>> trading blows, the u.s. and assia clash at the u.n. violence escalates in eastern ukraine. eu foreign ministers kicked off emergency talks shortly. back in the race, peugeot slashes its lineup in a bid to get back to a profit. its ceo unveils his recovery plan this hour. don't worry, china will save us. dsivate equity titan guy han said the country's appetite for m&a is key. we will bring you that exclusive interview.

good morning. look him. you're watching "the pulse." we are live from bloomberg's european headquarters and london. i am guy johnson, francine lacqua is off today. what have we got coming up for you? does the masters make you want to swing like a pro? do you want to be bubba? we are going to go inside a luxury club that has everything you need to train to make that course work for you. writing by the seat of his pants, meet the entrepreneur who puts it all on the line. we begin with a situation in ukraine. european foreign ministers are holding emergency talks shortly to try to defuse the crisis. clashed atd russia the un security council meeting late last night. this as violence escalated in eastern ukraine. david tweed has the story.

david, the ukrainian president spelled out the deadline for progress and separatists to lay down their arms. we passed that two hours ago. what now? iflook, it doesn't seem as there is any action being taken place on the ground. i have spoken to our reporter who says that all is quiet. those progression separatists still inside local council buildings. these are the buildings which are causing such contention in kiev. we have heard from kiev a statement on the interior ministry website. it says that the national guard reserve squadron will start combat duty in the slovyansk region. that won't start until tomorrow. their aim is going to be to stop terrorist shows and localized separatism and try to control the situation in the region. one other bit of news, we have heard the ukraine head of the anti-terror center has been fired by the president. we will find out more on what

the reason is behind that. i just want to quickly briefly talk about this clash between russia and the united states in the united nations last night. samantha power saying that insecurity in ukraine is written and choreographed by russia. russia says that the western powers are supporting neo-nazis in kiev. it is pretty inflammatory. >> and where do we think the european foreign ministers are going to go with this today? >> one of the things that european foreign ministers need to prove before they put into place any further sanctions is that there is this link between russia and the pro-russian forces in eastern europe. they don't have that proof. that is one thing that needs to be established.

is, there isng still quite a lot of opposition against putting further sanctions into place. i am just going to tell you about a report that came out this morning. deutsche is going to meet with the head of russian railways. lobby tovon trying to get the contract to build a railroad between moscow and kaza n. this could be worth as much as 20 billion euros. there is a lot of german business. >> we have been hearing from siemens and various other companies. thank you very much indeed. david tweed joining us from berlin. global finance chiefs are trying to ignite growth in their economies. exactly how to do that was the theme of talks at the imf spring meeting in washington.

draghi usedt mario the opportunity to take his strongest storms -- stance yet on the euro. >> the strengthening of the require tote would make our monetary policy stance to remain accommodative, would require further monetary policy accommodation. so the strengthening of the exchange rate requires further monetary stimulus. >> where the markets listening? let's find out. jonathan ferro joins us now. >> were they? let's bring up the euro/dollar chart. a move lower by a quarter of one percent. is, is that ay market that is pricing in further stimulus? you probably have to say no. not really. especially when it has had the best week since september. it is not as if the euro was falling.

are the markets becoming increasingly desensitized to the words coming out of the ecb? we have all this talk of connective rates, nothing happened. now the talk of qe, is anything going to happen? are they all together on which tools to use and when exactly are they going to use them? not sure they are there yet. >> probably not. another thing we haven't talked about is flow. there is still a huge flow out of em. that is something you can't ignore. the french are particularly sensitive to the euro rate. they have been talking about it a lot recently. the french finance minister. >> he is talking about the strength of the euro. he is not done. the new prime minister singh, why should we do all these things if the euro is going to kill us anyway? -- actuallyat mr.

had to say on the budget deficit. if they want growth, they need to get that growth. they need to be forecasting better growth if they want to rein in that deficit. the 3% deficit target is our fundamental objective and not because it is expected amongst nations in europe that because it is in france's best interest to achieve that target. a 3%when we achieve deficit target can we start to reduce our debt. then we can start to lessen the burden of this debt. we need to do this in france and in europe. it is our goal to achieve a level better than the 3% target in 2015, 2016 and 2017. >> he is optimistic. the problem for everybody who has been watching france the past couple of years, they have a track record and that track record is missing targets. they got a new extension of two years last may.

they were meant to the f 4.1% last year. they were meant to be at 3.7% last year. they listened that, it needs to be listened again. they keep missing these targets. he has got to be optimistic. he is a new man in the job. a lot of people are still pessimistic. >> draghi was keeping pressure on governments. you have got to deliver, you have got to do what it takes. the euro is an excuse. it is not a 100% excuse but a bit of an excuse. let's not the euro down and then you have no excuse. >> that is one way of looking at it but he hasn't knocked it down. was he trying to cap the advance of the euro? or was he trying to drive it lower? if he was trying to drive it lower, i don't think that is going to give a lot of guys in france, spain and italy the breathing space they are asking for. >> it did seem to get passive approval from others.

the u.s., the japanese even seem to be going along with it. the fact that now europe needs a cheaper country -- currency. we see what that did to japan. these things maybe take a little bit longer to of all. we will get back to you a little later. let's get to our company stories. peugeot shares under pressure. the carmaker prepares to slash its lineup. caroline hyde has more. we are waiting. half past this hour we are going to get the plan. what is he going to say? ng his investors to take a punt on a pond. back in the race, that is the strategy. investors not buying it. shares are down even though he is already outlining the key target. ambitious targets coming from peugeot which is the french carmaker under a big restructuring after they lost 7.5 billion euros over the past

2.5 years. how is he going to do it? mainly by cutting costs. he wants to cut costs by about half a billion euros. he wants a return to profitability. 2% operating margin, that is that measure of profitability. margin by 2019 to 2023. these are ambitious targets and it seems to be a bet on china. he says, i am going to increase volumes, mmm by 2020. -- triple them by 2020. they fell on china, big bet on the rest of emerging markets. russia, latin america. back,also scaling bringing focus to peugeot by cutting down on the lineup of vehicles they currently produce. he wants to cut the number from 45 to 26. almost in half is how much the

new chief executive is promising to cut vehicles. there he is now. he only joined peugeot in march. he is trying to hit investors between the eyes. some very ambitious targets. so far, shareholders aren't buying it. we know that carmakers do get hit when there is risk aversion in the market. there is risk aversion today. peugeot up by more than 3.6% despite promising to cut the number of vehicles and cut costs in general. >> clearly there is a wider story going on here. you have got to be looking at this and thinking the market is saying, we want more details. how are you going to do this? we will probably find that out a little bit later. >> certainly it is going to have a lot of convincing to do. doesn't seemseen to be winning them over. maybe not enough devil in the detail quite yet. how will he reach these positive

cash flows he aims for by 2016? 2 billion euros of positive cash flow. perhaps just cutting the lineup of vehicles isn't enough to win just yet. >> thank you very much indeed. what else are we watching this morning? shieldls say the ocean has detected an oil slick in the search area for the missing malaysia right 370. the australian ship stopped norching when the pinger -- confirmed signals have been received since last tuesday. a vessel will be redeployed to the seafloor as soon as possible. facebook is gearing up to provide financial services that would let users store money on the social network. users could also pay and exchange money with others. the social network is said to be weeks away from receiving approval in ireland for the services. citigroup is cutting as many as 300 jobs in its global markets

division. a is trying to cut costs as slump in bond trading a rhodes its earnings. citi will release first-quarter earnings at 1:00 p.m. u.k. time today. what have we got coming up? france's new finance minister says his country is vital to europe. i think we can take that as a given. we are live in paris with reactions to our interview up next. ♪

>> we can only have a strong europe if france is also strong economically. ourpe is interested in growth plans and if it will succeed in permitting france to achieve both growth and reduce deficit. >> that was france's new finance minister speaking to us at the imf meeting in washington. he is vowing to bring public finances in line with european rules. he is also talking about growth. is he being optimistic? atenior european economist barclays joins us. the new finance minister is two weeks into the job. he is saying that france is going to outperform expectations this year. you have probably done the numbers as well. what chance has he got? >> good morning. actually have a growth

forecast a bit above what the government has. government is currently planning 0.9%. we have a growth forecast around 1.1%. it seems doable. from a pure risk management and public policy point of view, it is always wiser to be a bit more conservative on your growth forecast. >> 1% growth is not going to do it. >> it is better than what we had before. it is a gradual recovery as we have in the rest of the euro area. it is not as bad when you consider the fiscal consolidation that is going on. in france and in the rest of europe, we have fiscal consolidation over the past three or four years and it is going on. it is slightly diminishing. when you put all this together, 1% growth might seem a bit low but it is still quite good given the amount of fiscal consolidation. had aer last year, france

growth rate of 0.3% while it was doing fiscal consolidation of around 1.5%. those are big numbers. growth in this respect is not that bad. >> he is talking about easing the tax burden for businesses mainly, but also consumers to a certain extent. is he going is, how to fund that? it does seem that that seems to be a little murky. >> i think you are right. when you put face to face the amount of tax cuts or contribution cuts, you have more or less 30 billion of those. it is financed by a plan of extra saving of around 50 billion. that leads you 20 billion to decrease or structural deficit. that is 1% of gdp over the period 2015-2017. what has been penciled in so far? budget by balance

2017, the government would probably need to do something closer to 1.5%. here we have a 0.5% of potential fiscal slippage. that is the gray area where either the government will announce further saving measures get fromse, or it will the european commission a bit more time to decrease public deficits and a slowdown in the pace of consolidation. 0.5%,ay areas are about which in the grand scheme of things is not that much. >> nevertheless, if i was pulling where hell on his polling right now, that it out at the moment isn't exactly favorable, i would be hoping that brussels gives me a bit more time. that is not looking particularly likely. it is a tougher choice than we think. is, but there are two

interesting points. the first is about the transition, how to move from a higher deficit economy to a lower deficit economy. the pacee question of of the fiscal consolidation is a real question. it is not really answered by the fiscal compact. the fiscal compact has ground rules that were in most cases. whether it is optimal in this case has not been proven yet. the fact that the government actually asked the question on whether or not this pace of consolidation is the right one is the real question. there is another question behind this. it is about the policy mix. that is the mix between fiscal policy and monetary policy. we have heard draghi all over the weekend but we also hear italy and france. if ecb doesn't help us to generate growth, if ecb is not accommodative enough, we will do it ourselves. that is also a very interesting question in terms of, what is

the optimal policy mix in europe? if you ask me, i would rather trade half a point of deficit against more growth that will put france and other countries in a much better situation in three or four years. >> they are talking about the fact that the ecb should do more. you wonder if they are overplaying that one. if draghi got the euro down to 1.30 or maybe even 1.25, what impact would the monetary policy side of the equation have? end are possibly going to up having this deficit conversation anyway. >> it could be, but exchange would do a loton of good for inflation, generate a bit more high inflation. for growth, generate a bit stronger exports. at a moment when france would go through quite an ambitious ,rogram of cutting labor costs

you will have the double impact of depreciation and lower labor costs. of and exchange rate depreciation is not negligible. the french government has also been putting on the table a rhetoric on if growth is better, then deficit will be better as well. it is true. on the short-term, high inflation means higher tax revenues. it means that maybe france will get 2% or 3% easier. euroreciation today of the will do a lot of good for the euro area. the question is whether drug he can engineer it. that is maybe more questionable, whether only talking down the euro will be enough or whether they ecb will need to talk up the dollar area and -- dollar. what can monetary policy still do? on the short-term, we see draghi ecb council members

stepping up communication. that is a good thing. the question is obviously open on -- >> we're going to hear more about that. thank you very much indeed. we are going to take a break. still to come, how not to pay taxes. wouldn't that be nice? the supposedly gold loop holes used by the wealthy to avoid paying up. george osborne, pay attention. ♪

>> welcome back. you are watching "the pulse." to jon ferro for more on the markets. >> but check out equity markets for you. a lower trading day. ftse down by 0.6%. the dax down by 0.9%. heightened violence within the ukraine driving sentiment this morning, driving equities lower. everybody is talking about one thing, euro. mario draghi's comment striving euro/dollar low by 0.3%. is that enough? most people say no. socgen says this would have to hit 1.50. for euro/dollar to go lower, most experts will tell you one thing, you need better data out of the u.s. and you need a dollar rally. u.s. retail sales out in a few hours. looking for 0.9% growth. that would be the best month since september, 2012. we will get more on that

later. up next, china to the rescue. private equity titans. the company's appetite for them and they could revive europe. that interview when we come back. ♪

>> welcome back. you are watching "the pulse." i am guy johnson. francine lacqua what is off today. she will be back soon. finance minister says they may grow far from the projected this year. its strategy is to do better. some people are currently thinking. trying to share is the core of our objective, to find the best way that achieves reducing the

deficit. bruce -- bubba watson wednesday masters. he shot a three under par. 69 on the final round. --is three strokes over ahead of jordan speak. -- speith. russia's ambassador calls on kiev to start a genuine dialogue. european foreign ministers meet shortly to try and defuse the crisis. more information on the situation. we are going to go to henry meyer. contact over the weekend. casualties over the weekend. what does it look like monday morning on the ground in eastern ukraine?

very intense. there was violence over the weekend. the first bloodshed in eastern ukraine since the crisis began. the official death toll was 1, but details are coming in that servicemengher, two and two civilians. has given avernment deadline, which is expired for protesters to abandon buildings and the situation is very explosive. >> what are the russians saying? withoutrces are insignia, but they are armed with significant -- sophisticated weapons. the russians say give us the proof. you cannot show us any evidence that shows these are russians.

ukraine are convinced that russian special services are involved. concern is that putin, while avoiding a full-scale invasion of eastern ukraine is going to be using these thishanded tactics to get part of the country to split off from the rest of ukraine. what prospects are there for talks later in geneva? >> they do not look good. the atmosphere was already pretty bad. this has made things worse. will00% sure the meeting take place, but even if it does, i doubt that they will be able to reach an agreement. time.nk you for your henry meyer, joining us from moscow. time for a bloomberg exclusive. one of europe costs largest private equity groups says

chinese money is changing the -- m&abal and and a deals are valued. still stuck in a groundhog day. to try tocontinued get better and they continue to, every now and again, offload things. the things that are most attractive to me are what art described as zombie companies. they have been sitting, bank control, for several years. >> a little bill murray reference there. he keeps waking up on the same day over and over until yet personal redemption. >> you need structural reform. it is not the same as the structural reform needed in japan. some of the protections need to

be taken off. we need to take on younger reduce graduate unemployment. in doing that, we will have to let some of the older people move on and go on to retirement. what is in your discussions to get the chinese more interested in investing in europe, in a dental -- in addition to the sovereign bonds? europe is not going to collapse. on the other hand, europe does need capital. it needs some life. the chinese have that. and they have cash. and they have markets. >> how would you assess the state of private equity right now? pools ofu see those

money collecting in china changing me m&a landscape? >> some of the larger chinese forms are approaching blackstone. they are getting permission to invest abroad. they will be competing for businesses which they can then leverage in china. because of their chinese connections, the price they are about to pay will be higher. in certain sectors, you will see ,n increase in price and frankly, you will see some of the western for -- firms priced out of the market. they're looking for strategic commodities as well. meat producers -- >> we have a large cattle farm in australia.

>> looking very relaxed, pool-side. and look atith m&a the megadeal that has been put through. china, picking up a theme here. -- yesterday.e to >> low-cost operation. 400,000 tons a year. that puts us in the top three in the world's production. it has over 20 years life and it is below a dollar cash cost. is jesse. us now i want to pick up on that.

he is spending more than some thought he would be paying for these assets. >> it is around a $5 billion mark. .ositive news pay have agreed to back $400 million in expenditures in the assets this year. you are one percent higher than the minmetals share. we are waiting to find out how they're going to use the money. this is an exercise in deleveraging. there could be a special dividend. >> the statement did refer to lowering debt, so perhaps that is why there -- some of the shares have not popped.

some are talking about two to $3 billion. clearly, the intention is to reduce the net debt. an asset like this does not come on the market very often. will announce sales later today. it has been on the acquisition trail this year, with the purchase of china's magic holdings. will this boost the company's growth? hyde.ith more is caroline thing.a big -- theme. >> it has 28 brands which makes

us the biggest cosmetics player. beenr, they have really blazing the acquisition trail. they have splurged more than $5 billion. chief among them is the deal in china. they are focusing on the growing middle class and the emerging markets. , face products and facemasks seems to be the area of growth. magic holdings spent almost $700 million, apparently their fourth biggest deal. what do they get for that? 32 chinese provinces and regions. that seems to be the key play, focusing on a $34 billion market that is china. beyond the china, they're

going towards the top end of the market. i find it hard to believe that there is anything higher than a snail facemask, but apparently there is. >> there is. beyond magic, it is about the focus on luxury. that is a key area for l'oreal. 25% of their sales are focused on luxury products and that is where they get most of the growth. that is why they are stepping up another company. it is the brand that is sold in spas. it is a real area of growth for l'oreal. overall, we are expecting about ..4% growth it is slower than in the fourth quarter, but it is still better than the rest of the market. the key areas for growth seem to be luxury. most of the sales go to the mass

market. that is why they are making a big play on china. hyde, ourou, caroline european business correspondent. we will have more on l'oreal's beauty lay book in the next hour. the next hour. we will talk about the playbook that they are pushing through. also coming up, peugeot, under pressure. slighting. can i get back on track? we will be live in paris next. writing by the seat of his pants, he is putting it all on thesene to sell powerboats. nice job. see you in a moment. ♪

>> good morning. welcome back. you are watching "the pulse." i am guy johnson. let's talk about something happening in france. peugeot, under pressure. stock is down. they are preparing to splash their model line-up. to the principle on the energy and transportation team. he joins us from paris. the market seems unimpressed.

are they waiting for details of the new plan? stock is trading lower today. >> there have been some announcements. they'rehe fact that going to build cars that are in line with a different market. they're going to set the original division, one for russia, one for jamaica, one for china. they are more a tommy muska with more power to design their own -- they're more a, must tonomous with more power to design their own car. >> why don't they build factories in low-cost regions. there was some talk we made about factories in eastern europe. is that the direction of travel?

that is part of the question pending today. are they going to announce a low car strategy? they have been able to penetrate all of the emerging market with dean --. the partnership they have with forfeng would be a good -- them to renewed the production cost varied nothing announced on the lower-cost car. cost asre about premium a premium brand. the objective is to move in a like of od. it will take time. clearly, now, the objective is to reduce the number of cars they manufacture and make sure --y are a brand which are each other. the car sector,

particularly the low end small car market is an structural decline. kids do not want cars and more. face on meet face to facebook or wherever else they want to meet. they do not need cars. what you do if you are trying to figure out a strategy for this brave new world? of the stronger challenge for all of the manufacturers worldwide. the car is different than what it was for two years ago. for two years ago, it was a way to emancipate, to leave your parent's house. the car is not a status anymore. it is just a constraint. people of the generation y, 1980 and forth, they buy much less car and they do not take their drivers license anymore. that is one of the big challenges. if you look at the market like

india, india went down 10% last year. why? people could not afford the oil prices. manufacturers have to design cars which consume one liter pour hundred kilometers if they want to continue selling cars because the oil of the lability is -- oil availability is constrained. to --ally, people need manufacturers with small cars with low consumption. >> is there anywhere in the world that that is not happening? is that going to be the best bet? all of theook at emerging markets, russia was down six percent last year. india was down 10% last year. brazil was down one percent last year. aina is the only place where grew 15%, up to almost 20 million cars. the highesties,

growing region. we have seen that in a recent report. with 3.5 million market going at more than 10% growth rate. they're going to leverage the partnership they have with dongfeng to go and sell cars in those new markets. >> we will leave it there. thank you very much, indeed. the view from frost and sullivan. i want to bring you some comments. we have the russian foreign minister speaking. , making comments vis-a-vis ukraine. he is saying russia's not interfering with ukraine's internal affairs. russia does not want to destabilize ukraine. this is in stark contracts to

views we are getting from places like washington. you are looking at live pictures coming from moscow as the russian foreign minister speaks on the subject of ukraine. we will have more when we come back erie we will see you in a couple of minutes. ♪

>> welcome back. you are watching "the pulse." bubba watson has another green jacket. his second in three years.

he won the masters and augusta. the golf driver, the pink one did again. let's stay with the theme. if you want to drive like bubba, if you want to cut like bubba, want to driveyou like bubba, you may have a problem in places like new york. there is a new indoor golf club that is attracting player from the pga tour. matt miller got in the swing. >> it is a tough choice new yorkers had to deal with for years. beth page is a world renowned golf carts -- course and it only costs $65 to play. good luck getting there using public transportation.

>> you can go to a regular golf course and take a lesson on the range. you can read a tip in golf digest on how to treat your body, but we get so deep into it that we come together and we work on your golf swing together. we were on it in one facility. shut-insat wall street , golf and body will get you back in shape and ready to hit the links when it counts. it is one block from penn station. we got an inside look at what it offers. state-of-the-art fitness equipment. privateass trainers, a living room, a stock café, seven high-tech hd golf simulators. with -- announced equipped with the golf radar that gives data on your

clubhead's angle of attack and 3-d imaging of the ball's flight. ismy fallon as a member, but it a winning formula? george derringer started training last year. he won the british amateur open. he enjoys playing golf, but i think it is even more refined in that everyone is a member here that wants to get better at playing golf. >> it is a value proposition hard to resist. if tomd not be surprised schiff opened more these one-stop shops in the future. matt miller, bloomberg news. quick scan i moving? focusing on bloomberg radio, bloomberg the first word is up next. for our viewers, it is a second hour of the pulse. what are we going to be talking

about? we will carry on the conversation surrounding the ukraine. plus, l'oreal, is it worth it? we will talk about its m&a strategy when we come back. ♪

>> the u.s. and russia clashes as violence escalates in ukraine. offthey're kicking emergency talks shortly. back in the race? peugeot flashes its market lineup. china tightens its grip on copper. tal snatches up a mine for nearly $6 billion. good morning to our viewers in europe, good evening to those in