>> deutsche land delivery is -- germany beat brazil on a record 7-1 win. making it the host nation's biggest defeat ever. >> he will unveil his strategy to boost growth as pressure is brought. data disappoints us any shares in data at lower coming in at 2.3% as the number range below the countries target -- the country's target. welcome to "countdown."

it is 6 a.m. here in london. are standingorters by around the world ready to deliver stories. largestd's two economies discuss territory disputes in the south china sea. news on thehas the aluminum giant. caroline hyde takes a look at his tenure and the debates surrounding his the archer. -- his departure. >> we will talk to the finance minister to see how lessons can be learned to handling the banking crisis. that is coming up at 7:10 a.m. london time. >> we will have more on that defeat of the brazilian team on their home turf.

toare live in rio de janeiro speak to one sports journalist. you will give us the reaction. >> did you watch the match? >> i did. >> i happen to be asleep but when i woke up and saw the headline, i just did not believe it. five goals in the first six minutes. what happened? >> look like there was this corner kick. >> goes to show once we start playing the game, anything can happen. no one wasn't is a bidding this. -- anticipating this. it is the biggest goal difference ever any world cup semi final. it is astounding. >> you literally saw fans crying in the crowd. >> it hurts when you are the host. >> still --

would -- we have a great game with argentina and the netherlands. the situation is but -- in brazil still has be watched. there was a press conference that everybody is going to listen to. what do you say if you are from the team? >> do you think this will let any political round fakes his -- political ramifications? that isey get beat, actually better for the brazilian stock market. what world cup results mean for stock markets because it would be to performs because people will get very upset and demand change. >> who saw this coming? german player, holds the lead -- to the record player.world cup he took it over from ronaldo. at 10:30is a fight

p.m. i am sure a lot of germans will be heading over there. off would not want to get the tarmac in brazil if i were the germans. and jack lew are in beijing today for the first day of annual talks on security and economic cooperation between the u.s. and china. we're joined live now from hong kong with the details. it looks like cyber security issues were struck from the agenda. what is still left? >> whole host of issues. i am not sure they discussed the world cup but many people here are. this annuallogue, event that certainly brings to the front the key issues between the u.s. and china. among them, cyber security. in theming trade deal apex conference and then regional security issues. region.role in the the maritime disputes we have

seen. as well as the filipino relationship. the u.s. secretary of state was bears well -- was there. treasury secretary asking china to be more transparent with the intervention in the currency markets, specifically the chinese. thisle range of issues as economic dialogue continues and part of the overall theme going into this business relationship or the breakdown of the relationship between china and the united states. you have seen a very icy reception between beijing and washington these days. just one year ago, we saw president obama and the president of china walking side-by-side in conversation that seemed casual and relaxed in southern california. how times have changed. they will try to patch this up

before november when president obama comes the beijing. >> inflation data out of china -- break it down. the consumerly, prices are still below the government target of about 3%. cpi in the most recent month coming in at 2.3%. that is below forecast. this is what is notable, the price of goods at the factory gate. it is at its slowest pace in three years -- 1.1%. the projections here were certainly higher. we are going to watch that very closely. we are going to see what that means for producers in china, manufacturing being the key element. to july 16dds up will we get second quarter gdp figures from china. the market will be watching that closely. >> more signs of stabilization in china. good news from one of america's oldest companies.

quartercked off second earnings beating analysts' estimates. it looks like some good news. it seems like years and years of cost cutting is finally paying off. >> i think we expected some good results from alcoa. there is not much complexity to the whole story. on the other side of things, they've been getting a bigger premium. we have heard all of the stories about deliveries of warehouses and delays. you see that reflected over the quarter. on top of that for the rest of you -- up of the year, they are predicting a bigger supply deficit in the previously forecasted back in april. for the company, a decent set of results. this is a template

for companies the common earnings season? >> it is the format of the dow. yet theompany, i think market these results. a company for over $3 billion. >> we know they are cutting back on that. it makes sense that they do something further down stream which is what they are doing. they are building up their manufacturing side of the business. sales were expected to grow by 60% over the three years. they're doing that at the u.s. it is the aerospace company they are pushing into. i think it really matters right now because the markets are a pretty big levels. day.ord high day after what was happening in

the market will see some strong earnings results which would justify with this has been at. it has had some pullback. you will have to see some big numbers from some these companies. >> it is a supply of the story. if the was a story about the man, -- demand. >> it is cost cuts and a bigger premium. >> all the capacity. >> so much negativity around the company as well. >> thank you. helm,er 10 years at the justin king is leaving the company but is exited not is going as gracefully as he would've liked. one hopes the vote against his pay giving the supermarket a chance to explain its new focus on the discounters. here with more is caroline hyde. we have to talk about the supermarket but first we want to talk about the pay. is it fair what he is getting? did he live up to the money?

>> 3.9 million pounds. it is down 22% of what he got last year. he delivered record profits but it is being called excessive. he waged a $1.7 million severance. it is not like he is clamoring for the money but he is the only supermarket chief, the only one tothe big four in the u.k. take a bonus and it is basically his competitors. clearly, we have a little bit of a furor coming from the investment research consultant. it is one of the loudest voices here in the u.k. are advising shareholders to say no, do not allow justin king to walk off with this. they call excessive. this is a man who is stepping down handing over the reins to

mike gupta. you think about 10 years ago, the morale was for recklessly low -- was her rent is below -- was her rent this lady karen horrendously low.is >> given a kick in the teeth by cutting his pay. >> who is to say what a ceo is worth? what about this acquisition? it looks like a big competition is the discount retailers. are we expecting anymore? >> i think it is pretty interesting for the shareholders. they are company -- really big in the likes of sweden, germany,:, denmark -- poland, denmark. they own this company calledn

want ton which they open 15 stores by the end of 2014. method toringing that the sacred eye out because back in 2010, they left. they're coming back because business has been so horrid. these discounters that are eating into their sales. we saw sales down for a second straight quarter. this is the attack the justin king is going to be explaining. the head ofspoke to the supermarket, the head of the other side of the joint venture and this is what he had to say. >> now is a great time for customers in the u.k. they want a discount because of all -- over the last four or giveyears, i think we can better quality with our entry into the u.k. market. we are very excited about this. we had teamed up with them.

it is a fantastic partnership. nobody knows their customers as well as we do. the head of the parent company. the jury is out because they have really opposite views. bernstein says this is the method.gic do not/her own prices, bring in another company -- slash your own prices, bring in another company. if you look at jpmorgan, they are confused about this tactic. you should try to lure people back in not just try to set up competition for yourself. i little bit of a mixture of views -- a little bit of a mixture of use. chinall to come, inflation data disappoints any shares lower overnight.

surprised to see signs of stabilization. we are going live to our chief asia economist next. we will be back. ♪

>> welcome back. it is time for today's company news. barclays is planning the sales of its natural resources unit . bankin's second-largest has hired an advisor to sell the private equity unit. this is the latest bank as a regular it is push lenders to increase their capital. the $1.7 billion write-down in its oil assets. it makes it the latest will explore to draw a blank in the energy boom. oil purchased stakes in blocks in 2011. a u.s. judge was asked to delay sentencing its tax evasion case. this comes after the bank made a guilty plea to help americans cheat on taxes and may. motions would delay sentencing from august to november. >> welcome to countdown. >> new figures released by beijing released the lowest pace

in nearly two years adding to signs that china's manufacturing sector is stabilizing. atlation figures came in 2.3%, just shy of projections. >> for more, the chief economist is rob. we have the chinese inflation figures. what do you make of them? is that the beginning of a trend? >> they are very benign now. whichion is coming down is the green light to keep easing. >> more evidence of stabilization? >> it will probably pick up this quarter and next quarter. it is not the start of the trend, we think inflation will become a problem for china next year. >> the slowdown has not bottomed out? >> you can call it a little mini cycle of upswing because of using but next year we are back in two way downswing -- back

into a downswing. the labor market is very tight. it is very tight because of the demographics, the amount of young workers that live in the city is diminishing. the other one is the home cycle. right now, the prices are very low. as a result, port production is at a record low. port prices, food make up a third of the cpi, it is going to become an issue. about lending into the shadow of the link -- of the banking industry and wealthy people that land corporation's money and there might be in implosion -- an implosion? is this something that is a concern? >> it is a long-term concern.

you can distinguish the business e from the cycl financial cycle which is the leverage and overinvestment and the risk being taken. they are out of sync in china. the financial cycle was at a very high level and they need to andeverage -- deleverage other issues as well which will take multiple years. sing marketoui in a bubble? >> yes. >> will it crash and air out quickly in ring -- and bring down the rest of the market or are we going to see gradual recovery? >> that is the big question. that is the big policy challenge for china -- to manage a gradual deflating. part of the easing right now is really a step in that way. china has a policy of two steps

forward, and one step back. two steps of tightening in a growth slows, they will ease off like they are right now. next year, they will have to do reforms to do with this financial crisis. >> when will inflation pickup? >> later this year. the deposit rate is 3% so negative deposit rate, that is an issue for china. >> stay with us. we will be back after the break because today indonesia goes to the polls. we will talk about what kind of impact that will have. we're going to get his thoughts on the indian budget which comes out tomorrow. we will be back. ♪

>> welcome back. rob.m back with us is thank you very much for being with us this morning. you flew in last night from singapore? we have the indonesian elections and are done voting. do you think -- what do you reckon the chances are that he wins and if he does, it that he will be able to clean up the economy? >> it turned out to be a very tight race. i think the latest polls show that he is still the favorite to %-5%.y 3

it could go either way. i would say a few things -- one, whoever wins, it is not good for the economy in the long term. neither of them. they both have a nationalistic, populist policies which is exactly what indonesia does not need right now. it has a current deficit. it needs more infrastructure. it needs investment in resources by foreign companies. is other thing i would say it is probably even more negative or markets. -- for markets. he is probably regarded the most nationalistic in terms of policies. we did a survey of investors. 90% expected him to win.

not, it could lead to some market selloff. >> you are pretty pessimistic? >> we are because -- next year, it will be around 5.5%. it is not the growth, the fundamentals. the fiscal deficit, high inflation. we have to see those things go away. >> india has a budget coming out. >> i think indonesia is going from strength to strength. this budget will be a large budget deficit but they are throwing everything in so they are not hiding anything. the rightsay all things about infrastructure, about selling government assets, about relaxing fdi. all these things will be taken very positively. we are very bullish on india in contrast, pretty negative on indonesia. that is the story of asia. >> thank you.

still to come, battling headwinds after battling tropic forecasts with the new corporate strategy being unveiled. that is coming up. ♪

>> welcome back to countdown, i am olivia sterns. let's get a quick check on the market. >> let's check in on the euro. a euro buys you one. reddy six -- 1.36. the dollard dollar, it has looking for -- been the opposite to the market reaction to the policy

announcements from the federal reserve. janet yellen any last couple of weeks referring to the inflation data as noise. this one a to push little lower. mario draghi comes to london tonight to deliver a speech. i imagine he will be looking at that as closely as you guys at home. this one is staying stubbornly high. john.nk so much, let's get you the top headlines thanks so much, john. let's get you the top headlines. israel has launched its biggest offensive in the gaza strip in years. it an army spokesman says hamas has to pay for rocket attacks on israel. may settle a probe as early as next week. the new york times is reporting the deal figure could be $7 billion. cupil is out of the world

-- suffering a 7-1 defeat. it is the biggest ever loss in the knockout round. germany will take on the winner of the argentina-netherlands match. >> i am rooting for argentina because i like their stakes. let's turn to the airline industry. louvre tom'sa -- fthansa. you've been watching the industry for three decades? you have identified one of the the airline asr transfer traffic. explain to the uninitiated what transfer traffic is.

and why it is a problem. >> it is their business. frankfurt hobbit at and munich and zürich. ub atey run a h frankfurt and munich and zürich. they don't have the strength of natural demand into frankfurt the same way british airways does at london. >> just because it is not a big city. >> frankfurt is not a big city. 10 million is the population of greater london. not the traffic base. >> the emirates, not very popular it's. -- populace. populous. how big of a problem are the gulf carriers for list on the --

lufthansa? >> they are a big problem. they are finding these carriers coming in and competing by going the hub. behind such as into berlin. >> the kind of sneak in and cherry pick or poach the would be transfer. >> yeah. you wille in hamburger, have to transfer somewhere. if you have someone coming in from the gulf who offers you a light -- a flight through dubai, that may be better than going through frankfurt. >> v.a. is teaming up with qatar. qatar.s teaming up with >> emirates have said to simply

they do not see the need to join in partnership. they can grow quite well quite happily as they are. another potentially -- a potential partnership could be with t h y. but they have already tried that. they have to go on their own on some way. a new they think of strategy. >> olivia mentioned the profit warning from air france. are the problems the same at the two airlines? >> in many ways, yes. it is a matter of capacity at the moment. >> capacity means? areore capacity than there room for passengers. >> this is supply. >> more seats. >> it is part of their own

problem. but it surely louis vuitton the ansaarticularly lufth increase their seats. >> which is evil, because you end up in a smaller seat. i will throw that out there. >> that is basically because the economies in europe were suffering. you can get the premium traffic humming on in the same way. you want people and me back of the bus -- in the back of the bus to live it up. >> how was the low cost side of their business doing? >> this is remarkable. they are using german wings to the point-to-point services in europe and touch the hub. they have given to german wings all the roads -- ro theyu felt

they had to operate on shortfalltes. wherehey could not -- they could not compete. it appears the profitability is increasing. but they have yet to get significant competition into germany from the likes of ryanair. at the moment, they have berlin who is conveniently supported by -- acting as a buffer to the -- >> we have the new ceo who has been in for two months now presenting his master plan to save the airline. what should he do? again their restructuring plans. they have done well. tweak.y need another >> what will that be? >> cost saving in some form.

whether they are spending the cost saving -- >> like norwegian air. >> that is interesting. don't think from the brand point of view they want to do that. they may be looking at separate employment classes in some form. >> like the second-tier of german labor. lot.mes, thank you a >> you might be getting more leg room. i hope there will be less passengers so i can get three seats in a row. doesn't always work. >> baby courson needs to hear from you. thank you, james. coming up on countdown, this sriracha grid the goes from red to green. we will meet the man behind the

project. >> any hot sauce you will find a red and green version. sriracha been so popular, it never made sense of there was just one style. i make green sriracha. i first came across it in a just six years ago. just six years ago. i had seen a picture. i was kind of obsessed with it. i would go to markets and ask if they would carry it. there was a guy in osaka who said, we don't have it but we make something similar on our own. he explained what he did. i tweak it to make it my own. that is how the recipe started. acha is thek srir name of a company because one

company dominates the market. but it is just the name of a sauce similar to catch up or mayonnaise. adecided to make mine with green chile because i wanted it to be more fresh tasting and have more of a kick. as with the green chilies achieve -- that is what the green chilies achieve. >> these are ground up green rano chiles from mexico and peru. the result will be a smooth, clean hot sauce. sale aprils went on 1. we only had 15,000 units. i thought they were going to had. two weeks into it, we medium outlets -- media outlets contacting us. people were going crazy. at one point, we were the number one selling hot sauce on amazon.

after 10 days, we sold out. now we are making 70,000 units, 0,000g to produce 50-10 a month. i hope to sell millions. i'm not doing this because it is my passion. i am doing it because i think there's a lot of money to be made. i don't think big opportunities come along many times. if you are confronted with one, it is irresponsible not to act. >> i got to try that out. i want to know who travels the world looking for green sauces. it is beautiful we have such variety. >> people who are into their hot sauce take it seriously. there is a hot sauce of the month club. >> i take it seriously if it is too hot. >> almost every table in the

states, it is next to salt and pepper. >> i'm going to see if they have it. >> still to come, a host nation humiliated. unless you are living under a rock, you know brazil suffered their worst defeat ever at the hands of germany. live in rio after the heartbreak. coming up after the break.

>> welcome back. it is time for world cup news. germany beat brazil 7-1 and a record to beat -- defeat. they scored five goals in 18 minutes. the team advances to a record eight world cup final. the opponents will either be two-time winner or -- argentina or the netherlands. a billy -- they play tonight at 9:00 p.m. london time. germany surpassed brazil by the goals- for the most scored in world cup history. their total is 223 goals.

the 36-year-old has scored 16 goals in four world cups. the loss was the biggest defeat for brazil since a 6-0 to uruguay and 1920 -- in 1920. occurred at copacabana beach in rio. welcome back to countdown. i am olivia sterns. >> and i am ryan chilcote. what was going on on the beach? way to kick somebody when they are down. fans were dejected after watching their team lose. d should i say their team's emise? >> i speak with a football

journalist in rio degeneres. -- rio de janeiro. of a book about brazil's football culture. it was completely unexpected. it must be quite sad there today in brazil. >> yes. it is a national shock. people in shock. no one believed to this. thinking, we could lose against germany because germany is a good team. but lose 7-1 in their home country? lost the worst since they the final against uruguay. >> we saw the faces of so many fans with tears streaming down

in the first half of the match. the concern was if brazil does lose, there could be right in the streets. -- riots in the streets. what is the mood like? >> now it is calm. there is a neighborhood where these -- that the police had to shut down in são paulo. there's a game between argentina and holland. there are a lot of argentinians who showed up. to seeuld not bear argentina. there were a lot of fights. but no shootings. calm. brazil has a lot of violence. what you saw on copacabana, there were like eight people -- it can be worse. this is a country made a football. was spent on this

world championship. they have no hospitals, no schools or bad hospitals and schools. they had to win because they had invested so much. now they lost, 7-1. people are getting crazed. they cannot believe it. i can understand there are riots on the street. we had rain coming down. i think that helped people to be more calm. >> how do you see this affecting the brazilian president? will it ruin their chances of getting rich elected -- reelected? >> it will be difficult for her. criticize.like to politics and football is almost the same thing in brazil. braziliansnce -- want to know, they want to fix

the country. they can't use that much money on the world cup. they have the worst schools in south america. bad hospitals. to, how can i say, change this way of thinking. it is a month of working hard for her. >> a lot of people questioning her spending priorities after the loss. one final question. we were talking earlier. if it is in fact argentina who final, will we see argentina get helicoptered out of the stadium? how will brazil react if argentina wins? >> yeah, that will be terrible.

it can be, i mean, tough. the team was very bad. the team played bad. you can't let for goals in in six minutes. they can to get violent. -- they can't get violent. as well as germany played, he will win. doesn't have a chance, even though they would like to humiliate brazil. >> i thought holland looked good. -- try and enjoy the rest of the cup. >> i will. thank you. >> coming up on countdown, we will look at how the newspapers -- are looking at the crushing defeat. the newspaper section is coming

next.

>> good morning and welcome back to countdown. >> we are just over one hour from the start of most european trading. time for a look at our top picks from the papers. caroline hyde joins us on set to do it. take it away. >> this is an extraordinary one.

they are digging into tax avoidance and highlighting some of the big names. george michael. who says one million -- one billion pounds has been avoided. caine.ve michael the arctic monkeys. i don't know what i am meant to view from this. one particular story is slightly upsetting. katie, she has been healed is the king of tax. she has been trying to avoid taxes. there is a scheme called liberty tax strategy. at the end of the day, this is not illegal. we put the rules in place. people managed to manipulate them. it is nothing illegal.

>> very few people queue up to pay their taxes. one that is what to watch. holding his head. a presidential candidate. he used to be the president of the northern alliance. they had an election in afghanistan. he said he won. the official results are still coming out. they do not show him as the winner. everybody is saying, will we have more trouble in afghanistan? are used to work for the guide to -- the guy they said did come in first. president obama spoke to both of them at. ini watched the guy call airstrikes. >> scary to see what transpires.

>> secretary kerry is going there in a few days. this is a source of concern. >> we will have to bring it back. i was going to bring you brazil's defeat, but i will bring it to you when we come back.

>> germany beats brazil in a 7-1 in the world cup, 'sking it the host nation biggest feet ever. lufthanasategy for to grow. >> and chairs in asia are lower. the number remains below the country's target. >> welcome to countdown, i am

ryan chilcote. >> and i'm olivia sterns. stay with countdown in the second hour of the show. we will be speaking to icelandic's finance minister to see what can be learned from his country's approach to handling its banking crisis. >> and we will be talking about -- >> catastrophe. it was a catastrophe. let's not mince awards. -- words. for goals in six minutes. four goals in six minutes. >> not only the biggest ever defeat but also the biggest ever goal difference in a semi final. the only thing i can say is, move on. >> what does result do? >> they do not move on. that is the big question. being the host, expecting to win, not winning. a lot of people are saying, you

have to watch what happens. >> think about all the money spent. compared to health care and schools. in ahey are out humiliating defeat. >> one investment bank had a report out. we look for a business angle and every thing on bloomberg. if they lose, they do now the wind, in that case, it would be good. people would be upset. it will force reforms that the country needs. we will see. it could be good for the underdog in the presidential race. >> they would be more upset if argentina actually wins. deep holland tonight and then going to the final and the final and beat germany. john kerry and secretary treasury jack lew are in beijing for the first day of annual talks. zeb eckert joins us live from hong kong with the details. this is their sixth round of

talks. cyber security -- what is the focus of their meeting today? is on a broad range of issues. the high-level meeting involves secretaries kerry and lew. talking about exchange rates. washington is index -- concerned. clarity on theer intervention and helen move the chinese currency. secretary kerry is talking diplomacy. the response to the maritime disputes that capture headlines. another issue is trade. they are looking to inky trade deal. obamas when president will travel to beijing. china is eager to see the meeting as success. they have a long way to go.

today, the press conference where you see john kerry, speaking to the chinese -- saying the u.s. does not seek to contain china. import messages here as they try to reset the relationship. >> we have inflation numbers. break them down for us. >> consumer prices in china not coming in as strong as someone expect. we saw a piece of inflation at 2.3%. that is below expectations. producer prices also falling at the slowest pace in two years. that signals what we have, a stabilizing effect on the economy. what policymakers have been looking for. be latest stable set of numbers showing the economic expansion continuing. that is the take away. >> zeb eckert, thank you very >>

i want to bring you some headlines. abbvie propose their fourth to take buy -- advantage of lower tax races. they had offered 30 pounds -- 30 billion pounds. news, now retracting statements on support for a transaction with shyer. -- shire. >> the company saying they want to clarify some reports that were misleading. >> interesting to see what share pricesshire as they open. >> citigroup may be up to $7

million to settle allegations that it sold mortgage-backed ons before the 2008 crisis. that is according to the new york times. jonathan ferro joins us. what can we expect? >> another big fine, by the looks of it. i said, what is the biggest headwind for the industry right now? it is clearly litigation costs. multibillion-dollar fines. we study credit suisse find it bigger and bigger. confirmation at how big this particular fine will be for citigroup. according to a person familiar with negotiations, we could get eight -- an agreement with the justice department. it is not about conducting transactions with entities under sanction. this is not about helping clients avoid taxes. >> this is legacy stuff.

>> it is about a program into mortgage ons and a probe -- bonds and a probe into them. said -- isself has said to have offered half of this to prosecutors. this is close to double what the bank was said to have offered them. a big fine. to takeaways. banks,eline of bakes, -- we are getting a result. these are big fines for european -- u.s. banks. >> jpmorgan settled a lot of these legacy claims for $13 billion. >> huge numbers. i wonder what they are going to do with the money. >> some of it presumably goes back to people that got cheated. people that help they got cheated by the mis-selling of these mortgage-backed bonds.

>> not as much as you would think. is there a sense that if they do settle this, this is the end? >> there are a lot of banks lining up. but we are getting close. for a lot of these guys. credit suisse have close-out. many people expecting a lot of the german makes to come through with deals as well. of light.it of a ray but you have to have a strong stomach. >> thanks so much. with 100 days -- he is only 100 days into the job. airline ceo will unveil his strategy. hans nichols is on the ground. defeat ofthe crushing brazil. it looks like headwinds for lufthansa.

are they going upmarket or downmarket? >> it depends if you are flying, olivia. if you are flying, will -- they will go upmarket. we know you have expensive taste. this is the challenge for them. they need to find their cruising altitude. from the gulf state carriers, they're so much pressure for luxury long flights. they have deployed it german wings. the low-cost subsidiary. that will be taking over in january, doing all their short-haul european fights. not frankfurt. non-hub cities. that is not cost effective. this came out from an executive yesterday. --n you can cap para to the when you compare it to the

ryanair's. there is a lot of speculation that you will get the announcement of another low-cost airline. we will see later on today when they unveil their strategy review just what direction they are heading in. a couple weeks ago, they issued a profit warning. 16%.tock dropped that is the most since 9/11. >> i note is only 8:00 in the morning. it is anybody talking -- nobody is talking about lufthansa. everybody's talking about the football if they are up. you did not want to be flying on a plane last night. people were shooting so many rockets. i went to bed when it looked like the victory was sealed. massive amounts of fireworks. i was confused, how could they be scoring so much?

i got up and thought i miss read it. can route safely for germany now. it was a shellacking that you would think is deserving of an american team. >> i am going for the netherlands. i know amsterdam is close to your heart. there.going to leave it >> ons, thank you so much. iceland'sars since collapse. this is fascinating. their firsticed eurobond. stay with us. you do not want to miss this. ♪

>> welcome back to countdown. it is time for today's company news. berkeley is said to be planning a sale of its natural resources unit for $1.4 billion. tois the latest bank deleverage holdings.

purchased three stakes in brazilian oil blocks in 2011. credit's wakes -- credit suisse has asked the u.s. judge to delay sentencing. this came after they made a guilty plea to helping wealthy americans cheat on taxes back in may. welcome to countdown, i am olivia sterns. >> and i am ryan chilcote. when iceland's three biggest tanks failed in 2008, the country took a unique course of action by letting me banks take the hit. not something that happened everywhere. now the country has christ their first euro deal sends the -- priced their first euro deal since the crisis. you must be quite lead with the

numbers -- quite pleased with the numbers. where does it go from here? >> we are happy about the -- entering the european market for the first time since 2006. >> that is a long time. >> it is important to not a -- not only for the summer and but also the five it sector. we are happy. we are refinancing the rules and obligations on better terms than we have had. all in all, it is good. >> to put this in perspective, 2.5% is the euro -- yield on the note. it looks like a nice return for the market. you did sell some dollar denominated bonds in 2011. euros? it important to for think it is important

iceland to show access, the ability to enter the european markets. that is what we were doing. we also needed and wanted to show the capability of refinancing some of our more recent -- we will use these funds to repay some of the loans we took on in the immediate aftermath of the crisis. >> for other scandinavian countries. >> yes. issueints lower in this than we were in 2009. >> let me ask you about a thorny issue. the central bank. many people look at the economy and say, it is in good -- shape. when i just extend the term of the central banker? >> we want to revisit the legislation that was revised in 2009. as you said, it is the end of

the term. the law provides we cannot advertise the position. >> this is a big topic in iceland. he is suing the bank. because he is not happy with his pay. are you concerned that has eroded his credibility? >> what i wanted to make clearly understood is those proceedings in the courts are over with. that is the past. that is not why this is taking place. it is the end of the term that comes up in august this year. >> speaking of your return to the rockets. -- markets. you said this was a stepping stone to removing capital controls. how far away are you from removing tebow control? >> -- capital control? >> it is difficult to say.

what needs to happen in our economy -- we are looking at our balance of payments going forward. there have not been -- theou want 15 million -- creditors $115 billion. offshore currency program -- problem. we also need to work towards re-mayan seen -- refinancing some of our obligations that domestic institutions have. that is being worked on. notor those of us that that know what capital controls mean. if you are leaving a iceland, how much cash cannot -- can you take? >> as a traveler, over 2000 euros. but you can use your credit

cards. >> thank you so much for joining us. we'll be with you coming up after the break. we have more to discuss. for example, will you stay with your currency forever? and more to the -- on the response to the banking crisis. ♪

>> welcome back to countdown, i am ryan chilcote. >> and i am turns. -- olivia sterns. we were talking about capital controls. firstve just issued year euro denominated bond. i will ask you again, when will you be able to lift capital controls? how much will the krona depreciate when you do? >> what we don't want to exchange a swift resolution for the controls. we want to maintain stability. market is showing this will need to happen.

just look at what is available in terms of rising. >> how big are those write-offs going to be? >> it is difficult to say. we are concerned about the balance of payment going forward. i believe the solution cannot be creative -- can be created. some people are waiting to gain access to their assets. we are concerned about having the controls for too long. they have been there for too long already. >> you have said that the creditors -- if they don't have a deal by the end of the year, that is it. you will intervene and propose a deal they have to accept. can a solution be created with the debt of the old banks? we have been working with the numbers for over a year. the central bank has been working on the numbers. we are saying, let's use 2000 2014 to have a concrete

answer on this issue. created?ution be if not, we have to consider other options. thean iceland free float krona? >> i think so. maybe not fully floating without some options. >> what i want to know is, given what we are seeing in europe, should iceland have just build out its banks? -- bailed out its banks? should they have bailed out the banks instead of letting them go? d no option ofha socializing the private that. no chance in trying to save the banks. i think we did the right thing. had 10-13 times our gdp.

it was an option that was never on the table. >> what is the lesson? >> what we saw in iceland with the increased competitiveness. the new exchange rate. being able to do value the -- the value the currency. let's look at the fact that iceland has the -- lower unemployment than any member state of the european union. we are growing and we have stabilized the budget to read we have a surplus. >> we just got 15 seconds. iceland says it does not want to be part of the european union or eurozone. they are looking at what happened in greece and spain and say, we were able to avoid that? >> we are already members of the internal market and we value that. but we don't want to join on the other issues. or on the euro. >> why would you want your hands tied by the euro? thank you so much.

iceland's minister of finance and economic affairs. >> coming up, it is all change at the vatican bank. we will go inside the vatican and its bank, coming up. ♪ >> welcome back to countdown.

let's check -- >> 7:30. euro-dollar, grinding higher. this one right here is not too strong. the big driver of this one -- mario draghi speaks in london. i have said it before, i will say it again.

janet yellen has referred to the data as noise. what does everybody else think about that? the hawks? one of the clues on one the central bank will begin to tighten? thanks so much. jon ferro with the check. has launched its largest offensive in the gaza strip in two years. assault on an aerial 150 targets, killing 23 post any and. spokesman says hamas has to pay for rocket attacks. the new york times reports the deal figure could be $7 billion for citigroup. of the world cup after the semi final last night -- brazil is out of the world cup after the semi final last

night. it is the biggest loss ever in the knockout round. the opponents will be subsided -- decided when argentina takes on the netherlands later today. >> palestinian rockets reached the skies above tel aviv. israeli troops are positioned for a possible ground invasion. elliottyou from -- joins us from tel aviv. what is the latest? sirens sounding here half an hour or 45 minutes ago. two missiles fired from gaza were intercepted by the missile-defense system, iron dome. no missiles actually hitting here just yet. but missiles rocking fire from gaza.

out air strikes in the gaza strip. more than 400 targets hit since the beginning. more than 20 health and killed. -- palestinians killed. the cabinet approved the call up of 40,000 reservists. it doesn't mean they are being pressed into action, it just means they are available. israel will not tolerate rockets being fired into israel and they are still keeping options on the table. possibility of a ground invasion which has not happened since 2008-2009. >> thank you, elliott. pope francis plans to replace the board at the that he can make after a year of reorganization.

more than 2000 accounts were blocked. profits dropped by 97%. italian bureau chief joins us for more from a lawn. wise the pope making these changes now? -- joins us for more from milan. why is the public making these changes now? >> this is part of his plan to reform this institution. which has been tainted by scandal. the most recent occurred in the 1980's. what he has done is to try and meet the request by international regulators to prevent any kind of money laundering that has taken place. we have seen some court cases in the last 12 months.

what he has been trying to do in recent months is gradually change the way it operates. theng a close look at accounts to make sure they are not being used for money laundering. bringing in new people. today's announcement will confirm he is replacing the chairman. with a frenchman who is a former asset manager. phases really the second of his attempts to change this institution. >> give us a sense -- my limited understanding of the vatican bank was he was well respected. why is he being replaced? well respected. the key issue there is he was francis's predecessor. he was benedict's man brought in to try to deal with the crisis. francis wants to have his own

person running the institution. it also might change in the way it is being run. it has been run almost as a fundamental and you didn't -- funded management unit, making investments worldwide. it will be interesting to see if that function remains at the bank. >> dan, our man in the lawn. -- milan. >> still to come. the hawks and doves and the rate hike debate. as the fed gets set to release the latest minutes from the meeting today. can it push the dow above 17,000? we will ask the next guest on countdown. ♪

>> the volkswagen mass-market brand is counting on new models to help turn around sales in china. companyident says the is aiming to increase chinese dealerships by 10% by the end of the year. and to expand the product beyond the six models assembled in china.

maersk took a write-down on its brazilian oil assets. they purchased stakes in brazilian oil blocks in 2011. any french catering company has cut its 2000 14 forecast. expects a lower fourth corridor -- quarter than expected. monthspany reported nine sales of 13.8 billion euros, manon -- coming in lower than expected. >> i am ryan chilcote. >> but stick a look at the top company story. caroline hyde is here. interesting one. the maker of perrone. this is a company we know focuses on the emerging markets.

making inroads into africa. they have come out with a new program called prospect. it is targeting -- they have a number of targets by 2020 to be achieving. it is about sustainability, helping growth in africa. they will be using their supply train direct from the farmers to the retailers to try what they call inclusive growth and sustainable resource use. our call responsibility. they want to educate people while driving. >> is this like the cassava beer. >> this is a company that has been innovative. you can't really grow hops to make beer in africa. it is hard with that environment. they have used roots that grow naturally. cost of a. -- casava.

they can farm it. within an hour, start making the alcohol. >> is absolutely nasty. >> not to our taste, but to their taste. how l'oreal started with makeup and then drives you to hire brands. this is what they do in africa. they start you on customer root beer -- cassava beer. then they make you start to spend big. grow to the perrone's and the other beers they make. ronis any other beers they make. they went to deuce the amount of water used. improve connectivity of land. help growth in africa so more people can buy their. -- beer. >> is a gateway drug.

i hear what you're saying. it is a gateway beer. >> it is overall a company trying to think outside the box. we will be speaking to members of the executive team later. a big press conference. we'll bring you more on how they are innovating and africa. >> the african consumer is a big story. caroline hyde, our european business correspondent. >> time for our macroeconomic check. really only one big item. the federal reserve minute. bottom line is this. this is the closest the fed has come to fulfilling their mandate. both the inflation and unemployment. the dual mandate.

even jim, a dovish member, has said this is the closest we have been for a long time to read the question is, how close are we? we have tapering on autopilot. when will we actually get a hike? janet yellen is enjoying -- avoiding that conversation. the risk is going swedish. they want to avoid that. they don't want to do that. for me, the interesting conversation tonight in those minutes is what everybody else thinks about inflation. they just noise or are more concerned? on beginning a little cautious? -- are they getting a little cautious? >> you have to wonder with the jobs number. it 88,000. when the fed is thinking it is outdated. >> i would say to get a more just addnterpretation,

some fuel to the fire. i looked at the federal reserve forecast rates. look at it. it tells you there is a huge dispersion between where federal reserve officials see rates, south of 1%, north of 4%. there is no agreement. that is quite yelling. janet yellen has to manage that. she has to get some kind of agreement. >> the bond market is not pricing that. >> no. in europe as well. mario draghi would like to see the europe go -- the euro go south. >> he speaks here tonight? >> 7:30 u.k. time. >> at the tate modern.

>> he is going to be careful. at the same time, euro-dollar 1.36. is that where he wants it? they don't want to target the currency specifically. measures unveiled last month are not pushing the euro lower, what will? >> dollar strength. in interest-rate hike is the only thing that can push down the euro. nothing mario draghi can do. >> he is going to be watching these minutes as much as we are. >> don, thank you so much -- john, so much. it has been a crushing world cup for brazil. also disappointing for witherspoon's. we will have more and are look ahead. next on countdown. ♪

>> welcome to countdown, i am ryan chilcote. >> we are moments away from the opening of the markets. let's take a look at what stocks we should be watching with alastair. in morning, thank you for joining us. out -- alcoa came out.

they swung to a profit and beat estimates. what should we make of this? it will be interesting to see if this will be the template for u.s. companies. they have headwinds. they are trying to reach4 -- restructure. demand is down. to navigatenaged that well. you have to ask the same sort of question, which we were asking the last reporting season. do a lot of these price multiples add up? >> you say a lot of that is just yellen and pushing up asset prices. we have seen a lot of merchant acquisitions going on. back in proper -- prop up the equity markets. how much of it is warranted from

the actual business data? >> can we talk about the world cup and rigging beer? weatherspoon's? presumably, the english were any pubs -- in need pubs and drinking beer? they pointed out they were little worried about this time because of the hours. partially because of the expectations for english performance. tolooks like that has come fruition. the figures may be less than an a. that falls into -- >> what with the world cup hit in terms of today's earnings? >> sales have increased 10% to read that helps. >> the world cup hit we will see in the next quarter. >> it well. they have been pointing this out

for a time. >> what about lufthansa? we had a big profit warning last month. carriers aref flooding the market with capacity. how is lufthansa doing? and the question ryan wondering is oil. >> the hedging for all airlines has been tricky of late. is affected by huge macro issues. at the moment, it seems relatively stable. you have to ask how long that will be the state of affairs. as far as the policies are concerned, they find themselves in the middle of nowhere. themheaper carriers have hedged in nicely. they havexury brands, a way to go to get up to that space. that may well be the tablet for

europe. >> tell us about shire. >> the u.s. company has come back in and increase their offer 11 pounds. >> the fourth offer now. >> u.s. officers -- companies are looking at u.k. companies. >> why wouldn't you want to pay 80 13% irish tax rate? >> it is unlikely they are going to completely ignore the u.k. seen. they may well come back at a later stage. maybe just tweak the ratios. help us understand the headline that crossed about one hour ago. it's as they have not gotten written support for the shire offer. >> they talked away from the normal template. they have talked to reporters

and tried to call to -- talk to client.il you can make a decent argument that they cannot understand the fair value of the company. they have been a little bit nasty with their phrases. a fifth offer? >> this is a multibillion dollar tax saving operation. nobody is counting their offers. nobody is -- it will take as long as it takes. >> stepping down, a legend in this country. some people are pleased to see him leave. his pay is going to get questioned. what do you reckon about where the stock is going to go. >> you hope he gets a warm reception. there were quite a few hot questions being fired at the

board. i think he will get a better reception, considering where the company came from. sbury has some issues in the pipeline. -- they are beginning to bite into it. fulley are out with their day trading numbers. mark carney trying to cool things down. introducing macro tools. effect.eeing it has an what kind of impact will that have? recordord is looking for profits. they have seen 84% of their revenue pegged in. another house holder sitting comfortably. seating -- city more

comfortably after all of the phraseology. the cherry on the cake will be if some of this red tape over green belts can be turned by the government. >> we will have to leave it there. >> thanks so much. on the move is coming up next. ♪ . .

>> welcome to "on the move." i am manus cranny in london. we are moments away from the start of the european trading day. keep an eye on germany today. everybody is talking about a crushing defeat for brazil. 7-1 to germany. the country is now out of the world cup. if you are looking for faces of anguish and pain, there you go. nichols.rro and hans let kick it off with hans in frankfurt. ok, we seem to have a delay with

hans. >> sorry, i am having a hard time hearing. i will just hold this up to give you a sense of what is happening. this captures the mood, the only news here. i am here to cover left anza. as a matter. it is all about the world cup. >> thanks very much. here we are looking at the u.s. the department of justice reports $7 billion. who said the big fines were just for european banks? that is a pretty big chunk of change. we are learning that that could close out. could reach a deal by next week. >> that is one to watch. there are some big themes in the markets. volatility is rising. we have equity markets coming off some low points. euro stoxx indicated 0.25% higher. london flat. draghi is going to be the key focus for the markets. >> he speaks here in london.