Lionel Barber

Lionel Barber is the Editor of the Financial Times (FT). Since his appointment in 2005, Lionel Barber has helped to transform the Financial Times into a multi-channel global news organisation, and during Barber’s editorship the FT has won many international awards for its journalism.

What kind of newspaper is the Financial Times?

The Financial Times is the paper of globalisation; I don’t call it a newspaper.  The day I took over as Editor I said that we are a print and digital news organisation, and we offer a unique global perspective on politics, economics, finance and business.  We have 568 journalists who connect the dots between these.  We are rooted in the City of London, but have a global footprint, with more than 100 foreign correspondents.

Is the FT is doing well?

We now have almost 1 million global paying readers, two thirds in the UK and US, 20 per cent in Europe, and the rest in Asia broadly defined.  Nikkei, our new Japanese owners, are long term investors and absolutely committed to editorial independence.  We are very happy with this stable relationship.

Do you make money?

We do make money, and have done ever since I took over, near peak globalisation and a couple of years before the financial crash.  Since the crash the paper of globalisation has had to encompass the reaction against globalisation into our coverage.

Because of Trump?

No, since the day Lehman Brothers collapsed, September 15^th 2008.  Think about Occupy Wall Street and when we had demonstrations against globalisation in Seattle and at the G7 summit at Lucca in Italy.  Things really changed after the financial crash and the rise of populism, so Trump is maybe the apogee.  Politics now affects trade and economics and the populists, and we have to understand and explain what’s happening, with no more multilateral trade agreements and America casting doubt on alliances.

Lionel Barber leads an editorial conference with his team at the Financial Times.

You made an important interview with President Trump and a much discussed one with his former adviser Steve Bannon, and you wrote an interesting article ‘What’s the point of the Interview?’  Trump continues to surprise everybody and dismantles things.  Is the world going the way you at the FT thought it would?

First of all, Trump is the Disruptor-in-Chief.  He is casting doubt, not just on the legacy of his predecessor Barack Obama, who supported the Trans-Pacific Partnership and the Iran nuclear agreement, he’s actually challenging basic tenets of the post-war liberal order.  He’s saying that alliances are cumbersome and he wants to move to a position of aggressive bilateralism.  This is not what we believe in at the FT.  It is a fundamental challenge to the European view of the world, and is also shift from what he said to me and my colleagues a year ago, when he gave grudging support to the value of the NATO alliance and said it was useful, but complained about the contributions of the major allies, notably Germany.

What has changed since then?

Now Trump feels comfortable in the job and thinks he is doing really well, and he has fundamentally changed his team.  The globalists, people like Gary Cohn and H.R. McMaster, have left, and now he has people who believe in aggressive bilateralism.  He thinks that he will be proven correct by this very transactional approach to international relations.

What have you seen that indicates this?

A year ago I went to the White House to interview the President and it was in such chaos, it was like a film set, with no attention to schedule and timing.  People were walking in and out, and I was even able to put my phone on his desk, a clear breach of security.  This had settled down by last September when I went back.  Nevertheless I wrote in April that: “There are tentative signs that there is a little more method in the madness than first appears.”  There’s still no real process, because he doesn’t believe in process and likes keeping everybody off balance.  He thinks he is going to handle North Korea, and he has figured out a way to get Kim Jong-un to the table; but will he be able to de-fang the nuclear program in North Korea?  Will Kim actually give up nuclear weapons?

One day Trump says this and the next that, but is he becoming more of a professional?

No, he is not professional, he revels in breaking all the rules, he revels in not being tied down and doing the unconventional.  The first question for me is: What does he really believe in, what is at the core of his world outlook?  And the second question is: How much of this posturing, the tweeting, the wanting to be the centre of attention, is actually just a giant distraction from what’s really going on?  I asked Steve Bannon: “You deliberately get people mad, but actually are you doing something completely different, so we get distracted?” and he said: “Yeah.  In the navy we used to call it diversionary fire.”  Trump changes the news agenda while gutting the government agencies, but much more is written about analysing his tweets than writing about what he’s doing in policy and deregulation.

What does he believe in?

Fundamentally, the exercise of American power.  He believes America has fought too many wars overseas, and has too many overseas entanglements.  If you think about the cost of Iraq and Afghanistan at 2.3 trillion dollars you can see where he’s coming from.  He also believes that American power deals with nuclear threats, particularly North Korea.

And Iran? 

Iran hasn’t tested a missile that could reach the USA.  The paradox is that if Iran resumes its nuclear programme then Saudi Arabia will become another nuclear power.

Isn’t this quite frightening?

Potentially very frightening.

The Chinese have long term projects, what are his ideas about restoring America economically?

He has a 1950s vision of what made America great, based on manufacturing and making real things.  He thinks America has not been a beneficiary of global trade liberalisation, I think wrongly.  He also thinks America has been outsmarted by other nations, notably China.  He thinks there is a fundamental imbalance.

But his actions have had immediate counter responses from China, that affect people like US soya farmers?

When he was elected I said to a top Wall Street executive: “OK, Trump has won; tell me what it’s going to be like?”  He said to me, “It is going to be completely different, like nothing you have ever seen.”  Normally, when coming up to a negotiation Presidents take advice and work out roughly what the demanding price is and where they are going to settle.  Trump starts by asking for 99% and then retreats from day one and waits to see where the other side come down. His style of negotiation makes it a big drama that is all designed to intimidate and to pressure.  You see where you end up, as in a form of price discovery. He probably did understand that the Chinese would retaliate, but to him it’s just business.

What about Korea? 

It all comes down to what’s the deal, and will there be rigorously inspected denuclearisation?  North Korea can launch an ICBM and we know they have a big stock of plutonium.  The sanctions have hurt Kim, but he’s reached the threshold of a nuclear weapon, which means he has something to bring to the table.

Trump has torn up the deal with Iran.  What do you think?  

That was predictable, he said it was the worst ever deal.  The only reason people are surprised is because a succession of leaders, Macron, Merkel, and May, begged him not to abandon the deal, but he listened and said no.  They ended up semi-humiliated.

What about Israel?

He is a friend of Israel.  The Saudis are not going to the wall for the Palestinians, nor will they make a huge fuss about the US embassy move to Jerusalem.  The closer cooperation between the Saudis and the Israelis is a sign of how the world is changing.  The UAE, Abu Dhabi, is very anti-Iranian, and very concerned about the nuclear program and Hezbollah and supportive insurgencies.  They felt abandoned by the Americans and shared a fundamental disagreement over the Iran nuclear deal with the Israelis.  It is no coincidence that President Trump chose to go to Saudi Arabia as his first foreign visit.

Did he recently bomb Syria to move against the Russians?

He bombed Syria, but there was clear coordination with the Russians beforehand; it was not an anti-Russian move at all.  It was about that any use of chemical weapons would meet a military response.  I call this an ABO approach (Anything But Obama) to foreign policy.  Obama did not take action, but Trump did.

Is Trump against Europe?

He is not against it, but he is influenced by people like Nigel Farage, who is seen as a successful revolutionary figure.  Bannon thinks he’s a hero.  They think Brexit was a moment of liberation, where the British people chose.

Is Europe shrinking?

Europe’s talk has been louder than its action for some time.  The EU Lisbon Summit in 2000 talked about making Europe the most competitive economy in the world by 2010, but that did not happen.  Europe has taken some extraordinary measures to strengthen its internal cohesion following the Eurozone crisis, but there is no great leap forward.  We are squeezed, spurned by America and China is on the rise.  Chancellor Merkel, President Macron and Tony Blair all say we need a bit more Europe, that we can ride Trump out and wait.  They hope it is a storm that will pass, but on the geopolitical chessboard at the moment we are at best bishops, certainly not the king, queen or rooks.

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President Donald Trump photographed with FT Editor Lionel Barber

The 2018 FT Business of Luxury Summit is being held in Venice.

What is happening in the UK?

The UK is going through a very difficult period, because we are so divided over Brexit.  The referendum was disastrously polarising, and was not necessary.  I am not a believer in referenda, especially on complex political questions like this one.  The most important geopolitical relationship over 40 years was submitted to a Yes / No vote in an irresponsible gamble by David Cameron.  Even in the United States constitutional change has to be approved by a three quarters majority.  In Scotland in the 1979 devolution referendum there was a 40% hurdle that had to be crossed.  The ill-informed debate and scare tactics ended up with a government that has triggered Article 50 with no plan for what the future relationship will be.

Is this a complete calamity?

No.  It has to be responsibly managed with a sensible transition and there may be new opportunities.  The FT is not saying we need a second referendum, which could be just as polarising.  Parliament needs a clear view and we need to make the best of it and think very hard about our immigration policy.  If we are to be on our own, trading freely with other countries and a global player, we have to be open, and a magnet to the best possible people.  We can’t be inward looking and xenophobic.  That would be a disaster.

But employers across all sectors are afraid of losing the best people, from simple workers to the most prestigious professors?

I am very concerned about that.  Nigel Farage says he is in favour of more Commonwealth immigration, rather than European immigration.  The general position of the Brexiters was anti-immigration.  It was mishandled and underestimated under Blair, but that’s not an argument.  We can’t reduce immigration to tens of thousands, and many people came in because we had a successful economy.

Is the City afraid of the Opposition leader Jeremy Corbyn heading a Labour government after Teresa May?

They are afraid of a Labour government that has been taken over by the hard left, something which was resisted in the late 70s and early 80s, by Dennis Healey for example.  The hard left leadership is pledging massive public spending, which could really spook the markets and is a throw-back to a different era and the 1970s.  Corbyn is a perpetual oppositionist who voted against his own party more than 500 times, and he is dangerous.  Plus he has definitely flirted with and tolerated anti-Semitism.

You are a global news organisation.  Do you see that in many places of the world dictatorship and populism is coming up? 

There is a tendency, but you shouldn’t exaggerate it.  After Brexit, 2017 was the test year for populists, and in Austria the right wing hardliners didn’t win the election.  In the Netherlands the populists did not win.  In France, the crucial country, Macron won from nowhere.  In Germany the AfD did better than expected, but the result is a coalition.  The centre has just about held, but the trend is not good.

What about the economy?

The economy is actually doing quite well.  We haven’t had a great depression.  Ultra-loose financial policy was the correct response, although it has had perverse consequences, notably in the inflation of asset prices.  To raise interest rates too quickly would still be the wrong response in Europe.  In America an interest rate rise is right, with growth of 3+%, a giant tax cut, and the 7^th/8^th year of recovery.  At this stage in the cycle it is probably necessary to have interest rate rises, but in Europe we are lagging and not the same.  A lot of jobs have been created, but the question is what kind of jobs, in this flexible labour market with part time work and the so-called gig economy.  There is some evidence that wages are rising in Germany and America, and that’s probably a good thing.  Inflation is not a threat in the immediate future in our view at the FT.

Might the US dollar lose its influence to other currencies?

There is no sign of that.  The dollar is actually going up, and that is causing problems in emerging markets to people with dollar denominated debt.  There is talk about economic sanctions, like against Iran, and people are exposed to the American economy, but Euro denominated debt is not a real rival to the dollar.

If England goes down does the FT go down too, because it is an English product?

It is very important to say that we are a European news organisation.  We believe in European cooperation and support the EU.  We’ve had correspondents all over Europe for more than three decades.  We are read very closely in Berlin, Rome and Paris.  We will strengthen our position in Europe, which is our backyard, and the FT is absolutely committed to Europe, whatever happens with Brexit.

London

10th May, 2018.

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