i don't think they have the instrument to fight. on a historical level, no. >> an exclusive with the german finance minister. in harris, to us wolfgang shoretel -- schauble. he says it was a good decision. >> i'm happy that he will continue. also adding that russia will

pay a price for its actions in ukraine. that comes as u.s. president obama blames moscow for the crisis. >> welcome to "countdown." get to our top story this morning. our exclusive interview with the german finance minister wolfgang schauble. european central bank has run out of ways to help the eurozone. with bloomberg at the business leaders conference. is sayingrio draghi again and again is what is needed is reform. it is not for the ecb to implement. there is a government.

we agreed. monetary policy can only buy time. problems asderlying a matter of fiscal policy in this globalized economy. we have the competitiveness. if you look at what's going on , it's veryal economy important that we all know in to do this we have again and again to enhance competitiveness. if we are complacent even in continueif we do not

to enhance our competitiveness, we will lose. >> should the ecb do more to fight inflation? >> i do not think they have the instruments to fight inflation, to be frank. interest rates are at a historic low. it is not aiming too low but too high. has comeonetary policy to the end of its instruments. what we urgently need is confidence regaining by investors, markets, consumers. we have the geopolitical risks

on the half of our experts. but this is driven by an internal demand because we have .onsumer investment the reason why we have such high because it is sustainable. we have stuck to what we promised. increase thenue to investments. raise ourve to development. that is what we have decided to do. go straight to paris where carillion the --caroline joins us. you also spoke to minister cabinete about france reshuffle. what did he have to say? his visit has been planned

for a very long time. he did not expect it to be so much in the spotlight in the middle of this crazy week for france with the resignation of the government, reshuffling, and the whole rebellion of policy. the german finance minister told me he was not happy at all about the comments from the former economic minister who called the austerity policies in europe absurd and dogmatic. he said the new economy minister pro business, politician and the competitiveness which wolfgang schaeuble says was the main problem with france. >> we are fine with it.

i have met my french colleague who used to be prime minister and he will continue. economic think french policy is going in the right direction? we agree that every member state needs to do this and to be very frank, we were not doing this when the former minister of economy has been happy that it has not been agreed upon by the president of the republic, by the prime minister, the new minister of economy saying the same as the finance minister. will welcome enhancing competitiveness for sustainable growth.

of course, we need to choose. we have to regain confidence. with markets, investments, and consumers to be reliable to stick with what we have agreed to again regain confidence. >> do you think france will be able to meet their deficit targets by next year? neededce will do what is in line with the rules. they have done so again and again. now we are ready and we are optimistic that they will deliver what they promised. of the economic reforms in germany, that could be different for france? >> we have a tradition of a social market economy and i

think our experience is a good partnership. unions itmpanies and is very helpful. in this direction, the responsibility has been announced by the french republic as is going in the right direction. way totnership is a good implement social, structural in everyhich is needed member state. it's always difficult to implement because they're always refuted but politics sometimes has to make those tough decisions. markets and more focus on competitiveness but still france needs to keep in sight cutting the deficit. that is the advice from the german finance minister to

france after this crucible -- crucial week for france. they have already abandoned deficit targets for this year. above 4% of gdp. the french gdp has not grown at all for the last two corridors. saying the difference between competitiveness and france and 160 billion euros. of course, germany needs france holdinger because it is back the whole euro zone growth especially at a time when germany is also going through a slow down of its own economy harmingsian sanctions the german economy. back to you. >> a very interesting conversation there. we will bring you more of course from our exclusive conversation with the german finance minister later on in the program.

says russia has innovated. nato puts the number of troops at 1000 and president poroshenko has asked the world for help. international trust on didn't hans nichols joins us now. obama rhetoric is very strong. costs and consequences, violating sovereignty repeatedly. this is really a game changer in terms of rhetoric, isn't it? >> yes and no. president obama was careful to say there would not be any military action and he declined to call it an invasion and that almost puts them at a different position rhetorically than the u.s. ambassador to the u.n. samantha power quite strong saying what they were doing in terms of moving additional tanks and artillery into ukraine proper. obama said it did not mark something new, just more of an

escalation of something that we had seen. after he spoke of the white house, they put out a statement saying president obama spoke with his counterpart in germany, angela merkel, talking about the prospects of new sanctions. angela merkel also spoke in berlin earlier in the day but nothing suspicious -- specific on new rounds of sanctions. we have a leaders meeting tomorrow in brussels. asked week there will be a nato summit in wales. it struck me how detailed they were with satellite images. nothing really concrete or specific run either angela merkel or president barack obama. vladimir putin praised the saying what they were doing was good work. he used an ancient czarist term referring to eastern ukraine. there are 20,000 troops that are close to the border with ukraine and this could escalate yet again. >> those nato comments of 1000

troops operating within ukraine and opening up a second front. obviously huge with everyone just stepping back one inch from using the real language that reflects what nato was saying. nobody wants to go over that line. let's talk about sanctions. aland and merkel referring to any movement on energy talks because that's critical. gazprom.ne, and inthe energy minister was berlin yesterday and he basically wants a two-track plan, short payment and long-term arbitration. listen to how he put it. it is clear that there is aggression.

[inaudible] they need a clear agreement. >> ukraine pays now and then international arbitration. the goal is to keep gas flowing into western europe. 15% of the supply here is provided from gazprom. this is going to be a much more crucial issue the closer we get to the colder months, manus. >> that the facts. hans nichols in berlin, thanks. wecoming up on "countdown," look at the case of quantitative easing in europe after a short break. ♪

>> welcome back to "countdown." 6:16 a.m. german finance minister wolfgang schaeuble speaking exclusively

to bloomberg. he says the ecb has run out of plays and it's time for the weakest governments to do more to spur growth. saying mario draghi is again and again is what is needed is reforms. that is not for the ecb to implement. it is up to the nations governments. guillerme joins us on set with more. when is the burden of where is they -- burden of responsibility now? a reformrnment with agenda, monetary policy? >> at the the burden has to be shared essentially. mr. schaeuble is right that there is more than they should be able to do. but for reasons and timing

considerations, these considerations that could be lamented later this year will take time to see through to the economy. the quickest way to give eurozone a bit of a boost is for monetary policy to, again, go through the adjustment process. >> you say that draghi is essentially setting a trap for the rest of the politicians. what do you mean by that? i think mr. draghi is being very careful. -- being very clever. there is this overall message and the closer he gets to 0% interest rate, the less easy it is for policy to have an impact. is basically telling us that aggregate demand is too low. unless we have a better policy to acty will be forced on the mandate.

unless the government do a lot more awfully quickly which clashes with the timing of the procedures been central banks in the next few months will have to conclude that their role has to be enhanced. >> how much wiggle room is there, to loosen the fiscal purse strings? the are governed by stability pact. what impact actually would have if governments were able to loosen the fiscal purse strings? >> we listen to the upcoming president, mr. junker, with his public-private partnership program. how frontloaded would that be? how aggressive could the european fiscal rules change in the next year to deliver a bit

of growth? i would have thought that maximum half a point of fiscal stimulus could be enacted. >> when draghi talks about the skull stability and flexibility is talking about the germans spending more or rules being relaxed to allow the french and italians to do reform and as a result possibly break some rolls along the way? giving thinking about every country above 3% gdp to adjust their balances. basic rule stays but generally the lack of domestic economic activity which is not been made apparent to germany is forcing a bit of a reflex into the wiggle room that governments can find. on given this, you will not meaningfully change

what happens -- >> you mean meaningfully change what happens in europe? >> you get the euro down. >> what about japan? >> given where we are, there's quite a bit of room to try it out. this is the reason why you were seeing governments and central bankers generally talk about this generally different stage. >> how low does the euro have to go? it is the longest losing streak since 1999. it is bordering at $1.30. ratethink in exchange terms effective, i think 10% gives you half a point of additional inflation. euro-dollar on could add about half a percent? >> that's right. euro-dollar would need to be a around $1.20 level. >> the long-term average? >> guillaume menuet staying with

us on "countdown." we will continue our conversation with him after a very short break. ♪

>> welcome back. this is "countdown." we are back with guillaume menuet.

thanks for joining us. we got the cpi data. is there a number that could force the ecb into surprise action at next weeks meeting even though projection is for inflation to pick up over the next few years? is there a number that could shock them into doing anything next week? 0.2 could be a problem because then you are getting meaningfully close to zero. there are so many special effects in this august number, fruit prices, etc., but it's probably going to be a low point in the euro inflation cycle. the over five-year draghi talks about or entirely politics and entirely the ecb relationship with the bundesbank that matters? >> he mentioned it because he needed to find an inflation metric that was relevant.

if he sticks with the five-year every time it reaches the 2% level, the clamor for ecb action will be obvious. >> that's a longer-term measure of inflation expectations. highat matters now is how inflation will be according to the ecb, in 2016. it's quite conceivable that rate cuts including negative deposit rates, longer liquidity windows, the staff from the ecb when they crank out the models will show inflation in 2016 being back up maybe a decimal point. >> your call is for qe, 6040 split between public and private debt. or will really a goal it not be what changes europe? >> it will be one of the little concessions the ecb can give to the market in addition to support.

>> we are going to have to leave it there. thank you so much for joining us this morning, guillaume menuet, from citigroup. >> taking a short break. 6:26 a.m. in london. ♪

>> welcome back to "countdown." cranny.s let's check on the fx markets. down velocity and the dollar drove higher on the back of the gdp numbers. retail a little bit lower, but you are seeing a pretty big spend an investment taking the dollar higher. let's see how me going to that. i think with interesting here is dollar going higher, tensions on ukraine rising -- i think that's probably an understatement.

this is over five days. high inust coming off a terms of the yen. it is the highest weekly advance almost saying that the yen willing to continue to rise. i whole host of data from japan today. industrial data missing target. housel spending dropping. none of those factors were able to move the yen lower. ubs says to look out for $105 dollar yen. risk is driving the dollar yen. dollar will be the key focus. we had an exclusive conversation here at bloomberg saying the ecb has spent their billets, quite literally, nothing left to help the overall growth story in europe. that is the german sentiment from mr. schaeuble. the longest losing streak since 1990 nine. euro-dollar on the lows of the day. we are waiting for the cpi to

come in. bloomberg top headlines. the bloomberg exclusive with the german finance minister. he says the ecb has run out of ways to help the eurozone. ecb has thehink the instruments to fight, to be frank. interest rates at a historical level low. >> we will bring you more from our exclusive conversation with wolfgang schaeuble shortly. president obama says the u.s. has no immediate plan to conduct strikes inside syria. he also says that he has not made a strategy at four confronting the group outside of iraq. and eu are blaming russia for the escalation in eastern ukraine. they say president clinton's troops have crossed into the before now discussion going to moscow. david cameron has made another

plea to remain part of the united kingdom. speaking ahead of next month's scottish referendum, he says there are huge benefits to being in the union. is one of ourrket union's greatest advances. together, scottish businesses have better opportunities. scottish consumers have more choice. more jobs.ve why put all of those great advantages at risk by going into the great unknown? >> vivendi has entered an agreement for an exclusive discussion with telefonica over the sale of gvt. they are favoring the spanish offer. let's talk about it. caroline hyde, u.k. business correspondent. cash is king. is that a fair take on this? >> seems to be.

they raised their bed by 11%. it's much more than the counterbid from telecom italia. it looks like winner could take all. this would propel telefonica into being the second-biggest player in terms of broadband and internet in brazil. that would be just after current biggest provider but it would leave telefonica with about 30% of the market. and poorently have 27% old telecom italia, 1%. very big in mobile phones. where everyone wants to go is a package. everyone wants their internet come a landline, all together that is something that they will now find very difficult to provide. leave telecomthis italia with less of 1% of the market in brazil but what else? many fear it's time to say

goodbye. when i say winner takes all, they could decide to actually exit entirely. tit-for-tatis whole was actually a way of just driving up the price of its unit in brazil. many feel that they were always basically looking to exit. there has been so much speculation about what it would since may, they have been saying, let's break you up around some of the players. it's quite a small pair. >> they are said to have batted that offer away. >> they came out and said we would potentially like to buy heart of you, not all of you. they are looking at how they could fund it. at the moment, the unit that telecom italia basically owns part of, at a whole is worth $12

billion. the unit they are selling is worth about $8 billion. probably cannot stomach the whole of that nor would it perhaps be allowed to but it wants to carve up between telefonica brasil and america mobile. >> where does this leave vivendi? it has more cash and it still has a stake in the brazilian doesned unit if the deal not go ahead. what next? >> they have three months of discussion. we got interesting numbers from vivendi. they are now saying they are a purely media company. they want to distribute content. they had universal music. what's to keep these relationships, these partnerships going potentially holding stakes to distribute content. what is interesting, the chairman who came on board who june butreins back in

probably could have taken it back in 2012, he's trying to shake up this whole company, slim it down, make it a more interesting proposition. he's been rolling up his sleeves and the whole of this getting down and dirty with the leaders of telefonica, the leaders of telecom italia. they want to navigate to just focusing on media. maybe more deals with youtube, spotify, how to distribute the content. what really was highlighted in the numbers was just how prize an asset is gdp is. sales down 3%, profit down 7%. my telefonica is wishing they were offering so much cash and so much at stake in telecom italia as well. >> should we talk luxury as well? up thanks to high sales in asia a narrow beat. constraint and high prices

cushioning the company from weakening asian demand for large luxury brands like a $10,000 birkin bag. japan is where it is all happening for this company right now, the introduction of this the and the fight against euro contributing to the 6.3% drop in second-quarter revenue which of course is one of its largest markets. they did warn earlier this year because of what's happening in japan that it would impact its profitability this year. it is expanding its french production boosting its global distribution network which costs but ultimately they are hoping will benefit the company. a narrow beat today for arm as -- hermes. >> telefonica announcing they are expecting the transaction to be in negotiation for three months. it is expected to close in mid-2015.

we will see how that progresses. that is still a year away. let's get more from our exclusive interview with german finance minister wolfgang schaeuble. having ane crisis is impact on the german economy and warmed -- one of the dangers of military escalation in the region. the crisis caused by russia economy. our andneed to be clear arguments and you have to take this into account to stabilize the political situation, to make clear and sure that we will not fall back. go on by violence.

we want to have partners. partnerswants to have as close as possible. of course, everyone has to stick to the rules that have been agreed to. we cannot accept that the rules will be violated. do you think you need to revise or growth target for this year? >> we have been very careful. a month ago, most experts in the economy had higher forecasts for our growth. the german government has been very careful. we are not so optimistic and therefore we are still with our fiscal targets, economic targets . we have some movement and we have been careful. big customer of

russian oil. is this one of the reasons we are not seeing more sanctions on russia? , and persistence by all europeans. that is what the german government wants. it is what we are working for again and again. we are finding a common european decision together. look what we have decided with the financial markets involved. i think what we are trying to find the right balance not to work for escalation and to help but to makerrect clear to russia they will pay the price that is not really acceptable to us. if they will not change the policy. druggiest,

deflationary demo. we preview the euro zone cpi numbers which are out later today. ♪

>> time for today's company news.

london property market stagnating for a second month. capitalnchanged for the in august. buyers are reluctant to accept high asking price is ahead of an increase in borrowing costs. national australia bank lands to sell its u.s. unit. it wants to free up capital to focus on its domestic business. i made no mention of prospects payshe u.k. unit which compensation claims related to insurance product. posting profit growth of less than 10% as china big banks enter a slow growth era. icbc is the world's biggest lender by assets. asian's stay with the theme. japan's rate was unchanged in july slowing from the previous month. david inglis joins us now. coming out from japan, it makes for gruesome reading.

it certainly does. it was unchanged. the mere fact we are not seeing a bunch higher does show that perhaps the economy does need support. keep in mind it's been above 3% for five months which really comes down to not exactly the most ideal economic forces. you have the sales tax that jacked up prices but keep in mind japan is importing inflation for its energy mix. so you have the wiki and all we see theg to why cpi and japan at 3.3%. put this together with the other set of numbers that came out overnight for you guys out of japan. industrial production is another key thing to watch. it was an absolute collapse back in june. we were expecting a 1% pick up. all we got was 0.2% playing into this big japanese corporate

meant simply not building up inventory. we did see for the first time since the sales tax was implemented in japan a little bit of a pickup. there is also a related reading here. household spending shopping close to 6%. again, it's mostly disappointing because this is data for july and it shows you that the economy does need more support to recover from the slip that we saw back in the second quarter. let me end with this from the .hief economist at smbc we are still at the bottom without a rebound. their concern that the government may not raise the sales tax as planned and the likelihood of perhaps a supplementary budget is rising.

that's not good. we were hoping to see a little bit of a recovery from the collapse in the second quarter and that's not what we've seen so far. not with the bank of japan wanted. thank you for that roundup. have a great weekend. from david in japan, it's going to be all about europe. that will be the critical issue, the unemployment rate still at 11.5%. we started the conversation on cpi with citigroup's guillaume menuet. he said begin be at a low point in the cycle. the number we are looking around 0.3%. projection to rise. >> he did say if it was going to come in at 0.2% it could trigger the council. >> what is it that is going to

be the trigger that sets the ecb? is it the cpi number? is it the five-year swap that draghi keeps talking about a jackson hole? ithe's going to talk about every single time. >> they're not pinned to the wall without a bit of data. or is it about politics? when wolfgang schaeuble was talking to caroline, many were thatg once he is stating when the rates are zero or was he saying that there would be no quantitative easing because the bundesbank would not agree to it . we do not know what's behind his thoughts. the bloomberg team ran a piece with the german inflation bit yesterday. it came in way better than estimated and was great. that was the second lowest years.on rate in four

the reason why i reflect back to yesterday is germany is nearly 30% the inflation index. so what happened in germany, we're talking about this rebalancing with fiscal policy. draghi wants everyone to adjust their fiscal policy and he wants there to be restructuring. he wants there to be monetary policy, the tripartite. you can see germany on the lack of inflation, the big issue. there are also just a couple of glimmers yesterday in the data coming in the form of lending. the ecb said, bank lending contracted for the 22nd consecutive month and not just a wee bit better. it was just not as negative as it normally is. you have to clutch at straws in this economy. aume said what guill

about the dollar-euro moving down another 10%. it's got another 5% default. then fiscal flexibility will growth.vide 0.5% the ecb delivers its growth forecast in the ecb council member has already said they probably will cut. >> one of the other points that is, through time and time again is that the u.s. recovery, it takes about six months. maybe i'm digging into the deep recesses of my mind but the line between the momentum of velocity that drag rise and takes about six months. the growth effect in the united states ultimately transfers back into europe and everything.

they will take everything they can get to help them. a nudge in inflation. >> coming up, other high-power appliances could be banned if the eu has its way. have more in the newspaper segment after this. ♪

i'mith this outcome,

totally in favor that we all that we need to look at risk. recommend torongly become a strong and engaged member of the european union. german finance ministers speaking to bloomberg exclusively on the scottish independence issue. welcome back to "countdown." i manus cranny. i know you are sitting there waiting before you wait to get out on the tube. a picture of the day. theme. to get our own >> he's been working on this. >> this is "the wall street journal."

north sea oil. in terms of the overall momentum, weighing heavy on the scottish referendum. pro-independent party saying london has been tapping our deserves for many years. just london. and this is part of the great ebate. >> many estimates out there. rules,russels possible could we see high-energy use hairdryers and tea kettles banned? i'm raising an early flag because it could take me longer to blowdry my hair. >> depression. wednesdayfriendly on

against norway. they are in a post-world cup depression. i'm so depressed even thinking about it. >> improving the memory with this magnificent brain zapper. >> we will get one for the next hour. "countdown" returns. stay with us. ♪

>> i don't think it's an easy thing. >> a bloomberg exclusive with the german finance minister there. >> picking to us, -- speaking to us about the french cabinet reshuffle. he said it was a good decision. >> it will continue. forhey will pay a price

actions in ukraine. that comes as president obama blames moscow for the crisis. >> a warm welcome. >> let's get back to our top tories.-- the european central bank has done out of ways to help the eurozone. with caroline at the business leaders conference. that's what mario draghi is -- is again and again saying again and again, it is not for the ecb to implement. we

100%. the policy can only buy time. the underlying problem is fiscal policy. we watch again and again. look at what is going on in the global economy, it is very important. we all know europe. if we will be complacent, even in germany. continue.d not

>> you cannot solve the problem in industries. market is not to know. the policy has come to the end of its instrument. we are gaining confidence. our economist has political risk

, but our growth is driven by internal demand. we have high investors as well. we go straight to what we increaseand we will weest in and -- investment. have to wait for development. that is what we decided to do. straight to paris. caroline, you talk to the minister about france off cabinet reshuffle. what did he have to say? been planned for a

very long time. did not expect to be so much in the spotlight. know the former economy minister openly criticized the policies of germany, and he said he wanted to end the us rarity is an focus on boosting domestic he said he was happy of the reshuffle. iso the new economy minister pro-business. he said he has the right competitiveness, which is the main problem of france.

>> we are fine with it. he used to be finance minister there. economic think french wallace he is going in the right direction? going inic policy is the right direction? >> it is what we agreed to do. by the primeacting minister is the same as a finance their. -- minister.

for sustainable growth. confidence. byin investors and by consumers. they have regain confidence. >> you think france will be able to make or deficit target by next year. >> i think they will do what is needed. it has been agreed again and optimistic.e are there economic reforms in germany that could affect france? >> every country is different

and has its own tradition. we have the market economy. partnership is between companies and unions is very help full. i think it has been announced by the president of the french republic. because of the partnership we would like to implement social reforms and structural reforms, which is needed, but it difficult to implement. make toughou have to decisions. >> labor market reform focused withde headed business more flexibility. this is the advice of the german

finance minister to the french government. the are going to hold growth. especially when germany is going through its own slowdown. >> think you very much. we will bring you more from our elusive conversation later on. but the little breaking news from britain's biggest retailer. testers has lowered the forecast. the haircut big the interim dividend down by 75%. . it's goingbig news to be interesting what direction the market takes it. capital expenditure is going to be cap. they are going to save the money a big pointof i.t.

tesco's had gone through. whole new product offering. is coming ine ceo a month earlier. but we are getting a sense of the kitchen sink here. getting all the news out there. tesco announced its first profit, which missed us meds. he would be the thing down. it teams as though that has all the bad news out there. interestingly, and tesco made 21,amount meant on july 13%. recap those market share pictures -- figures. we just got those out.

the loss that tesco was quite substantial. they have gone down to 28 point eight percent just in 12 weeks. when you look at the retailers that are gaining market share it is in discount areas predominantly. percent, and the other big retailers are moving around a little bit. there are some move us. the big trend is away from test though. >> a little on the other side. he is a high street man. he has never actually operated on the high street. >> the relationship with tesco's, we know the business very well, but

interesting to the weather they are specializing in selling -- -- personalare. care. fromat 8 a.m. we get calls retail about politics. ukraine says russia has invaded. president or should go has asked the world for help. our international correspondent joins us now. first there was a meeting. then president obama spoke. as the world united against russia, is that the sense you are getting? but they are united that something needs to be done. there doesn't appear to be a clear line of response. there appear to be divisions within the u.s. government.

you mentioned the u.s. ambassador was quite strong in her accusations and language against russia. moment later president barack obama's boat. he declined to call it the invasion. he said this was more of what we have seen before. thatit is an escalation, he didn't use the word innovation. after that a white house put out of date meant saying president -- statement saying president obama and angela merkel had spoken. they talked about what could mean more sanctions. it appears a lot of this will come together tomorrow when they meet. there is a nato summit in russia. take a look at wes what mr. puts saying. advances.ring their nato put out satellite imagery saying artillery and tanks are

moving into russia. we don't have that confirmation from the u.s. this is officially an invasion. there are the 20,000 russian troops amassed ng on the border. -- on the border. inwe speak to hans nichols berlin. t-mobile shares in the u.s. rallied yesterday. for m&a action we have got that

>> welcome back. it is 6:17 in london. let's talk telecom. the price of $35 a share. did ale recently reject share. joining us to look at the rise of m&a market. let's talk about this and the brazilian unit as well. let's start with t mobile. there is a price, which is below

what's rent was seemingly willing to a and what billy at in -- what gilead was seemingly willing to pay. does it bring it back into play? difficult.een as it was at a higher rise. now they are able or willing to take a lower price is probably said testing they are seeing more ahead. >> the fact we are getting this type of comment from deutsche telekom, do they really want to get out of the u.s.? >> they have been wanting to get out of the s -- the u.s. for a long time.

heavily oro recommit get out. they be sided to get out. crazy, lowball offer, but they have the banks backing them. do you think they have the potential to do a deal? what is more about deutsche telekom want to do in their future. day it goes tohe who the inquirer is. if they don't have any issue regarding access concentration -- the excess of concentration, and he would go. >> why are some willing to move from four to three, whereas in the united dave -- united states, it is interesting

because the top one and two have such an advantage over the other two. >> the industry wants to see a consolidation from five to four. the fewer the better. competition point of view, it is quite clear. as to what is acceptable from a market void of you -- point of view, in many cases each of the european market has a smaller scale. it is a fairly big market. three, then four to it is good, but it is though possible with such a vast market . >> in the meantime it is not only going to go for 23 in mobile.

to fix.ing from mobile it is getting concentrated on many layers. >> stay with us. 7:20 here in london. we will discuss the unit when we come back. ♪

>> if you don't have job creation you don't have enough labor income creation.

♪ >> we are back with our analyst. i saw this asset being described by one analyst as a strategic mishap. is that have areas it is such an >> it is very tough from that point of view. one to get all of it. if they had managed to get the asset it with thinness by the end -- it would signify the end in the resilient market. nobody would be able to break up telecom italia. is, let's make one player disappear.

>> let's hear your view on it. they wanted to get out of telecom. >> the short question is do they have enough. yes they are paying a lot more cash compared. they are trying to they have afact stake in a telecom asset. they have reasons to keep it. they believe that big is going to help them -- that stake is going to help them so the operator has a large customer base over latin america. >> where does this leave

what is it going to be -- if i buy vivendi now, am i buying pure media play? the best in that industry to mark -- toreston latch onto? >> you by a peer media layer. all of them are fairly mature. player --a peer media buy a pure media player. they are promising to return cash to investors to some extent, and also they are promised to build in new markets. whereexample is french-speaking content is. that is an area of growth for vivendi.

>> thank you for joining us. we will take a break. 7:26 in london. >> we are going -- ceo with this eeo about incentivized risk next.

>> time for quick foreign exchange. the dollar be gdp numbers yesterday. briefly to the session. a new crane the accusations of invading are there against the russians. those risks are transmitting themselves. no matter how bad the data was geopolitics dominates

the entire trading schedule. let'ss the dollar yen. have a look at euro-dollar. pretty poor coming out of your many. the euro-dollar has the klein 47 weeks. -- has declined seven-week. german retail sales down 1.4%. german inflation at a tense of one percent. we are waiting for the eurozone numbers. --y asked that -- i expect they expect the cut in repo next week. elusive --erg exclusive says they have run out of ways to help the eurozone.

>> interest rates are in a historical low. >> we will bring more. president obama says the u.s. has an immediate land to conduct airstrikes against islamic state targets in syria. he says they have not made a strategy at for consulting the group outside of iraq. tesco has lowered earnings forecast. the new ceo will join the company. >> caroline hyde is with us. two men gloom at tesco's. >> if you thought the good news had come out deviously, the troubles continue at tesco.

is what is eating into their financial performance. they cut their x in the chair. it is going to be no more than 2.1 billion pounds. they cut the dividend. maybe this is good news. the chief executive step down a month earlier. the brand manager is coming up to become a shopkeeper. he will art on september 1. it is interesting. says theytement it and makehe competitive sustainable hold for the shareholders. at the announced and was made on july 23. they need these eels, don't they us to mark that they need to. edeals,need those don't they? asked we have got to find a new .ay of rebranding tesco it self

when you look at what is happening to their ales, -- sales, they are below that 20% mark. it was the worst sales decline in two decades. the discounters on the higher-end are winning. it is coming up to three years with negative. they are still a giant on the high street. is moving in the wrong direction. they were the bottom. all of a sudden they were undercut by a lower-cost model. they are feeling the pressure right now. >> we can shop online now. but then into lidl,

we go to waitrose. people have learned to shop better. you have negative after negative out sayingey came they are cutting the debt rating because profit is not going to improve. it just feels a little bit more like the markets carrying the can. there is much negative news. been ar, there hasn't cut in 20 years until he took the helm. >> it is tough out there. in terms of incentives everybody would have. >> i have got everything to say about waitrose. i would.a lidl, >> they are becoming better.

>> you didn't before. at tescoub cards was before anywhere else. they led the charge. there was an element that before you were just getting loyalty. we are just starting to get that. >> on that note, you were mentioning credit ratings. anredit benchmark provides alternative to the credit rating companies. joining us is the ceo. fantastic to have you with us. saying tesco's credit rating may be under review. should we care what you have to

say? what are you doing that is so different? data. theytally new are actually taking. the company was two and half years old. what we do is take credit rating estimates produced by the largest investment they. -- banks we set up a technological platform that allows them to produce consensus risk. at the business level. the financial crisis hit the ratings agencies. it became apparent there could be conflict of interest.

where does your money come from? what that's exactly the point. the credit rating was much criticized. there is nothing fundamentally wrong with having that model in the market. you need a variety of information. fromata we provide comes the investors themselves, the people actually taking the risk. the incentives are completely in line. they are paid for by the people in that thing. -- investing. >> they are looking to ask and as many as they can. it is a classic scale. the more contributors, the ither the elegy of the data. is a core part of the model the

confidentiality should always a guaranteed and risk active. -- and respect did. of ratingse hundreds companies, aren't there? 95%.rate how can you realistically challenge that they be damaged by the european sovereign debt crisis? can you challenge the three? >> absolutely. the financial crisis regulators desperately want to increase in in the u.s. markets. it is an oligopoly. you do need a certain scale. our model is widely different because it is technology led.

they let us produce ratings on anything the banks cover. it is a different business model. easiest -- not the banks are not the easiest to convince to change. it he in? -- how has it been? who is the most engaging? ask we find it is an extremely simple concept. it is very much in their interest to get their risk assessment. it is really well as analyst in financial sectors. it is a proven model. it just hasn't enough applied.

-- hasn't been applied. we initiate a conversation with the bank. we don't have to go for a very long series of up ruvell and security checks. approval and security checks. in the is not just a way business. you are disrupt things an area of the financials the stem. system. although you had a backlash, you suddenly got mom and pops recession. how have you found the recovery? >> it has been there in

different -- serendipitous. we definitely need new sources. then we see the scene in london being so vibrant and dynamic. we had a lot of interest and very good investors. >> can we talk about the card? you say you cannot use it but there is huge potential. >> because of the nature of the data we deal with, our data sits in highly secured data centers. at some point the transportation of our business model. the banks are not ready to go there just yet. >> thank you for joining us.

up next, we will bring you more from hours russell conversation with germany's finance or. find out about the standoff between russia and the west, next.

>> time for company news. london's property market has stagnated for a second month. the survey shows the value has changed. it shows buyers are reluctant to accept high asking prices. and wanting to free up capital domestic business. they mention prospects for the u.k. unit, which faces compensation claims related to insurance. for the fourth straight month, profit growth of less than 10%. this comes as china's biggest bank reaches a new era. icbc is the largest lender by assets. more from our exclusive interview with the finance minister. he spoke with caroline for an

hour. the crisis on ukraine is having an impact on german economy and warned of the dangers of military escalation in the region. crisis as discussed by russia does not harm the economy as quickly, but you actually need to have a hierarchy of you have to take into account and destabilize the political situation. you will not change part of it. you want to have a partnership of course.

everybody wants to have heart ownership. -- to have a partnership. we cannot accept that they will be violated by force. >> are you seeing a need to revise the growth target this year? >> we have been very careful. the german government has in very careful. we are still at the economic target. we have been careful. >> germany is a big target of russian oil. can you tell me the reason we are not the a more sanctions in russia?

>> it is lagging again and again. i think we have in rather successful. you are together with the united states. it is related to financial markets. i think what we are trying to find is the right valid. collect, torussia make clear to russia it is not acceptable to russia. more from bring you our conversation with the german finance and mr. throughout the day -- finance minister throughout the day.

>> you are looking at a live shot from the city of london. after the break we will take a look at the market for the last of the day. andill take a short break see you in a >> welcome back.

time to talk about when the markets are going to open. gaine just eating out some -- eeking out some gain. >> inflation keeps trending lower. weit of a set back because keep seeing more calls for ecb action. what is going to change was a speech by mario draghi and everybody's interpretation and all the excitement monday morning. record lows across the board pretty much everywhere you look. there was an interview conducted by bloomberg news saying perhaps we have over exaggerated what happened on friday. i think that is worth when theng, especially

bar is so high ahead of when reo druggies speaks. aheaded a consultant -- of when mario draghi speaks. he hired a consultant. assets,l the eligible they say qe will come at christmas time. abs, that paper which is five percent of assets. it is not the answer or the solution. >> a big piece of data out of the eurozone. >> it is disappointing. they expect the euro to go much lower. this diversion policy for almost every ravages.

this is probably the best call i have heard for a number of months. it is time to go short the dollar. we haven't heard that call from many people. i will be talking with them and about dirty minutes time. >> it is -- about 30 minutes time. how many weeks of losses? >> seven weeks of losses. . usually have to check my data >> there is a decline at .5%. we fall half a percent. >> they cut the earnings in the short-term. we are going to be talking about which companies he is looking at. >> we have seen calls that tesco's is down at the start of trade.

that will do it for countdown. >> on the move is next. we will bring her eu market action from the european open. pay special attention to tesco's.

>> welcome to on the move. we are just moments away from this dark of european trading. german retail ales already in. disappointing. you have the u.s. talking about consequences or russia. the only consequence i can see is the recession in the eurozone. with me is hans nichols and caroline high. let's start in paris. >> i spoke to the german finance thester there, who says

european central bank has run out of ways to help the eurozone. he endorses the new government of france we are seeing this week. hans is in berlin. >> we will be looking at potential sanctions against russia eu leaders will be meeting in brussels tomorrow. brussels. meeting in we will have more and a little bit. >> talking about the tough troubles at tesco. ning. capitals the dividends are slashed.