kiev loses >> control as fears grow of another russian military intervention. a clean break. portugal announces its exit from a three-year they'll out program. program.t and the u.k. government comes under pressure to block pfizer's astrazeneca bid. good morning. you are watching "the pulse." we are live from bloomberg

headquarters in london. francine lacqua is off today. she will be back tomorrow. let's get straight to our top stories. the conflict in ukraine is escalating. violence spreading across the country. while president obama and chancellor merkel appear ready to impose more sanctions against russia. happensgure out what next and what has just happened. ryan chilcote joins us on the -- ryan chilcote joins us in the studio. on the phone is henry. >> according to interfax, ukraine has renewed its offensive and there is heavy fighting. eastern andeen in southern ukraine, it can be very confusing, conflicting reports from the two sides. fighting in a city not too far from there. and this is the important thing, edessa in the south of the country. we had that tragic fire where

more than 40 people were killed in the fire and the clashes around the fire. yesterday, we had pro russian activists storming a police headquarters, freeing safety seven of their colleagues. they could have taken the police headquarters, but the head of police said they would release these. they were able to avoid -- the police were able to avoid the seizure of their headquarters. clearly, this conflict is now the east, not just in and west, but the south as well. >> let's bring in henry from moscow. a significant escalation. any sense of what the kremlin's view of this is? issued a strongly-worded statement over the weekend. described what happened in odessa, where more than 40 , as a died in the fire

crime. he said the authorities in kiev had blood on their hands and also pointed the finger at western countries, the united states and european union states, which support the authorities in kiev. and he hinted that president putin is looking into options. he said he is getting thousands of appeals for help from residents of those regions. the risk of any kind of russian military intervention appears to be rising. >> give me a sense of the geography of all this. now that we have moved the point of conflict down to edessa, that changes the geography effectively. that is the main offensive for ukraine, minus crimea. >> basically, the ukrainians only have one gateway now. you can begin to see how this is

important because the russians already control crimea. you have tensions in the eastern parts of the country. if there was russian intervention, you could have russia taking these parts of the country and they would get this land bridge that would take them to a pro-russian enclave within the republic of moldova. russia could extend its border all the way to romania. ryan playing out the geography. moscows of the view from in terms of creating such a land bridge, how realistic is that? that would take significant amounts of military hardware and a lot of political capital. is that the direction of travel right now or is this an exercise in upsetting the political story in advance of the elections? >> rispoli, i do not think that the russians have decided to do

that yet. their strategy has been a different one. they have been using support for separatists in the east and now in the south to try to stoke unrest and sabotage the elections. when these presidential elections happen on may 25, they will not be able to be held across the country and therefore, russia will be able to say, whatever government that emerges does not have national legitimacy. that, for the moment, remains their goal. >> we will leave it there. thank you very much indeed. let's turn our attention to portugal, the country following ireland and will exit its three-year bailout plan. it will do so without the safety net. they will not need further help from the troika. jonathan ferro has been tracking this story and joins us with the details. that exit later this month, may 17.

we will call it a clean exit. clearly a demonstration of the portuguese government's ability and confidence to go to the markets and funds themselves. what a turnaround for portuguese debt. just bring up the 10-year bond. the yield has come from around 18% in a couple of years to 3.6%. borrowing costs we have not seen this low since 2006. a remarkable turnaround. the question is one i will continue to astrid are those low borrowing costs a false sense of security? is this an overextended search for yield? if it is, then this crisis is not over. >> let's talk about the politics of this. what does it mean for the portuguese government? they can spiny, it as success ahead of the parliamentary elections. fore is some success

europe. germany can turn around and say, this is great. portugal is standing on their own two feet. portugal can tell its voters, look, we have made a progression. 8-year low.sts, debt to gdp climbing to 130%. byudget deficit target of 4% the end of this year. that needs to come down to 3%. the challenges are still there. they still need to reform. there are going to be cuts on the way to meet those targets. >> thank you very much indeed. jonathan ferro bringing us the latest on portugal. i think it is about time for another bloomberg exclusive. in germany, news about the siemens reorganization is leaking out. now they are finalizing the sale of their airports and logistics infrastructure business. david tweed has the story. put this in context. put this into the siemens strategy for us.

>> we have heard that this business is up for sale to a group led by wilbur ross. about whatw more exactly will happen after the supervisory board meeting, which will take place tomorrow. on wednesday, we have the strategy review which we have been waiting for since he took over the chief executive job at siemens last august. -- firstants to do is of all, we are expecting to see a big reorganization in the company. it will probably take out a whole level of management, which might lead to some job losses. more in the white-collar areas, administration, then in the other areas. at the same time, we are hearing about how siemens has some parts of the business up for sale. this is a great example of the sort of business that it wants to get rid of. though the airports made about 900 billion euros -- million euros last year, the market ash the margins were

single made digits. -- mid-digits. gins have been lagging behind their two main rivals. they want to lift those margins. that is the aim of this entire strategy review. this, thing about all of you talk about those other businesses. tom, what is happening there. do you get the impression that the german government is putting the full weight behind the bid? it is interesting. angela merkel and the german government have said that they would support a bid by siemens for alstom. they were interested in some of alstom's energy assets. another business which does not have terribly high margins. but it is a bit difficult politically because just after crimea was annexed by russia, he

goes to vladimir putin's private ata outside moscow. angela merkel a little disappointed with that. she said she understands the need for german businesses to continue links with russia, but at a time when she is talking about ramping up sanctions against russia, what would -- what with ukraine blowing up thomas he is going to angela merkel and saying, i would like to have a meeting. can you please support our bid? politically, it is looking difficult. we do know if he has asked for that bid. we do not know if the meeting has taken place. i will ask him that question on wednesday when we have the strategy review, because it will be here in berlin. >> looking forward to that coverage coming up later this week. thank you very much. what else is on our radar this monday morning? the u.k. is enjoying the

holiday. u.k. government is coming to block pfizer's acquisition of astrazeneca. the takeover may not be in the national interest. they also say that no other country would approve the deal on the basis of weak assurances from pfizer. are conflicting reports of whether pfizer will sweeten its bid after rejecting the offer on friday." over to france now. francois hollande is hosting prime minister abe. it is the latest leg of his six-nation tour of europe. they are said to focus on trade talks with tokyo. the visit comes as japan deals with china. we will talk about that as well. and a new gauge shows china's manufacturing contracted for a fourth straight month. the hsbc purchasing managers index dipped below analyst estimates, a further sign of the

slowdown in china. coming up, russia's next move. president obama and chancellor merkel set a trigger date for more sanctions. ambitionsstop putin's in ukraine? we will discuss that next. ♪

>> at a time when we are trying to prove that yes, it is

possible, we can deliver growth and jobs, and then this happens. this is not because of the connections of russia and ukraine economically to the rest of the world. and thecause of tension possible implications of somebody making a mistake under these conditions. oecd secretary-general speaking about the crisis in ukraine. somebody making a mistake. i think we are getting into that point now. let's talk about what is happening on the ground. the impact on europe and the global economy. appears to be losing control. violence intensifying across the country. now more focused on the south. russia is considering its next move. west is ramping up sanctions. people are talking about russian military intervention. sanctions are going to have a negative impact on european growth. let's pull it together and give us a sense of where we sit this monday morning.

the chief european economist at barclays joins us from paris. seen, the just situation in ukraine is developing in the wrong direction. as youstart thinking come to work this morning that i need to start penciling in lower growth numbers for europe? do you start thinking that as a process? are sanctions looking increasingly likely? >> yes, i think you are right to mention we are reaching a new stage in crisis. stage 3 if the sanctions are triggered, this would definitely have a significant impact on the global economy and europe. germany would be hurt quite badly. also estimates showing that we could have up to 1% of gdp impact on germany, which is quite big.

--s is something we need to i agree. >> what is your sense of where you see the numbers? we talk about these numbers floating around. how bad could it be for germany? at the start of the financial crisis, we saw just how geared germany is for the global economy. it does not take much to start pushing the numbers down quite strongly. >> we should not exaggerate. case, it could be 1%ficult to cede more than of gdp. past,y has shown, in the that they were able to deploy some measures to continue to grow. germany was heading towards th, may be even higher. clearly, the risk now is to see growth below 2%, maybe in the range of 1%-1.5%.

>> is there anything that can be done fiscally to alleviate that as a result of taking -- taking the russian economy out of the equation for germany? with regards to what is going on in russia and ukraine, i think the ecb is facing a dilemma anyway. recovery, forget about russia, is already quite weak. even though we are now one year ahead after the recovery. we are in a situation where growth is 1%-1.5%. i think the ecb is facing a challenge. crisis ism of this that it might actually increase a little bit inflation. however, inflation remains well below the ecb targets anyway. a move by the ecb is a

possibility. with regards to the other pillar , fiscal policy in europe, i think the room is narrow. most countries are continuing to consolidate public finance and i do not see any room for increasing public spending or cutting taxes in this environment, except maybe germany. >> even in germany? for aople have called long time for germany to stay more on the fiscal front. they have locked themselves in the not do that. could the german concessions change the story to allow themselves more fiscal wiggle room? >> yes, of course. i think it could. it is probably a way to have some significant move into fiscal policy. do not expect anything big, but i think some steps forward would be very helpful to the general economy, especially since germany is probably the country which is most vulnerable to what

is going on in russia. take on whatyour we are expecting from the bank of england this week? this is kind of the last mopc -- mpc meeting without the fully formed mpc in place. is this going to be a nonevent and the next one is the one people focus on? give us a sense from barclays. is the is most important next inflation report. we do not expect any move this week by the bank of england. however, given what has been going on in the labor market the ecb will have to have a second thought about it strategy. it is interesting to see the debate about the economy. we are in a situation where there is a big absurd he -- a bsurdity about the slack in the uk's economy. the timing of the next policy

move needs to be on the upside. >> trying to measure output gaps. that is always fun. thank you very much indeed. come, the walker revolution. we will test out the speaker that controls from any service into a surround sound system. we will take a break and see you in a couple of minutes. ♪

>> good morning. welcome back. you are watching "the pulse." let's talk about a tiny french invention that is creating a great deal of buzz in paris right now. rock'r speaker can turn any surface into a loudspeaker. jeff howard has the report. >> forget about your fancy sound system. with this it'll device, you can play music through just about any object. connect it to anything you want and transform the surface into a real speaker. also work.radiator even a trashcan, anything you want. >> made by a french company, the speaker uses a vibration system inspired by the technology that submarines used to communicate. thanks to a bluetooth connection

, you can control it with your smart phone. already soldas about 50,000 of them, mostly in france. but it wants to start exporting as soon as this year. >> we really want to go to the united states and canada. >> the french company is developing accessories, like this tag that lets you where the speaker on your head. have sound around your head. is you better about this can hear what is happening outside. >> there are more entries on the way. the sound will just depend on how creative you are. >> the helmet thing is really cool. london is shut today. let's find out what is going on elsewhere. >> a little volume in the market and actually developing into a lower day. cac down by .5%.

the dax down by about .4%. comes in at 48.1. contraction territory for the hsbc. it is a number that has been trending lower. concerns about signs of growth or lack thereof in china carry on. was mostlydollar lower. a bit of risk aversion for the japanese yen. those moves will start to be erased as trading gets underway in europe. that move most of higher that we saw earlier this morning. we will show you another trade. this is the swedish krona. awful industrial production data out of there. a move lower. norwegian currency on a move higher. certainly is. jonathan ferro covering the markets for us. still to come, the next space race.

companies building america's next shuttle. we will get a look into this space pioneering story, including a tour of spacex with ceo elon musk. ♪

>> welcome back. you are watching "the pulse. so i am guy johnson. my colleague, francine lacqua, is off today. france's president francois latest of aon the six nation tour of europe. japan has to deal with mounting tensions with china and is certain to talk about that.

ukraine is seeking to dislodge separatists in its industrial heartland. violence has spread to the black sea gateway of odessa. got together this weekend to celebrate itself at the annual white house correspondents a precision dinner.- appreciation the president made fun of everything from phone tapping to soft drugs. >> colorado legalized marijuana socialar, an interesting experiment. i do hope it doesn't lead to a whole lot of paranoid people who think that the federal government is out to get them and listen to the phone calls -- and listening to their phone

calls. that would be a problem. >> hans nichols joins us now to explain why this event is so funny. to make to i'm going political statements that are probably shouldn't. one, resident george w. bush was funnier than we give them credit for. obama is funny. he does and make fun of himself as much, but you have to hand it to him. he is funny and his timing is very very good. just listen to this joke. >> of course, we rolled out healthcare.gov. that could have gone better. [laughter] in 2008 my slogan was yes we can. in 2013, my slogan was control alt delete. >> the comedic criticism of president barack obama as he doesn't make fun of himself enough, he just makes fun of his

enemies. he's a little thin skinned, they say. sidell come down on the that says use pre-funny and can tell a joke. >> control alt delete, that is a bit old school. i have to ask. who did you take? >> at her know if i'm allowed to say. i took the former ambassador to the u.s.. don't take it former russian ambassador to a party like this. you won't be able to keep up with him drink for drink. boehner is made fun of quite a bit. we like it when he gets roasted. obama used the opportunity to make fun of his pigmentation. let's have a listen. >> these days, the house republicans actually give john boehner a harder time than they give me. which means orange really is the new black. up porters like

it.- why reporters like if you have a string of red paint from your suit jacket, he would come by with a lighter and lighted on fire. john boehner is a lot of fun. hans nichols, thank you very much, indeed. dinners's go from big to nice cars. the electric car race heating up on all four corners of the globe. this comes as europe seeks a way to reduce pollution. for more now, we're joined in barcelona by the chairman for nissan europe. congratulations. how many of these things are you going to sell? anye are not announcing

sales production figures. we are celebrating the first production vehicles of the new electric van. there is no announcement on volumes. >> ok. you're hoping to sell more of these things in the future. andstarted with the leafs now you're going to the vans. i get the sense of the technical difficulties you are dealing with here. >> there are two major issues. we are making over 100 million euros of investments. the big result looks similar to the existing in be 200 van. over 30% of the components are different. is produced ink sunderland. a big chunk of the hundred million euros of investment goes into the restructuring of

product and the new components, and obviously come -- preparing it for whole new platform. it is a massive exercise. >> why go this direction, particularly with the van? there are various options when it comes to electric vehicles. you can have all electric, you can have a three cylinder engine inside the vehicle which allows to charge they battery while you're on the move. if you are a van driver that may be a better option. or you can get the full hybrid option. why did you down this route, particularly with a van? you take a step back and look at our business, there's a whole blend of different technologies that will soon come to the theme. half of van drivers in europe don't need a vehicle the travels more than hundred 70 kilometers. than 170 kilometers.

perspective, the cost to run dnb 200 is less than three euros per day. if you compare that to her normal gas engine, that will be a massive financial benefit. the driving experience of the electric vehicle is fantastic. there's limited vibration. , it is veryrunning efficient. is a massiveost benefit. on top of that, obviously, there is environmental benefit as well. if you put the whole package together, it is a great proposition for many commercial reasons. oldest production facility in europe. it is the center of our lcd production. it is where vehicle know how it

is. it will be the mother plant. this is a production announcement, but it is for the globe. it will be exporting electric vehicles around the world. i think it is a great boost to spain. a massive investment. >>, guys do you have working on it? this is just the start of production. we are bringing an additional vehicle, a compact hatchback, in the second half of this year. we will increase the number of people working here significantly in the next 6-9 months. we are seeing a big increase in headcount this year. >> next year, if i stood where you're standing now, how many of these things in my going to see rolling off the line? we will have this compact

hatchback coming off the production line as well. we are not announcing production figures. we will produce enough to meet the demand. it gives any indication, we're seeing a rapid increase in the adoption of electric vehicles. leaf has sold 52,000 globally. every year we see new increases. we are extremely confident that electric vehicles are part of blended technologies and will be an increasing part of vehicle consumption. >> where are we in the evolution of the story? clearly, most of us will be driving some sort of electric vehicle. that is clear. that is a no-brainer. where are we in the evolution towards that? >> i can give you a direct comparison. the first five years of hybrids, it took five years to

sell 100,000. with the introduction of leaf, we surpassed 100,000 already. in terms of the evolution of the demand in the market, i would say electric vehicles are starting to really take notice in the market. at the moment, we are seeing 100% growth year-over-year. i expect to see massive growth in 2014. the real sign of the tipping point is if you go to a motor show, every manufacturer is talking about motor vehicles -- electric vehicles. i think the tipping point has already started and will continue to grow from here. >> paul, what do you drive? drive a nissan. will you do a conversion at some point?

occasionally,eaf but at some point, yes, of course. i drive all cars. i'm very lucky in my position to drive many different products. around theany places world. i work in japan and geneva and london. -- my car ine u.k. the u.k. is a different model. when i'm in geneva i drive a leaf. >> hall wilcox, always a pleasure. paul willcox. john moulton joins us next. ♪

>> to ever question if you're crazy? the race is on. >> good morning, everybody. welcome back. u.k. opposition leader ed miller band accused by david cameron of inappropriately promoting pfizer and astrazeneca. hands, run us to the charges that ed miller band is leveling at the prime minister. iband is leveling

at the prime minister. >> they're doing all this by the books, they say. the business minister talking about this being in the public interest. there may be an opportunity for review. let's take a step back and look at the siemens -- ge deal. industrye french minister they're talking about the need for creating to european powerhouses. it kind of backfired. in part, or member, siemens made this deal and they made all kind of assurances that they would make new job cuts for three years. here, the script is flipped. here's what the ceo saying. keep 20% of combined r&d in the u.k.. that will be for at least five years. a substantial manufacturing facility would stay in

macclesfield. that is what it seems to have gone in france. it is too early to tell in both cases. it seems that the public has a better sense of whether or not it will lead to more jobs are fewer jobs. >> i think the public is probably slightly less engaged in this deal then maybe the french are. probably less engaged than the british were when it came to dbury's. p look, this down to, is what we have seen so far in the siemens deal. it is one example. the board still has to decide. we have to agree on price. there's a lot that still has to happen with astrazeneca.

>> hands, thank you very much. hans nichols, our international correspondent heard will continue to track every piece of this story. remember, bloomberg broke the story at the get go. let's talk about the political angle of all of this. clearly, this is something that politicians are getting hot under the collar about. he's often referred to as a turnaround specialist. the question is, is this a company that needs turning around or is it doing ok on its own, or would it be better as part of pfizer? where you sit on this? >> both companies are declining in revenues. both have very mature product portfolios. quitehave relied extensively on acquisition rather than r&d to generate new products.

pfizer is smaller now in market cap than its last couple of acquisitions. it is a contracting business that buys things, sucks out the revenues from the products and moves onto the next. the art thing about astrazeneca is it really isn't very english. it has 7000 staff in the u.k. out of 52,000 globally. chairman, adish french chief executive, a french finance director. it really isn't a very big deal in terms of total u.k. , and the undertaking to keep 20% of the r&d staff of the u.k., that is basically less staff and r&d and astrazeneca has now for the combined group. it is not much of a commitment that is being made. i think this is going to go through. when people sit back and look at it, it is not strategic to the u.k..

it is not a threat to the u.k.. it is not really a very big deal for the u.k.. you lay out the industrial logic of why this is potentially a deal that should go through. this looks like a fiscal story to me. this is about the fact that you back repack trade capital to the united states. is that the right way to approach such transactions? >> it may not be the right way, but it is certainly good arithmetic. 40%can either pay pushing tax by bringing the money back to united states if you are pfizer or you can take 20% tax on u.k. profits at the most. so the u.k. is positioned as a tax haven here here it is definitely a big driver in this deal. >> are you going to see more of that further down the road? the u.k. has positioned itself to be this kind of offshore tax haven. we see more global transactions as a result?

yes. they are happening at a reasonably steady lake already. it is quite a steady driver. >> do think the fact that the u.k. economy is showing a more is this justor something that is so non-u.k. focused that it doesn't matter what happens in britain? >> u.k. is a relatively small part of it. is a huge amount of sales and marketing globally. the u.k. is something like five percent of the revenues. so clearly, a very small part of the story. how's business at the moment? is it as good as it looks in the black and white pages of the "financial times"?

>> i prefer misery. actually the misery is in retreat. parts of the country are doing well. there are still parts of the country which are going absolutely nowhere. manufacturing is showing a .ittle bit of an up swing there is a rather concerning level of construction boom in what is happening in the u.k.. the u.k. is much healthier than most of europe. it is a relatively cheerful position to what we have had for several years of really quite deep depression. always a pleasure. we're going to take a break. back in a couple of minutes. ♪

>> welcome back there you are watching "the pulse." sector is heating up. the company is focusing on a new acquisition. free joined by michael iedheim. >> we don't take any development or consumption risks. our operating skills to

manage those assets more effectively, to deliver an attractive dividend yields to investors that have subscribed in the ipo. >> what is the return? >> on unleavened basis, it is in the order of 8-9%. we will be paying dividends in the order of 6.2 five percent, rising with inflation. the difference between those amounts is we invested in the business to grow the underlying asset race, to grow the fund over time. >> was a fund like to get involved? >> there is significant opportunity out there. we have a series of partners that we deal with that build the assets and then deliver them to us once they are constructed, which allows us to invest the capital we have raised. >> is it going to become harder to attract investors in the future given that the yields are therefore a risk free rate of return is getting

squeezed. is that going to be a little tougher going forward? >> i think we will now start seeing more and more demand for funds like ourselves. have the opportunity with a business model that is underlying that distribution model. that the u.k. returns dividends are linked to upi obviates part of the problem and gives investors the upside and a connection to rpi. >> just briefly, how easy is it to find new project. the u.k. government has suggested they want to have at least 10,000 megawatts of solar power installed by 2020 to meet the eu targets there it today we have about 4000 megawatts. of 10it is in the order

billion pounds sterling. >> for our viewers it is the second hour of the pulse.

>> kiev loses control. fighting grows across the ukraine. fears of another russian military intervention. a clean break. announces a three-year bailout program without a safety net. good morning to our viewers in europe. good evening to our viewers in asia and a very warm welcome