>> u.k. chancellor george osborne warns of a very bad outcome of greece in the eurozone. everyone could be affected. >> the idea that britian tying into that is not true. >> bp saying they had a solid start earlier. we will be speaking to the chief executive. chinese inflation slows to a five-year low, prompting speculation about further stimulus for the world's second-biggest economy. $1 billion for violating china's

antitrust laws, the largest fine in corporate history. a very good morning to you. welcome to "countdown." i am mark barton. also coming today is your smart television passing your conversations on to private parties? first, the risk from greece's standoff with the eurozone grow by the day. that is the view of george osborne. he has been speaking to bloomberg at the g20 meeting in istanbul. greece's future in the eurozone is high on the agenda. the danger of greece leading to a bad outcome is increasing. he said the risks to the world economy and british economy are also growing and he is urging

other countries attending the g-20 meetings to find common solutions. in an injury -- in an interview with bloomberg in istanbul osborne talked about the risk and how he is planning to deal with any outcome. >> it is clear the risks to the world economy, the risk to the british economy on the standoff of the eurozone and greece is growing each day and i think the risks of the miscalculation or misstep leading to a very bad outcome is growing as well. here at the g-20 we are urging all parties to this dispute to try to find some common solutions. we are also stepping up our preparations for whatever the outcome may be. we have to make sure that the british people are best protected from whatever develops in this crisis. it is unclear the greek exit

from the euro would be very difficult for the world economy and potentially very damaging for the european economy. we have to be prepared for that outcome. we have to make sure that we choose a path of confidence and stability over potentially chaotic and disorderly exit. >> so the repercussions for the u.k. could be harmful? >> there is no doubt that the u.k. economy would be affected by a crisis in eurozone. we know that from recent experience. that is why we expect to protect ourselves at home and why it is right we step up our contingency planning. it is why it is absolutely vital we go on working to our economic plan so that we are taking steps to secure and strengthen our economy. the idea that britain or the rest of the world is entirely -- is not true. >> written's membership of the

european union is a hot political issue. george osborne told us that he wants britain to stay in a reformed eu with a referendum of membership 2017. >> we have made it clear that britain wants to stay in a reformed european union. the european union needs to change. it is a place where prosperity is created. we need to make sure the relationship between members of the eu who were not in the euro, like the united kingdom, is a fair one. those are our priorities going forward. we say we will put this to the british people in a referendum. we said that referendum will take place by the end of 2017. as the prime minister said, if we can conclude the negotiations earlier, we would be delighted. >> many have voiced concern that an early referendum could potentially speed up or cause a neck's it -- cause an exit.

what would you say to that? >> there has been a lot of talk in the media. since we set out on a policy we have continued to receive a huge amount of investment into the united kingdom, more of much of the rest of europe but together. we are now a go-to destination for competitive investors. it is a great place to start a business. our european policy is about making sure the whole of europe is that, a place where business can grow and jobs can be created. what we want to achieve is britain in a reformed european union that is an economic success story. >> u.k.'s chancellor is looking ahead to britain's place in the eu. the british chambers of commerce

is having its annual conference of westminster. anna edwards is there. george osborne highlighting the risks the u.k. economy faces from greece. what is likely to be the reaction from the business community today? >> in the shadow of westminster we will see business leaders gathering here for this british chambers of commerce event. greece will no doubt be one of the topics of conversation. we saw david cameron meeting with representatives of the bank of england and treasury to talk about the fallout we could see from any escalation from the tensions surrounding greece in your. john longworth of the bcc will be talking about how currency unions can follow part and how britain can protect itself. greece no doubt will be on the mind of the people.

very mindful of the trading relationship the u.k. has with your. wages getting on the agenda because david cameron is expected to speak here and he will talk about how he wants british business to give a prayerpay rise. the labour party has been critical of conservative support during the last parliament. they don't think we have seen sufficient wage raises. mark carney talking about how we started to see wage increases coming through in the u.k.. the conservatives want to take that criticism head on and call on business to do their bit. they want to suggest that business is the best generator of wealth and opportunity and there's no better way to show that than to give a pay raise to the u.k. europe will be on the agenda as well. the shadow chancellor will be here flexing his pro-european

credentials. you'll will be saying there needs to be renegotiation with europe over the relationship with the u.k. if he says -- he says if europe walks away, that will be a disaster for the u.k. economy. that was the biggest adverse risk facing the country, the fact that the conservatives have pledged they will hold a referendum on the u.k.'s membership in the eu. >> many columns have been written over the relationship between business and politics in the u.k. i guess there will be more of that today. >> there could very well be. we've seen some of what you might call the usual suspects. stewart rhodes, a longtime supporter of the conservative party in some form or another. he is the ex-boss of martin spencer. he and ed miliband believe they

are in a 17th throwback. it was not just those usual suspects. some other business leaders who had been speaking out in favor of labor in the past like some of the sainsbury family, they have not been so vocal in praising the labour party in recent weeks. we will be speaking to the shadow chancellor to see how much that matters if they are seen as a business party, and what are the policies they will fight that with. a recent poll shows the people they polled in this survey suggests that the conservative party as the best policy for business and conservative policy would be best for business. it also shows the u.k. electorate has an appetite for the u.k. government to stand up to business. all of that will be in the mix.

before then, we will speak to the british chambers of commerce. >> anna edwards near the houses of parliament. switzerland's biggest bank ubs, have reported earnings for lesser. stronger than estimated. the bank also doubled its dividend. it is up from $917 million a year earlier. that was thanks to a tax gain of $493 million beating the average estimate of analysts. sergio amotti is reorganizing the bank to focus on managing money managing.

he is boosting the share to shareholders as some competitors/estimates. in a few minutes we will be speaking to the man at the helm of the bank. manus cranny will bring us that interview live and in full at 6:25. you can find more on that story at bloomberg.com. barack obama is taking a tough line on russia. the president's considering all options as violence escalates, including giving lethal weapons. >> it is true that if diplomacy fails, what i have asked my team to do is to look at all options. what other means can we put in place to change mr. putin's calculus?

the possibility of lethal defensive weapons is one of the options being examined. i have not made a decision about that yet. >> angela merkel visited washington yesterday. the german chancellor staunchly opposes sending weapons to ukraine but says europe's differences with the u.s. over lethal aid will not shake the alliance. the eu has delayed a fresh round of sanctions against russia ahead of talks for tomorrow. hans nichols has been following that story. good morning. >> what we see is a president who is very publicly weighing his options. there is not any doubt about angela merkel's position, and she does not see a military solution to this conflict. despite these differences merkel made a point of saying the two sides would make through their differences -- work through their differences. >> as to the export of arms, i

have given you my opinion, but you may rest assured that no matter what we decide, the allies between the united states and europe will continue to stand will continue to be solid , even though on certain issues we may not always agree. >> the line coming out of the white house is that there is a tactical disagreement between the two sides. they are united on the idea to increase the cost for russia as it continues, as ukrainians allege to support the rebels in eastern ukraine. ukraine has alleged in recent days that another 1500 russian army troops have crossed the border into eastern ukraine. fighting his fears. at the same time, ukraine is facing an economic crisis. they have taken 17 billion euros from the imf. they may need another 15 billion to stay afloat. there will be talks in brussels

later this week. the eu delayed implementation of sanctions on 19 individuals. that is to give a little more breathing room for talks. merkel has hinted about additional sanctions. they could be sectoral sanctions if diplomacy does not make much progress in the coming days. >> merkel, is she off to minsk before heading to brussels? >> is an option. there is an option to have peace talks between merkel, whole on -- hollande, poroshenko, and put in. they want tangible talks to put the leaders had to minsk and have a big discussion. there is an eu summit in brussels weather could be additional sanctions. >> thanks. our international correspondent hans nichols. let's look at other stories we are following. qualcomm has been fined a most

$1 billion by chinese regulators for violating antitrust laws. they have agreed to pay $975 million, the largest fine in charges history. chinese stocks have risen amid speculation that the first drop in inflation five years allows room for stimulus. gold rallied on the news. china's slowing inflation as the 35th straight contraction in factory prices give policies extra room to further stimulus after cutting interest rates in november and reducing bank reserves requirements last week. saudi arabia, the world's largest oil exporter, has had the outlook on his credit rating cut to negative by standard & poor's as crude prices hit the nation's growth prospects. s&p says the kingdom relies on

oil for 90% of its government revenue and could lose its aa- credit rating in two years should its liquid assets lose value or fiscal position we can. you may have seen this transasia crash. it shows how close to turboprops came to what could have been an even worse tragedy. the wingtips past less than a meter from the building. at least 40 people died in the crash with at least three people unaccounted for. 15 people survived the disaster. berkeley is planning to raise pay for junior investors as the company seeks to remain talent. some barclays junior employees are set to receive an increase of 20%-40% in salary and bonuses. the plan has prompted mid-level

employees to voice their unhappiness about the compensation gap with her juniors. if you have a samsung smart television, you might want to be careful what you say in front of it. the television can transmit user data to third parties when the voice recognition feature is activated. certain critics have compared it to the telescreen in george orwell's "1984." a couple of the trending subjects today, delhi and modi conceding an overwhelming defeat in india's capital. his first setback at the poll you there i am. coming up after the break, i will be discussing those chinese inflation figures.

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>> what we want to achieve is

britain in a reformed european union, european union that is an economic success story. >> welcome back to china. welcome back to "countdown. [laughter] let's turn to china. we are not in china. also rates -- policy rates being cuts. let's bring in the head of macro strategy at aviva investors. we just interest growth in five years. we have had factorygate for five months in china. does it lead to further monetary easing? >> yes. if you put it in the context of what is going on, there's a structural reform progress, a large-scale shifting. it is the way china does

business, if you like. that is slowing the country down. that is going to continue to slow down and that combined with the dis-inflationary forces we're seeing globally partly because of the oil price but partly because of commodities and everything else, that that slowdown is compounding. the chinese authorities are trying to guide the economy on a glide slope so to speak. they know it is slowing down but don't want it to slow down too much. stuff like the day we had today will continue to reinforce only that they have to come up with the occasional targeted support policy to stop the economy from slowing too much. as you are right to point out, i think that will involve breakups. -- rate cuts. >> the debate about the u.s. raising rates rages, doesn't it? especially in light of friday's blockbuster u.s. job reports. midyear rate hikes still on the

table? >> we are going off of q3 in june. more towards september. it is difficult for a policy maker to trade-off what would traditionally be a sign that you've got to raise rates, they are too low, because the employment economy is doing very well, but inflation is very benign. if you strip out the shelter of cpi there goes deflation as all. cpi is close to zero if you take out a combination. how much do they need to raise rates if inflation is that low? you would have to look through the oil price and go longer-term the economy is fine and we need to cut out the emergency rate level. there is nothing to suggest the fed should be ag gressive. we need to be prepared for a scenario where we may say 1, 2, maybe three rate hikes once they

begin but then they stop is there is not the need for an extreme, strong rate cycle. it would not take much with that low inflation story to put the fed on hold or wait-and-see mode. all would take would be to one or two weaker nubbers, which does not seem to be particular with the lower oil price, which is helping consumer confidence. one or two week members and people go, the fed should do nothing because inflation is so low. the burden of proof is on the data they should move rather than what they shouldn't. >> does it hedge the dollar's performance the last few weeks? after friday's report, biggest one-day increase for the bloomberg dollar spot index in three months. it has been a little bit lower, hasn't it? it is at a record high against

10 currencies. >> the currency, the long dollar trade is ita broadly believed-in trade. we have had a long run. if there is any question about the size of the fed move, which the mark was starting to contemplate because some of the data outside of payrolls has been softer than people were expecting, then that sort of kills the strong dollar story, particularly coming off such a dramatic move. if the valuations are extreme, it is not surprising the market goes, we will wait and see and we would like to see the color of that money before we move further. >> let's talk about the color of your money when it comes to greece. the finance minister goes to the finance minister's meeting with what seems to be an idea of some

sort of 10 billion euro bridging arrangement. let us extend our holdings of treasury bills let the e.c.b. give us 2 billion it is made from holding greek deck. it is a reaching arrangement isn't it? merkel does not seem to be biting. the french finance in us -- finance ministers seems to be saying, give them a bridging loan. will it be february were greece runs out of money in the loan erruns to its end? >> take the statements to parliament you are getting over the weekend in greece. they were real fighting-talk-typ e stuff. you are not going to get anything else. this is the first big boilerplate speech after being elected. they are not going to turn around and say we will not stand

up to what we said we would do. the european wants to play hardball. they want to make sure greece toes the line. equally they have a vested interest in one greece to stay in the eurozone. a compromise has to be found. it is a very european way, this sort of public debate going on and using the media to have an argument, almost. and then they sit down and eventually come up with some sort of compromise. i think that that is the most likely outcome. but what i would say is that the risks of an accident are starting to go up because as that brinksmanship escalates the fact that someone, somewhere, goes, you know what? we are not going to go the sensible path. we will do something else. i don't think that is the most likely outcome. far from it at this point, but they are increasing and that is

what we have to watch. >> charlie, good to see you. let's focus on ubs. it is switzerland's biggest bank. it reported an increase in fourth-quarter increase. manus cranny is joined by the ceo sergio ermotti. >> a good day to you mark. a dividend play out that is been raised by 100% and a payout revenue that will make the germans happy. joining us live is sergio ermotti. great to have you with us live. there is a phrase that comes to mind. the skate philosophy. how sustainable -- escape vel ocity. how sustainable is this agenda? >> we completed our transformation last year. i think we still have the strongest capital position

amongst our peers. we always say that when we reach our 30% 10% rate, we would return capital to shareholders. we believe that the dividend is a sustainable base going forward. >> there is no iron he in the set of numbers. the investment bank is up 20%. 350 million swiss francs. this is a piece of this bank that is bolstering the fourth-quarter numbers. >> i think the performance not only last quarter but over the last eight quarters, the new model is working. the investment bank is focusing on its clients. it is focusing on velocity of turnover of inventory, serving our clients as i said. delivering returns of about 20% in terms of allocated returns

on allocating capital. well above our target. very happy. >> huge volatility in the foreign exchange markets and interest rate markets. while it is premature to draw a conclusion about the quarter, we had a solid start. did you make money? did you make a profit? >> as usual, we do not comment during the quarters. this is an exceptional situation where we feel it is important to give some indication. january 15, to make money is quite fickle. we are giving the best execution to clients. it was important not to lose money. of course, tehre were some positive effects in hedging

risks. abandoning the peg was always in our scenarios when we looked at the euro crisis. day to day trading activity, we didn't really make money out of that. it was not really a priority. >> forewarned is a good way to be. we hear from the central bank they are afraid to go in negative rates. what is the impact of the smb's action? what does it mean to ubs? >> everybody is focused on the currency movements, which is something that we need to adapt. the consequences is clearly the negative interest rates. at this time, we're passing the

cost of negative interest rates to larger corporate clients. we cannot rule out that more clients will be affected. clearly that has some severe and devastating consequences for part of the economy. >> what is the reaction so far? but has the movement and? -- what has the movement been? >> we saw a huge amount of swiss clients buying euros. they were buying euros for shopping and holidays. i would call it temporary demand, not structural. >> they are introducing cost

cuts. at what point might you reconsider the strategy? >> the strategy won't change. we have concrete plans we announced in 2015. we executed those plans. there may be pressured to speed up the execution of those plans. we have been well-planned for this environment, or in terms of what it means for cost. >> some people i have been eking to said that the s&p was trying to affect a soft floor on the euro-swiss. is that where you would be comfortable with as a ceo?

>> uncertainty is the worst enemy of any business and financial markets. i would be happy to have more certainty. i don't think we will have this issue. uncertainty will continue to be a main theme for 2015 along with volatility. >> the ceo of swatch said that he got a sunol me on a -- tsunami on the swiss economy. >> i see him from time to time. in these kinds of moments, very often. >> how did the conversation go? >> a regular conversation about macro things. nothing specific. >> i noticed that you are reducing the variable

compensation. i suppose it depends on which seek your sitting in. if i am an employee i am probably not hugging the management at the moment. is that a move by you to realign compensation? what does this really mean? >> compensation is a function of performance is a function of competitive positioning and is a function of a fair balancing between shareholder returns and then if it's. -- benefits. overall i would say that employees and shareholders should be happy about what we have and we will continue to deliver value for them going over it.

>> the return on equity targets for a return on investment targets for the bank. also the margins, the amount of turnover from the clients is under pressure, isn't it? >> the gross margins are under pressure. if you saw the growth in our wealth management businesses they are quite impressive. we are seeing a growth of net profits before taxs of 10%-15%. that is our target. we want to continue to grow. we will continue to be kdi objective, but not a short-term target. quite often times when we talk about litigation, you say that i cannot discuss it. it is too early.

structured products is one. the second time is using bearer bonds. if i was to say to you structural products in fex, give some sort of quantum force. >> it is not a multi-alien dollar business. -- multi-billion dollar business. we are looking into those matters with on don't -- ongoing discussion nations with the authorities. >> i wish you well. i am sure a comp while, on the floors around ubs.

that is it from zurich. one billion swiss francs in profits. it is about sustainability. we will listen to the interview more throughout the program. it is officially cold, even though i look warm and toasty very >> manis cranny with the chief executive. finance leaders are in istanbul to tackle the big questions. we are joined by one of those leaders. she is the will thank chief operating officer and director. good morning to you. thank you for joining us today. >> good morning. it is my pleasure. >> what is your chief concern when it comes to the global economy right now?

>> the global economy is facing another policy challenging environment. you see the pace of recovery is not even. japan has still struggled to recover. adding to that is the policy divergence. it will create challenges for many policymakers. adding to those challenges, it can become a mixed lessing for them. at the same time, it can also challenge for many oil exporters. you talk about russia, the middle east. this is something that will be watched and discussed.

it is up by an additional 2% since the policy reform last year. it is going to be very challenging. now adding to the environment becomes even more difficult. >> on the matter of diverging central-bank policies, one topic up for debate is whether the u.s. federal reserve will raise rates this year. if they raise interest rates, can emerging markets withstand such a move? >> last year we already had emerging markets have the implication of this potential of the u.s. monetary policy. many of them is correct in their fundamental. they are in this case, even in

their fiscal size. india is one that is coming strong after the election. that clears more confidence and their readiness to implement if this policy is going to come. many countries will have to deal with this. the interest rate increase and many have -- because of the countercyclical policy. their exposure to the dollar is going to be another social problem. if you combine that, we can create revenue dropped from many oil exporting countries. in terms of the policy readiness, there is the

indication that this time is going to come. many are trying to prepare by creating confidence from macro policies and creating policies to have a new stronger foundation. >> i would like to talk about greece. the exchequer george osborne has spoken. he says the danger of a miscalculation leading to a very bad outcome between greece and the area is increasing. do you worry about this option? a very bad outcome taking place between grace and -- greece and your area? >> this is a challenge in greece. that will definitely have an impact, not only within the euro, but on the rest of the world.

we can see that europe has been the source of challenge for many developing countries. weakening trades with them and also with the perception and confidence. it reminded me when i was finance minister. they can, with an agreement and create a confidence for the global economy. this is not an easy time. with strong cooperation, they have the possibility to respond with confidence and providing a clear guidance for the economy in order to rebuild their foundation better. >> thank you for joining us from

the conference in istanbul. coming up, chinese inflation falls to a five-year low. do join the conversation on twitter. just me today. quite close to the houses of congress. there i am all alone @markbartontv.

>> the u.k. chancellor george osborne has said that the danger of a miscalculation leading to a bad outcome is increasing. he is urging other countries attending the g 20 finance meeting to find common solutions for a greek exit from the euro. the u.s. chipmaker has agreed to pay 975 billion dollars -- $975 million, the largest fine in chinese corporate history. chinese stocks have risen and speculation that the lowest deflation in five years has allowed for stimulus.

oil goes up for the first time in four days. china is slowing inflation. policymakers have room for extra stimulus after cutting rates in november and reducing angry served requirements just last week. let's get more on that. good morning. what does this mean for the world's second is the economy? >> good morning. it means that we are kidding closer and closer to deflationary terrain. we are talking about falling commodity prices and food prices. economists say that if you exclude all of those factors and look at the straightforward interpretation of these numbers, prices are still low. the economy is still weakening as we are talking about it. domestic demand continues to be

weak. 0.8% still missing estimates. producer prices down more than 4%. also worse than expected. we have seen factory gate numb ers have fallen. that supports the data we have seen over the weekend. let's break down what contributed to this ppi. raw materials are down nearly 9%. mining, 17.5% down. chinese new year, the timing of it all. it does play a factor here. we will deal with a higher base here. the result is lower numbers in january.

>> comments on more pboc coming are surprising. >> it brings the timetable a little bit more forward sooner than expected. there is going to be a lot of chinese consumers coming back to visit home. they will be purchasing things. there will be that remaining feel-good factor in the country. some are saying we could see more stimulus as early as this month. >> thanks a lot. coming up, we will be looking at our favorite stories from bloomberg's digital app including "50 shades of grey."

>> the idea that britain or the rest of the world -- it is sadly not true. whatever the economic costs that sanctions bring, they are very much lower than the economic risks. what we want to achieve is written in a -- britain in a reformed european union, one that is an economic success story. >> mcdonald's is finding its latest figures hard to swallow. asia is the problem.

>> shares of mcdonald's came under pressure in the latest session on wall street. sales in asia dragged down results. the company is replacing its ceo and they reported a worse than estimated the klein. how bad was it? sales fell 4.8%. that is more than the 1.2% decline expected. this failed to offset the big problem. the region includes asia, the middle east, and africa, launched almost 13%. to quote an analyst, i do not think we will see a major bounceback. it is a competitive market.

the fast food chain has suffered a series of well-known set asked which included a rationing of french fries in japan and a scandal involving a meat supplier repackaging old meet. the problem has taken a heavy toll in japan where the company lost 186 million in 2014. sales plunged 9% in january marking the 12th straight month of decline. >> digital pics time. caroline is here. a special treat for me. >> it is a great piece. it is an excerpt from "bloomberg west." 9600, that was the square foot that mark zuckerberg had to buy of the plot behind him that a developer threatened to build a

mansion on. it would actually see into his main bedroom. it is alleged that this particular real estate developer threatened mark zuckerberg saying that i would be able to see into your main a dream. you could take this plot off of your hands. mark zuckerberg bought four plots around his house to ensure that he remained private. the suit being filed against mark zuckerberg saying that the billionaire never followed through on a secret agreement that in return to not building the mansion, that he would introduce him to his other billionaire friends. your heart goes out to mark zuckerberg. they did all of this reporting. he said that it is stuff like this that makes me so sad and angry. >> speaking of angry, "50 shades of grey" opens this weekend.

>> will you watch it? >> i am not sure. i have not read the book. it could be the first -- biggest opening ever for an r rated movie.

>> u.k. chancellor george osborne warns of a very bad outcome between greece and the euro area. he says that everybody could be affected. >> it is sadly not true. >> ubs fourth-quarter earnings beat estimates. we will have the latest live from zurich. chinese deflation slows to a five-year low. that prompts speculation about deflation. qualcomm is find almost $1 billion for violating chinese

law. welcome to "countdown." i am mark barton. it is 7:00 in london. is your smart television passing your private conversations on to third parties? we will have the latest on the latest samsung scandal. the latest as greece's standoff with these eurozone continues. george osborne has been's eking to the -- then speaking to the eurozone g 20. he said that the probability of a very bad outcome is increasing. he is urging other countries attending the meetings to find common solutions to the risks

posed i the euro. and it interview, osborne talked about the risks and how he is planning ahead to deal with any outcome. >> it is clear that the risks to the euro economy and the british economy are at a standoff between the eurozone and greece is growing each day. the risk of a miscalculation or a misstep leading to a bad outcome is growing as well. here in the g-20, we are urging all parties to find some common solutions. we are stepping up our preparations for whatever the outcome may be. we will have to make sure it that the british people are best protected him what ever emerges from this crisis. i am clear that the greek exit from the euro would be very

difficult for the world economy and potentially very damaging for the european economy. we have to make sure that we choose a path of competence and stability for a potentially chaotic and disorderly exit. >> the percussions could be harmful? >> there is no doubt that the u.k. economy would be affected i a crisis in the eurozone. we need to take steps to protect ourselves at home. it is vital that we go on working through our economic plan so that we are taking steps to secure and strengthen our economy. the idea that britain or the world is insulated is untrue. >> britain's membership of the e.u. is very much a hot

political issue. george said that he wanted britain to stay in a reformed e.u. >> we've made it clear that britain wants to stay in a reformed european union. we also need to make sure that the relationship between members that are not in the e.u. is a fair one. those are our priorities going forward. we would put those to the british people in a referendum. we would be delighted. >> many investors have voiced concern that an early referendum could speed up or cause an exit.

>> there has been a lot of talk in the media that our european policy might deter investment. since we have had this policy we have continued to receive a huge amount of investment in the united kingdom. we are a go-to destination for international investors because we have a skilled workforce. it is a great pace to start and grow a business. the whole of europe has to be a place where business can grow and jobs can be created. what we want to achieve, is britain it in a reformed european union? a european union that is an economic success story. >> he is looking ahead to an election year. the british chambers of congress holding its annual congress in

westminster. we will be looking forward to that with anna edwards later. switzerland's biggest bank has reported a fourth-quarter profit that beat estimates. manus cranny is live. he just interviewed the chief executive sergio ermotti. what were the highlights of that interview? >> it was all about getting to the dividend payout. the ratio above 50%. the headline is great. one billion swiss francs in pretax profit. if his investment bank that actually bolstered things, some would say that is because he transformed the investment bank to deliver better returns on capital. a couple of headlines for you. wealth management, the most important part of the business

the margins are under pressure. when it came to the swiss national bank, they were prepared to have it in their business model. they were very happy with him essman banking. i do not think the whole story has been told. and the impact of the smb is the unknown. >> we completed our transformation last year. our capital position amongst our peers. we always say that when we reach our 13%, 10%, we would return capital to shareholders. setting up a dividend is a good, sustainable base going forward. >> there is no loss in these numbers. the investment bank profitability is up 24%. this is the piece of this bank

that is bolstering the fourth-quarter numbers. >> we are pleased with the performance last quarter and over the last eight quarters the model is working. the investment bank is focusing on the clients and the turnover. serving our clients. we've been delivering returns above 20% on allocating capital. well above our target. >> let's go to the start of the year. huge volatility in the foreign exchange market and the interest rate markets. it is premature to draw a conclusion about the quarter. you are a big player in foreign exchange. did you make a profit when the smb withdrew? >> as you know, we usually do not comment during the quarters.

this is an exceptional situation where it is important to give some indication. january 15, to make money is difficult. what we're focused on is giving the best execution to clients. it was important not to lose money. of course, there were some positive affects in managing risks. one way or another, the swiss national bank could abandon the peg. we were looking at the eurocrisis scenarios. we have been benefiting from that aspect. we didn't really make money out of it. it was important to serve clients. >> forewarned is sometimes a good way to be. we hear from the central bank

that they are ready to go in negative rates. what is the impact in smb action? what does it mean to ubs? >> everybody is focused on the currency movements. we choose something that we need to adapt. the most impactful consequences is clearly the negative interest rates. what we can do at this time, we are passing the costs of negative interest rates too large corporate clients. if it goes further, we cannot rule out that more clients will be affected line this. clearly there could be devastating consequences for part of the economy. >> it is very interesting how he draws that difference between what is going on in the exchange markets. it is important not to lose

money on january 15. and what is going on with the interest rates markets. have you have the conversation with mr. jordan. thomas jordan was probably -- i know how that feels sometimes. you need to go behind the banner headline numbers of the dividend. that is followed up by the headline profit. the gross margins that is gone as a very clear target. they also came in a little bit lower. my job is not to speculate why the stock is down 3%. my job is to tell you what the facts are. the facts are that they are paying a good dividend. they have to review those businesses. we are not at the end as far as

what the interest rates are going to do. this stock is down 5.8%. credit suisse is down 20% on the year. next year, it is 15%. 3 billion in the fourth quarter going into wealth management. that was over 9 billion in the third quarter. the clients are still struggling to trade. i love the irony. the investment bank that bolster the numbers. i thought it was a very forthright interview as far as the status quo of switzerland and the smb. >> great interview. manus cranny live in switzerland having interviewed the ceo of ubs. barack obama is taking a tough line on russia. violence in the region escalates, including providing weapons if pieced negotiation's

with russia fail. >> it is true that if diplomacy fails, i have asked my team to look at all options. what other means can we put in place to change mr. putin's calculus. the possibility of lethal defensive weapons is one of those. i have not made a decision yet. >> angela merkel visited washington yesterday. she staunchly opposes sending weapons to the ukraine. she says that will not shake the alliance. the eu has delayed another round of sanctions against russia with trusnik negotiation's scheduled for tomorrow. what did we learn from the press conference yesterday? >> we know we have a president who is very much waffling. he is publicly weighing all of

the options. he is mediating a dispute within his own white house. from merkel, we have a clear position. there will not be a military solution to the conflict in eastern ukraine. both leaders made it very clear that they would work through their differences. >> as to the export of arms, i have given you my opinions. you can rest assured that no matter what we decide, the alliance between the united states and europe will continue to stand, will continue to be solid even though uncertain issues we may not always agree. >> the term on the white house is a tactical disagreement. both sides are united that they need to strategy-wise increase

the cost for russia if they are supporting the rebels in eastern ukraine. what we are seeing is an increase in fighting. this peace agreement has all but collapsed. ukraine allege that over 1500 russian troops have crossed into ukrainian territory. diplomatically, there is a separate track going on. there is a process for additional sanctions. we had that push with merkel heading to moscow. they are trying to give the home and see a little more space to breathe. they delay the implementation mark of 19 individuals going on the black list. 19 of them were russian. we do know that she will be heading to brussels for the eu leaders summit. >> she is off to minsk before she heads to brussels? >> that

is still an open question. the question is, will there be enough diplomatic process to have angela merkel and francois hollande there you go -- there? he wanted to see steps towards having a diplomatic solution if the leaders do indeed, that could be a decent sign. if not, you could have possibly sectorial sanctions, another round coming out of brussels. >> thanks to our international correspondent. here is a look at some of our stories we're following on "countdown." qualcomm has been fined almost a billion dollars i china for violating anti-monopoly laws. an inquiry lasted more than a year and threatened the company's growth in the world's

biggest mobile market. the slowest inflation in five years allows room for more stimulus. gold rallied. china's slowing inflation. the second straight contraction in factory prices give policymakers room for extra stimulus. malaysia's top court has upheld opposition leader and were ibrahim's sodomy conviction. an appeal overturned the 2012 acquittal on the charge and sentenced the former deputy prime minister to jail. new pictures have emerged of the plane crash in taipei. the surveillance footnote was taken on the 21st floor of a building and shows how close it

came to what could have been an even worse tragedy. 50 people survived the disaster. you are looking at live pictures of the public memorial service which is being held for the victims in taipei this morning. far clay's is planning to raise pay for junior bankers. the company seeks to retain talent. some barclays junior employees are set to receive an increase of 20-40 percent. it has prompted mid-level employees to speak their unhappiness about the shrinking gap. if you have a samsung television, you might want to be careful about what you say in front of it. the television can transmit user

data to the parties. when the voice recognition luncheon is activated, they have compared it to the tele-screen from george orwell's "1984." you can join the conversation on twitter. among the trending topics. modi the prime minister in india conceding an overwhelming to feet in his capital. that is his first setback in the polls since taking charge of asia's largest economy. manus is in zurich. he has been speaking to the ubs chief executive. there i am all by myself. get the violins out. a strong dollar and weak oil prices. i will be speaking with the chief asset manager.

♪

>> the idea that britain or the rest the world is isolated from what happens in the eurozone is not correct. the economic costs of anybody that introduces sanctions are much lower than economic risks of global instability. what we want to achieve is written in a -- britain and a

reformed european union. >> let's turn our attention to emerging markets. what does this mean for emerging markets? i am joined by the jpmorgan cio. this started with china. the lowest inflation in five years. factory gains of 35 consecutive months. >> you have to expect that they are going to raise. the economy is slowing more than they expected. the asian market is up. the market is telling you that policy will be easing. >> interestingly, the indian stock market is up as well. the longest losing stretch since november, 2013. modi has conceded an overwhelming defeat in india's state capital.

does it have implications for his reform agenda? >> it does not have broad implications. on a broader level, it was very much a local event. the market likes the basic tenet of the reform agenda. >> there was a bloomberg story that india, the last brick standing, it will grow faster than the other bricks for the first time since 1999. is it fair? is it the last brick standing? >> i think it is the first brick to stand up. it is the first one where you will see change improving a sudden -- sentiment. i think it is ahead of the others rather than the last one

standing. >> who will be the last one standing if you had to put a that out of the other three? >> russia has the whole oil ukraine situation which puts it almost in a different camp. the question is which one between brazil and china do you see turning around first? china is obviously the big beast . you woul expect china to take longer to turn around. i think that china will remain the concern for foreign investors. >> it is raising rates. russia was raising rates. were you surprised by that? we spoke to the central bank governor. were you surprised that you raised rates to 70% and then cut

them shortly after? >> russia is in a crisis-type situation. they have come to the conclusion that defending the currency is a lesser priority than reducing the burden on the domestic economy. you have to expect that there is a political influence behind the scenes. in general, we would expect the trend to move towards easing monetary policy. >> on brazil do you have faith in the new economic team? that they will make the necessary reforms to turn this economy around? >> they will be forced to. whether they want to or not, the economy is going in the wrong direction. the government is under pressure to do something. they are highly unlikely to go to the left and become more market unfriendly very i think

they will be forced. >> good to chat with you. still to come, obama mulls sending weapons to the ukraine. merkel maintains a stern no. ♪

>> the idea that britain or the rest of the world -- is not true. whatever the economic costs that sanctions bring to anyone, they are lower than the risks. you have the cost of global instability. what we want to achieve is britain in a reformed european union that is an economic success story. mark: you're watching "countdown

." let's see how the bloomberg dollar spot index is faring. i chose this because after the u.s. jobs report on friday, we did see a big spike in this index which measures the dollar against tenant of its main trading partners. what we have seen in the day sense is a little bit of it -- a comeback. the dollar is up since friday and monday and over tuesday, the dollar is lower against its main trading partners. investors sit back and decide when the federal reserve will raise interest rates. still the money seems to be around the half year. we spoke to a guest earlier who suggested it could happen in the third quarter, but the money seems to be on midyear third quarter. at the end of last month, the index reached its highest level ever since the series began in

2005. applause so we can i -- digest the data. the chancellor here in the u current -- u.k. said that could lead to a bad outcome. finding common solutions to the risks posed by a great exit to the euro. the u.s. to makers agreed to pay $975 million. the largest fine and china's corporate history. it ends in inquiry that lasted more than a year and threatened the company's growth in the world's biggest mobile market. president obama says the u.s. president is weighing all options and aiding ukraine including providing lethal

weapons if peace negotiations with russia failed. angela merkel visited washington yesterday. she opposes sending weapons to ukraine but said europe's differences with the u.s. over lethal aid will not shake the alliance. let's get more on the ukraine situation. charles is here. will it shake the alliance if they go on its own and aim the ukrainians against the rebels? >> charles: that would represent a fairly large disagreement. we have seen how hard it is for these sides to reach consensus about what to do against moscow. the likelihood of the u.s. arming the ukrainians is quite low. do not forget the world domestic politics is playing in this debate and the goal of the republicans right now is to force president obama into an uncomfortable situation by bringing the war drums as hard

as they can and making it look like he has no option other than to arm the ukrainians. i do not think that on balance we will see the u.s. sending weapons there. if they do, it would be a big break with europe. >> if they did send what -- weapons, how would russia react? >> you have to anticipate an escalation. this is a war that ukraine cannot win no matter how many weapons you send to that country. russia will escalate either militarily or also in the non-conventional ways that we have seen them behaving. either through cyber or influencing european domestic politics or through all of the other asymmetrical manners that they have been waging this war from the start. mark: that does not mean you are holding much hope for some kind of compromise? the one that was signed last year was in tatters. they are close to getting something in minsk but we will

have to look for some difficult issues and that is what to do with the borders between russia and ukraine, what to do with the borders with donetsk. all these have to be ironed out. mark: a frozen conflict is the best option? charles: we have a battle of attrition between russia and the west fought out in ukraine with an unstable ukraine for the foreseeable future. mark: sanctions are being postponed for a week to a love for tomorrow's meeting to take place. does that resume after this meeting takes place tomorrow? charles: it is this long running can mouse game about sanctions. we see the eu and the u.s. holding these out as another type of nonmilitary weapon and i think that would be one of the next steps prior to sending ella terry hardware to ukraine were

that to happen. it would escalate on sanctions. mark: why did we see an escalation of fighting after the last degree of last year? what has happened from then to hear? charles: russia has nothing to lose in waging additional aggression and further destabilizing that country. maybe they are pushing for a land bridge along the southern rim. maybe they want to rehabilitate the donetsk report to create an air bridge between russia and eastern europe. but why not? they can and they are not meeting any resistance or not that much resistance as they keep pushing. mark: ukraine is on its last legs as it seeks ale outs. it needs one of the $10 billion asap on top of the $17 billion that has been given by the imf area and financially economically how bad is it for ukraine right now? charles: ukraine is and then

extremely difficult situation. militarily and economically. they are down to their last $6 billion, if you will. that is way below a safe buffer for your foreign currency needs for the immediate future. and there is increasing talk about a ukrainian default, the direction of travel in ukraine economically is very bad. mark: the direction of travel in russia is not brilliant, is it? charles: no. mark: not as bad as in ukraine. charles: russia has a long way to go. it has $380 billion in the bank and it can continue to support the ruble if it needs to find these battles in ukraine of it needs to. mark: and other battles, we have heard of other types of aggression toward baltic states

toward central europe, should we take those threats, ideas seriously or not? charles: they will keep happening and russia will continue to test the will and security structure of europe through these minor incursions into airspace or green territories and there may be additional cyber hostility coming from russia aimed either of the u.s. or the baltics or broader western europe. mark: great to see you. charles hecht -- hecker. one of the trending subjects is advice for young journalists. >> learn how to write. mark: learn how to write. there i am. that is mark barton and manus is in europe. anna is at westminster at the annual conference.

what is your handle? 2it is the -- is greece breathing complacency? that is straight after the break. stay with us. ♪

mark: is reading complacency?

greece yields -- is greece breeding complacency? this chart shows the difference in yield or spread as it is called between the spanish and german 10 year bond going back as you can see to 2012. on january 22, which is the red circle, three days before the greek election, it reads -- reached a record low 95 basis points. it has widened to 118 basis points which is less than 1/5 of where was at the height of the greek crisis in 2012. go to the top left of your screen at the yellow circle when the spread reach was 638 basis points. that is the widest ever.

that is when greece defaulted. the ecb is helping the likes of spain and italy. we are entering into the third week since sereiza swept to power. all that encourage other countries like spain or ireland to look at the terms of their bailouts? according to thomas ellotson, spain may attempt to scale back its austerity policies because of the similarities between its insurgent opposition party and the party. the wary of complacency. steve barrow said there is a

danger that everyone is too complacent on this. the eurozone officials are saying there is not really a substantial contagion and threat and maybe that lulls the market into a false sense of security. keep an i on the spread between the german and spanish 10 year government bonds. is greece breeding complacency? the bloomberg top stories this hour. chinese stocks have risen amid speculation the slowest inflation in five years allows room for further stimulus. oil has fallen for the first time in four days. gold is rallying on the news. china slowing inflation. factory prices give room for stimulus after cutting interest rates in november and reducing banks reserve requirements just last week. qualcomm has been fined almost $2 million for violating anti-monopoly laws. they agreed to pay 170 $5

million. it ends an inquiry that lasted more than a year and threatened the company's growth in the world's biggest mobile market. george osborne has told bloomberg the danger of a miscalculation leading to a very bad outcome between greece and the eu area it is in -- is increasing. there is a meeting to find common solutions to the risks posed by a greek exit from the euro. that warning comes 85 days to go until the u.k. general election. politicians and business leaders are meeting at the british chambers of commerce annual conference in london. and is there and joined by the bcc director general. over to you. anna: thank you. i am marking them off. on the agenda here with the bcc

annual conference, some of the commentary you are here for -- hearing from george osborne is the topic as is the conversation along -- about pay. good to see you this morning. pay very much on the agenda because david cameron will be speaking later on today's a that britain needs a pay rise. what reaction do you think you'll get from the delegates? john: i find timber businesses are meeting the challenge of raising wages as the economy improves and they recapitalize and are able to afford it. on balance they will think it is a good thing. when they can afford to do it. increasing pay differentiates the difference between welfare and work. it encourages people to work harder. it shares the benefits of economic growth. it raises taxes. it is better than taxing

aspiration at the top and so there are a lot of benefits in raising wages. >> if businesses could afford this they would have been doing this already. >> especially small, medium, and midsized businesses have had to work through the recession, recover, rebuild their cash, and they are beginning to think about growing businesses and sharing the benefits of that growth. anna: we heard that david cameron was meeting members of the treasury and members of the bank of england to gauge the risks surrounding the greek crisis. given the level of export that takes place between the u.k. and the level of trade between the u.k. and the rest of europe, are you increasingly concerned about what you see coming through from grace? >> there is very little trade between the u.k. and greece in the overall scheme of things. all the information i received is the financial system in europe is much stronger than it was a few years ago. and if greece were to exit, that would not create such a problem as was originally was the

concern of the european union. obviously, if there was not an effect that would be a different matter. anna: business is very much caught up in the early days of the u.k. election campaign. how do you view that because business has been really thrown into the very political spotlight. john: you are talking about the spat around businesses speaking out. we did a poll of the electorate before christmas to ask whether people were interested in what business has to say. it was very clear. 72% of the electorate wanted to hear what businesses say about politics and policies. whether they take it or not is another question but they wanted to hear, and they a legitimate voice. it is quite -- mark: we have lost the bcc director general.

apologies for that. he was just answering that question from anna about should businesses get involved ahead of the u.k. general election campaign and they did a survey and yes, businesses should, he said and get involved ahead of the election campaign. it is a very contentious issue. apologies for that. we will try to get back to john and anna at the bcc annual conference. qualcomm has been fined close to $1 billion by chinese regulators after being found to have violated antitrust monopoly law. here with more ease curl. good morning again. what it -- what is it being accused of? caroline: they are fining 975 million dollars. qualcomm is this -- makes chips that run nearly every single mobile phone that you can access the internet on. it is ubiquitous among most of

us. phone users. china accused it of saying your license fees are too high. the way these companies boost their profit. you have to give me a royalty for my chip. the licenses are too high and you're using your dominant position to force customers into accepting conditions which is like bundling. if you are going to have that patent chip you will have to other -- have to have the other ones. we are fining you almost $1 billion. mark: going forward, some relief? caroline: it is going to be a big sign -- sigh of relief. it ends a year of investigation. they now allow them to still work in china so that is positive.

they can charge a licensing rate similar to what they charge the rest of the world. this is a big take away. many had worried that they would have to sell at a discount. the chinese regulars could hit them back. hard. this overall -- could hit them back very hard. it hurt the ability to collect any other license fee. customers are saying until we find out the end of this investigation we're not going to pay you anything. the chief executive came out in a statement and said, we end up [indiscernible] and it removes the uncertainty. also other countries are being investigated. microsoft has been under the spotlight facing regulatory scrutiny as has some intact -- symentech. they may decide they may no

longer work in china and boost their own companies and said -- instead. mark: mcdonald's is fighting -- finding its latest figures hard to swallow with a worse than expected to klein in global sales. asia seems to be the -- decline in global sales. shares are under pressure as sales in asia drag down results. su: the company reported a worse than estimated decline in january global sales. how bad was a question mark the sales which measure locations in stores and 13 months fell 1.8% and that is more than the 1.2% decline forecast by analysts. with u.s. sales narrowly increasing this failed to offset the big problem. the region that includes asia

the middle east and africa which plunged a most 13%. to quote an analyst, they will see a major bounce back this year. it is a top competitive market. the fast food chain has suffered a series of well-known setbacks in asia which includes the rationing of french fries in japan and a scandal involving a meat supplier accused of repackaging old meet in july. that prompted mcdonald's to take products off its menus in the region. the problem has taken a heavy toll in japan where the company lost 180 $6 million in 2014. the company sales plunged 39% in january. marking the 12th straight month of decline. i am su keenan, bloomberg tv. mark: let's chat about some of the corporate news that is going to make headlines today. one man making headlines her4e. -- here.

he said the shares were called lower and they have doubled their dividend. "countdowncaroline: they had a tax gain and they are doubling their dividend. what is not to like? this is ubs which unlike credit suisse restructured itself. i had seen the allure of wealth management. they were going to slim down on investment banking. investment banking was doing rather well. that is 38% say some banks out there. it is down 3% or 4%. four year earnings missed analyst estimates. they fell versus 2013. weak demand again.

this is a company that went for emerging markets in a big way. india, brazil, and china they bet would be going into more tires. now they are in an economic slowdown. that is also hurting because of foreign currency. it tried to put all its manufacturing and other countries because it was cheaper to do so but now with the euro weakening and this is going to potentially put it more vulnerable to foreign currency swings. overall even the raw material costs are looking better, the rest of it is not painting a good picture. mark: and the 35th decline in factory gate prices. caroline: it is quite amazing how slow inflation is. oil prices, run material costs coming down and suddenly the inflation costs are coming down. when you have 0.8 percent

inflation, well below forecast, slowest in five years, there is a silver lining. they could inject stimulus. chinese stocks rallied. mark: stay with us. see you nice and early tomorrow. have a good day. ♪

jonathan: good morning and welcome to on the move. the british economy in a standoff between greece and the eurozone is growing each day. consumer prices enter the world's second-largest economy with the slowest pace in five years.

resilience. they're willing to push this equity market higher.