>> russia's prime minister speaks exclusively to bloomberg in an in-depth interview. president putin nears a gas deal with this neighbor. their set aside an agreement 10 years in the making. credit suisse pleads guilty and pays up. the swiss bank will pay 2.6 billion dollars to end the u.s. tax evasion probe.

welcome to "countdown." i'm anna edwards. it is 6:00 here in london this tuesday morning. bloomberg reporters are standing by across the world, ready to deliver the stories that will drive your day. ryan chilcote is in moscow to walk us through his exclusive interview with dmitry medvedev. stephen engle is in beijing to tell us what is topping the agenda. has thenathan ferro details on the guilty plea by credit suisse with u.s. authorities. .acktrack top story in an exclusive interview with bloomberg television, russia's prime minister dmitry medvedev sat down with ryan chilcote to talk about everything from the ongoing conflict in ukraine, the impact of sanctions, and russia's relationship with the united states. ryan chilcote joins us from moscow with the details area brian. >> high, anna. this was the prime minister's first interview in four months.

we spent a good amount of time talking about sanctions. the prime minister is saying that the u.s. has called. this reminded him of leonid brezhnev's rule of the soviet union, saying that it was not since then that he has seen such a politicization of trade ties between russia and the united states. ,s for the personal sanctions some russian politician said that is something that didn't even happen in the darkest hours of the cuban missile crisis. have a listen. russian prime minister dmitry medvedev. to put it simply, no one is happy about sanctions. moreover, you probably noticed that we have responded to them harshly.

it could cause some unpleasantness to the country exposing -- imposing the sanctions. let's be honest, though sanctions are a sharp knife for european business and american business. the only ones who want sanctions are politicians who use them to reinforce their convictions and demonstrate their power. for example, our american colleague needs to show the mecca public that he doesn't fear russians. they need to show that the u.s. president can make top -- make tough decisions. what americans are doing. the situation is somehow different for europe. >> speaking about president obama, because you're the architect with president obama of the reset in relations, are

you disappointed by how president obama has handled this crisis? yes, i believe that president obama could be more tactful politically than discussion those issues. some positions taken by the administration are disappointing. we have done a lot for russian-u.s. relations. the agreements that were reached in america were useful. i'm very sorry that everything that has been achieved is now being eliminated by those decisions. basically, we are slowly but surely approaching a second cold war that nobody needs. why am i saying this? because a competent politician reserve, to make subtle, wise and intelligent decisions, which i believe mr. obama succeeded at for a while. was being done now proves that the u.s. opposition has run out of patience. of united states will be one the parties to suffer from this.

>> anna, resident putin is in china today. prime minister medvedev says he is to sign an historic gas supply deal that we estimate could be worth as much as $400 billion over the next 30 years. int comes amidst talk western europe about diversifying away from russian gas supplies. though the prime minister says he is not really taking that too seriously, because he doesn't europeansat western have a viable alternative. have a listen. is not because we don't attach much importance to the statements. first off, every country or group of countries, including the european union have the right to diversify their source of supply. that is true. we don't attach much importance to that, simply because there is no viable alternative to russian supplies. we just happen to think that we

as a major energy supplying power should have an opportunity to deliver gas not only to europe but to asia. i wouldn't look for any politics in that era to have no doubt that supplying energy to the asian pacific region holds great promise in the future. we have enough capacity and enough gas to send supplies to both the eastern and western roots. worst-caseat the scenario, purely theoretically, any undelivered european gas supplies can be sent to china by the eastern route. again, this is an absolute theoretical possibility. >> if western europe was to move --y from russian supplies >> all of this talk is absolutely abstract or politicized. let them give us a calculation. understand, even if this is done on a balanced

basis, the price of energy supply from the united states of america would be 40% more expensive than russian pipeline gas. >> we discussed the deadline that ukraine is facing. the prime minister telling me that ukraine owes russia $3.5 billion for gas. he doesn't expect to get it all in one go at the beginning of june, however, he said if russia is to get at least some of it, enough to indicate that ukraine is serious about paying, that would be enough to avoid a supply disruption. the russians would like to see a timetable that ukrainians intend to follow for further payments. thing that is important in this interview is with the prime minister declined to say. thatclines to guarantee the east and south of ukraine would remain outside of russia, that they would remain art of ukraine. he also declined to recognize the presidential elections set to happen on may the 25th in

ukraine. he said, we will just have to see how that election goes. anna, back to you. much.n, thank you very ryan chilcote that exclusive interview in moscow. you can see that exclusive interview in full at 5:00 london time. that is the russian prime minister, dmitry medvedev and ryan chilcote at 5:00 london time. as ryan was saying, vladimir putin is in shanghai today. the top of the jet is a contract to supply natural gas to china. the deal could be worth close to $400 billion. let's talk to stephen engle who is in beijing. do we have a deal yet, stephen? >> we don't have a deal yet that we know of. we have been waiting for some headlines to cross from their meeting. it was originally open to pool reporters, then it was hastily canceled. the pool -- they must really be

hammering out price for this deal. i assume. this is a pipeline deal that has been stalled many times over 10 years overpriced. anin has told chinese media interview that was published yesterday here in china that the " nearly finished." bigprofile and china is a one. gazprom aims to sign that contract with china national petroleum during this visit, if not even this afternoon. the deal is valued at $400 billion over the proposed 30 years. a $22 billionuild pipeline to china to carry as much as 38 alien cubic meters annually. oft is almost one quarter china's current consumption, estimated at about 10% of china's consumption in 2020. the delivery could start as

early as 2019 or 2020 if they get this deal signed on this visit. price again has been the sticking point. gazprom ceo has said they are just one digit away, but with russia's economic troubles and the ruble outflow we have seen with those sanctions from the west, it will be interesting to see if we can has to make concessions in his talks right now with the chinese president in shanghai. >> let's get back to the credit suisse story. this was bank has pleaded guilty to helping americans cheat on their taxes. that makes it the first bank in more than 10 years to admit to a crime in a u.s. courtroom. joining us now from zurich is jonathan ferro. tell us more about the agreement that credit suisse has reached with the u.s.. >> we expected that outcome.

where the uncertainty was was what would happen to management, to freddie duke. the ceo and chairman will keep their jobs, at least for now. this will be a chapter that the bank wanted that plenty of questions on the table. let's be clear about that. could they have handled this investigation better on credit suisse his side of things? -- on credit suisse's side of things? could management have handled it better? the u.s. attorney general gets a clue yesterday. take a listen. failed to take even the most basic steps to ensure compliance with tax laws. when the bank finally began to feel pressured to correct legal practices and comply with the of the justice department's investigation of which they were notified in 2010, credit suisse fails to retain key documents, allowed

evidence to be lost or destroyed, and conducted an inadequate internal inquiry. >> that is not exactly a ringing endorsement, is it? >> wraps not heard was the significance of the guilty plea? we talked quite a bit yesterday about what this would mean for the bank and for other banks doing business with credit suisse? >> the consequences are twofold. politically, as is a big scalp that the investigators were under pressure to get. they can put it on the mantel piece. optimistic. is he says we can focus on a future. he said this has no material impact on our business over the last several weeks. it is very easy to sensationalize the potential fallout from this, but let's be clear about something. ask people to consequences are and they are not 100% sure.

able to carry on doing business with credit suisse? if you're a client, do have internal rules that prohibit you from doing business with any entity that has pleaded guilty to a crime? best if youomeone ask someone to truthfully answer to that, they just don't know. towould take time for it become clearer. >> jonathan ferro with the latest from zurich. let's continue the latest news on pfizer's attempt to take over astrazeneca. leif johansson would not say the offer was hostile, but he would not call it super friendly. >> is the end of the road at this engagement, and certainly at these terms. after -- thee offer of 55, but we had other things that concern is also that we did not get resolution to do to the hurry with the bid itself. as we stand right now, this is

the last and final offer from pfizer. it.ave rejected >> later this hour, i will be speaking to sweden's finance minister. he dealt with job losses and sweeter in the wake of the astra and set a coverage zeneca mergerd that took place 15 years ago. carney take action? we will discuss that and other topics right after the break. ♪

>> time for today's company news. the p faces billions of dollars in additional payments after it failed to convince an appeals court that the companies being forced to pay claims that aren't directly related to the gulf of mexico oil spill. the u.s. court of appeals thatted bps contention they had misinterpreted the agreement. google is acquiring mobile device software start up divide. trend caters to a growing

known as bring your own device, where companies let employees use their own mobile devices while using third-party software to separate business and personal functions. go pro has filed for its initial public offering. go pro posted a $60.6 million profit last year, almost double what it earned in 2012. while most of that was acquired through cameras and accessories, it plans to as edition itself as a media company, today's filing shows. time in london is 18 minutes past six. mark carney is about to meddle in britain's love affair with housing. the property market is at risk of overheating. our next guest says the sense of urgency has shifted. we're joined i the chief economist at invest tech securities.

they say mark carney will take action on the u.k. housing market in june. are you one of the 67%? >> i am indeed. if you look at what the bank of england have been saying over the past few weeks, there isn't a problem in the u.k. housing nationally,ally -- that they are saying there are signs of heating. it would be foolish to ignore the risks that might he posed at the medium term. to me, what that says is there will be some action to curb some potential excesses in the housing market. to comeion is not going from the monetary policy commission but from the financial policy committee. the bank committee is likely to employ some of its new tools in terms of macro prudential policy, which it designed to curb financial instability. >> we're watching the afp c.

will june be a month for action in the shape of mark connie and mario draghi of the ecb? people are speculating as to whether we will see some action from the ecb. >> it will be an interesting month. a number of flaws it can -- of tools it can deploy. can, for example, increased capital requirements on certain types of mortgage lending. what it could do is pass the stress test further. there are things it can do which directly affect the housing market that don't have any direct monetary policy affects. ecb members have been talking about lowering the rate corridor , which would include not just a

reduction in the refinancing rate, but taking the deposit rate into the next territory. >> stay with us for further analysis when countdown returns. ♪

>> welcome back to "countdown." we speaking to the chief economist at invest tech security.

dmitri medvedev says a second cold war may emerge from the crisis in the ukraine. how does that make investors feel? up tothat we are building elections next weekend? >> the russians are very good at laying down their markers, aren't they? they have done that from medvedev's comments, also in terms of the troop movements by the ukrainian borders. they're sending a message to the ukrainians, the european union and the u.s. that is not going to be pushed around. yes, the elections at the weekend in the ukraine, a lot of uncertainty about how negotiations will go in the postelection environment. russia is not backing down. a to we still continue to see low volatility environment.

the fed's richard fisher was saying this wasn't healthy or at faced some sort of correction. -- cally , the odd it of volatility shakes investors out. it is good, providing a volatility is not too intense. we have seen the markets move. last week, we had one or two sessions where u.s. investors were concerned about u.s. stocks . subsequently we had a bit of a rally. somehinking we have seen volatility in those markets. my impression is that if you look at u.s. stocks, u.k. stocks, european stocks, they have not been hurt in value. >> does a growth crisis at the eurozone risk emerging? some economists are concerned about a lack of growth, low

inflation. some of that is being expressed at the periphery in terms of movements in the bond markets. you've seen some of those yields moving higher on some of those peripheral eurozone debt runouts. >> i'm not too concerned about the eurozone growth. last week, gdp numbers were disappointing, but that is not a big deal in the great scheme of things. on the peripheral, and that one trigger was capital gains tax being levied retroactively on greek bonds. that didn't help the rest of the periphery. you have to recognize how far the periphery's rally. if you have spanish and italian 10 year bonds yielding as they were below three percent, portuguese yields below four percent, how much further can those instruments rally? you're going to see some volatility at these levels. >> thank you for joining us this morning, philip shaw.

we'll take a break in the program. up ahead, berlin's unfinished airport comes under attack. details next. ♪

>> welcome back. time for today's currency check. at a two.ading the record low rates are probably there for some time to come. growth is below trend. that message from the reserve bank of australia. appropriatee stance for some time and no reference to the currency. breaking below [indiscernible] is a little bit of a

reprieve. ordered troops back from the eastern frontier of ukraine. not confirmed by nato or the u.s.. what you're seeing is a reprieve on the ruble. dropping 50% on the chicago mercantile exchange. >> these are the bloomberg top headlines this hour. russia's prime ministers in his country is likely to agree to its first long-term gas supply contract with china. dmitry medvedev tells bloomberg that the agreement will come visit.esident putin's visa delayednd payments based on u.s. sanctions. >> therefore i would like to law in the context of the -- this was a direct violation.

they trusted the payment systems. >> a chinese army and government is denying charges that five members of its military still u.s. trade secrets by hacking into corporate websites. the u.s. and i did the chinese officials -- indicted the chinese officials. been thes it has victim of u.s. espionage. thai army has imposed martial law. saying it is not a coup. m&a in the communication sector in the u.s. flourishes with at&t snapping up directv.

the acquisition of vodafone looking less likely. here with a preview is caroline hyde. it looks like vodafone is on its own for now. >> going it alone and that is what goldman sachs analysts are saying. m&a in terms of vodafone being a target is really far less likely right now. i cut the price target going coming intotock and neutral. there was so much speculation whether at&t would come over from the atlantic and snap them up or whether softbank might come over the atlantic as well. companies based in the u.s.. usa ank is buying t-mobile so m&a off the agenda and we are million -- the

400 million customer provider. this is a decent bed. it will take a long time. gradual recovery and this is what we are expecting today. we get for your numbers coming from vodafone. europe is exposed to 77 -- 70% sales. >> they have big exposure in europe. price wars are taking lace and the sluggish economy. >> some of the markets are looking to offset some of that and they have not had the best agent, similar themes as well.

they are doing well in south africa but this is the new normal for vodafone. how when you and i are calling us on our mobile phones because we do not need to. we can do direct messaging and skype. these free services we can use, we are using data far less. how do they get up to use vodafone, that is why they have project spring, 19 billion dollars. they are throwing money at this at the moment. >> let's talk about the other u.k. company. this is the culmination of the three-year turnaround plan. it will be a third year of profit to your reading. 650 million pounds sounds like a

lot. it was one billion pounds, a record sale. this is a company that loses i could share. even though they have thrown to the ends of pounds upgrading the business trying to invest after decades of underinvestment. clothing, and signs of a that was the best ever in the first three months of this year. the quality is getting that are in they said they will increase prices. >> they have also been bringing in a new team. those who defend them say you have to wait till the third or the fourth quarter to see what their impact will be on the clothing and underlying performance. this is an area that is far more profitable. sales are not doing as well. they have to find out how they can lure in the female fire in particular.

interestingly they are focusing online as well. that is where the expansion plans have been made. trying to get us to buy online. 150 million pound website they hired from tech city. they have movers and shakers and they do target big. one billion pounds of sales. they can draw in more than their stores that they have 800 of. the distribution center is not paying off. you have had your three-year land of investing, when well investors get money back with the worlds eyes trained on the cannes film festival red carpet fashion

brands line up to showcase their has been a'oreal sponsor for the past 17 years. it provides huge exposure but does it boost sales? opening night of the zoe s film festival and as ana is here ambassador for l'oreal paris. a walking advertisement. exposure to reach [inaudible]they see >> she is one of many spokeswomen here. he describes cannes as the

biggest opportunity. this is an amazing media exporter. >> other sponsors include carmaker renault. it is not just the stars in the spotlight. brands are hoping to share a piece of the glamour. >> let's take you back to one of our top stories. we are getting at its coming through from china where the chinese leader and russian president bodmer put in our meeting. they have signed for documents. russia and china do not sign the gas contract at the shanghai

event, russia's president putin saying that russia has reached a new level of relations with china. russia and china have not signed a gas contract area that could have been worth billions. we are bringing you that story at the top of the hour concerning a pipeline. russia turning east to find customers for its gas. more on that story as it develops through the morning. more from ryan's exclusive interview with the russian prime minister. -- advice for mastercard and visa.

>> time for today's company news. credit swiss agreed to pay 2.6 billion dollars in penalties and pleaded guilty for helping americans cheat on their taxes. this is the first global bank in crime.e to admit to a helping -- holding a platform that has

more than 45 million viewers a month. j.crew is opening two new stores in hong kong today. the chief executive told bloomberg he wants to establish shops and online stores and capital cities worldwide including paris. >> we have quite a large internet does this. to radicallyss increased we opened in the u.k.. prior to the openings this week we have an important spike. we have shops, a man's and woman's shop. that has also helped that business. >> they did not comment on reports j.crew had held early retailalks with soft about the sale of the chain. it is 6:44 a.m. in london. in an exclusive interview,

russian prime minister dmitri medvedev said a second cold war may emerge from the crisis in ukraine and weighed in on the sanctions on his country urging mastercard and visa to stay in russia and saying he did not want the companies to leave russia. >> in fact a great number of our people are used to using foreign payment systems. mainly visa and mastercard but also american express. other systems are widely used. will not be focusing on sections -- sanctions. i am a holder of an international bank card. a russian card issued by a foreign payment system. there are 200 million cards of this type in this country. or than the population count.

i would like to stress that i do not have a relationship with a foreign state. i have a relationship with the bank that issues my card and it never occurred to me that my payments to pen on the political stance of a foreign state. therefore i would like to know that in the context of our law and the u.s. and eu law what these at and mastercard did was [inaudible] i would have spent my time and effort to take those payment systems to court if i were as a lawyer which i am not now. you concerned that visa and mastercard as you said yourself or just following orders in a sense from the treasury and the united states could leave the russian market. >> i would like to re-stress that we do not want these are mastercard to leave russia.

our corporation with them has been quite productive. i believe this company should have [indiscernible] responding in such an awkward manner to our request. >> you can see the exclusive interview in full at 5 p.m. london time with russia's prime minister dmitry medvedev and bloomberg's ryan chilcote. berlin's unfinished airport is being questioned from some of airbus's biggest golf customers. they are training their sights on germany's air traffic laws. hans nichols is at the berlin air show. >> you put that so delicately. let's talk about tax. there is some military aircraft. we have qatar airways. and an emirates a 380 landing here. we are talking in a fork we hear

but this airport is under attack . it is under attack for couple of reasons. it is not done. it is not even going to open until 2017. that is an optimistic scenario and all these long-haul carriers like emirates want to be to win here. they need germany to revive its air traffic laws. four concessions in germany. they want to add a fifth. that just being here at this airport when it opens but to do that they're going to need to get permission and that puts been aauthorities difficult spot. their own airlines are struggling. what do you do when companies with cashtes flush want to land here? when you look at how many orders 380s, they0 -- a

have made announcements here and the question is one will this airport be finished and when -- will germany liberalize their lending laws so that emirates can land here along and otherr -- qatar airlines. it has an airport that makes you feel like you are flying into the suburban midwest. >> who is attending this air show, is boeing there, for example? >> boeing is only here in spirit. airbusis flying over letting them know that whatever moves they make they are going to counter. last night the ceo of airbus acknowledged that saying the a380 will need to make improvements. the dreamliner will have a new model and their -- there is going to be real competition. this is a must likely fighter package that we talked about.

improvements,kes the other does. they will have a virtual fly off the boeing is a no-show and four correspondence from seattle i have to say it pains me a little bit. you very much. reporting from berlin. --her zycher rejects pfizer astrazeneca rejects pfizer's offer. more on what the latest developments mean for astrazeneca's swedish workforce. that is coming up. ♪

>> welcome back. the time in london is 6:53 a.m. astrazeneca has rejected pfizer's bid. what this means for the swedish workforce and economy. something of a stalemate right now. if this issue does come back onto the table is there anything that pfizer management could say that would convince you is kind of deal would be a good idea? quite worried.

what pfizer said is they would [indiscernible] similar to the wyatt. mean a couple of thousand in different sites. i get quite a lot of reactions on this deal. quite big opposition i must say that might cause reputation image to pfizer in the long run. >> do you think that either the union or european takeover codes need to be changed, beefed up, given more substance, in particular in industries where there is this research and development on meant? >> i am worried that we have seen this off-site and -- and

this aggressive behavior. it is a game changer for how we view the is this climate. we really have two things through deeply what to do. i would argue more for creating a stronger tax situation for long-time ownership, and to strengthen industrial owners because we are saying quite a lot of the owners coming out and argue for the long term. there are some short-term people who are in for the next quarter. i would rather think about strengthening our business climate in terms of promoting long-term ownership. >> we see a number of u.s. businesses deciding to look at european companies at the moment and as a result saw been part of their own domestic tax affairs. have you had any conversations with u.s. tax authorities on whether they plan to change their tax regime question mark >> i understand that there are proposals that are pending and

congress on inversion. as we feel it this is worrying that we basically are seeing texture been mergers. even if mergers are concave to normallyh the ones are less likely to be successful in terms of business operations. it is quite worrying. as we had afly conversation with the prime minister of russia where he says we could see another cold war resulting from tensions in ukraine. is that something that worries you and european business? >> i think the main effect from that is basically the russian government is pushing russian growth down. we are seeing humongous outflows from the ruble and the investment climate has been [indiscernible] rapidly now. saying a muchy

more negative settlement. >> thank you for joining us. we appreciate it. we'll take a short break. the second hour comes with honey of earnings -- plenty of earnings. ♪

>> we are slowly but surely approaching a second cold war which nobody needs. >> dmitry medvedev speaks to bloomberg in an in-depth interview. although it has not been signed, russia says it could happen any moment. credit suisse pleads guilty and pays up. paying to and a u.s. tax evasion probe. welcome back.

and an exclusive interview with bloomberg tv, russian foreign minister dmitry medvedev sat down with ryan chilcote talk about everything from the ongoing monthly didn't ukraine, the impact of sanctions and russia's relationship with the united states. joining us now with the details. >> the russian prime minister and i sat down for his first interview with the national media in four months. the interview took place ahead of the business form. a form that the white house has told ceo's they should stay away from. prime minister said that was reminiscent of the rule of landed brezhnev when the soviet union politicized its trade relations. something he said should not happen. he also said the personal sanctions that have been introduced against russian politicians is something that did not even happen in the darkest hours of the cuban

missile crisis. the current standoff could lead to a second cold war. >> no one is happy about sanctions since they are always a sign of tense relations. we do not support sanctions. we probably [inaudible] bad for international relations. with our relationship with europe and the united states. let's be honest. the sanctions are a sharp knife or business in american business does not need them either. the only ones who want sanctions are all efficiencies and to demonstrate their power. he needs to show congress that america does not fear russia. that if anything happens they can hurt us.

the situation is different. >> you are the author, the architect with president obama of the reset in relations. are you disappointed by how resident obama has handled this crisis? yes i believe that president deal more tactfully. some issues are disappointing. we have done a lot for russia-u.s. relationships. i am sorry that everything has -- that has and achieved hit -- is being eliminated. we are slowly but surely

approaching a second cold war that nobody needs. why am i saying this? because a competent politician knows how to make wise and intelligent succeeded -- decisions which i think obama succeeded at for a while. >> the prime minister said the president is likely to sign the contract to supply china with 30 years of gas in a deal we estimate maybe worth as much as $400 billion. the prime minister said the price of the chinese pay would be comparable to what europe now pays. we have no deal yet but that is something we are clearly waiting on. it comes amid talk in western awaye about verse flying from russian supplies. that is something the russian

prime minister is hypothetical. he said he does not see any viable alternative. .e talked about ukraine ukraine is facing in early june deadline to pay for its gas. the russian prime investor told russia threewes point $5 billion and while they did not expect to get all that and once they would like to see some of it. they're prepared to discuss price and schedule if the prime minister said they get some money from the ukrainians indicating their intention in general to pay. have listened. we and i mean across the russian government to -- we do not consider them to be legitimate and they have not shown themselves to be honest and sincere partners. it pains us to see what is happening with ukraine and the

people residing in that country. tothat sense we are prepared discuss any corporation. in order for that to happen it is necessary to demonstrate a serious intention to cooperate. >> can western europe count on getting all of the russian gas that they are expecting to get this year? >> if the ukraine market is stable and they fulfill their obligations europe will receive what it is entitled to. this task includes getting gas apprise -- supplies to ukraine. everything will remain as before. >> if we are able to commission

shipwe will not need to gas for ukraine. if we get this done and the europeans will have guaranteed access to gas at all times regardless of who is in power. but perhaps the most significant element of this interview is what the prime minister declined to say. he declined to guarantee that the east and south of ukraine remained part of the territorial integrity of that country in decline to recognize the results of those presidential election scheduled to take place this sunday. those two points are absolutely essential to get out of this crisis. can see that exclusive interview in full at 5 p.m. london time with the russian prime minister dmitri medvedev and bloomberg's ryan chilcote. sticking with that story,

president letter put in is in tonghai today at contract supply natural gas to china is supposed to be top of the agenda. >> there is no gas pipeline deal yet or at least it does not look like it will be signed today in shanghai with the president and vladimir putin. chinaokesman saying that -russia gas deal could happen at any moment he said and they may progress toward a deal. talks have stalled for about a decade over price and it seems that is the sticking point again today. -- he said that a .eal was nearly finished his delegation is a high-profile

one. it includes the head of the state gas and oil companies and gazprom is trying to sign the pipeline contract with china. in a deal valued at $400 billion over a 30 year contract. gazprom wants to build this $22 billion pipeline to china to billion much as 30 cubic meters annually. that is almost a quarter of china's current consumption and delivery could start as early as 2018. the year 2020 and the price has been the sticking point and the ceo of gazprom said they are one digit away but troublesia's economic it will be interesting to see if vladimir putin has to make concessions and it looks as though they have retreated to launch an able exercise.

they have concluded the signing ceremony but it does not look will put pen to paper today. from thatdlines meeting between the russian and chinese leadership still coming through issuing a joint statement saying they will boost energy cooperation. yetetails of any deal as even though the spokesperson is saying that again still can happened in -- a gas deal can happen at any moment. todit suisse bit guilty helping americans to none there'd taxes. pled guilty to helping taxes.ns cheat on their notee ceo notes that

change in management at all. but keeping them banking license. business as usual, right? not quite. there will be some questions. could he have handled this investigation better? 1/3 ofe ubs paid was what credit suisse will pay and they did not plead guilty. i stood here one month ago after they delivered earnings and asked how long, what would happen to the next set of earnings, will they have to be provisions?er second-quarter earnings will be cut by 1.6 billion dollars. that is a huge chunk of change. >> is this a warning shot to other banks, do we read broader implications into this whether they be european or other parts of the world? you have got to ask the question.

if there the first bank, is there a last bank? store --n -- in other in store for them? as for the business impact with not be naïve about this. the outcome of this investigation was heavily leaked. we knew about it, everybody knew about it. but it's was sure knew about it and they have on their homework on the impact because the two questions anybody wants answered, wilbanks carry on doing business with care -- credit suisse, well they have to step back? the big pension funds, are there rules that prohibit them from doing business in -- with credit suisse. i spoke to chris wheeler, and analyst at media bank. he said credit suisse will have looked into this. they will have spoken to their big clients and pension funds and will have established the potential for fallout. when we spoke about it chris said the impact, there is no

real answer for that and that is what you will get as a consensus. him, ithis question for do not think anyone really knows. it will take time to play out. >> thank you very much. vodafone earnings breaking now. let's get to our european business correspondent caroline hyde. you have he tells and some of these corporate. expected.than this is the measure of how much we are using our phone data, text messaging. that revenue, sales down 3.8%. better-than-expected that falling on a full year. this is a company that is saying a new normal. a sluggish economy. we can skype nowadays.

>> it is about whatsapp or messaging. costing $19 billion. we will have to wait for a payback. m&a is less likely after at&t is buying direct tv. quickly looking at markets. pretax profit still falls. a long way away from the one billion pound sales. >> i like the title. from transformation to delivery. is the nonfood unit. sales down 1.4% for the year but

it was down on the fourth quarter as well. internationally they are growing. sales of six percent. online they are growing up 23% and they promised us for the future that profitability will improve. general merchandise is closing. the margin will grow in the next four-year and we will start from quickerfit sourcing overall. they're cutting spending by half a billion pounds every single year. now it is all about getting access cash to shareholders but it has not -- they have not been bathed in glory. >> thank you. we will have more on those numbers and the m&a in the telecom sector coming up after a short break. 7:15 a.m. in london. ♪ >> welcome back.

the time in london is 18 minutes past seven. we have had numbers from vodafone this morning and it has been a big week for telecoms. at&t announced a deal to buy directv. for more on the m&a action in

the telecom space let's bring in our next guest. thank you for coming in. let's get the numbers out of the way. anything interesting or a continuation of the same in the vodafone numbers? rex a continuation of what we have seen so far. the story is the same and the economic outlook for europe is very weak. determine -- the termination rate regulation is weakening the results. a tiny bit better than most expected but nothing really great. activity is doing ok. pressure on some markets is a little bit slower. the initiated a most a price war last year on the italian market. theme in thee eurozone. that's talk about m&a. some people have been suggesting that vodafone would be taken out

by at&t. at&t is doing other deals with substantial amounts of money. much of an m&a rhenium was there in the share price, how much have investors and waiting for a deal to see someone by vodafone? rex if you go, it was in january when at&t said at this time we are not bidding for vodafone. that is off the table for a while. hugeoint is it was a eventually m&a activity. both companies decided to go .heir own ways and market at&t has gone for tv. at&t would put together their average spending per customer of more or less $50 with the pay-tv

is this 100 dollars per customer. vodafone is doing the same. fixed lineng after businesses and some tv businesses. >> this is part of the mobile to media track. >> at the very least two directions for consideration in europe. one is mobile to mobile which is the difficult one. the same story and many of the other targets. [indiscernible] is real so far. >> thank you for giving your

analysis of the numbers. next we will dig into the credit suisse tax probe. our next guest raises this question. we will talk about that when we come back. ♪

>> welcome back. let's talk about the banking sector. the bank pleaded to helping

thousands of americans evade taxes. hair to discuss is chris skinner. thanks for coming in. what impact is this going to have on the sector or credit suisse's business? rex it could cause the bank to go under. and -- it will not happen with credit swiss. tois political card playing make it seem to be that they are being punished. they will still continue as a bank in the usa ,> some with the biggest signs is this part of a deliberate

just part of business? they did not admit criminal activities. equally jpmorgan got find $19 million for money-laundering issues with iran and cuba and other sanction states in 2011. ed $1.9 find -- fin billion. the american authorities want to preserve their banks. rex thank you. we will leave it there. for coming in to talk about the subject of credit suisse. we will drill down into arcsin spencers earnings after profit beat estimates. more details when we come back.

♪

>> welcome back. check.et an fx >> the euro is hitting a three-month low. europeantting more central banks speak today. consensus is a rate cut coming through later from the european central bank in june. i thought we would have a look at dollar ruble.

rising at a four-month high against a basket of currencies. -- jupiter being pulled back from the cane border. you're looking at a two-week low. the deliver their announcement. accommodative for some time and they did not refer to the currency. back to you. >> thank you. russia's prime minister said his country is very likely to agree to its third long term gas supply contract with china. dmitry medvedev said the agreement will come during putin's visit to china. >> therefore i would like to

know that in the context of our law and u.s. and eu law what they did was a direct violation of their contract with russian clients. thoseople who trusted payment systems. >> the chinese army and government is denying charges that five members of its military still u.s. trade secrets i hacking into corporate websites. the u.s. and i did the chinese officials and laid out the case that china has been involved in extensive espionage of commercial secrets. china said it was the item of u.s. espionage. martial law.g the army chief said the move is not at who and people should not be concerned. thailand's stock index suffered its biggest drop in two weeks on the announcement. biggest retailer marks & spencer reported a third straight drop in annual profits.

thank you for joining us. the titled this piece -- this report from transformation to delivery. have they got far enough down that line two years in to the turnaround to your liking? rex it is an interesting title. there have been -- they have been transforming themselves. the question is are they where they need to be and probably not is the answer to that. heavy lifting has gone on behind the scenes. the merchandise has been revamped. >> they say they see early signs of improvement in general merchandising. that coming in a little better. 0.6%. what promotions are necessary to

drive that? rex it is the fundamental question. the key figures showed a surprising bounce in clothing sales. that raised the slightly suspicious eyebrow. of general about 90% merchandise so home wares must be declining in double digits. numbers do not stack up. >> how about the push into digital because they are trying to turn themselves into an international and online multichannel retailer and how is that push it going? i pulled out from their statement some comments on their website. what does that tell us about

their expectations for the quarter? of mildhere is any kind warning in the statement it is these things will take four to in.weeks to bed they have made the heavy investment and they had a big online relaunch a few weeks back. they got some quite interesting numbers. those are to be converted to online shoppers. some big numbers there. the proof will be in the pudding. some would suggest that we need to get the more time to get these people through in the numbers. the new clothing ranges were launched in september.

they have been around a few months and they have had a dramatic turnaround. we do -- they do need more time. belinda is a very seasoned operators. she is a good person to have on board. there was a nagging doubt that we are not saying the numbers. >> food consistently has been outperforming markets. is that still a bright spot? rex absolutely. they tend to focus on the negative which is the clothing side. it is a very polar business. it's food business is performing exceptionally well. you have the big forearms. the top and, they are performing very well. food market.

>> you have been quite scathing about their international efforts. >> i have been. >> people do not -- they are in 50 markets. the store here and a store there in a lot of markets. that is too many markets. and there's enough to be done at home to be whirring about these international markets. that is not to say that there is not a place for mns overseas but i would like for it to be more focused. it still live for dive by its womenswear, is that still the mainstay of this business, despite all these activities the international operations in the food business? >> it is totally not the dominant force. or 25%.tween 20%

>> it is quite a lot of money. thearite to because business will stand and fall on its womenswear. a lot of it does hang on that. that does not account for a huge amount of sales but menswear tends to hang off womenswear. >> is this the 21st century? >> that is why it does have an older demographic. the things are not going to change overnight. >> thank you for joining us. just ahead, we will see why the publishing house behind the harry potter series is putting its money and could ask. cookbooks. ♪

to buy aeroflex and it expects to close the deal in the third quarter. gopro has filed for its initial public offering. takets sports enthusiasts

professional quality videos. j.crew is opening two new stores in hong kong today. the chief executive told bloomberg he wants to establish shops and online stores in capital cities worldwide including paris. >> we have a quite arjuna business. when we opened in the u.k., our business dramatically increased. hear what has happened prior to the openings this week, we have seen an important spike. we have a men's and women's shop. that has also helped to that business. >> he did not comment on reports that j.crew has held early-stage talks about the sale of the chain. let's move on. bloomsbury is the publishing house behind the harry potter series. it is reinvesting in academics and

publishing. pleasure to have you on the program. tell me about would be correct to say life after potter or you are still selling some of those. tell me about how you transitioned away from selling quite so many harry potter books. >> we were extremely lucky. we were the publisher did not overo to harry potter and 14 years it generated millions of pounds of cash flow. money slowly the 23r those years into different acquisitions many of which were extremely steady and dull. tax.cts like up a substantial

academic division and we have turned lounsbury into what is a form publisher as strong a negative publishing as an consumer publishing. >> where reporting a terrific year where turnover has been up up 4%. profit before tax academic division is soaring up the ladder. publishinging into folklore. that you gave the harry potty -- harry potter manuscript to your daughter who liked it and fell in love with it and ask for another one. >> it is true. that is the myth and that is a great deal. the book was taken on by our editor barry cunningham. i did take my copy home and give it to my then-eight-year-old

daughter and he -- she said this is better than anything you have ever published. >> tell me about the transition towards e-books. how are you coping with that transition? >> our industry has been a winner in the digital revolution. books.are reading they can be accessed on for hours a day seven days a week. in ansider ourselves golden age. it is complicated the transition for the industry, it is having a negative impact on traditional booksellers. >> how do you manage the power games? presence these

days and bookselling. they have been critical about the amounts they put on publishers. do you feel under pressure? >> people and businesses are they're always complaining about something. that is a nice album to have. , howat our relations like much time do you spend managing that kind of relationship, that is one of the big hearts of the job. >> is not a big part of my job. it is a big part of every publishers job. and the opportunities are incredible. >> tell me about the different things you have. academicgone into books and children's books and cookery books are a big seller. >> we -- nothing we do is boring. in our specialist divisions we just launched the world of labor which is a knowledge hub about

integration,cs, unemployment, gender balance, the big issues of our time and it provides evidence for policy makers to access. it is a terrific new example of the big knowledge infrastructure project that you could only undertake in the digital age where we have worked closely with and institute in bonn whose project this is. >> it is -- that seems to be a big theme in publishing. >> cookery is eager than ever. and the spectacular year that we have had, cookery but the charge. that delicious and fattening food. bakinga run of books on bread, pies, and puddings. of there the rock stars

present. >> i am not very hungry. thank you for joining us. a pleasure to talk to you. morning to make us all feel like another breakfast. let's take a look at some of the top corporate stories. caroline hyde is here. >> let's talk about more food. m&s has come out better than expected. it is the third year of falling profit at marks & spencer's. it was slightly better than what they expected. shares crept one percent to 2% higher. 1.7%.p general merchandise clothing down 1.4%. the positive trends that kicked

out growth in the last quarter, the first time they ever broke that down for us to show independently. was said -- they said that better in the trends are continuing. it is all about delivery going forward. come -- becoming more profitable and promised us more profitability. online.l about the move of 23% in terms of sales. we're seeing profit down for vodafone and many fearing it will be deteriorating in 2015. saidsee even the -- they ebitda isata -- down. eats into profitability.

they say would get worse in 2015. shares called 1% to 2% lower. >> thank you. caroline on those big companies reporting in the u.k. today. we will have further analysis when we come back. ♪

>> welcome back. the time is 7:52 a.m. let's take a look ahead to the market open. about some of the corporate's we have reporting today. rex i like the marks & spencer story. people have been down in the dumps for quite a while. they announced this three year plan which came to an end with the first quarter. it has not been as good as women's clothing picked up which gives us a little bit of hope that it is taking longer. perhaps as the company is saying, seeing early signs of

improvement. always a bright spot for that business. this is part of the business that you are never really concerned about. the food is certainly a strong point. >> on vodafone, what is your their biggestthat challenge at the moment? >> this is another story where there is going to be improvement down the road. is ony focus [indiscernible] they have positioned themselves well. message.been the is a bit of a concern.

they have these low inflation figures. they're expecting it to pick up. this is a good level for the bank of england. you could see steady inflation. >> and something of a stalemate. does that continue for the next few months or do we see more news? >> this is an interesting story because pfizer made this bid. advantageying to take for tax purposes. >> thank you for joining us.

on the move is next. they're watching vodafone and marks & spencer. that will do it for "countdown." have a good day, everybody. ♪

forex hello. welcome to on move. i am mark barton. we are moments away from the start of european trading. and caroline hyde. jonathan ferro is here and ryan chilcote is in moscow. a nondescript start to the trading day. this captures my overall thinking.

australia with low rates. in ank. is still fundamentally keen a zero game -- fundamentally in a zero game. >> let's go to zürich. .ou are watching credit suisse >> that is right. licenses and the man at the top was this investigation mishandled? fallout from the guilty plea and you and i will talk about it. chilcote spoke to the russian prime minister. have a listen. >> we admit that we are sure slowly approaching. >>