get done. first, let's check in with manus cranny in london and our markets team as the european trading day begins. >> it is something that we touched on quite a lot. emerging markets are on the move . we have our european business correspondent, caroline hyde, jonathan ferro, and david tweed is also standing by. futures getting a small bounce here. what is your focus? >> i think it has to be emerging markets. you have to say the selloff yesterday did not discriminate. it hit european equities as well. fedt of people talking tapering in the end, but you have got to talk china as well. a china slowdown is the big concern for investors i have been speaking to. flavor withtech microsoft. how did that play out for the european context? >> you look at some of the suppliers, sap might be getting

a bit of an uplift. microsoft made per day more than a quarter of a billion dollars in the last quarter. finally, their tactics are working out. they are selling hardware. this is a software giant, killing it in terms of xbox one over the holiday season. a move to the cloud, sales doubled there. they also doubled for the microsoft surface. at last, the move into hardware is paying off. samsung, a different story. still profit growth, but it is lower. they are being eaten into market share. also, the cheaper chinese players really stealing it in terms of the cheaper market of smartphones as well. korean won is too strong. >> it is ironic, isn't it? david tweed is standing by.

this is an interesting shaping, getting this deal done. >> first of all, i think you better watch those shares because the biggest pharmaceutical distributor in the u.s. wants to get heft in the european market. it has bought 75% of celesio shares. it will launch a tender offer. the question is, at what price? >> we will catch up with you a little bit later. let's take a quick snap shot at how the equity markets are playing out friday before we get to dollars. -- to davos. all under pressure, all eyes on davos. not the least for the interview that fran is going to bring you. draghi and carney are expected to speak as forward guidance changes complexions potentially

here in the u.k. francine is standing by with a special guest that is close to my heart. >> i know he is. let's get to the special guest. in his three years since taking office, the irish prime minister has successfully steered his country out of its 85 billion euro bailout program. he joins me now live from the world economic or him in. most -- in davos. thank you for joining us. a quick note on the eurozone. everything is great and everybody thinks it is great. are we really so comfortable and confident by the fact that the european crisis may not start biting six months from now? >> the differences between the wasn and the united states it was settled quickly and decisively and comprehensively. of have had a long period

negotiations and discussions in europe because the tools available now were not available a couple of years ago. obviously, we are very conscious of this. there is a long way to go from the european point of view in terms of having a banking structure that will stabilize economies and create roads and jobs. that has gotten increasing attention, both from the minister of finance, and the counsel of leaders. there is renewed focus. the building blocks are being put in place in terms of the resolution, directive, and the building of a fund to subdue any rices that might arise. is one of theng main challenges for the european union this year. how confident are you that banks will be able to withstand the stress tests? >> they have passed the liquid review tests just some months ago. we are confident that the stress

tests will be carried out across all european banks. there is a deal of work to be done at home in terms of stress and access to credit and lending facilities and that sort of work is going on. but we are happy and cognizant that our banks will measure up to the stress test. >> how likely is it that europe would refund their bank recap fund? >> this was a decision taken in june of 2012. that the european stability mechanism would hold out the possibility of direct recapitalization of banks, a different position than everybody else. the mechanisms that are available now were not available then. that is work that is unfinished. eccofinnue through the meetings to give effect to that

decision. people in europe like to see decisions actually carried through. itsand, because of circumstances, was mentioned specifically in that decision. there was a well-performing program leading to bailout where we had a strategy and a plan. that is an issue that would help reduce our level of debt, which is still very high and -- still very high. signal, small country, people prepared to put their shoulders to the breeze and deal with the problem. we need continued assistance to that sets us on a road to prosperity and a brighter future. >> david cameron will be one of the keynote speakers today and one of the ongoing issues is the british membership in the european union. how realistic is it that the u.k. will eventually choose to leave the eu and for ireland, it

is very important, of course, how do you make contingency plans? party, another party sets a position that is unclear. typical for the prime minister and british politicians. that is a matter for themselves. european council want britain to remain a central part of the european union. they joined at the same time we did 40 years ago. david cameron has said that very clearly. faceis an issue that we ourselves in ireland in the middle of the crisis. we had to have a referendum. people generally, and referendum situations, might want to give out of the government, ireland made a clear decision in favor of the eurozone. we have an understanding with britain, a very close relations, obvious neighbors, strongest trading bloc.

irrespective of what decision they make, we have our arrangements with britain. but the european union would be much weaker without britain. david cameron has been a very strong supporter of the single market, the negotiations between europe and the u.s. this leads to trade, jobs, economic prosperity. fire,y are playing with the u.k. >> it is a difficult position to be in. investors and businesses like clarity. they like there to be certainty. issue that, it is an the british political system has got to deal with. in our country, we have had referendums over the years so that the population understands the way europe operates between the council, the commission, and the parliament. britain does not have a constitution the same as

ireland. they do not have a series of regular referendums to deal with european issues. for us, we want britain to remain part of the european union, a central part of the european union. the union would be much weaker without them. is an issueint, it that british politics have got to deal with. >> you say the future of politics is uncertain. ?ould you clarify you yourself have been connected with some top jobs in the european union. are they positions that you would be interested in? >> the mandate given to me was to take our country out of an unholy economic mess that we inherited. happy that our people have moved to a point where we have a clear land -- plan to follow through with the medium-term economic strategy. that is my mandate and the trust that the people placed in us.

is your mission to get into a second term? x yes, it is. >> we have spoken to a lot of ceos and talked about ireland. they say they are worried that the income tax is too high. >> we set a bunch of ceilings for 2014. will starts for 2015 soon. we do all of those things in context of how the economy is growing. we recognize that many of our people have been squeezed because of the economic situation and have had to put up with a lot of hardship. any relief that could come would be considered carefully by government. we recognize the frustration and itiety, but you cannot do unless you have the capacity to do that in the budget. we reflect on all of those things as we move through. the budgetary calendar has changed in europe. it is now earlier, in october, which gives a time for better clarity and planning.

also concerns about retailers, what might happen over christmas , a traditional time for the budget. >> the toast of the bond market over the last few months, everyone was pleased to see him returning. as you said earlier, conditions on the ground are so tough. when do you expect it to turn for -- for ordinary irish people? >> ireland is blocked out of the international markets, interest rates 15%. ,onfusion, unemployment soaring mortgage distress, all of that. to go from that point to a place where the national treasury managed -- last year, we were able to borrow to prepare. after the bailout, to be able to make enough short-term money, 1.7%, is quite remarkable.

there is no complacency in ireland. what we have to do is to ensure that all of that filters through the country, that people can say it has actually turned and can see it in our local economy. we still have a journey to go in that regard. >> we are almost running out of time. eventday, you are at an with sheryl sandberg of facebook. she was quite complementary. a lot of countries need to attract more technology giants or disruptors like facebook. bono and sheryl sandberg and it was quite a mix. a mixture of music and technological genius. , the talentreland pool is enormous and extraordinary. they are the creators of the future. last autumn, 10,000 web innovators turned up in dublin. they are talking a different language than the core of europe. they are creating the frontier and we are very out of that and

confident that they are going to employmented part in and globally over the next couple of years. of the 60,000 jobs we had in ireland last year, two thirds came from companies less than five years old. the big employers in the next decade are from companies that have not even been heard of yet. >> watch out for the disruptors. thank you so much. 2 irish gentleman and one italian onset. just one person wearing a coat. that must make you proud, right? >> it does. that really sums it up. we will leave it there. now, just six months after linking interest rates and unemployment, it was the big thing at threadneedle street. tok carney may be ready dissolve that link. he says there is no immediate need for rate increase.

meanwhile, the jobless rate hovers just over the 7% threshold. for more on this story from last night is jon. a lot of the distinction is the fed are trying to say tapering is not tightening. here we have mark carney backtracking. what is your take? >> the interview last night has sparked some debate across the u.k. and globally as well. this is about forward guidance, pure and simple. implemented in august, we have unemployment around 8%. the threshold does not matter so much anymore. there will be a lot of questions over that today. what does the central bank need to achieve? it needs to be credible. what would enhance credibility? would it be to move the threshold down to 6.5% or would it be to do what you were always going to do? use it as a stage post and look elsewhere. whichould look to wages,

have also been historically low over the last couple of years. the other side of this is inflation coming back down to 2%, which gives them a little bit of a buffer. they are not in any hurry to put up rates and they have an very keen to put that on the wire. iane have had paul fisher, mccafferty, and this morning, we had mr. we'll -- wheel come out. talk about the sentiment coming from martin wheeler. >> .1 four martin we'll. -- wheel. he says there is no imminent rate hike. of houses changing their view on where rates could go. let me tell you, that will have implications for people sitting at home, thinking about their mortgages. can they absorb a rate hike?

that will be a big concern for those people and the u.k. high street as well, because that can erode disposable income. >> you are right. it is about the level of disposable income against the level of extreme. we will leave it there. stay with bloomberg because we are going to go straight back to davos after the break. francine lacqua sets down with maurice levy. ♪

>> welcome back to "on the move ," live from the world economic forum. i am francine lacqua. it is day three and we have been joined by a very special guest. to our next special guest, blicis are close to a deal that would create the largest ad agency. publicis ceow is maurice levy. what an amazing 12 months you have had for a casual conversation you said was started right here. what are you talking about this year? have first to complete the

deal. then we will see if there is .ome other casual conversation >> i am glad you said after a not before so you could tell me about it. talk to me about regulators. you have the green light from some. you are still waiting on china. do not know if we will get it on time because there is the chinese new year. it may take a little more time. that is what we anticipated. we do not anticipate any major beste because our competitor, it is not impacting the competition and we believe it is good for everyone. we have not major problems with china. couple ofe last months, you have been defining the strategy, more for digital.

is there anything fundamentally that will change in this new merger? changet of things will naturally because you are bringing to companies of that size together. there are a lot of consequences. most important one is that, when you look at every single aspect, it should be good for our people, our clients, and the industry. we will take some steps in o more digital operations, big data, and being a more integrated partner to our clients in order to bring to them a whole range of services on our own omnicom or our company on our own cannot bring to them today. we will be the complete, most up-to-date upper it -- operation. this will probably make a big

change in how our industry will be structured. >> you have been here doing business. offering do your clients want? do they want more presence on social media? is the world changing the way we advertise and our clients catching up or have they already done this? >> when you look at the client, they want everything. they want to have more integrated communication, which means they want the digital ease integrated with the off-line world. they also want social and, at the same time, crm. they want all of this working ,nto an integrated campaign obviously at the cheapest price. they are looking for efficiency. they're looking for effectiveness. the competition in this world is becoming much tougher. we bring to our clients the solution which has them compete.

what they are expecting, they will get it from us and they will get it at some extremely good conditions. workinghis should be well. >> how concerned are you about disruptors? it could be a disruptor against walmart, a disruptor against a carmaker? new agencies that do great things him maybe more digital. do you feel threatened by them or are these acquisition opportunities? >> they are interesting because it is very important that these disruptors exist and can come up with new ideas. we are trying to be as -- astors -- as octave disruptive as we can be and finding the solutions on our own. a two-bedroom

apartment can find new solutions, new opportunities. it is very interesting. that extremely important these disruptors exist and are bringing new solutions. they can be acquired by us. is that theytant are creating new options, new solutions, new ideas, innovative technological solutions and all of this is extremely important for all of us. >> the branding world has changed so much in the last few years. is this your main concern, that you do not get left behind? in the made more dances last two years than the previous 10 years. will get left behind, but that we are leading the pack. today, if there is one pr agency who is really changing the world and the way we are communicating, it is ours.

we have set a very strong operation which is linked to , a lot, social networks of great options. we have some things which are extremely interesting. we got our inspiration from london, in your office, your newsroom. when you look at what bank of live, it is something that we have to ask and it is the kind of newsroom where you can monitor your brand , you know exactly what is happening on facebook, on twitter. you know what the bloggers are saying about your brand, what are the issues, the conversations. and you can interact and participate in the conversation. some things wrong which are said about your brand, you can interact and say, this

is not exactly right. if it is positive, you can push it to a higher level. >> that is so great to hear. >> it is something that we did. based on what bloomberg is doing. you are a french ceo, but one of the most known. how often do you get asked about france and the colorful affairs that we have been hearing about? , thisyou speak at davos is the conversation that is going on. effect of this story. , the people are expecting that france will take some steps. with theinterested decision that has been announced by president hollande. they are now looking at the implementations of this

decision. there are some very important steps which we have taken. now, how will this work and will the socialist party follow? >> we are back in 2. ♪

>> syria actually used to be a very well-developed country. it is now being destroyed. to it will be a big effort rebuild it. the important thing is to stop the bleeding. >> that was george soros speaking to me about the situation in syria. welcome back to "on the move." we are live from the world economic forum.

these are the bloomberg top headlines. anger mingling governor mark carney says there is no immediate need to increase borrowing costs. he also indicated the debate has begun on forward guidance. his comments came after u.k. unemployment fell to 7.1%, just above the level they said would reviewing of record low rates. antigovernment unrest spread from ukraine's capital as the government calls for an emergency session. parliament will convene on january 28 to consider a no conference motion against the cabinet. lawmakers will consider repealing laws meant to crack down on rallies. 4 days and nights of clashes have left as many as five people dead. fitch ratings affirmed germany's credit rating as aaa with a good outlook. month, standard & poor's also affirmed germany's aaa credit and its outlook. yesterday, i sat down with the

imf managing director christine lagarde and we had a wide-ranging conversation. ifegan by asking her complacency is risk more than five years since the beginning of the financial crisis. >> complacency is a risk. it is one of them. what we are seeing at the moment, to go along with the optimism you referred to, you are seeing recovery in consolidation at the moment. that is our analysis. we are also seeing risks that should be of concern. we have the old risks that are not all sorted out and we have some new risks as well. essentially, what we believe is needed is a reset of the way in which the economy grows around the world. >> how would you do it? are, the old ones, you have the financial stability, which still can be an issue, especially if there are bubbles developing here and there. we have massive unemployment

north of 200 million people who do not have a job at the moment and a growth rate that is going to slow to actually respond to the market needs in terms of job creation. we have still an unbalanced growth and uneven growth. there has been some rebalancing, but we are not there yet. the question is, will it last when the economy does consolidate further? new risks we have seen, we have tapering, which is on the horizon. it is now beginning in the united states. it there is the effect that will have, particularly on the emerging market economies. >> the relation is a concern. are you only concerned about it in europe or is this something that can actually spread? rates, ininflation general, a bit lower than where they are targeted by central bankers. i do not think that anybody can

challenge or argue with that. , there is aof that potential risk that long-term core inflation is also lowered. that has consequences in terms of potential interest rates, a consequence in terms of the cost of debt on sovereigns in particular, but on corporate as well, which have a heady -- a heavy debt load. consider we have to and imagine, then we have the risk of deflation. >> you can watch that full interview at 7:30 london time, later. we spoke about climate change, having to reset the world economy, the rights of women. , two thousander 14, she was hinting at the fact that there is too much complacency. i asked her what her top picks

for ceo's in davos were. >> bring women to the table, that is for sure. celebrate them and encourage them and mental them and help them. you will do good to your company's. wherever you can, incentivize innovation and create jobs. go for it. dnas there something in our that has changed since the crisis? >> i would certainly hope so. >> for the better. >> for the better and in terms advocating some of the ancient greek principles of balance, measure, fighting against excesses, eliminating abuses where they are. if we have not learned that a little bit on the occasion of the crisis --

>> do you think we have? >> it is a pity. future will tell. i think we have. fullu can catch the conversation later today on bloomberg television. for the time being, that to you in the studio. >> thanks for that, francine. as she said, we will find out whether we all learned something over the past four or five years. hearing,re just christine lagarde, a major concern is the fallout from the fed, the tapering effect. big moves in emerging markets over the past couple of days. ear to try to make sense of it is jonathan ferro. is this a rerun of what we saw last may, june, july? is this the ignition of shifting gears in the emerging market currency discussion? >> it feel that way if you look at some of the moves.

a lot of people talking about tapering, the signs of contagion. if you look at these individual countries, you see individual problems. a lot of talk about the ocean going back out and we get to see who is swimming naked. you do see political instability. south africa, the biggest export industry is the minors. -- miners. argentina doing an out right devaluation to their currency. explain some of these individual moves in these individual markets. >> these are countries with deficit issues. there is a lovely line that says there is not a panic, but we are not finished yet and there is no reason to buy for now. the jury is out as to whether this is the beginning of a step change in the end. >> it would be interesting to focus on the yen this morning. you saw a selloff that did not

discriminate. indices all trading lower. it is what we called lasix risk aversion. you did not just see the dollar up against everything. that was not what we saw yesterday. you some money going into treasuries as well. this is not just about paper. it is about concern elsewhere too. concern was barred by a contraction or sign a contraction in manufacturing in china. it points to that as one of the big risks for 2014 and it is becoming an issue. >> we will leave it there. who knows where it goes from here? we will watch it closely. coming up, antigovernment unrest is spreading in the ukraine from the capital. we have the latest on the situation next with ryan chilcote. ♪

>> i am manus cranny in london. this is "on the move" on bloomberg television, streaming live on bloomberg.com, your tablet, your phone, and now any windows phone. kiev thiss calmed in morning, but the antigovernment protests have spread beyond the capital in a fifth night of conflict. ryan chilcote is here with the latest on this. where are we with this? 4 days, 4 nights, the dead, the injured. is it escalating? have we reached a crescendo?

>> the violence has cooled a bit. at the same time, we have seen a geographic expansion with protest now outside the capital, where they have been. regional cities where the protesters occupied the government headquarters. why? the governors in those regions are appointed by the president of ukraine. he is from the east of ukraine. where they tend to be more ethnicsian, maybe russian. >> explain that to me. this is something that i was not aware of. i read some of the stories. you said that there is a very anar divide and it is more ethnic and cultural divide. >> it is. perhaps it has been underreported so far. one of the fault lines or issues laying out on the streets in schism, if you will, this divide between

ukrainians in the west and ukrainians in the east. the ukrainians who live in the west tend to speak ukrainian only and be more western-leading -- western-leaning, more anti-russian. in the east, more pro-russian, maybe they are ethnic russians and speak russian as their first language. these protesters in the west of ukraine were objecting, resenting the government respective regions. they are appointed from the outside, if you will. this is not to say there is any sort of civil war brewing, but it gives you an idea of how, among the other issues playing out, this issue of national identity is at the heart of what is going on. >> you are saying it is still very much about the relationship, whether it is dependency on russia or facing back toward zero. >> -- towards europe.

>> that is one of the issues playing out, but not the only one. last night, the opposition leaders, marginal control over the protesters, net with the camedent for 4 hours and out and said that they had reached a truce of sorts with the president. the government agrees that the police will not use bullets, live ammunition or rubber bullets during the protest. the government will release some of the protesters that were arrested and on tuesday, the country's parliament is going to convene and vote on tuesday. a no-confidence vote in the government and secondly, whether they should repeal the anti-protest law that was enacted last week that sparked all of these protests. they may get rid of the law. >> do you get the sense that yanukovych is backtracking?

>> it is too early to say. thee did replace government, that would definitely be a compromise. if he did repeal the anti-protest laws, it would definitely be a copper mines. all he is saying is that parliament will meet and vote on these issues. >> we will watch with very keen interest. coming up at the top of the art. guy johnson is in charge of that program, as ever. >> along with my cohost, francine lacqua, out in davos. that is where the show will really be coming from. that is where the heart of the matter is. we have a double act. david cameron will be speaking at 9:30. we will be bringing you parts of that conversation. and then we have the mark carney element. he will be speaking at an event around 1:00. -- around 12:00. we will be talking about what these men have to offer.

next focus on that in the hour. then we will turn our attention to france and the eurozone. ovici, the french finance minister, will be joining us. he will talk about where he takes his economy next. we need to talk about the relationship with the eu, the deflation threat that christine lagarde is talking about. francois hollande, we need to talk about what he is planning for the french economy. also, what have we got for you? you have got to find out what the team in davos did last night. some of the pictures of the big events that were out there last night. quite an evening. heads, not amongst our team, of force. hans nichols, what is in that glass? we will find out. >> the elixir of life. a few hotshots on the slopes of davos. catch you later on.

>> here are some companies on the move this morning. the anza -- lufthansa has asked a court to blaine it -- to block a planned strike. hascomptroller's union planned a one-hour walkout next wednesday. starbucks posted first-quarter sales that trailed analyst estimates. weakening consumer confidence and more online holiday shopping slowed u.s. gross. -- u.s. growth. the ceo is pushing higher quality goods and opening stores across america to try to maintain sales growth. novartis failed to win backing from a european advisory panel for one of its drugs. the product had a potential to corner as much of $1 billion in annual sales. novartis will ask for another review of the drug. tries, u.s.l

druggist riveter mckesson has succeeded -- u.s. drug distributor mckesson has finally succeeded. a retractede struggle, but they finally clinched a deal. a look at the share price over the last year or two, you can see a big jump in october. that is when they started to talk about it. the story is not over yet. the shares are up about 7% above the price that mckesson paid for 75% of celesio shares. they bought the shares from a hedge fund and i gave it just over 75% of celesio. now you can see they are trading about seven percent higher than that. what is expected to happen now is that mckesson will launch a

tender offer for the remaining 15% of the shares it does not have. of the shares it does not have. people out there are saying it might have to pump up a little bit extra money. me they are to prepared to pay up to -- up. what exactly is so valuable for mckesson? >> mckesson is the biggest u.s. drug distributor. what it gets is absolute heft in the european market. 132 wholesale ranges -- bra nches that supply 65000 drugstores and hospitals. it gets quite a bit of heft. the background started in 2012, when walgreens bought a 45% stake in a u.k. pharmacy chain.

that prompted rug distributor's tolook -- drug distributors look at their supply chains and say, where can we take out costs? they are happy with it. >> we will leave it there. we know it is not all business at davos. there is an awful lot of partying as well. grillthe break, we will hans nichols. what exactly is in that wineglass and did he have too many last night? ♪

>> welcome back to "on the move ." i am manus cranny in london. davos is a big business opportunity for many attendees. some say the real action only gets going after nightfall. hans nichols spent cocktail hour with an elite network or to learn the finer -- networker to learn the final point -- the finer points of working a room. i am david jones, the cofounder of one young world. up until two weeks ago, i was the only british ceo of a french company.

the main reason i come here is because you can see, in one day, more people that you would love to get to see across a year. nobody feels like we have to do a half an hour of polite conversation. the factpologies about that a 15-20 minute meeting, you can both get out of it what you want. you can spend half of your life cubes, but if you are only in and out fast for a meeting, do not bother checking your coat. that is the sort of thing she was -- she does and she will not be phased by that. other people are much less comfortable with having a high social profile. .t is about knowing people nonstop events, nonstop parties. a lot of work during the day. everybody ends up staying up too late and having too much to drink and having to get up early the following morning. balanceore on how to

your partying and networking, let's talk to the man himself, hans nichols. tell me, last night, the balance, was it networking or partying? or both? >> such a direct question so early in the morning here. we can make a lot of fun of davos for being one big party scene. you talk to government officials and ceos and it is the ability to stack meeting upon meeting upon meeting. in can get more done here six days than you can in six months of travel. one of the takeouts was that nothing is off the record. you can see that in some of the shots that we got last night. we went to a couple of parties. everything can be tweeted and every picture can be taken. these are things you have to be aware of. in hislebrity in london own right, you are certainly aware of these challenges. not tool you what, i am worried about what people tweet about me. what i want to know from you is,

is this a zeitgeist moment for twitter? notnna huffington does check her coat. or are we so consumed by twitter and social media or are they really taking center stage? >> i was not here last year so i cannot give you an indicator of the velocity with which twitter has grown. there does seem to be a sense that social media will fundamentally alter the way these conferences go. we are at an inflection point more than anything. no one knows how long that is and where we end up on the other side where people just accept mistakes that are caught on camera. party tonight? i have got to go, quickly. holdingver tom keene is torque, which i suspect is that piano bar. we have got to make sure his gin is not bruised. >> look after france on lot --

look after francine lacqua for me. "the pulse" is up next. that is it for me. let's have a quick look at where the action happens, davos. do not miss the french finance minister. that is coming up here it -- coming up. ♪ . .

>> double act in davos. david cameron and mark carney are due to speak. the preview in 30 minutes. lagardef christine tells me the economy needs a reset. french speak with the finance minister in the next hour. lacks plus, no new boss but record revenue. the xbox and the cloud deliver for microsoft. good morning, everybody. welcome. you're