also then really more loss. So not only economic damage, but there will also be human loss due to the heat wave. So all these things will clearly leave their marks. We're only at the end of June.
This could last a couple of more weeks.
No, I think it's going to last until at least September. And with El Nino and all that, you know. Vietnam obviously doesn't produce petrol for electricity, so we have to buy it from outside. And with this, we're kind of going to pay a lot more for our power. And that will probably hit people's pockets as well alongside business aspect of that.
Yeah, we're really interested in what you're seeing, where you are around the world, and how you're coping. If you run your own business, let us know. Businessdaily at bbc.co.uk is our email address. We'd love to hear from you on that. Carsten, let's move away from the heat and look at some domestic matters in Germany.
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Chapter 4: What recent developments have occurred in the tech sector?
So gradually moving up, and I think by 2080, we would then have a retirement age of 70. There will also be a kind of top-on of the pay-as-you-go system, but now by a capital markets-funded additional pension scheme that will also be gradually built up. The option for people to go into early retirement will also be cancelled, so no longer getting a pension with 60 or 63.
There will also be an attempt to broaden the base of potential contributors by hoping to include at least politicians and also freelancers into the pension system. So all of these things together really mean that this government has now come up with a proposal that would make the pension system financially more sustainable.
We're not there yet, it now has to go through parliament, but the hope is that it will be embraced by parliament Because the government also knows if they don't manage to get this one through, then they're more or less doomed to fail and they can actually close the shop. But it is a nice achievement and for a change, some positive political news out of Germany.
It's actually quite interesting, isn't it? Because Asian countries actually have been dealing with aging society problem for so many years. But what I see here is that we actually in Vietnam, for example, we are going to lower the pension rate. I mean, the age that you can actually receive the government's subsidise on your... Oh, really? Yeah, from 75 to 70. So I wonder why it happens that way.
I mean, we do actually send lots of young labourers to, say, South Korea, Taiwan, Japan and other countries. So maybe that helps because Vietnam's population is relatively young.
Yeah, but I think that also shows that, you know, the country and the Vietnam has become more prosperous in the economy because you said 75, so 75 to 70. Going back to France again, Carsten, we've seen plenty of people protesting about 70, yeah, 67. Exactly. Exactly.
So therefore, I think to me, this is rather a sign that you guys actually think that you can afford it and that there is enough prosperity to actually pay for it. So that, you know, to me is a good sign. I think in Europe, on average, we are somewhere 63 to 65. And we have also as demographic change is hitting the entire continent, something needs to change.
And one screw to return is clearly the retirement age. Which makes sense also because when these public pension schemes were invented in the late 19th century, people hardly ever made it to the retirement age. And now we have more or less on average 20, 20 good years after we enter retirement. So, of course, there is a financing problem.
70 is the new 50.
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Chapter 5: How are extreme temperatures affecting productivity?
I'm just looking at a picture of one here. It looks a bit like a jackfruit.
Really? Is that right? Yeah, it's spiky and very pungent. And it has a very strange smell, doesn't it?
From what I remember, it smells strange, at least for Europeans, Will. Yeah.
But now, actually, it also happens with Taiwan because Taiwan, the government there has warned farmers about selling custard apples to China as well. So in 2021, when I was there, China also stopped importing Taiwanese pineapples. You couldn't imagine what Taiwanese people had to do with their pineapples. They invented like dozens of dishes made of pineapples.
Everyone's addicted to pineapple and I got sick eating so much pineapple cakes and things. So the government actually is saying to the farmers that don't actually increase your export to China because you don't know what they're going to do. If they're not happy with us, they're going to stop buying from us and we'll be basically in big trouble.
Or worse, you'll have durian on a pizza alongside that pineapple as well. We'll get plenty of text about that. Don't tell this an Italian. I apologise in advance to our Italian listeners.
You're listening to Taking Stock on Business Daily from the BBC World Service. Lapland Hotels. Lapland Hotels.
And today we're in the company of NARFAM, journalist in Hanoi, Vietnam, alongside Carsten Breski from the multinational bank ING. Carsten's joining us from Frankfurt. Right. It's that time of the week where we get our guests to give us some of their heroes and villains of the business week. I'm going to save one of the villains because it's something we've talked a little bit about already.
But NAR, give us an upbeat one, first of all, a hero, because coffee is your choice.
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Chapter 6: What challenges are posed by aging populations for pensions?
OK. And I was even lucky. Indeed, it is my villain of the week because you saw I was actually part of it. I think it was Tuesday evening. I was just traveling from Frankfurt to Dusseldorf, which should take not more than 70 minutes. It took me two and a half hours. And even better, I had a sauna for free because there was no air conditioning functioning on the train.
And as a good bank economist, I was there dressed as a good banker, wearing my suit and really sweating like hell. Unbelievable. But, Will, I was even lucky because all Deutsche Bahn passengers the day after. So on Wednesday, the entire system collapsed for 90 minutes in the evening. Was that due to the heat? No, no, that was not due to the heat.
That was due to some kind of a disturbance in the communication system at Deutsche Bahn and to make things even worse. So somehow Deutsche Bahn is the triple villain of the week. So the third thing is, because I was just checking it online, so Deutsche Bank now is actually calling upon its passengers not to use Deutsche Bahn this weekend due to the heat wave.
Because they are afraid that there will be, again, new disturbances on the German railway system, probably then also with not functioning AC. So they advise people not to use their trains this weekend. In their defence, we have private railway companies here in the UK. They've got the same warning at the moment as well. Now you can see us Northern Europeans, we're really struggling with this.
Now we'll be laughing about it.
It's very disconcerting news, actually, because in Hanoi, they are considering to build the first speed rail and they're pitching for contractors from other countries. So, I mean, listening to you guys, I think... I think they should probably stop it before he waves to come and destroy it.
Yeah, we might not be the best advocates for the European bids in that. I'm sure something we will cycle back to in the future. Something that's been an ongoing theme over the last few weeks, isn't it, on the programme, when Rahul has been chatting with our panellists about this, has been what's been going on in the world of technology stocks.
It's been a particularly volatile week this week, though, across global markets.
We have liftoff for the SpaceX IPO. History being made on Wall Street to a crowd at the Nasdaq market site in Times Square.
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Chapter 7: How is Vietnam addressing its pension system?
Really interesting. Well, that is clearly going to be something that's going to be continued to talk about across our programme, Business Daily and World Business Report here on the World Service. In the coming week, what else do we think, guys?
I'm very interested looking across now that the price of oil, our editor Justin was flagging this up this morning, back now below where it was before the US and Israel's war in Iran. What does that tell us, Carsten? Do you think it's pressure easing or is it still in wait and see mode? Yeah, that's very interesting.
Well, to some extent, it should help Vietnam, you know, at least with these energy prices now to get all these... Definitely.
I think it's great news. Great news.
Exactly.
Because we can afford more air conditioning now. Exactly. That's everything I can think of at the moment.
There are clear benefits to it. I must say, Will, I'm still a bit skeptical, but maybe this is the German in me. I also checked with our oil commodity or oil expert at ING, and... For us, this is still too good to be true. Because think about it. There are still the mines in the Strait of Hormuz. And we're still talking about insurers trying to find new premium.
You know, how costly will it be to get the vessels through the Strait? We're still far from certain that we will get a successful deal between the US and Iran. So to us, I think the market has, you know, got carried away a little too much. It means I think we still expect prices to go up a little bit from the current levels towards year end.
If we're wrong, we will all applaud because lower energy prices are not only good for Vietnam. If this continues and if the energy prices stay where they are and even go lower, well, fantastic stuff. You know, you can fill up your car again a bit cheaper than before. The European industry will also applaud. So obviously, if this comes earlier and faster than we expected, it's a nice tailwind.
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Chapter 8: What volatility is being seen in technology stocks?
Autoliitto auttaa.
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