>> the stand all. prime minister and angela merkel are divided old for -- are divided over who should lead to be european union. argument, we the must make the argument -- that happens to be something i've always believed. divide standeuro in the way of a possible deal in the fourth largest mobile carrier. china's will -- inflation speeds up.

>> hello, welcome to "countdown." i am mark barton. >> i am anna edwards. standing reporters are by ready to deliver the stories that will drive your day. hans nichols in berlin. choosing the next european commission president. the chinawson has inflation problem and the potential deal between two french mobile carriers hit a snag a caroline hyde has that story. >> jean-claude junker's candidacy to head the european commission. they have time as the prime minister of sweden set a summit will not lead to a speedy election. hans nichols joins us.

time is not an ally, is it? >> it certainly is not. what junker needs is his extension to the had of the commission to be a foregone conclusion. you heard from prime minister brian felt that this would not be the time to discuss personnel matters. on headingis going into the meaning, cameron was quite critical. craig, you spoke with reaching out trying to find a bloc. it is like matteo renzi is against junker. it is like the momentum is pushing back against junker. david cameron said we should be the way -- we should be the one who decide who should pick instead of a new process that was never agreed upon. there is one site that is positive for junker.

angela merkel reiterated her support for junker in a way that was believable. she was quite passionate and said she will use all of her discussions to lobby for junker. casting about for an image of this process when they got this, the prime minister retrieved and they went rolling and -- rowing and rowin in circles. >> thank you. i saw the picture of the 4 of them in a boat. let's pick up on this topic. he he was really echoing david cameron's comments that we should keep the integrity. it should be paid by national governments. nick is not backing junker.

he leads the liberal democrats. they suffered defeats and the u.k. every pro-european party. he denied his party is so pro-european that are against reform. work cut outtheir for them. >> europe is perfect, is it not? no one is perfect. in order to secure jobs and prosperity and deal with possible crimes. you cannot deal with it on your own. and recent polls show his support is down to a record low. that puts them under pressure. i asked if he will consider stepping down. he said, sure about if he saw one year ahead it would help to have a change of leadership. record lowty is at a

according to one poll. on deck sustainability, it has been creeping down. the debt burden, the debt load has been creeping higher. % of gdp. what is his view on deck sustainability? -- debt sustainability? crooks will step out the platform for the next election and they make commitments. one of them is around the level of debt sustainability. safe and sustainable. they have a goal of reducing debt. course, if you do nothing with it -- and growth, -- with a debt and growth, you meet that commitment certainly because it is a percentage of gdp goes down. what exactly are you committing to hear? theaid the devil will be in details. something they think is safe and

sustainable. just yet.not he was talking at the other commitment on balancing the budget. with the exception of infrastructure. that was the gist of the conversation. >> on a lighter note with the world cup coming up on thursday, he is torn between his mother and his wife and another game that is due to take place. >> no situation any man wants to be and. teamupport for the england and said he does not have his loyalties. this is what he said. >> this what i am really worried about. do i side with my mom or my wife? is the worse dilemma. >> everyman's worst nightmare. latesting release its

inflation data with prices picking up at third fastest paces earlier this year. john dawson in hong kong. with the breakdown of the numbers. good morning, john. chris good morning. -- >> good morning. that is the concern here. the figure is above the forecast 2.5%.% coming in at the australian doctor is the -- dollar is the most responsive. overall, quite encouraging. concerns over food prices rising. and the banks and more easing. 2.5% target. there isn't room for more easing. it is not done yet. -- and there is a more easing.

it is the fastest pace in four months. >> john dawson and hong kong. franklin templeton provided his perspective out of china. manages $45 billion i said he is optimistic on china's economy and the long-term and expecting failures and the short term. >> china is going through an credible almost revolutionary change. is -- if youp added 10 points, [indiscernible] incredible change. the 10 points is -- [indiscernible] internet seen in the joined aalibaba,

money-market fund. also signing a bond market. propertynge in the system. all of these changes will have an incredible impact. i am optimistic, however, you will get a lot of bad news out of china. >> possible tie up between french mobiles looks to be struggling. a huge difference of opinion and the price tag. a caroline hyde. how big is the disagreement over price? about 3 billion euros in all. pretty phenomenal amount.

is the new kid on the block. in 2012.t joined ownedird-biggest player by conglomerates. informal offer. and they want seven billion euros. 'ay above analysts expectations. all of the bickford eubanks would be worths -- all of the big european banks thought bouygues would be worth 7 billion euros. isa conglomerate, bouygues 11.5 billion euros. that is about 2 billion euros. wasgues as a conglomerate worth 5 billion euros two years ago. it wants more than that. 8 billionion euros to

euros. a fascinating debate. the dell has -- deal has come about because bouygues was trying to get the sfr unit. buyer is aal potential seller trying to sell the unit to iliad. all happening and telecom. m&a. billions of deals announced. 9% year over year. the fastest pace of growth across any of the set is. what is interesting, it is not the only company that bouygues could be talking about. if that isn't early stages.

three issues. orange is the biggest player. -- it is in the early stages. whether they can combine number one and three. orange.s of a deal to share costs. a deal to share mobile networks. it is put on ice. we have to remind ourselves for the sudden rush for consolidation. networks. it takes a lot of money to invest what we want our phones faster. you have iliad offering incredible cheap, discount deaks, ation. very difficult situ to invest one need one side.

the french minister back in march saying, there needs to be three players in france. the first iranian president to visit turkey. he talked to erdogran. details are next.

>> welcome back. >> it is 6:15. made aian president has visit to turkey for 18 years until yesterday. rouhani met with the turkish prime minister as they try to improve relations. elliott gotkine has the details. i suppose they had quite a lot to catch up on. crooks very much so. -- >> very much so. it is always not so easy in this region. two regional heavyweights. he ryan and turkey. they do not see eye to eye. -- iran and turkey. take syria where iran is backing the regime of assad, not independently.

turkey is of course trying to work toward unseating him. yesterday was all smiles and handshakes between the two. theiranian president making first visit of an iranian leader to turkey since 1996. mr. rouhani described the meeting as a turning point and said we have decided to improve oil, and in the gas, electricity even though there are some snacks. those that might be the price that turkey pays for iranian gas. fouling a complaint -- filing a complaint. they want to buy more gas from iran and want to boost trade ties as well between the two. they are talking about potentially doubling trade by next year if the unfair trade sanctions against iran are

lifted. iran showing how serious the delegation is led by president 100ani including more than business people to turkey and the meeting yesterday. that is something that to hope they can -- two hope they can work through. israel trying to sell gas to turkey, too. >> thank you. investors, after the president measures by uc been -- ecb, bo nds hit record lows. in.o, thank you for coming spanish tenure balance -- 10-year continue to fall and others. lated to what ecb did or what they might do? >> i think this time is a

consequence of what they did. we were as the market was expecting this to have a package target. not financial corporate. actually seeing what could be given to banks is bonds. the end gold bond until of sept. >> is it because it is not prescriptive? >> not as prescriptive as sls out of the bank of england if there was a penalty if you are not helping lending. >> does it mean lending will not get through to the private sector? >> it is supposed to help the real economy. >> it does not mean that. the target giving an advantage to loan up to the private

sector. that is a key of this. big banks have to lend at a lower cost. >> what about the demand for credit? is there a demand in the eurozone? >> it depends on the price. there is a big decrease in the cost of a banks. , and italy, ag could gain two percentage points. 50%, you could see more demand in italy and in spain. >> do you think european businesses that have not been bothering with rates as low would be encouraged to borrow more with that little bit extra? >> not necessarily in france or germany. but italy and spain, rates are much higher. . think there is a chance

will lend more. we'll borrow more. >> what about the banks themselves? target. they have already paid back half of the original ltro. why are they going to take up 400 million euros of extra money? >> billion. >> i am sorry, billion. >> it would be more potentially. it is expiring. here, you have a chance of borrowing up to 4 years. why not? thank you. he is staying with us. ♪

>> welcome back to "countdown." i am mark barton. >> i am anna edwards. we are back with marco stringa. landscape seems to be changing quite quickly. is it having an impact on the forecast and research you are doing? >> i guess it is too early it has an impact on our projections. oft is true is that success

the number of european countries could have an impact on national policies. probably, the biggest repercussion as not european -- but it could be on a government level. chris does a make it more likely that david cameron might get his way and be able to tweak british's relationship with the european union? >> difficult to say. when you have somebody that is more difficult to keep it. it could help. it could help the u.k. >> what about the euro heading from here? will not see much action. >> i would not say it is surprising it did not budge. europe has got a positive current account. it is not clear it is in position. growth should pick up.

italy -- at least a little bit. >> it works by increasing inflation? your measure of success? >> increasing inflation. if you increase growth, assets become more attractive. >> a does the ecb needed to implement qe marker or not? qe, aftermean private the policy, they will have private qe. according to what the drive he says, they will wait to see if that works. says, they will wait to see if it works. >> i am to about buying government debt. like the fed has done. >> i think it will happen. notth, even mediocre does realize then the possibility. but not in our current. >> marco, thank you very much. marco string from deutsche bank

joining us. can he sell the made in italy guaranteed to china? why it is so important that italy's a big business leaders have, along for the r -- italy's big business leaders have come along for the ride. ♪

>> welcome back to "countdown." i am anna edwards. >> i am mark barton. fx check for you to a big day in china. came out showing consumer price accelerating at the fastest price in four months because of food prices. we had a drop in factory prices. investors keeping a close eye on

the currency. there is the dollar against the -- 0.1%.owing 10. china central bank is boosting traderrency after doubled. there is the dollar against the yuan today. >> these are the top headlines. standing in the way of a possible merger. france's third and fourth largest carriers. in recent weeks, iliad made a informal offered to buy bouygues . billions short of what they are demanding. in the past few minutes, gazprom said they are not moving the deadline. even as talks have yielded progress between russia and ukraine. ofv saturday reached a deal

the priorities for de-escalation in eastern ukraine. italy's prime minister is in asia to promote a italian businesses and boost investment. matteo renzi has visited factories in vietnam before going to china. in a few hours, he meet members of the committee and shanghai. he will be hosted by china's premier and president. >> more of the story from hong kong. our reporter is a following it. it is renzi's first international trip. how significant is it for him? it's prettyhink significant for help. he became prime minister through turmoil and maneuvering. to stand on the world stage and gives him a bit more legitimacy. he is coming off of a substantial victory and the european alimentary elections. he was not elected.

you try to boost his prestige. he is looking for italy. he will be on the center stage in italy -- in asia for a couple of days. >> why did you choose vietnam and asia and khazhakstan? >> he visited a factory. scooters. it is a big market. it is very widespread. he also visited a factory that makes home appliances and they pledged to boost total traded two $5 billion between the two countries from 3.5 now and he is moving to china where he is promoting the expo today. he will be meeting with the prime minister tomorrow and clearly, chinese investments and up for italy.ry companies like the fashion companies, the luxury companies gucci are huge in

china since the wealth has grown. he is looking to show chinese investment for italy. the italian economy is still being really slow to respond even as europe recovers. it has contracted in the first quarter. that relieves direct investment. one of the weak points. he goes to kazakhstan where italy's biggest energy company is very, very big investor. he was show his face there. there will be energy deals and -- in kazakhstan. >> what else is on the agenda on this trip? >> he trying to promote the expo in shanghai. they hosted it in 2010. milan has it now. he can use good publicity. a big corruption scandal in italy. a few can get good headlines for the expo, it would be welcome in

italy for >> and thank you, andrew davis speaking to us. >> for more on the chinese economy, let's bring in timothy ridelh. good to see you. you announce earlier, we often think of germany as exporting high precision tooling to china. we look at the links coming through that avenue. italy does export that. >> one of the main european providers of high precision goods globally. and the number of industrial companies exporting and to south asia and china from italy in that sector is pretty large. as -- andre among they are, as your guy in hong kong stated, they are pushing the expo strongly. just last week in singapore,

was a majorhere it topic. now with renzi going to china as well as vietnam and kazakhstan, it is highlighting the importance. >> it is more than handbags. interesting 24-48 hours. datave had inflation creeping upwards, rising in may, the highest in 4 months. well.te has risen as put it all in context. >> first, the inflation data. -- aickup because of based pickup because of basic effects. the overall inflation picture if anything is relatively soft. very negative and negative 2% up from

levels that it is a drag on the investment profile. it is telling us there's not a huge demand into the industrial sector. inflation pressures are not really a big profile. >> because of targets. cpi below 3.5%. >> there is room for further easing. what we are seeing is a second round of cuts. we really need to get the big banks, the major five and other large estate banks getting another boost to their liquidity. >> is it coming? >> we think it should. and there is discussion at 20 the prime minister and state leaders on how to provide more liquidity into the system. >> why do you think it should happen? some are worried there is too much debt in china already. and there's a certain type of bank because they want from

current lending to small businesses not to maybe bigger businesses. >> with getting a lot of different types of collateral financing alternative investment vehicles which are going around to the official lending sector. we have talked about shadow banking system. what we are doing is uncovering where there is unregulated financing that occurs. they are being clamped it down. the industrial sector seems to be falling. they were being used as collateral for financing. they have been pulled away. as you pull them away, you have to provide something else for industry. and at the larger level to keep the growth rate towards the we are looking% for. we are looking close to 7%. in order to provide that, you do

need to bet that target, you need to provide more general liquidity as you are clamping down on the regulated areas. >> the central-bank raising the fell most or so ago i since october 2012. we know which way the yuan went. has it bottomed? >> we think so. the training rate with a fixed rate, the past three days the fixed down below the model of forecasting. it is a clear sign. that's what we had back in february. we started getting the movement up in dollar/yuan. it moved against what all of the models were telling us. the authorities want to see the yuan weaker. we are in the opposite profile. we have seen it three days of fixing.

dollars/yuan as we reckon will move lower. a move back down into the middle of the range. >> dictating the move will buy chinese authorities to move the currency in one direction or another. there's a longer term picture about moving towards a more floating on the free exchange rate, isn't it? getting all to do about the markets more flexible and not having a distorted positioning in the yuan. what we had in the beginning of this year was the vast majority of corporates were heavily yuan offshore. when they were getting contracts coming through, they were not directly convert it back to onshore. there were using offshore to enhance that earnings would interest rate differentiation. it basically distorting the ability --

>> currency traders? cricket yeah, they were using differentials instead of what you are actually producing? manufacturing. they were boosting the by using these different vehicles. we are creating what they are trying to call a level playing field that we do not have too many two way bets. that allow a stable, domestic capital before we could do to the international capital markets. >> is china doing enough to prevent -- tokyo was talking about the bursting of the credit bubble. does nothe leadership have a note to rebalance the economy. you're not look for worst-case an reo, are you -- scenario, are you? >> it is easy to take the growth in credit. that extraordinary growth of china over the last 15 years.

five years ago, we had an economy around four point $8 trillion. it is now $9 trillion. we had huge expansion. credit has expanded is enormously alongside. we need to see a more sophisticated and deeper capital market to support the growth on that scale going forward. to do that will cause problems. it will cause issues with potential credit. the chinese are trying to move before a credit crisis occurs. normally in the west, we have a credit crisis and we overreact. chinese lifting of the stones is seen the worms and trying to preempt the crisis. >> a different markets. it's a very different market. we and the west overestimate the next. >> timothy, thank you for joining us. >> 6:42.

crime does pay for the private security business is doing sec urity ahead of the world cup. the price of protection in brazil. ♪

>> welcome back to "countdown." i am mark barton. >> i am anna edwards. ♪ >> we are today's away from the world cup kickoff in brazil on thursday. let's look at the latest news about the tournament. paulo workers are threatening a strike. the metro workers will vote on june 11 on whether to renew the stoppage the next day when brazil plays croatia. >> police officers from the 32 nations competing gathered for the inauguration of the international police center. the center will assist in dealing with violent fans and foreign criminals during the tournament. the international offices will wear their uniforms to the

stadium. they hope the uniforms will make it easy for fans from those countries to identify them. >> as preparations for the cup continue, brazilian football legend pele has weighed in on his tip on who should win. he won three times said germany and spain where the 2 best teams. he added that one has to respect england and italy and the world cup is an unpredictable box of surprises. english --as foreman i wonder if it was from an english journalist for some >> he did not say that english it would await a but you have to respect them. they might go out in the first round. as more predictions are telling us. >> he did not say brazil would win. >> last year, there were more than 37,000 muggings in rio de janeiro. more than 50,000 murders.

add to that a threat of kidnappings and gang violence and you can see why brazil is known as one of the most dangerous countries. it'll be a big concern for anybody traveling to the games. it means big business. we talked to one of the top security firms to give you an inside look of the price of personal protection. ♪ in brazil, there is no value in human life. they will rob you. if you resist in the lease, you will be gunned down. with a nobody moore's, -- with no remorse, they will do it. s -- thisdent of pd my security team. we know we will have demonstrations.

we know we are going to stoppages or strikes or so on. it is how violent they are. they are unpredictable. this could be a security nightmare. to some of us, to others, like me, it is a challenge. ♪ the misconception that these security guards is suit and ties. there is much more training going into it. these folks out here working are all a tough, professionals in their field and they work to make sure they understand how and how theyent is operate. we can get a better opportunity. -- we can get a better at protecting. we are looking for anything that may be out of the normal that we of. to be aware that van is pulling up. they might be curious when they

see this kind of configuration. they try to cut us off. the key is to at least be moving at this speed. constantly in motion. it is very common to have a blockaded thrown in front of you to get you to stop. some type of a roadblock or assailants come out all of a sudden. and we get out of your potential situation. ♪ to avoid being stopped or being locked in, we will take a helicopter out for our protect and takeprotectees

them to the next site. if you fail in this arena, it could cost you your life. we are not only protecting our clients and their families and their company assets, it could cost us our lives as well. >> i am frightened. on other people's behalf. >> i am frightened with being in são paulo with traffic jams. quit we stay here. -- quit we stay here. should students focus more on their exams? newspapers are up next. ♪

>> welcome back to "countdown." i am anna edwards. >> i am mark barton. newspaper time. hans, take it away. noa respectable newspaper, nudity. i will try to peak your interest. berlin is considering bidding in 2024.lympics they still not decided whether or not to get their infrastructure ready. it would be a massive outlay but they are thinking of it. part of my campaign to bring a mark barton to 1936, the university of washington won the gold medal in rowing. a great book if you have time to read it. >> i do have the time.

very sad day yesterday. if you are english or british, maybe some be outside the u.k. would've heard of him. he was a very big comedian especially in the 1980's and 1990's. it was possibly one of his most popular characters when he guns."rik in "the young it was about undergraduate sharing a house. it is the benchmark. student life. such a seminal comedy. that is his big -- in the movie with him. edmonson spoke yesterday at said there were times when rick and i together when we almost died laughing. some the most carefree, stupid days i have ever had. i feel privileged to share them. he has died for real without me. selfish -- [bleep].

>> he was a comical genius. this about the greek text startups. talking about wanda has raised money as a main problem was not raising the funding from silicon valley but getting out of these current jobs. 2 quite young thirtysomethings who set up. rolled out to new york and san francisco and getting recommendations. one of them cannot get up his job teaching at a public school for basically a year. he was trying to start up this other company. talking about how greece is nurturing excited startup culture. >> this is the telegraph. --ils are told to go read world cup a red card. he is reminding students that they should win their exams rather than watch the football.

because of the time differences around the globe many european stay.ts attempted to >> a couple of games at 1:00 a.m. , thatto my levels morning, watching the game. >> you failed. >> we did all right. in thentdown" continues next hour. stay with us. ♪

. .

>> deadline day. against ron tells ukraine it must make payments for gas by tonight or risk being cut off. >> and mind the gap. a 3 billion euro divide stands in the way for a possible deal for france's third and fourth largest mobile carriers. welcome to "countdown."

i am mark barton. >> and i am anna edwards. welcome to the program. the forces opposing jean-claude candidacy are joining hands. they have bought sometime as the prime minister of sweden said it will not lead to a speedy selection. hans nichols joins us from berlin. is time on john carter juncker -- jean-claude juncker's side or not? the more likely it is for another candidate to emerge. it does look like the prime minister of sweden is lining up against juncker, playing for more time. arethese forces in general making calls, trying to find a different candidate. here is what happened going into the meeting. cameron was very firm that if someone -- that someone like

juncker should not be picked simply because their party wanted a plurality of the votes in the may elections. we should be the ones to choose. is cameron. to choose who should run these institutions, rather than accept a new process that was never agreed. there is one point on the upside candidacy.cker angela merkel seems to be a little more forceful and proactive in defending juncker. here is what she said. she said she would use all of her discussions to lobby for him. that is a bit of a shift from her. in the past, it seemed that, while publicly, she was for him, i really, it was unclear how much she was willing to risk, to gamble. now we have yet another discussion that continues today. they are saying the focus will be on policy and not personnel. you.ank hans nichols reporting on the latest european commission

developments. i spoke yesterday to the deputy prime minister here in the u k much taking the same approach as david cameron, saying that he does not want to see a european commission president handpicked the european parliament. this should be something that is treated by the national governments. he is also opposing the apart -- the appointment. >> it is quite rare that they agree. this is about the sole point of agreement between the coalition partners. >> they have taken a different stance on that as of late. over the last 24 hours, the liberal democrats leader has been trying to set out his economic agenda for the election, which is scheduled to take place in spring of next year. platformt his economic for the next elections and i asked him what he was committing to. >> we are committing to make sure that, in essence, future

generations do not spend bucket loads of money servicing the interest on this generation's debts. then there is the question about how you do it the -- how you do it. that is the kind of thing we will pin down in the coming period. there seems to be a relatively strong consensus on how you define debt that is a safe level. is it around 60% of gdp? we will scrutinize the detail of toting get down -- debt down safe and sustainable levels by the middle of the next decade. it is a sensible approach. we have such a high debt burden which is still going up the we are trying to deal with the episode. -- still going up. we are trying to deal with the

deficit. >> and looking at the stock of then debt asrose, a percentage of gdp falls. so you need that commitment. but is that substantial enough? would you be ok with that? are you willing to commit yourself to a firm percentage? >> the devil is in the detail. you are quite right, of course. the faster the economy goes, -- grows, the easier it is to deal with those debt issues. that theo make sure economy, if it is hit by another allow the deficit to reemerge in order to deal with that emergency. , assuming that growth is stable and strong, we

want to see debt come down by that sort of sustainable rate and, if necessary, take the measures. otherwise, there is no point in having a debt rule which can take care of itself. we think aiming for a sustainable level of cumulative debt to bring it down to those sustainable levels around the middle of the next decade is a sensible thing. >> he is an interesting man to speak to about the relationship between the u.k. and europe between his party -- because his party has suffered some significant defeats as of lately. his own personal approval rating is at a record low. he said that if he thought it would help one year ahead of the election, then he would be the first to advocate changing leadership. >> he was a european parliament member. he knows what it is like to work within that system. he said that each tribe -- that

he tried to change it. >> he said he thinks he has done the most of any u.k. politician to try to change europe from the inside. he goes along with the line that you have to be in it to change it and that is what we have heard from a number of politicians. but he is european in many ways. he has experience in europe. >> he can speak spanish, french, german, and dutch. his mother and his wife are from different nationalities, which, leading up to the world cup, puts him in a tricky position. >> he was very quick to say he was fully behind the england team. bring other matches, he doesn't suffer some divided loyalties. game, holland-spain between my mother and my wife. that is every man's worst dilemma. >> and your advice is -- >> wife. if my mother is asleep, mother. 7:07 here in london. let's talk about some m&a within

the telecommunication sector. a possible tie up between iliad and bouygues. gues things it is worth more. how much is the difference between the parties? >> phenomenally huge. 5 billion euros. bouygues thinks it is worth 7 to 8 billion euros, almost double what iliad thinks it is worth and way above what analysts think it is worth as well. analysts have analyzed this and probably about 5 billion euros, which is a significant amount. just two years back, as an entire conglomerate, remember, they are only 17% sales,

telecom. worth 5 billion euros as a whole entity two years ago. now it is worth 11.5 billion. it is asking for a hefty rise tag overall. and what is so interesting is the reason for which this deal is coming about. to be a wanted purchaser. it was a buyer and now it is turning itself into a seller because sfr is being disposed of by vivendi. it did not win out so now bouygues might have to sell its own telecom unit to iliad. it was looking to sell some assets to iliad if it was able to get its hands on sfr. >> thank you very much. >> gazprom tells ukraine to pay up. >> it has said it will not move today's deadline. we will get reaction to that news live from moscow. ♪

>> time for today's company news. time warner is in talks to acquire a stake in vice media. the discussions value vice at

between $2 million and $3 million. vice media attracts a younger male audience coveted by advertisers from youtube to hbo, where it's correspondence report from areas of conflict around the globe. ross is selling his remaining stake in the bank of ireland. he has almost tripled his investment in less than three years. company boughtis a 35% stake. the deal helped the bank avoid state control in the wake of the real estate collapse. paypalk has hired ebay's president to lead its mobile messaging business. the move comes as facebook seeks to gain an advantage in the fast-growing and competitive mobile market. markets -- he will be tasked with finding business on the messenger, which currently does not make any money. welcome to "countdown."

>> the time in london is 7:30. in the last hour, gazprom has said that it is not moving today's deadline for gas payments from ukraine. that is even though talks between ukraine and russia have yielded progress. for more, we are joined by our bloomberg news reporter. toughm sticking to this stance with ukraine despite some diplomatic breakthroughs. >> that is correct. we spoke to a gazprom spokesman in the past hour and he said that the deadline will not be moved. in fact, he said it has been moved already by one day because the deadline was technically yesterday for the payment. obviously, this remains a deadlock. and the european powers seem to be doing everything in their power to broker this agreement to help ukraine and russia come to an agreement. >> does there seem to be a sense in other areas that russia is willing to cooperate with the new ukrainian government?

>> that is the sense. the markets have rallied on that. the russian markets. market reachedck bull market levels last week, on friday, because putin met poroshenko for the first time and they actually had a conversation. proceeding and there is progress there. russia is definitely willing to talk to ukraine now. the rhetoric has changed. importantmind us how it is that these gas talks between gazprom and ukraine bring results. how important is it to both parties? both is important for parties, but it is also very important for the european union because the gas supply from areia through ukraine responsible for 15% of the eu gas supply, so it is a very

important deal. that is why the talks are happening in brussels. they are supposed to continue at about 9:00 p.m. unless an agreement is reached tonight in brussels with the help of the european powers. >> thank you so much for joining us. >> let's turn to the impact of the ecb's latest moves and hear from one of the best-known known economists. the managing director of capital economics and the author of "the trouble with europe," which we will talk about in the next section. good to see you. ecb's actions that they bazooka, but you say it is not as bold as it seems. >> it is a big thing to cut rates into negative territory, the first large central bank to do that. i think that took some doing. but 10 basis point is not going to achieve an awful lot. get on with deflationary

reforms, you have got to do it early. the bank of japan was slow and lucked into move. deflationary forces grounded them down and eventually, they did what they should have done earlier. is the problem with the ecb. >> we spoke to an economist earlier who thought that what was happening now in terms of peripheral bond yields, which seemed to have been falling since the ecb meeting, is that banks are going to be able to take money from the ecb and go out and buy government bonds. the conditions attached to that money not as onerous as economists thought. that the banks would be forced to lend that into the real economy. are you surprised, that lack of conditionality? >> i think that is what is happening. i do not think this is changing the game in a meaningful sense. what europe needs is real demand in the economy to pick up food if the banks -- to pick up. if the banks are buying government bonds, that is not

creating demand. it keeps the yields down, which is a good thing, but how are you going to get people spending? this is the key thing. it is not happening. >> and you have cited some great figures. undertaken bye the fed and the bank of england equate to about 25% of gdp. the sterilization of the ecb bond purchasing program, the 400 billion update from the target of ltro will be 4.2%. that is a massive gap. does that gap need to be filled? could it be filled or not? >> i think it could be. this is a largely political thing. the germans fundamentally do not approve of this policy. they have had to been -- to be totrolled -- to be cajoled where the ecb is now. what the ecb needs to do is embrace full-blown qe. and to tell the markets that

that is what they are doing. we are going to go on buying government bonds and private bonds without limit. that is what it needs to be able to say. of course, it cannot. >> isn't it going to try to deal with the same problem that you say is not actually the problem? that type of measure is designed to reduce the costs of banks, but it does not force them to lend into the real economy. it does not force companies in the real economy to borrow. you said you do not think there is the demand there. dothe limit to what you can be starting from here. given where we are, qe is the only thing we have got. one of the advantages of massive qe is that it will have an effect on the exchange rate. you have got to tell the markets that you have unlimited firepower. we are going to do a little bit of this and we might reverse it or we might not. do not get that change in psychology. >> stay with us.

we are going to talk about rodgers book next. there are three questions on the cover. why the eu is not working, how it can be reformed and what could take its place. we will ask roger. stay with us. ♪

>> welcome back to "countdown." 7:22 here in london. roger is here. here it is, "the trouble with europe."

thank you for coming in to talk about it. is the eu and the euro unsustainable in its current form? >> the eu and the euro are quite different things. argued for some time, is unsustainable. so far, i have been wrong. but give me time. i think i will get there in the end. the eu is a much broader thing. what i argue in the book is that i think it is fundamentally badly structured right from the beginning. euro derives from that. this idea that you have to bind these countries closer together. the euro has been a complete disaster. >> why do we feel the need to decide whether the euro has been a disaster or not right now without giving it more time? many european leaders talk about how it is still a work in progress three they say they are taking action to fix some of the infrastructure, the physical requirements.

other currency unions exist with big divergences. either, not be perfect but why do we feel the need to condemn it after just this many years? >> well, it is not that young, you know. you had more time than me, i suspect, but if we see a breakup, it is going to be very soon. it has been catastrophic for the peripheral countries. the collapse in gdp increase of 25%. this is the order of magnitude that happened in america and germany in the 1930's. the diversions between european performance and performance of countries in the world. it is possible, in 20 or 30 years, the euro will be doing perfectly well. i do not want to wait that long. >> what about the eu and the u.k.'s relationship with it? if david cameron does not get what he wants, do you really believe that it is better for britain not to be within the eu?

>> let's see what it is that he has got and he has not got. if he does not get very much, then yes, the answer i would give is it would be better for britain to be outside the eu. a lot of people talk nonsense about the cost of leaving. trade betweenst britain and the eu would continue. the barriers would be very small. we would have a good chance of agreeing with a free-trade agreement with the eu. we just would not have this flood of regulation. they might not be minded with a free-trade agreement with the u.k. if they just snubbed them and left. >> it is possible. but they are striking free-trade agreements with other countries around the world. biggest trading partner, believe it or not, bigger than the u.s. i think you would find lots of german carmakers would the

putting enormous pressure on the eu authorities to do something about it. how do the parliamentary elections in europe changed the political landscape? >> well, it is too early to tell, what you would think that they would be putting more pressure on leaders to make some moves in the direction of the eurosceptics. maybe that is what is happening with juncker at the moment, a sign that that is happening. it would not go well to have a federalist in this important post. we will have to see. france is the fascinating country where they got such a vote.ote three -- a huge yet he is anything but a champion is -- a champion of free market, anglo-saxon capitalism. >> do you think it can be reformed, europe? >> i certainly do not think we should ditch it.

but i would want to try -- actually, in my case, without a great deal of confidence for success. >> thank you very much. roger bootle. kicks off in l.a. microsoft and sony are evenly matched. does one company have a big advantage over the other? that is coming up next. ♪

>> let's get a check on the fx markets. i am watching the dollar against the yuan today. china today, inflation accelerated in may to the fastest pace in four months because the food costs are declining. by 2.5% fromes up a year earlier. that is slightly exceeding the economists' forecasts, but

inflation is well below the government's target of 3.5%. that gives- to many, them room for easing when it comes to monetary leeway. yesterday, we had the announcement of a cutting of reserve requirements for some banks from june 16. that is intended to support agriculture and small business. when it comes to the yuan, heading for the biggest three-day advance since january of 2000 well. that is as the chinese central bank boosted the currency's fixing as the trade surplus doubled. the dollar falling against the chinese currency for the third consecutive day. >> these are our bloomberg top headlines. a price gap is standing in the way of a possible merger. in recent weeks, iliad made an informal offer of 4 to 5

billion euros. that is about 3 billion euros short of what bouygues is demanding. gazprom has said it is not moving its deadline or gasp rain it's -- for gas payments from ukraine. if he does not pay, ukraine could be cut off. and italy's prime minister is in asia to promote italian businesses and boost investment back home. visitedsited -- renzi factories in vietnam before jetting to china. in a few hours, he will meet with the financial community in shanghai. on wednesday, he will be hosted by china's ramirez and president. but -- premier and president. welcome back to "countdown." >> no iranian president has paid a visit to turkey for 18 years. that is until yesterday. rouhani met with turkey's prime minister as they seek to improve relations. elliott gotkine has more.

i suppose they had a lot to catch up on. >> very much so. take the might neighbors for granted, but in this region, you are talking about two regional heavyweights, turkey and iran. they do not always see eye to eye. they sometimes step on each other's toes. in syria, the iranians are backing the regime of assad and the turkish government is doing its best to have him on. yesterday, although that seemed to be forgotten. andas all smiles handshakes as it was the first visit of an iranian president to turkey since 1966. president rouhani described the meeting as a turning point. adding that they decided to improve relations in gas, oil, and electricity even though there are some snags. those seems to be the price that turkey pays for a rainy and gas. like -- over iranian gas.

took ae of years ago, it case to the court of international arbitration about the price it paid for gas. turkey will get cheaper gas and it will boost trade between the two countries. turkey's development minister says trade between the two could if, in his year words, unfair sanctions against iran are lifted. >> does a closer iran-turkey necessarily affect turkey's relationship with its western allies? not as longshould as turkey does not try to lift the sanctions that remain in place. that is not to say that everyone will be doing somersaults. iran is also on the brink of restoring top-level diplomatic links with turkey, exchanging ambassadors, something that has not been in place since 2010,

when israeli commandos raided a turkish ship bound for gaza. israelis may not be happy about they willfor turkey, get more gas and cheaper gas, more trade, and a vantage point from which to cherry pick the best deals from iran if and when the sanctions are lifted. it is another chipping away of the wall of economic sanctions that have been hurting the iranian economy so much over the last few years. we still do not know if it will be a permanent deal on iran's nuclear program. it is currently a temporary one in place but that is something they are working towards right now. >> thank you. >> coming up, selling the stock exchange. ice has set the ipo price for the euro next exchange. we will have more next. ♪

>> time for today's company news. barclays is planning to sell its first samurai bond in three years. other banks have offered samurais recently as the yield

premium on the note falls to the lowest since 2007. imperial tobacco intends to sell shares of its european logistics unit on the spanish stock exchange. the company will retain a majority of the shares in the business. it was inquired by -- it was acquired by imperial in 2008. avolon aerospace filed for a $100 million u.s. ipo. this comes as industry dealmaking accelerates. lon has a portfolio of 202 aircraft. they say that after half of the global jetliner fleet will be operating off leases by 2020. looking back to "countdown." 7:39. speaking exclusively to bloomberg, franklin templeton's his take ondivided

the news out of china. he told bloomberg he remains optimistic on china's economy long-term while expecting failures in the short term. through is going incredible, almost revolutionary change. the leadership is determined to reform the economy. thatu read the 10 points was passed by the third plenum, you realize these are incredible changes. these 10 points include things improvisation. some taste of it can be seen when the internet company alibaba started a mutual fund. isoney market fund that worth over $3 billion now. organization.

also, a change in the property title where people can get titles of land-use. all of these changes will have an incredible impact moving forward. so i am very optimistic. however, a lot of bad news coming out of china. if you have a freer economy, obviously, there will be for years. -- there will be failures. >> the tv show "star trek" popularized ray guns and teleportation's and also brought the handheld scanner that could reveal the properties of unknown materials. one is really start up has now made this a reality. elliott gotkine reports. >> in star trek it was known as a tri-quarter. molecularhe first scanner that fits in the palm of your hand.

it analyzes chemical properties of materials using light. >> by analyzing how light bounces off the subject, it can identify cheese. it works on tomatoes and even pills. >> i am going to go for the blue one. >> it illuminates the actual pill and sends the properties to the cloud back. work ones not yet random objects, such as my shopping. only items that are ready on its system. >> we wanted to create the world's largest database. what does that mean? it means we scan every piece of property that is out there. all of us can start understanding better the world around us. >> are we going to see the future of people walking around supermarkets and zapping a tomato to see if they are right or sweet? >> i can imagine people walking

andnd the supermarket knowing if it is sweet or not before they put it in the bag. >> the final frontier is to get everyectrometer into internet-connected device. it is certainly the right size. >> this is it. >> it goes inside the chip. >> if only they could beam it to you, it would be there even faster. >> where did he go? you send him to? it has to be on this earth. >> i am a big fan of elliott. he is listening. >> is he? >> let's take a look at today's top corporate stories. caroline hyde is here. where should we start? >> we are looking at ipo's again. tsb due on june 20. euronext will be coming out on june 20 as well.

and we get an initial idea of the pricing on this. not --r, this is andrew intercontinentalexchange, ice, selling off euronext. 25 euros per share. next is worth up to three quarters of a billion euros. trading expected june 20. this after they have already sold some shares to financial institutions, the likes of socgen, bnp paribas have all been taking up little pieces. and then it goes to the retail and institutional investors. >> you had a business that was independent in 2007. it was bought by one business and the whole business was told by another business.

then that business decides to spin off some of the bits that were originally purchased. >> and it is making bankers relatively wealthy too. the listing is putting shares into the market. will be put in the market as well. >> thank you. we saw in lasty week's ecb decision might not be that deep or lasting. the president of the bundesbank said in an interview with a german paper that the ecb measures were a wake-up call for government to continue with reforms. hans nichols is in berlin. what is his message? >> he is concerned. we are entering new grounds read he said -- new grounds. he said that there is a wake-up call. the risk of overreaction was another quote. a lot that we have talked about on these shows about the unanimity, as you said. mario draghi almost trumpeting that when he spoke in crank for

last week. they cut -- in frankfurt last week. they cut interest rates to record lows. i do not want to say a naysayer, but a little note of caution. we live in such a high-risk world. here is a quote from this interview with the local german paper. translation, from central bank speak, he is worried that this low inflation period could be popped and we could suddenly have high inflation. here are his concerns. we need to remain vigilant over ecb measures. tro's have weaknesses, he said. and he is against the long-term monetary policy. how long will these rates stay low or negative? really a note of caution. quite an interesting interview. i suspect this will cause more

in the coming days and weeks before we have the next ecb meeting. another interesting note, he said you need to have further discussion the for you have further policy measures. we will be watching the euro later today to see if it is reacting to these comments at all. international correspondent, hans nichols. >> it is 7:46 here in london. nearly 13 minutes away from the start of european equity trading this tuesday morning. we will have a preview of what we can expect from the day ahead. ♪

>> welcome to "countdown." is 7:49.me in london automakers are no longer relying on dealerships to sell cars. audi, and lamborghini are enticing buyers at the racetrack. how they turn prospective buyers into customers. the road, these cars will put you in jail as soon as you get into third gear. drivingmborghini's school, you learn how to drive some of the fastest cars in the world. i got to check out a class in the home of some of the wealthiest people in america. rex talk to me about what we are experiencing here. >> it is an opportunity for raw

specs and clients to get a taste of lamborghini, a chance to experience 700 horsepower, all-wheel drive, the flagship of our family. i would say that, over the arese of the year, we looking at having anywhere between 400 and 500 people who have a chance to have this experience. in the big picture, it is a small number. >> we are talking about a $500,000 car. how many people reach for their wallets on the way out? >> actually, quite a few. we see direct correlations with the sales that we do. >> lamborghini only recently began hosting classes in the united states. >> number one in sales is north america. the brand needs to sell here. >> like its competitors, ferrari orsche, they are trying to turn their clientele into well-groomed gentleman drivers.

for those who know their way around the track, lamborghini has a fast-paced race series. all you need is a basic racing license and a whole lot of cash. >> how much would it run me if i wanted to get into the racing? $30,000-40looking at $5,000 a weekend. >> are you going to time this? >> of course. go! >> as an unexperienced beginner, what do i get? >> 9.5. >> now off-camera. >> fail. and mynow, my skill set wallet will keep me in the beginners lane. >> this is more of a retreat for them. they have the enthusiasm for the luxury of life, but looking for performance and that edge. >> clearly the most important accessory you can have, driving

a lamborghini, is sunglasses. >> even when there are clouds in the sky. now our market analyst joins us. >> speaking of stylish. >> the market opened today -- opens today and baker has announced a statement. looking for an increase of 15% in sales. what is the take away? >> it is all positive. the question is, what will happen to the share price? the shares have rallied in the last three or four weeks. are we going to see a little bit of profit taking in the short term? long-term, i think there is still plenty of growth. >> talk about their e-commerce sales. obviously, very well-publicized, a victim of its own success, to some extent, promising big growth rates and delivering some big growth rates, but not as much as the market estimated and that means that the share price came down in the last couple of

weeks. that was the second profit warning since the start of this year. do you think other retailers are playing catch up? asus has a big online presence. looking at these numbers, they are trying their best to play catch-up and doing a good job. >> tesco, a bearish case. is it still there? say buy, 39% say to sell it. that is what most analysts are saying. >> until today, there was the talk of the current account being a game changer. he has seen a positive impact on the credit cards and the mortgage offering has brought customers back into the stores. this could be a positive development for tesco and something they desperately need right now. >> lloyd's very topical, talking about the ipo of its tsb units. are you bullish on this one? >> the ipo itself, people have been in the know to some extent.

there have been so many ipos this year that there is a bit of loss of appetite for them right now. lloyd's, in general, is looking good from a technical perspective. a are trading above moving averages right now. we have got to be quite bullish on them. every time we break these new highs, we seem to get a significant correction. i think we need a real positive catalyst now to give us the next push for the next major move higher. until then, i think we will see these little corrections. >> a lot of volatility. central banks have been worried about lack of volatility. we do not see that at the moment. >> we are seeing quite a significant lack of volatility. multi-year lows. that is a concern when you pair it with lower trading volumes. these indices are trading at these multi-year highs because we are seeing it on the back of the low volatility.

>> thank you for joining us. >> it is 7:55 the the 3 billion ino price gap is standing the way of a major french connection in telecoms. is up next.ove" that will do it for us today. we will see you tomorrow. ♪ .

>> good morning. welcome to "on the move." i am a guy johnson. the start of european trading. looking for a sense of direction. we are recent highs and a volatility still on the floor. we have picked up. senseheless, not a great of direction coming from asia. we'll look at your but when it comes up. hans nichols and caroline hyde. -- will look at europe when it comes up. s> what jean-claude junker' chances are. is more vocal in

her support. caroline, over to you. >> it was a by your and now it could be a seller. to do with its telecom unit. and the price tax. at 4.5s pricing it billion euros. they want to double that. more on the telecom m&a. and a billionaire who is selling a stake to get this triple what he put in. >> we are looking at the rate of return. what does a decent rate of return on your trade right now? low.ility is a we are talking about the european markets. where does it take us and what does it mean? on volatility remain in this low. let's get a heads up. caroline hyde is talking about the