a thief faces calls to rerun a world cup vote. corruption allegations are overshadowing a major meeting at qatar. hourig story over the last , spain's king juan carlos is abdicating the throne. we will be live from madrid. good morning to our viewers in

europe and a warm welcome to those just waking up in the united states area dime guy johnson. >> this is the pulse live from bloomberg's european headquarters in london. juan carlos is to abdicate. that is according to the nation's prime minister mariano ajoy. why now? why is king carlos stepping aside now? the spanish economy has stabilized, the spanish government feels a lot more confident in their position now. i think they feel like they are now in a position where the country is able to handle this transition. 18 months ago, in the middle of a banking bailout and questions about the membership in the euro region, they would not have been able to. of the this is a mark

renewed stability in spain, first of all. >> in terms of how this is going to be handled, what are the next few days going to look like? be apect this is going to vote of confidence in the country. it will be a big shock. been on theave throne since the 1970's. >> before this can be formalized, there needs to be an act of parliament. that is due to happen this week, and then we will be moving toward the formal crowning of will become prince felipe the sixth. the king may be making a statement later today, and the institution will step into top the reflections

and recollections, the best highlights of juan carlos's rain. eign. >> felipe has never been touched by the scandals as his father and sister. they want to get the country and its image to feel a little bit stronger. what kind of role do you think he will play? >> symbolically it is a positive move for spain. to buildis looking this narrative of renewal and regeneration, then what better young,do that with a dynamic, educated, modern king ,n the throne to replace this to be frank, doddering old man who has needed to be rationed because of his infirmities.

forward, kinge juan carlos has been a tremendous asset to spain in many ways. he is a major figure on the world stage who is able to pick up the phone and speak to world leaders everywhere from the white house to the kremlin. that is difficult to replicate. it will take felipe time to establish himself with the same weight as a statesman as his father had. ,eyond the initial excitement spain is actually losing a significant advocate on the world stage, at least in the short term. >> are thanks to ben sills joining us from madrid. >> let us move on. calls to rerun the vote for the 2022 world cup. allegations surfaced that qatar won the bid following secret payments to officials.

that scandal is now overshadowing another major event in the country, the annual meeting of iata, with the airlines'biggest names represented. let's start with the shadow that these latest allegations are casting over the event. i imagine people are talking about it. >> they are, guy. i can't tell you it is dominating, but they're talking about it. it is at the very least isrtunate for that qatar who want to put on a show to put qatar in its best light on a world stage. there were concerns about reports of the alleged mistreatment of workers. and now, allegations adding to

coals. many are saying that the country should not have been awarded the world cup in the first place. qatar has already put a lot of effort and a lot of money into its land to host the world cup in 2022. $17 billion on the new airport, $35 billion on the subways, and $7 billion on the port. certainly, they would feel that allowance to host the world cup were to be removed. >> this is the airline industry is biggest event. what are some of your other takeaways from the morning? look, they are celebrating

100 years of aviation, and they are doing it in pretty good shape. they put out a report today 3.3 billion customers are being served. especially when on so many occasions it seems like the airline industry is in crisis, u.s. airlines going to chapter 11 bankruptcy, on the centenary of aviation, they are able to come out with this good news. they are wondering -- wandering around here, if you spill a drink, chances are you're likely to spill it on a ceo. if the challenge of turning spain around had been achieved with iberia in particular. >> we are always open to an

opportunity that exists, but we are not actively pursuing anything at his stage. we still have work to do to complete the turnaround on iberia. i am pleased with the progress we're making, but at this point, we are satisfied with the size and structure of iag. we are ready if the right opportunity presents itself. we are capable of making a move. >> they're obviously trying to grab as many as we can. reiterating -- last night i was having a nice casual chat with the new freshfaced ceo of lufthansa who was there at the bowling event. >> i'm really hoping you're not spilling too many drinks at this event. you don't want to spill them onto many ceos.

>> there were no drinks spilled. overshadowing the ceo of qatar airways. she came on stage, did a few numbers from back in the day in destiny's child. tried to resist her advances, she did insist on taking her break with me. this is just part of qatar trying to put on a real show for the world. if i'm not mistaken, everyone expecting kylie minogue to take the stage tonight? we will have to wait and see. >> elliott, thank you very much indeed. gotkine working terribly, terribly hard. >> it is time for another one of our top stories.

a bit of a reputation as europe's copycat capital. herewith moore is our international correspondent, hans nichols. good morning, hans. tell us more about these elusive what rockets business model really is. >> the uncharitable thing has .een that they clone that is what rockets does, take successful models from the states and translate them into different countries, different languages. they say they're adding value because they know the local market. the brothers are behind us. it is part that -- venture capital fund, part inc., part mentor. a lot of their companies are names we know of, or at least business models we know of all across the world. there is an ebay version that was initially here in germany, groupon called citi deal.

. you darlinguber for eharmony. they took a look at what they're planning on doing. 3-5 billion euro valuation. that is a lot of money, guys. prepare that to whatsapp. to whatsapp.at it is not based on these pie-in-the-sky star of growth models, it is a little more grounded. and ironic for a company called rocket. >> imitation is the sincerest form of flattery. the does this say about german ipo market right now? >> it is heating up. this could be a sign that

breaking through the sound barrier for berlin to have a big billion year exit. startup that is identified with a singular product. you always have to explain what rocket is when you are talking about it. it will mean something. we'll see whether or not that cash gets plowed back into the ecosystem, cash and expertise, and whether berlin takes off as a rival to london or silicon valley. it seems like that is a couple of years away, guide, if it ever happens. withast to come close london, let alone silicon valley. >> hans nichols joining us from berlin, thank you so much. >> >> next? let's talk about what is going on in china. overnighting data skewed by signs of strength. let's dig into the details with caroline hyde. >> if you're looking at government day that you're getting expansion.

if you're looking at hsbc's number, there is still contraction, 49.7, but still the strongest we have seen in manufacturing this year. they have been setting money aside for the railway investment, therefore boosting the budget, getting the money out into the economy sooner rather than later. money to, getting smaller businesses, because medium-sized businesses are doing pretty well. small businesses are still in contraction according to government figures. >> the more we talk about chinese statistics, we raise the question as to the extent that we trust the government. these numbers are still lagging. expectingwe're not 7.5% in terms of growth. that is a target for 2014. many markets will see if further slowdown than what is currently being assumed by a economist to

being seven .3%, and undershoot by 0.2%. still, the slowest growth since 1990. we are seeing a cooling in the chinese economy, particularly because they're trying to rein ir programs. this is a stabilization, potentially. it is meant to hopefully ease some concerns. some performing particularly well. >> caroline hyde, our european business correspondent. >> we will bring our focus back to the airline industry. ceo had to the iata say about profitability in their sector. when we come back. ♪

>> welcome back. you are watching "the pulse." later this week, pretty big events coming up. the ecb, will the central bank deliver on the promise? are we going to see rates cut? will we see further action? the pressure is mounting ahead of that meeting. we have seed and some regional and state aid to out. that data points to weakness. it is certainly well below targets for the ecb. that is the impact of his hat on

the euro dollar. we are trading just below 1.36. it is a right-hand hand side of the chart that i want to point to. we are at six-year highs for the won. is also playing into the hands of the chinese, some would say, who are happily weakening their currency. it shows exporters doing very well. maybe the koreans will end up paying the price. maria come over to you. >> if there's one thing you like covering more than currencies, it is planes. the global association of the world's airlines are meeting in doha. we spoke about shrinking profitability in the industry. >> the level of rough readability is on an upward are, but profit margins 2.5%, really nothing to write home about.

it is vulnerable. we have seen consolidation and developments in the international market airlines assisting in this movement upwards. it is very vulnerable to any number of shocks, the main one being global economic growth. fuel price rises and any other sorts of things that can affect the industry, whether it is disease or natural disaster, and so on. >> to be optimistic about this, it is good to see that the ministry structure is improving so that airlines are generating slightly better returns. >> the government is wrongly inecking $4 billion of airl funds. this is evan money. mrs. not government money.

hasyone i has asked consistently called on the venezuelan government to release the money and the exchange rate at which it was generated, and to do so quickly so we can resolve it. if we don't do that, more airlines will stop flying there. already to have stopped. others are considering it. this will do terrible damage to the economic prospects of venezuela. connect it is vital to do business in today's world. only the airlines can deliver that. if they're going to keep delivering it, they do need to be paid. i call on the venezuelan government to do what it needs to do and release the money. . talking off iata feeling comfortable, thousands of hours, tens or even hundreds of thousands of dollars going to make you feel comfortable when you are on a flight. angus bennett for a peek inside

the studios were airline seats are literally dreamed up. overteam of designers pore and designer plans. they're working on the next generation of airline seating in top-secret. >> i can show you that, i'm afraid. i can't be more specific. >> we were all flying in the equivalent of dentist chairs. his firm helped change that, designing seats that fully reclined with luxurious material that made us feel at home. >> our challenge is to make something that is aesthetically pleasing and functional and satisfies all requirements. challenge.anding >> this is a hostile environment for luxury. sees can't just feel nice, they have to be safe.

>> safety is king and it is paramount in aviation. >> they're tested, and aid to endure. if you were to experience the extremes, then i think it would be quite unpleasant. >> the finished product is unbelievably expensive. a single economy class seat cost the airline as much as a small car. if first class seat, try your house. >> we have worked on a number of products with china been award-winning and have gone on to sell great numbers. therefore, the unit cost comes down. but, they are no less expensive. takingomething worth about next time you spill a drink. angus bennett, bloomberg. >> still to come, private baths and personal butlers. we will show the world's most

luxurious first-class cabin. ♪

>> welcome back to "the pulse." streaming on the ipad and bloomberg.com. in today's energy and finance, here are your top headlines. president obama will propose by 30% byeenhouse gas

2030. the environmental protection agency is expected to unveil its plan today. not expected to was previouslyny spun out from scottish energy. the sale is not imminent, but options are being evaluated. >> apple is expected to launch its smart technology in san francisco as part of the high trend of the internet of things. companies like apple are betting benefit to consumers and the original carbon footprint. it is not for frozen, it is the new disney movie. in u.s. and canadian theaters over the weekend, this is an

angelina jolie film. live-action twist on the animated classic sleeping beauty. x-men pushed down to number two. >> the way -- the question is, this righticate assessor's success? >> it is no lion king. ♪

>> welcome back to "the pulse." i'm olivia sterns. >> i'm guy johnson and these are the bloomberg top headlines. billionaire investor carl i can says he has no knowledge of investigation into possible insider trading. and wallork times street journal say icon was the subject of a federal rope. he calls their reporting inflammatory and speculative.

the sunday times reported that qatar won the bid for the world cup following secret meetings with fee for officials. >> spain's king is to abdicate. his son will take over. complete thest process before the change can occur. >> growth in germany and growth in the eurozone as a whole, growth in greece, even. franz is trading lower -- france is trading lower. mortgage approvals actually dropping from last month. u.k. manufacturing still going great guns. territory.xpansion let's have a look at how chinese manufacturing is paying out.

chinese manufacturing is the strongest in five. the demand for copper is strongest in china. but that the euro. you could not accompany newspaper over the weekend without everyone talking about mario draghi and what he will do later this week. reduce the rate into negative territory in helping to put money into the smaller businesses as well. one quarter of a percent lower in anticipation of the june meeting. the us trillion dollar, interesting move there, down a half percent against the u.s. dollar. we have seen housing starts actually dropped surprisingly and house prices down, two. let's have a look at the market and how we're doing in europe. we are generally up on the day. in the industry groups it is the minersthat are up -- the that are up. every industry group is

currently trading higher. $64 trillion. that is a value of global stocks. appetiteas though that is continuing into the month of june. >> in 25 minutes time, it is surveillance with tom keene. he joins us from new york with a bit of a preview. what are we looking at today? >> an interesting week. the wall street journal article on mr. icon and mr. mickelson and billy williams. mr. carl icahn and phil mickelson. of themer chairman securities and exchange commission, truly one of the nation's experts on the squishing us, olivia. that is the word for the day, the squishing us of insider trading. to ae that, we talked grizzled prosecutor, douglas , to be kind, suspect of

the reporting so far. it will be a most interesting morning. >> a grizzled prosecutor. looking forward to that. surveillance with tom keene and 25 minutes. >> let's turn our attention now to russia. you have given ukraine and next week to pay for this month's gas supplies. the countries will resume talks in brussels. over eastern ukraine continues. >> in three hours they will sit down for these talks in brussels. ukraine,russians, european union. the russians gave the ukrainians another week to pay their jets. ukrainians ponied up three quarters of a billion dollars on friday which the russians say they got today. otherwise, the details get messy. billione quarters of a

are for february and march. they still owe gas from for the marts -- for the months of november and december. november and december, the russians thought that they were ready to pay that 30 was good to be $1.5 billion. the ukrainians said they disagree on that price. in april and may, the russians say you owe us $486 per 1000 cubic meters, where the ukrainians say they're happy to pay 286. they should find a middle ground on this pretty easily. is thate, however, neither the ukrainians or the russians need to be in a big hurry, because it is warm right -- in the ukraine now. they have a couple months or they can wait and try to hash out a deal. it is only the western europeans and the eu which are losing the

stocks that are interested in working as quickly, because at western europe into don't like risk and you. they're thinking about what are the ukrainians don't sort out the act and said offering our gas, 16 of which comes through the ukraine. i expect the europeans to be running both with sticks and saying really, we would prefer you come up with a deal. >> perhaps a little bit of flexibility, but there could be some catalyst this weekend to agreement because a lot of international engagement by non-. there could even the a face-to-face between president clinton and president obama. >> it could bump into each other. it is a heavy night and board -- border of ukraine. 405 is rebels on one side and a couple dozen. that was to set the tone for the week. tomorrow, or rather wednesday, we have president obama flying in on tuesday night, meeting with ukrainian president-elect polishaw, as well as the

leadership, as well as almost every eastern european leader you can think of. then he goes to brussels where they have a g seven, not g-8 meeting, where they will talk about more russian sanctions. then, obama decamped to paris, where he will have dinner with president francois hollande, but not before president aland has a different dinner with resident through june. >> what is up with that? this.t get joint -- if there were a choice between russian, french and american food, i would pick french. the president-elect of ukraine says he is happy to chat with routine. routine is happy to chat with anyone, but no one appears to want to. obama will be around. everyone is here

to see his massive symbol of whenean unity, the day allies landed on normandy beach. ebay basically feel that gets do it as a way month before winning the war against the germans. they pretty much did the hard work you. and that is a sore spot for the the celebrations on friday. putin everything he is done to draw attention to past efforts. busy deals guy or a car guy? we will talk about that when we get that. ♪

>> welcome back to "the pulse" live on bloomberg tv. we're talking cars now. marchionne marking his 10th year as the head of the italian carmaker. for more on his reign and his ambitious plans for the future, let's bring in ryan chilcote. ryan, obviously the company is transformed since marchionne began. a somber sergio marchionne

walks into his first press conference as the new ceo of fiat in 2004. the chairman had just passed away. he is wearing a suit and tie and he tells everyone in the room is going to try to save fiat from the brink of bankruptcy. lost $8 billion in the preceding two years. fast-forward to today, 10 years on, look, fiat has bagged chrysler, the company is profitable, marchionne has tripled revenue and his tripled the share price or it is been a pretty good 10 years, it pretty good run, but analysts are skeptical because his new plan for the next five years involves them raising the number of card s that they intend to produce two 7 million, that a 60% more than they are producing now. as for profit, he thinks he can rise fivefold.

analysts are a tad skeptical. >> is obvious the a roller coaster ride therefore the stock you are looking at. many investors say marchionne still has a lot to prove. what is he up against? >> everybody agrees he is a good deal maker, he was very good at the turnaround, but how much does he understand about selling cars that people want to buy ultimately echoed that is what it is all about. responsible much for bringing back the fiat 500 and 2007 years since then they have sold more than one million of those cars. his master plan, which, simply put, is to take jeeps which is selling well in the united states and sell globally here and in europe, and take the offer of males that are being made in italy and sell them not just in western europe and also united states, that is going to cost an awful lot of money, in fact 55 billion euros over the next few years. it is going to expand their balance sheet, they're dead by

quite a lot as well. sure that thatt is actually worthwhile endeavor, that he's been to sell all those cars. after the event pitch to investors at the beginning of away from thatd meeting and change -- the stock has dropped about 10% since then very people are watching to see if he can really now make cars people want to buy. cracks are thanks to ryan chilcote. never let -- an effortless transition from talking about russia to talking about cars. fiat owns the jeep rant which is a former american military vehicle. it is now being produced in russia which i think is in interesting irony. >> history, let's leave that to

one side for now. what does the future hold for fiat? here's a company that is tried to compete with the boys like mercedes and bmw. once you put out for a male front and center. the pentecostal of money. they have a lot of debt. the two don't necessarily go together in my mind. >> this is where i am skeptical. said that marchionne he would revive trancelike alfa romeo and jeep as to increase performance. going premium takes time and a lot of money to investors because you cannot to sell any. you need to achieve customer credibility to do that. it is not an easy plan, i have to say. >> so far the cf 500 has really been a big success it for marchionne. now he wants to move his focus up to the higher end at rc alfa

romeo and was rocky brands. what are the prospects for alfa romeo to come eat? particularly in the u.s.. has an amazing heritage, but very diluted because alfa romeo was strong back in the 70's. >> it is a great sport car brand. >> yes, they are a sexy car. last year, alfa romeo sold daily design. to become premium you need to celtic aji and value for people who have to spend a lot of money to buy those cars. have done it with maserati, though. >> maserati is probably the best results of marchionne in europe. they did amazing. they recovered from the situation that was dreadful. there were below 5000 units. 15,000st year they sold

heard because of maserati's success, many believe that marchionne could replicate sharing platforms, the same success with alfa romeo. >> rarely, we know he is a fixer, but does not have credibility as a car guy. he's a key now has a fleet of cars it will take to resonate with customers and increase profits fivefold in 2018? likee volume makers peugeot are trying to target pw. there are no other chances in europe if you want to him through profits and just break even. >> do think these cars are really going to sell? >> i think alfa romeo, especially in the u.s., they want to relaunch in the u.s.. >> you think the cars sexy enough? >> in the usa of possibilities because people like to buy european.

they have memory of a heritage in europe. there are quality problems that they don't remember in the u.s.. the right choices to start in the u.s., going back to europe. >> they missed out on the whole -- fewn quality became of them broke down, let me put it that way. tofor many years they tried share with fiat, which was crazy, because there are too many differences between the two brands. withiat may be sharing chrysler but alfa romeo has to go another level. to share technology, otherwise you don't have enough volume for writing down your investment. >> he is a good poker player. if you were to look at his hand

right now, what has he got in that hand? >> he has a value of the brand with potential. >> any aces in their? >> not at the moment. there is no range at the moment. there are a couple of rough it types what sport cars it can be leveraged for the future. -- therey, there is are a bunch of alfa fanatics that are desperately waiting for this car to come to the market to buy them. there's a good opportunity to start, but i have to say this is the last start -- the last call for us. >> thank you very much. joining us. at the fancy world of flying first class, from the dreams and private baths to personal butlers, here's a tour through five of the world's most luxurious cabins. >♪

>> i just wish i could have a cabin in which i could corral my children. after a few flights. love my children hugely, but them wriggling around on little seats really doesn't work. onwe will be back with more "the pulse" in two. ♪

>> good morning, everybody. welcome back. you're watching "the pulse." euro-dollar on the move. factare highlighting the that the ecb has a significant problem with disinflation. we have state data out from germany. one of the few to be showing a positive number. other state it is negative ahead of the national day that tomorrow which will further rusher a 0.6 reads. mario draghi has artie promised that we will see action. -- has already promised that we will see action. hans, you can't resist a good sports story, particularly one involving insider trade story

with carl icahn. >> is a remarkable story that broke over the weekend. the wall street journal and the new york times had it as well that there is an sec probe that carl icahn and phil mickelson the golfer are being investigated for potential insider trading. both people have denied any wrongdoing. our own trish regan got carl icahn on the phone. he said, i have done nothing wrong. this blemish is a 50 year record. a remarkable story. the latest is, because the news broke, government authorities were able to use wiretaps. there is another wrinkle. the news breaking is going to present any sort of conclusion from this investigation. great story. >> very interesting. carl icahn clearly denying that he has ever had anything to do with one of the companies involved. he says he says he's never even met phil mickelson. move onto data.

we have some ok chinese data. the french data is horrible. we are expecting manufacturing to come in at 55.5, much stronger than we saw in chinese figures and the eurozone. not quite as strong as you. , but that breaks later today. 15%, ites come in at 55 will show that the second quarter is going to be very strong for the united states, representing almost four percent growth. it may even accelerate in the second half of the year. first quarter is a blip. of europe news out this morning is that the spanish king is to abdicate. one caller -- juan carlos will favor of his son felipe. factlls us a lot about the that the spanish are beginning to feel more positive about life, the fact the country can take this application now may be an indication that the government feels that momentum

is now turning a lot more positively. >> bond prices have come down. darling costs much less. totally it.t that is it for "the pulse." .om keene is coming up next ♪ .

>> this is bloomberg "surveillance." >> is it a tempest in the clorox teapot gekko what will we know friday after a critical ecb

meeting and the jobs report? and there is anticipation in cupertino, apple presenting worldwide to a conference. this is bloomberg "surveillance ." it is monday, june 2. i'm tom k. joining me, scarlet "new york rangers" fu. and adam johnson. the kings beat the blackhawks. that is one of our top briefs. >> there is another one for you, and it has to do with mixed data overnight around the world. europe -- >> crisis over. surveillance analysis. >> what is going to happen when we find the rangers down two potentially in the series? >> let's not go there yet. --manufacturing slowed then