>> a $40 billion plan. the imf announces and record for the country. >> bailout to break down. a solution for greece. >> swedish qe. rates below zero and announced it will buy 10 million krone. ♪ >> a good morning. welcome, you are watching "the pulse." i am guy johnson. >> i am francine lacqua. >> imf have announced a $40

million bill out between friends, russia, and ukraine -- france, russia and ukraine. there is a draft proposal and they are having an agreement but does it mean that will not be able to sign something. >> yeah, absolutely. they have been there for 60 hours, i have lost count. the leaders of germany and france, what we understand has taken place is that came up with a document that the russians presented to the pro-russian rebels who were in the building but not part of the talks because ukraine will not talk to it and they rejected it. the eu said that start of its meeting with all 28 heads of state will be delayed so the talks can continue. >> in terms of the process, i put the bits together, the

financial package critical to establishing a baseline for the economy. you needed to get back in and build a deal. how do the 2 bits fit together? >> it is important, the timing. what they were hoping was to have a cease-fire but i do not think the german chancellor and french president would've went in there if that was not a high probability in everybody thought it would get done late last night. christine lagarde in brussels announced a financial aid program. it is significant chanel still without an agreement. she did say it is a deal without -- that is not without risk i.e. geopolitical risk. clearly an effort by the imf to say they are respective of what happens and we stand by the ukraine.

we want to keep ukraine from of warning default. a lot of people would say it is pretty late, they got 15 billion last year and now -- the ukrainian currency -- >> 17.5 billion. >> the eu has to come up with some of the money and russia is responsible, russia linked the ukrainians 3 billion and will they do a deal on it russian mark i would not get too hopeful on it. -- on it? -- i would not get too hopeful on it. a lot of people in kiev would say our currency was the worst performing last year. and the sector is incomplete crisis. it would be great to get the financial aid earlier.

>> ryan chilcote, the latest on the imf loan. >> let's go from one potential deal to another potential deal or may be no deal, we will wait and see. the greek gridlock is continuing in brussels. the early hours of this morning, however, we failed to bridge the differences between greece and what could be the next aid program. let's talk about what happens next. hans nichols joins us and he spoke to the greek foreign minister and what was be tone? >> of the t -- the tone was confusion. four hours into the meeting we thought we would have a dell. then it was called off. there is a plan to fund agrees beyond at end of this month. we do not know it they will stay in the bailout program.

i asked if they might turn to russia for support. he was pretty emphatic it would not happen. >> to see how europe evolves crisis to crisis, disagreement to disagreement, we always find solutions and managed to stick together. that is how your evolved. we would not be here if it was not the history. >> would you rate russian financing? >> know. i was pretty emphatic, i said, no. no. >> i mentioned earlier in the evening the late evening, the euro was up on the report that it is potentially had a deal and then it sank when the leader of the euro group said we have this thing that is back and forth. it appeared they had a deal and then -- [no audio]

yanis varoufakis called back to athens and try to get approval and he did not get a deal and took to the floor. it gives you a sense night talk to the belgium finance minister about this guy and a sense of how difficult of these negotiations are going to be. >> there was a discussion and anything that is really important in this discussion between greece and the euro area countries but like i said, we do not include what to conclusions and continue on monday. >> give me a sense of your optimism, if any at all. >> like today it went from left to right, up and down. it is hard to take leverage of it. but it will continue to the a very important discussion.

>> guy, we will be eu leaders gathering today and we might have progress but it looks like the heavy lifting will be done on monday the next time they gather. and gets us closer to the end of february for greece could be cut out of funding arrangements that have ecb or eu backing. >> hans, thank you. hans nichols on the greece story. we wait, we watch, we will see what happens on a monday. >> that reported their first loss in seven years. we are joined by the ceo thank you for joining us. in terms of some of the impact or things that impact the most impact negatively on your earnings, the price of fuel. what is your strategy going forward? will you hatch or by moore -- hedge or buy more? >> going forward taking one

billion in losses in 2015 and the end results. it is just [indiscernible] losses going forward. reduce our costs to $2 billion in 2015. >> good morning. ryanair more hedged than you at 90. mr. leary talked about the airlines with lower hedging has an advantage. how are you going to use that to your advantage? >> well, first of all [indiscernible] to begina a lower cost going

forward. contrary to hedged heavily and a cost element. the other thing what we do we will do the same building up to u.s. that's one more key. a key element and strategy. [indiscernible] good position to compete. >> a final question because we have breaking news, where are we in the agreement with the u.s. on the transatlantic? we have been waiting and watching you get a sense it is

tough going. when are we going to get an announcement? >> it is a long time overdue. and, obviously, a long time ago. i think only because of competition. prices that we get our customers. that's why they tried to stop us. >> ok thank you very much. bjoern kjos ceo of norwegian air shuttle. >> of breaking news from vladimir putin is the cease-fire with ukraine has been agreed on february 15. he said they are expecting basically germany, france ukraine, russia, express constraint to the cease-fire on february 20 -- 15.

it is quite telling he is the one telling this. >> quite tell it in terms of the details and the nitty-gritty. it has been reached on the withdrawal of heavy weapons. that is quite significant because of the heavy weapons have caused the ball of the damage and the fact that they are withdrawn is a turning point. what i have not seen is any sense of whether or not you are going to have a of militarization of our buffer zone in place -- going to have do military station or a buffer zone or peacekeepers going in and monitoring this situation. if there is to be some kind of buffer zone, how big will it be will be a critical question people will be asking. >> this they live picture from minsk and we expect leaders. we have been waiting for a signing. there must be some sort of photo

opportunity at maybe that is where the officials are. mr. putin saying there's been an agreement on ukrainian constitutional reform. we will get more, this is a huge deal. we have talked about it for the last couple of hours. now, we have a cease-fire. for february 15 is one of the cease-fire starts but we expect more restraint on until then. >> let's see if with that the russian market and the ruble up. people have been waiting to see if we got a deal and if it could in turn lead to a more benign environment may be for the russian economy, i.e. sanctions. frozen after this stage or if they can be withdrawn. a little bit reaction in dollars/ruble. let's go to ryan.

>> the russian president finishing prepared remarks to the russian pool. these comments are coming from the russian president and none of the other leaders. what is more important is that it was not a joint statement. the russian president said they agreed on a cease-fire that will begin on sunday. it was much greater in many ways if that is correct that there will be a cease-fire starting this sunday. he said, disagreements and discussions over who guards the border and there seems to be a lack of clarity when it comes to the autonomy that in the separatist regions would enjoy. these meetings went on for 15 16 hours. the presidents and leaders of germany and france and the eu meeting, it went on so long that the meeting has been pushed back to accommodate angela merkel and francois hollande.

it looks like perhaps they resolve some of the issues, may be well cease-fire like we agreed in minsk once upon a few months ago that failed a month later. some of the more ambitious goals they had for this meeting -- yes, go ahead. >> you have been following up vladimir putin and the russian economy and politicians for decades. what do you make of the fact it is unilateral? it just comes from vladimir putin? is is something to give him the upper hand or make him look stronger? >> i do not think it was pre-agreed to make him look stronger. what we were expecting to have a big signing in the been hall and weapon watching the video feed and expecting -- and we have been watching the video feed and expecting the president, the 4 of them.

we have the russian president leading and speaking before anyone else reading prepared remarks. we have a cease-fire and schooling off. there are a lot of questions that remain unanswered i am sure we will get answers over the next 5-10 minutes from the other leaders. it looks according to the russian president, and have achieved some things here but not what everyone was anticipating. the comments from the ukrainian president earlier today starting toward people these talks may not deliver the success that some people were hoping they would. >> ryan, thank you so much. ryan chilcote on the cease-fire. there will be a cease-fire on february 15, this sunday. >> we will take a break and analyze the new news. it is a fast-paced morning. we have plenty more to come.

inflation. that is a little bit later and waiting for statements. their press conference potentially calming up. we will take a break and see you in a moment. ♪

>> welcome back. we have breaking news a big deal. vladimir putin announced a cease-fire in ukraine from

february 15. these are live pictures at the independence palace where vladimir putin was meeting with francois hollande and angela merkel. >> we were stunned watching pictures of vladimir putin and it looked like he was leaving. he hasn't made his statements and is now going to be departing, i.e. if i was reading the body language i would say vladimir putin wanting to make it clear i am in control and i am out of here now. >> let's go to ryan chilcote. is there a danger he has announced too much? we have not heard from leaders and that is unusual. >> that is unusual. it would've been better from a peace or a joint statement as we were expecting. what we saw was reading prepared remarks saying a cease-fire has

been agreed upon for sunday and exacted they agreed to remove heavy weapons. an agreement on ukrainian constitutional reform and to federalize their political system in order to give more autonomy to the republics in the east. >> comments from first walk alone at and getting statements from some and dust from francois hollande and statement -- comments from francois hollande and statements from others. we are not getting any more details. it is pretty clear that -- >> confirming what we heard. >> there a statement from the leaders we are looking at live pictures from the independence hall and we are expecting a formal statement. >> the military zone and they have removed the weapons. they are talking about a 50, 70

kilometer and that is no wider end of the spectrum of what people were looking for in demilitarized. it freezes of conflict. this is what putin while too. he talked about a -- of this what putin wanted. -- he talked about a federalize country. that is the bigger end of the spectrum. poroshenko is speaking in let's wait to see what he says. >> it is a big gap in the artillery cannot hit either side and neutralized the violence. we have the an agreement from the very same city just a few months ago and is survived for a month and a half. >> rings are moving along quickly. an hour ago, we had the head of the imf announcing 17.5 billion in terms of dollars of aid.

it is a very big step. >> it's a step in the right direction. it underscores the confidence in the nation's currency which is one of the worst-performing currencies last year. they are already in tatters. the currency and the banks. this on top of the 17.5 billion they got from the imf last year. christine lagarde set would be part of a $40 billion package. >> we are here from the ukrainian president saying they rebuffed ultimatums. tough negotiations. of until an hour ago, it was unclear if we'll get an agreement. >> at there were clear sticking points and one was a town, which the ukrainians control, just barely.

we understand it the rebels asked if be part of their territories and the russians said, no way. as it is, it will be interesting to see. since it's a last agreed to a cease-fire, the rebels took another 200 square miles of ukrainian territory. it appears to be enshrined in this zone and we will see. but more, as they were asking for, was not the delivered. >> the 50 kilometers. what i am not seeing an poroshenko is in the middle of the press conference, i am not hearing anything about peacekeepers. no mention of any kind of u.n. mandated peacekeeping force going in. >> in terms of one in 10 where 10 is where we can forget about it and the violence ins, we are

at a 4 or five. they have agreed on the cease-fire. >> the last cease-fire did not last very long. >> it did not last very long. >> they are also not taking hostages. what we understand is independence palace and, they are probably briefing some of the reporters upstairs and we are expecting them to come down the stairs to talk to reporters. there is a are. >> -- there they are. -- >> it was signed by the contact, lower-level officials that were attending. it was not a deal designed by the russian president and ukrainian president with hollande and merkel. >> emerging from the talks. >> the door sill summit in what it is called.

16 hours. -- duracel summit is what it is called. >> it looks like they may be about to brief. let's see if we can listen in what is being said by the 2 leaders. >> absolutely extraordinary. they will head to brussels. they eu meeting has been pushed back so they can make it. >> we think, just looking at live pictures. they seem to be on their way out as well. >> one thing we can preclude we are unlikely to get more sanctions imposed against russia. what we were hearing from officials, there is a visible failure of the collapse of the top if the russian president verse out another is agreed upon , they are going to discuss imposing more sanctions.

>> this comes from -- >> the does it meanwhile peacekeepers on the ground or does not mean that -- does it mean we will have peacekeepers on the ground or does it not mean that? >> they have people on the ground and will say where the fire is coming from and what is going on. they are there to observe and not peace keep. >> it is interesting to look at body language. merkel and hollande seems to be in a jovial mood. not a perfect a deal, but something that is pretty strong. >> everybody was concerned a complete collapse would be a calamity. if these talks yielded nothing it would be a real disaster. they you in threatening more sanctions and the u.s.

considering arming the ukrainian army. angela merkel said she believes it will lead to a larger conflict. people use the term "proxy war," like the old cold war. and government funding the separatists and ukraine is the battleground. that is what really -- everybody wanted to avoid was complete collapse. about a week ago, angela merkel change her decision on the talks only wanted to enter if she can get some dissociative and then concerned up that substantive and then was concerned and agreed to engage again. she was with hollande and they are here again. >> cameras are on the move. >> the ukrainians leaving. >> angela merkel chasing after him. making comments. still a big effort to make on

the ukrainian talks. what is there still to decide and still to do in terms of what needs to be achieved? we have a demilitarized zone, observers. what is next? >> to stop shooting full stop. what kind of autonomy they have? who polices the area as you were saying, will their bps keepers? maybe they were making progress and things seemed to be strained. >> the borders. renegotiated on the borders. we understand some press agencies and there's been no decision. >> the borders with the ukraine itself were up for discussion and then the patrolling of ukraine's borders of the federal border. the question is, does ukraine

get patrol is on the border? the rebels, said no. >> implementation risk. we have a deal and we are into implementation. the markets, as you pointed out has been quite shy. will there be a view that yes, today, a big sigh of relief. but still, it needs to stick. >> what is interesting as we have more and more of the talks and we had them in normandy with holland merkel and poroshenko and putin and we had them in milan and geneva but the reality of the matter is the stakes are going for the russian president. if it is deal fails, you have to wonder how far will angela merkel's patience extent. if there is a breakdown, i would

expect sanctions very quickly. >> today's a huge, huge day for this conflict. it has been 10 months since we have had the country -- countries in conflict. we have had a cease-fire. we spoke to a guess earlier and must see what she has to say about the $40 billion. what's it is a big program. $40 billion is a lot. >> it is a big program. it is ambitious. it is not without risk. we put to buffers in there to take account some of the geopolitical risks and we much rely on the determination of the ukrainian authorities to conduct of the reforms. if conducted will unleash significantly. >> there has been relief of four ukraine. -- relief four ukraine. >> absolutely.

we heard from the imf head in itself, the regional head said that contraction in ukraine was around 70%. the worst-performing economy. it is not looking great in this year. -- the contraction in ukraine was around 7%. it is hard to make a forecast when a big chunk of the country is engulfed in warfare. even after these talks, the cease-fire, if it happens, will not happen until midnight sunday and there will be plenty off a fighter. >> at this is from poroshenko saying they are going to decentralize powers. >> a russian demand. >> is that the federal structure he wants? what the devil is in the details. what the pro-russian separatists who would like is the kind of federalization that would allow them to weigh in and veto, if you will, federal government

decisions. should ukraine, 10 years down the road, we like to join nato then the government's in the regions could say we do not like the idea. veto. same thing for ukraine joining the european union and would exercise veto power. the government has been of this that for 2 reasons. they think kiev should be in charge of national policy and their concern that is what this was all about to have a lever of influence for the kremlin and in their own affairs and this proxy state if you will. their second concern is if you start doing it in the east of the country, western ukraine has its own identity as well. how much of a government, of a country are you going to be left with? >> we are getting live pictures

from the independence palace in minsk. leaders, actually. almost giving a statement. >> it looks like a long -- hollande and merkel went to briefing the press. >> on the first floor. >> that is alexander. saying go by as they exit the building. >> giving a press report. >> you get a sense, as ryan said, a first step and many more needs to follow. when we step back and analyze what will been talking about over the last 10 minutes, how much of this how does it move the box for putin? he said it was a good day. you have a since he went to through a list and worked through it and got a lot of what he needs. maybe a federal lies ukraine and significant buffers on which

freezes the process. he has the imf to give a fair whack of funds. you are looking at the process and he was the first to brief and looks to be the one in charge for the is it enough for putin? >> that is a fair read, it is a good start for putin. at the end of the day, if the talks have failed, russia would look at more sanctions. you have the u.s. talking about arming the ukraine military. they do not want to do is the addition of's, bucks -- initiatives and big steps and making some ground. >> you can really sell this one home. >> that is probably why he came out and asking for -- a massive sip -- spin. >> he's bit of the night with

the president of france and the german chancellor -- spent the night with the president of france and the german chancellor and now he is important. he had 2 of europe's biggest powers, the ukraine president and talks with him because we are a great power, that is the main take away for russians. not all russian support of vladimir putin as a person, but most of them support his foreign-policy. the idea that russia was a great power and should be treated as a great power. >> let's check on the markets. i am sure we had reaction and the ruble is a sliding. >> a busy morning. what has been happening in sweden and waiting for the inflation report. a lot of things for jonathan ferro to think about. >> of this want to release it looks like especially on the dax.

1%. gains over 1% in spain and italy. the ftse almost missing out on 0.3%. russian future that was a risk over the last year or so. when you get that cease-fire agreement, a relief rally. i wish in your on the chart, the dax, the move. up a by 1%. foreign policy, one part of the news. the other was the swedish central-bank, the riksbank cutting rates to -0.1%. what you see is a swedish krona going lower. surging higher, the swedish krona hitting a five year low against the u.s. dollar. isn't this the riksbank -- is this the riksbank reacting to the central-bank? what does it mean for the likes of denmark? sweden, denmark, going south.

i want to show you the two year. that is a-and eventually we will fall off the screen. central banks easing and riksbank surprising the market somewhat, who else will react? that is the question. they will be talking about if mark carney will push back rate hikes? >> we need to fix our graphics. denmark of being obscured by its flag. >> we need to get on top of that. up next, a great bloomberg exclusive. we will talk to the ceo of unicr edit the bank with the third-largest exposure to russia among european banks and will be great to have his take on the

cease-fire. ♪

>> welcome back. ruble having an impact on the biggest a bank. the sludge -- plunge weakened. we are joined with unicredit's ceo. thank you for joining us. what a delight to have you. we have the cease-fire announced to buy president putin --

announced by president putin and it must be encouraging you for your business. >> it was encouraging news for us. for us in particular, we have quite a person's any ukraine. and a big presence and all of this will mean the situation politically speaking [indiscernible] >> if we had not had a deal and implementation that needs to be dealt with we would see more aggressive sanctions. how easy is a 40 -- how easy is it for you? >> sanctions are easing up.

actually we are estimating 50 million versus previous with sanctions. if the situation continues continue to be, we sing and -- we see it as long-term strategy and more prudent. [indiscernible] makes things much easier. [indiscernible] european banks in russia and clearly the situation for us is very important. >> in you said you are committed to russia and you brought the third-largest exposure. give us a sense a maybe what we heard about the cease-fire will

change what your view is on the ruble and the impact of this quarter will have on all of 2015 because of your exposure. >> the ruble the political situation and the oil price. impacting on europe. i think if cash a settlement is reached it will have some way to. -- some weight. business stock, 60% is any u.s. and the rest invested in rubles. business in its self is not suffering yet to much because we all the time are being very prudent. long-term impacting. [indiscernible]

>> let's say the cease-fire does and the ruble gains traction. a lot of people focused, is is something that gets reversed quite quickly? it looks like a sort of currency effect that goes the other way it goes the other way. >> a negative impact on our tier one, up to seven basis points. [indiscernible] so this is something we can manage. the ups and downs. >> you are comfortable with that and you have to wait and watch. >> in terms of capital, i would say that if you look at the position today we had a problem

in the fourth quarter. committed to keeping capital toward earnings. it has been performing quite well. >> an update on your strategy. any m&a? you put the unit in the ukraine on cell and you have to stop it. when do you expect that sell to resume? >> it is not a secret we have a discussion ongoing because of the current situation. we see looking forward some discussion with international -- and that may consider the capital of the bank if we decide . the first option is -- in 2014, we have done some m&a.

we have left kazakh a stand -- kazakh is stan -- kazhastan and discussing about the combination of the 2. [indiscernible] re-create one of the top global companies. we keep going to russia allied and create a value. >> can i ask a bit of a mixed up question? let's start with greece. we have talked about russia and the shadow it is casting at the moment. how different does 2015 feel from 2012 when you look at and try to figure out that degrees will have? -- and that degrees will have? -- that greece will have?

>> i do not think we'll have the same sovereign crisis we had that in the euro area it is much stronger governance, we have a banking union and a stronger central banking head. things are working better. compared to three years ago. i think that the worst-case scenario would not happen. i think [indiscernible] leaving europe would be potentially -- leaving euro would be potentially disastrous for greece. >> do you have a plan if they leave? >> we have a plan that we do internally, a stress test. greece the plan would be the

affect on the liquidity of the bank. would keep this -- we keep this. >> we now have qe. that will keep a lock on governments. is it your sense of the market will be less effective because a potential buyer standing there? >> it could be a big mess if greece leaves part of the central banks. the market is not like it was two or three years ago. a reason to be optimistic. >> give us a sense of how important this for you to be italy's largest bank? we spoke to a ceo who will make a bit acquisition. is there competition to be the

biggest or relevant? >> for us, it means that 8% of the growth. so, the business is different. for us italy was an issue three years ago. a problem of turning around. now, it is over. the benchmark in italy it is 50% below the average of the market. quach or years ago, 50% above. -- 4 years ago, 50% above. with had revenues for italian growing 9.5%, the rest of the group. european growth [indiscernible]

it is clear. moment based. one moment against the group. 2014, many things playing against us. we had russia greece some problems at the beginning of the year in turkey. >> 2015 doesn't look much better. >> i am quite positive because i got to see a good signal in the economy. very low. we start to see demand. in italy three or four years, the demand was very weak. we have [indiscernible] in september and we have a pipeline of 4 billion euros on request for investments. also germany, for us, germany

means 26% of our business. we have started to see pick up in terms of demand. still economies that will be better than 2014. >> talk about those loans. how much are you going to make? we are in an incredibly low rate environment for the >> it has been stable. we have been able to replace what we lost. if this continues, denmark could be pressure on the landing side. -- lending side. so far, so good. 2015, if we keep this level and these volumes, we will benefit. >> thank you so much.

federico ghizzoni. we have you on and talk about mobile and banking. you can get hijacked with an news. thank you. >> it is not going away. >> a big revolution. >> thank you. >> shortly we will bring you the ceo of the french oil giant will join us. that's following the company's earnings. he is coming up shortly on "the pulse." ♪

>> welcome back to "the pulse." >> in the last couple of minutes, not to be outdone, matteo renzi have called the ukrainian cease-fire "an important step." he is expecting hollande and merkel at the leaders summit. >> we spoke to the ceo of a bank , italy's biggest bank that has huge exposure to russia. a look of what calrlsberg is doing. a company that has been suffering because of what is going on there. on the announcement the cease-fire, the stock has gained 6.8%.

>> a material bounce as a result of this. german economy, a benefit if we got it is to stick. we will see. the ruble reacted. we are traded at 64.79. the dollar is down on the day. it will be interesting to see how out -- asset classes react. a look at the stock exchange in russia. >> a look at that. 2.4% higher. it seems that is the mood across europe. a cease-fire their start on sunday, february 15. everything went up. the ftse is up. >> yeah. we have to think about greece as well. markets on the ukrainian story. we have no deal done with

greece. that's going to be held until monday. a shadow across the european economy. >> for our viewers, a second hour of "the pulse" is common. we have a great exclusive with a ceo. >> and the bank of england live. ♪

francine: cease-fire announced. vladimir putin says the truce will begin sunday. guy: a bailout breakdown in brussels. eurozone finance ministers failing to find a decision for greece. francine: swedish qe. announcing it will buy 10 million kroner of government bonds. guy: good morning to our viewers in europe, good evening those in asia and a very warm welcome to those just waking up in the u.s. i'm guy johnson. francine: i'm francine lacqua.

live from london. the imf has announced a $40 billion bailout for ukraine as peace talks continue. the cease-fire announced for sunday. ryan chilcote joins us. the very latest, we saw the leaders leave, we do not know borders and actually white house they have disagreed on. ryan: the single part -- the simple part is this weekend. saturday night into sunday they are going to stop shooting. 2 days later they are supposed to begin pulling back weapons. that plays out over a couple weeks. that is the simple part. then the political part has to happen. that is where things are more complicated. ukraine has a great to decentralize, not federalize

power in its country. it will have to pass constitutional reforms that will establish breakaway areas, give them a special status. once that has been done and they have had a regional elections in those places, then according to this agreement, the ukrainians the federal government will start to get control of the borders. i.e. the border between russia and ukraine which is now controlled by separatists. we heard angela merkel say she has no illusions about the cease-fire. she says it gives us a glimmer of hope better than nothing. but she says she recognizes it is going to be very difficult. a lot of concrete steps have to happen. the market reaction has been extraordinary. the ruble has strengthened. companies in russia are doing better.

carlsberg's best day since 2010. even a bad deal is better than no deal. guy: let's talk about the politics. we are going to get a buffer zone. we are going to get control of the external border. do not quite know what that means. foreign policy in kiev there is some fairly big ambiguities at this stage. you drew a difference between decentralization and federalization. how big a difference as there? in russia's mind duty to things equate? ryan: that will be the axis success hinges on. are they able to come to a mutual agreeable resolution on how autonomy is given? the ukrainian president saying they will not have autonomy

they will have a special status. and they are not federalizing their system of power. they are just providing a special status to this area. ultimately, this was floated as an idea by the russian delegation, what they want is this area to have enough power to block federal decisions like joining the european union and joining nato. what we do not know is would russia be happy with any other arrangement whereby they have more power but not enough power to do that. francine: this is the political situation. a great relief because of the human loss in the region. we have the agreement from the imf, 17.5 billion overall. christine lagarde was saying it is 40 billion. will it be enough? ryan: it is more than they had and probably less than they are going to need. they already got 17 billion last year.

this is an additional 17.5 billion. part of the 40 billion. they need at least 40 billion over the next 4 years, the length of the a program. it depends on a, their ability to get the economy going full stop. and b, to get their economy going given that there still is, at least until saturday night, active warfare underway in the most industrious part of their country. that is where their plants are their coal base is. one of the things that came out of the agreement, it looks like ukraine has to pay for this area after it is all over. that is going to cost billions. forget the 17.5 billion -- they must have destroyed tens of billions of dollars worth of property already just in the east of the country. i think as the imf doles out

the money and donors provide assistance, nobody has any illusions. this is just the beginning. if the fighting does start, the area needs to be built, it is home to 3 million people. francine: ryan chilcote, thank you. guy: from one story to another good luck over -- gridlock over greece. talks between greece and creditors one into the early hours of the morning. people started making phone calls. hans nichols is been brussels. you spoke to the finance minister yanis varoufakis after he had to say i am going to call athens to check that we have a

deal. it turns out they did not. what did he tell you? hans: i asked what he thought market reaction would be. i asked if they got any agreements. if they can raise their limits on treasury bills. on market reaction he seems to think it would be positive. have a listen. yanis varoufakis: i hope it is positive. it should reflect the positive attitude of everyone around the table. i was impressed by the openness of the conversation, the understanding. there were disagreements but they were civilized. the way they were expressed it was clear to me and my colleagues that the intention of everyone around the table was to find common ground. that is greatly encouraging. hans: any closer to issuing another 8 billion in t bills. yanis varoufakis: don't ask me it is late.

hans: this is a serious question, will you have the ability to find your government? yanis varoufakis: allow me not to enter into public finance in detail. hans: i took a look to see whether or not yanis varoufakis was right on market reaction. look at athens stocks, they are up slightly. we do have some negative news out of athens. unemployment rate came in at 25.8%. the youth number came in over 50%. one quick note on the back and forth. they did think they had in agreement and it broke down on the language of the bailout program. was it going to the extent and conclude. wolfgang schaeuble was ready to leave the summit. they did not have the deal after yanis varoufakis cause back to athens and asks to retake the floor. they ended up not having any sort of agreement. the only agreement we had was

talk again on monday. the leaders are in brussels today. guy: thank you very much indeed hans nichols joining us from brussels. francine: tough questions late at night bad hans nichols! doing a great job. guy: yanis varoufakis you never quite know how it is going to go. francine: today's corporate stories. a solid fourth-quarter for credit suisse. a return to profit. a dividend was the surprise part of the release. manus cranny is in zurich, where he spoke to the credit suisse ceo. manus: a lot of people thinking they would have to cut the dividend. it is the biggest one-day move. he is moving to deleverage the

bank and holding firm on the dividend, which is the key piece . brady dougan: we had a strong operating results are the business continues to perform solidly. on capital generation, we had a target for the end of the year, 10%. we met 20.10.2%. if you look at the capital generation capability, it is strong. we went from 9.3 to 10.2, almost a full point of increase in the capital ratio. there is a lot of capital generation capability. we felt a 70 centime was consistent with last year. we are offering the option for shareholders but we think that was the right balance. manus: do you think institutions will take the script dividend to allow you to build capital?

brady dougan: a lot of institutions like to take the alternative. it helps them build a little capital as well. we had a lot of institutions that like that. we actually reduced over 50 billion dollars in balance sheet in the fourth quarter. we made progress on continued deleveraging. we set new targets for the end of the year. our view is we are continuing to be a ahead of the curve in terms of restructuring and evolving the business in a way that is mark efficient in terms of using balance sheets. we feel good about our ability to achieve those. that will put us at a swiss leverage ratio of 4.5% by the end of the year, which is strong. manus: that will keep the regulators happy. when it came to the discussion about the swiss national bank brady dougan ties up and says

long-term is about cost mismatch. the more negative the central bank goes the more pressure inputs to review, pay cuts at the board. employees down 9%. paying the price. pay cuts, dividend holds deleveraging. reducing the risk weighted assets on the balance sheet. could he have gone further? he's not a ceo that will be harried into anything. back to you. francine: thank you so much. manus cranny in zurich. guy: from banks to oil. in his first international interview since the death of christophe de margerie in october, total's new ceo spoke with caroline connan in paris. she started by asking him

whether $50 for crude is the new normal. patrick pouyanne: i do not know. we are in a new cycle. our job as a company like title is not to bet on the oil price. it is to take action in order to be able to face the low oil price and be successful and profitable whatever the price is. which is why we put in place an action plan. we reduce it by $40 a barrel spending less. reducing our investments by more than 10%. an action plan for operating expenditures as well. caroline: it is quite drastic. patrick pouyanne: it is a reaction. it is not a novel reaction. we want to stay the course in our midterm and long-term

strategy. we do not want to overreact. but we have to react. $50 per barrel compared to $100 a barrel, we has an action plan with an additional $8 billion of cash. we are seeing some exploration costs. the oil industry is spending a lot of money. cost services are very hot. -- high. maybe it will help us to clean up not only the company but the industry and it will be good for the future. the idea is to get stronger out of the period of low oil prices. at total we have all the capabilities of being a major company to be successful and that strategy. caroline: in russia you are part of the $27 million -- the 27 going dollar y -- the $27 billion yamal project.

patrick pouyanne: yamal is a huge project. we want to stay the course. we are impacted by the sanctions. we cannot use the dollar in terms of financing. there are other currencies in the world, the euro and the romanenminbi. the chinese have no problem in financing. the chinese banks would be among not just supporters of the project, the objective being to have it in place by the middle of the year. francine: in just under half an hour we will be taking the bank of england inflation report. guy: you are looking at the rim room -- the room. in around 14 minutes' time. coming up, live on bloomberg.

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guy: welcome back. you are watching "the pulse." live from london. european finance ministers have left decisions on greece until next week after talks in brussels stall. all eyes on mr. alexis tsipras

attending his first eu summit. the bailout program expires at the end of the month. what happens now? joining us is ricardo barbieri. let me start with you first. we do not have an agreement. we thought possibly we were getting closer but it is clear that mr. tsipras does not want to talk about an extension of the bailout. how much work is there still to do and what is your sense of the possibility of a deal? ricardo barbieri: they do not have numbers it. it is important to discuss something that can be put down in figures. what they were aiming for yesterday was a broad agreement on how they are going to proceed. a roadmap to the next meeting. i do not think anyone expected a

specific agreement. they could not even agree -- francine:. on a roadmap. riccardo barbieri: it was a friendly meeting and everyone expressed their views, including the greek finance minister. the problem is he has been touring europe with broad brush plans but no specific ideas. they would like to talk numbers especially against the background of an economy that is weakening if you look at all the economic indicators. the new government is trying to push europe to lend more money but then does not tell us what happens after that. who is going to finance them once europe pays this breach long -- bridge loan they are looking for. francine: daniel it seems we have never gone into the european crisis with 2 sides

that are so far apart from each other. what would you do so that the two sides come together? daniel: i think right now it is a question of politics. can they find a choice of words that says europe cares for growth for the social situation in greece and europe will do everything to help the new greek government. behind that behind-the-scenes technical work has to be done. the weak points are going to be greek banks. what happens if they run out of money. they must be thinking about capital controls in greece. this will be the tension at the highest political level and technical work on capital controls. guy: capital controls is a fairly aggressive step to take. we saw the reaction to that in cyprus. is that something you now assign

a high probability to? is that something you think is going to be possible in the agreement? daniel: perhaps not part of the agreement. if you look at the greek situation it is clear. they are running a slight primary surplus and and external current account surplus. if they did not have any debt risk payment and capital flight, they could sit tight for years on end without really having to repay anything to the creditors. the temptation for them is actually to do this. slap on capital controls so they do not have a problem with banks. then sit tight for some time. francine: sit tight? markets seem a little complacent. we are not talking about capital controls. we talk one day and heading north for a couple days. is this a reality? riccardo barbieri: i hope not. it would probably make greek

depositors wary. people would pull out more money from the banks. there's already been a lot of that in recent months and during the crisis three years ago. this is something that must be avoided at all costs. i think the key point in a possible deal is the following. syriza has some plans of social expenditures, fiscal adjustment, repealing the property taxes. that costs money. they need a reason why they are attacking the problem of debt. they do not want to have a primary surplus of 3% and 4.5% next year. it is necessary to redesign a debt reduction plan that involves lower primary surpluses for some time. let's say two years to three years. and a strategy to stimulate growth in the economy. and something serious concerning

corruption and tax evasion. these guys are saying they are serious about this but they have not presented a plan. guy: the structural elements. riccardo barbieri: as a matter of fact, the troika tried to advise them on this and there is an expert group working on greece coordinated by the european commission that is trying to help them improve compliance. a lot of things were being done that were very important and must be continued. no question about it. ultimately, syriza should tell us who is going to finance public debt. why are greeks not willing to lend a single euro to the government? these are the questions we should ask. in the past couple weeks we have seen the yanis varoufakis shell around europe. it is time to put some questions. francine: and have the details in the numbers. riccardo and daniel, thank

you very much. guy: the south african oilfields reported a decline on the back of global gold sales. 2014 was the low point for gold-mining and expected improvement this year and beyond. joining us from johannesburg is gold fields ceo nick holland. what makes you believe that we have hit the low point and things get better. the market traded your stock down aggressively this morning. mikhail and: -- nick holland: if you look at the one project in south africa, we've had a poor year in production. we've had to shut the mind for four months due to safety considerations. we are projecting to improve

production by 15%. that should be through to the bottom line. it is highly leveraged to production. most costs are already in the system. that is the reason we are saying we have hit the low point and we should do much better in 2015. francine: when will the mine be up to steady production of 700,000 ounces? nick holland: we are reassessing. all the development we thought we would have had to open the large parts has not happened. it is taking longer. we are looking at getting the mind back to basics and making sure we understand that we have got operator skills, good maintenance skills behind us. let;s get those bright before we expand the operations.

that is where we had decided to go more cautiously. we have got to get it right and not get it quick to production. let's get it right first and then expand. guy: what level are you evaluating the reserves? i was talking to wrangel's earlier on this week. dissent seems to be -- the sense seems to be it would go further south. nick holland: we have to evaluate and terms of a south african rand. the current gra -- the current price, we are valuing this at 400,000 rand per kilogram. that is a discount of about 15%.

reasonably conservative. even if we use the lower price, it is not that sensitive to prices. people that it will get through at a lower price anyway. it is not a body that is largely sensitive to call prices. francine: i wanted to get your sense on labor unions. does productivity need to be a part of the negotiations? nick holland: that is a target of the coal industry, to see if wage discussions can incorporate a variable component link to productivity. and then a base component link to cpi. that is something we have tried in the past. i can see the logic behind it. we want to try and improve the output for the industry and reward people for extra efforts. it is early days. i think we will get into the heart of the negotiations in two or three months then we will get

a better view as to whether or not this is achievable. guy: you have done some m&a in australia. is north america a possibility? looking at some assets maybe they want to offload. what is the m&a picture for 2015? nick holland: we would love to do another deal. the australian deal was a big deal. looks like we will get our money back into years. that is very hard to replicate that we are looking around the globe. there are assets trading below net asset value. we are not interested too much in late stage or early stage. we are looking for stuff and production that can reduce or equal our current cost of production. we are in the lower cost of production. it depends on someone willing to sell at a reasonable price. francine: nick holland, ceo of

gold fields talking about the strategy on mines. guy: let's turn our attention to what is happening further down the road in london at the bank of england. the inflation report about to be delivered in this room. waiting for mark carney to enter from stage right, i guess you would call it. he will be over there. there is the governor of the bank of england. we will get a break introduction over the next few minutes. he will be finessing the line trying to get the market that off -- back off be dovish start a few weeks ago. francine: we've seen some currency moves on the back of that. the pound being at a seven-year high compared to the europe. a lot are expecting the boe to be bullish. guy: let's listen. governor carney: inflation is at its lowest level since two

decades ago. it will likely fall further and potentially turned negative in the spring. be close to zero for the remainder of the year. as a consequence i have written the first open letter to a chancellor explaining why inflation is so low and what the npc is going to do about it. i will likely have to write a few more before the year is out. as unusual as all that is, it is arguably not the main story. the headlines today mask stronger underlying dynamics which will determine u.k. output and inflation tomorrow. growth in the global economy was a touch stronger last year than expected in november. the outlook for the u.k.'s trading partners is unchanged since our last forecast. despite renewed headwinds from geopolitics and deleveraging modest global growth is expected to continue, reflecting three factors. first, oil prices have halved

since six months ago. they are more likely to reflect changes to actual and potential supply of crude than a reductions in the demand for it. this development is unambiguously positive for the global economy. second, central banks have provided additional stimulus. most notably recent ecb actions should provide much needed support to activity in our largest trading partner. third, partly as a consequence global real interest rates have fallen further. notwithstanding recent increases in market volatility financial conditions have improved on balance. in the u.k., output growth remains solid and domestic growth robust. unemployment reaching its lowest levels with half a clean jobs created in the last year. the margin of slack has fallen.

as the labor market has fallen labor costs are beginning to pick up. the combination of rising wages will help household finances and boost the growth of real take-home pay to its fastest rate in a decade. this will support solid growth in consumer spending. as demonstrated by the recent bank of england stress test, the core of our financial system is resilient. access to credit continues to improve. many borrowing rates are at or near historic lows. against that backdrop, surveys .2 robust investment growth.-- point to robust investment growth. today's projection for gdp growth is stronger than in november. with that context, let me turn to the open letter. starting with why inflation is so low. the mpc estimates that 2/3 of

the gap between the current inflation rate and target is explained by the falls in food and energy prices. this is generally good news for british households. commodity prices do not fully explain why inflation is so low. the balance of the gap from target is the result of subdued generalized inflationary pressures. more inflation is running around 1.3%. this reflects a long period in which unemployment has been high and wage growth muted. as well as the remaining degree of slack in the economy currently judged to be in the region of .5%. the mpc's job is to provide clarity over the horizon for which it is aiming to bring inflation back to target and take actions to achieve it. our inflation target is symmetric. we care as much about inflation below as above. our remit is clear that the

inflation target applies at all time. it also recognizes there will be inflation that will deviate from the target. it takes time for monetary policy to affect the economy. it's peak effect is generally between 18 and 24 months. the mpc can do little to offset the effects of falls in energy and food prices on headline inflation. with the effects of the falls and prices likely to dissipate in around a year, we will look through them. with inflation below target and unemployment above its long-run sustainable rate there is no immediate trade-off between returning inflation to target and supporting economic activity. in fact, to return inflation to target it is necessary to eliminate the remaining degree of economic slack. this makes it appropriate to return inflation to target as quickly as possible after the effects of energy and food price movements have abated.

the mpc's judgment, the appropriate time horizon to do so is within the next two years. this can be accomplished by adjusting the pace and degree of bank rate increases in coming years. reflecting a broad understanding of our reaction function and the forces affecting inflation in the u.k., market expectations of bank rate increases have fallen notably since november. the inflation forecast in today's report shows inflation coming back to target within two years and then rising a little further. that forecast assumes bank rate follows the path implied by market yields gradual and limited increases over the forecast horizon. that a gently rising path of bank rate delivers inflation to target reflects the underlying dynamics of the economy i spoke of. with sustained growth supported by robust real income growth and

a subdued but steady global recovery, unemployment continues to fall to its pre-crisis rate of around 5% over the forecast. the remaining slack in the economy is eliminated ib middle of the forecast period. there are risks on other side. on the upside, the mpc is alert to the risk that lower oil prices could provide a greater than assumed stimulus to real incomes and to demand. or the possibility that slack in the economy is absorbed faster than in our central case. if these risks were to materialize it could be appropriate for bank rate to rise more quickly than implied by current market yields. on the downside, the mpc is vigilant to the risks of disappointing global growth or any signs that low inflation begins to affect inflation expectations and wage growth and therefore becomes self reinforcing.

where -- were the downside risks to materialize, the committee could adjust the pace and degree of bank rate increases or cut the bank rate further toward zero. to be clear, the mpc judges that the risk to today's forecast are balanced. whatever transpires the bank has the means the will and responsibility to set monetary policy to achieve the inflation target over the appropriate horizon. british workers and employers can count on that as they make important decisions about wages, hiring in investment. the prospect of limiting gradual increases might not make the headlines but they are likely to be inconsistent with the continued normalization of the u.k. economy and with meeting the 2% inflation target. with that, we will be pleased to answer any questions. >> state who you are and who you

represent. stick to one question. >> i just wondered about greece and whether a greece dirty exit would throw your forecasts off course and require -- what kind of response would it require? governor osborne: recognizing that this is -- governor carney: recognizing that this is a hypothetical. would a change in greece's position have an impact on the forecast, yes. would it have the same impact on the u.k. economy as it would have had in 2012? no. there are differences than in 2012. differences to the institutional arrangements in the euro area,

the facilities at the level of the euro area that also facilities announced by the ecb. i am speaking specifically of omt. coupled with the demonstrated willingness of the ecb to use its full toolkit as appropriate to meet its remit. there are differences in terms of the track records of the various economies. so-called peripheral economies within the eurozone. and those differences and track records are certainly reflected in market yields. you have seen yields on 10 year bonds of ireland, italy, spain, portugal, etc. tighten over the course of the last several months as these issues have risen up the focus of markets. at the same time greek spreads have moved further out. the third reason is that the scale of private-sector exposure to greece both within the euro area and certainly from the u.k.

financial system has gone down. on that last point just to be clear, one of the advantages of the structure of the bank is that we are obviously the prudential supervisor as well as the monetary advisor. we had direct line of sight into the exposures of our largest financial institutions to greece . the level of that exposure is less than 2% of common equity. and it has been coming down. i'm speaking specifically about the u.k. banking system. for all those reasons, it is a different order of magnitude. but it would have an impact. and we would have to assess the impact of the time. as i said in my opening we do have the means, that will and the responsibility to take whatever action is necessary in

any eventuality in order to bring inflation back to target within a reasonable time. >> from bloomberg news. a question about your inflation protection. they are shown as above target at the end of three years. market expectations have changed and are now looking for a q1 rate increase. can you talk about what that does to your inflation forecast? does it mean that at the end of the period they should be down at the target? what does it mean for what investors are seeking, are they spot on? governor carney: as you know we do not do real-time updating of our inflation forecast. the next one is in the middle of may. we have three months to think about these questions. i think what is safest to say is that using the curve that we had at the time when we conducted the forecast, which is the time

at which we took our policy decision last week that you did have that slight overshoot. >> so what does that do to wear markets -- [indiscernible] are they right, wrong? governor carney: markets will adjust. back to something i said in my opening remarks. what markets have been doing since our last forecast in november is they adjusted their expectations around the pace and degree of rate increases. in an environment of some additional external headwinds, particularly to growth. they adjusted them down. and notably so. i would suggest they did that because the market understands what the mpc is trying to do. what we have with today's report

and accompanying letter is as much clarity as we can give about what our objective is. we've been very clear that we think we should be returning inflation. given the nature of the shot that hit the economy and most of the shocks have been one-off price level shocks, commodity price shocks. we've been clear that we were going to look through this. given the absence of a trade-off between output employment and inflation, that we should return inflation to target as quickly as possible. our judgment is within the next two years. the market can take that information and take other developments and make its own judgment about the exact pace of this. we will not provide a real-time commentary on that. except, i think i should underscore the point that what is consistent with our objective

of returning inflation within the next two years. it is, it does require some limited and gradual increases in interest rates over the forecast. >> perhaps trying to make your comments slightly more concrete. in your letter to the chancellor you refer to falling prices and the action you can take if deflation or to set an. should borrowers and savers beeper parent for a rate cut, as we have seen in sweden, or a rate rise? governor carney: it is clear that most likely the next move in monetary policy is an increase in interest rates. as we have been saying, we expect adjustments to be limited in at a gradual pace. the message is clear.

in order to achieve our objective we are going to look through this one-time adjustment , which, in the end, is good news for british households. recognizing the distributional impact across the u.k. it is good news for british households. and ensure that inflation comes back to target in a timely fashion. that is consistent with some rate increases over the forecast. >> from reuters. the pound has hit its highest level against the euro in seven years. i was wondering how much of a concern that is for the bank. governor carney: from an inflation perspective, one of the drags on inflation at present has been the impact past depreciation of sterling. not just against the euro but a host of other currencies, yen and others. particularly emerging-market currencies.

we are seeing that path also help dampen inflation. it is not the most important but it is helping dampen inflation. it is something that we do monitor. as i said before our judgment is that given all those factors, given the shock that has hit the u.k. at present we can chart a course which delivers inflation back to target within an appropriate horizon. >> good morning. you say that the months you expect of zero inflation probability, that it will turn negative, is basically a good thing. it reflects oil price cuts, food price falls, putting money into peoples' pockets -- spending power. how would you know how would you judge that good price falls

were turning into bad deflation? if you were to judge those good falls were turning into pernicious deflation, what would you do? governor carney: we would distinguish what is happening at present and what is likely to happen over the course of the year from a as you say a bad deflation outcome. we have had a dramatic change in a series of commodity prices, most notably oil or be third-biggest move in the last half-century. that is flowing to the country. that is different than persistent and widespread falls in prices. one of the things we look at and will continue to look at is all the components of the cpi. in the letter we draw attention

to this. the figure is about 60% of the components are rising the components of cpi are rising -- >> [indiscernible] governor carney: they are rising. components\ increasing within the cpi. we are seeing more concentrated falls in prices. it is nothing particularly unusual about the breadth of changes. the first element of your question is what are we going to look at. we will continue to look at the breadth of changes in prices. we will look at the persistence. we will monitor inflation expectations very closely. we do as detailed in the report. inflation expectations are consistent with the 2% target.

we listed are the ones we look at, more than half are in line with historic averages. we will watch that closely. we will also wish developments on the wage friend as well to the extent that wage patterns start to be affected. the important point which is entirely from a contingency or risk management perspective is to underscore that if we were in a situation which we are not in, if we were in a situation where we needed to provide additional stimulus, we have many options. we have many options to provide that stimulus. the effectiveness of that stimulus is reinforced by the relative health of the financial system as well. just to bring it back to where we are today we see these one-off changes in prices. good news it helps support real income.

we expect the strongest real income growth and over a decade. as a consequence of that in other factors, our view is that the most likely moves on monetary policy will be a rate increase. >> i wondered whether you've had any reaction from brussels or frankfurt to the point you made in your speech about the fiscal deficiencies of the eurozone? governor carney: the short answer is yes. the issues in that speech -- let me generalize at first and i will get to the specifics. the importance of building greater private and public risksharing in the eurozone. banking union, capital markets union here it and some element of public risksharing related to physical arrangement. just as we have in the u.k.

virtually any country. those issues have been discussed in the past. those issues were publicly aired in the report a few years ago. and i have had discussions with my counterparts both prior to the speech and subsequent to the speech. both in central banks and ministers on this issue. these are medium-term issues. it is not about short-term stance of policy. it is about structuring a viable currency union. if i could bring this back -- i would say there is a much more general recognition of these issues than one might expect. if i can bring it back to the u.k. speaking from a structural

perspective, one of the reasons why the fall in oil prices is unambiguously good for the u.k. economy even though there are distributional consequences. there are impacts in a series of businesses that support the energy sector, we have longer-term fiscal arrangements. this structural fiscal arrangements have the impact referenced in the dublin speech. the impact of fiscal capacity is only 1/10 of what it would have been in their absence. that is one way the benefit of lower oil are recycled through this economy, which helps smooth adjustment. >> the reaction -- [indiscernible] governor carney: the issues are

well appreciated, i would say. it is an issue in terms of understanding the economics of the issue. the question is the timeline and the mechanics of addressing it. >> larry of "the guardian." one thing history has told us is the bank forecast is unlikely to pan out the way you expect. you say that the risks around them are broadly balanced. i wonder whether you could explore that a bit more. one option here, one risk would be that we have something similar to what happened after 1985 and 86's fall in oil prices. there was a very late increase in consumption. much higher growth than you can imagine. the other risk is the dynamics that kept inflation falling, the underlying reasons, low wage increases and slack in the labor market, that continues.

which has been more recent history with the last two or three years. expectations for wendy bank rate will rise have been pushed further back. do you think the risks are equally balanced or do you have a hunch which way it is more likely to turn out? are we likely to see stronger activity and higher inflation as it was in the mid to late 1980's or are we likely to see a continuation of the more recent past? governor carney: let me say a couple of words and then i will pass this to ben. the thing we have seen in recent months is the start of the turn of wages. consistent with the change in slack in the labor market. we have seen the start of that. i would not overplay that. it is still relatively early days. i might take an opportunity to point out that we think there

are going to be some base effect that impact the average weekly earnings numbers in the course of the next couple of months. we may see, sequentially, a little slowing. but on an annual basis we still expect a pickup. that -- that provide some balance to that downside risk. that is the first point. the second is, what is important is that it is recognized that we will for fill our responsibilities. by which i mean we're going to have a period where headline inflation is very low for most of this year. that is a good thing in general because of the causes of it. it is not a good thing if it persists though -- guy: the governor of the bank of

england, mark carney, sounding a little bit more hawkish. the pound stronger on the back of this. for viewers in the u.s., we will hand you over to "surveillance" with tom keene. in europe, back to the news conference. ♪ . .

>> this is "bloomberg surveillance." tom: there will be a 30-mile buffer zone across eastern ukraine as newton, merkel, and hollande fine hope in minsk -- as putin, merkel, and

hollande find hope in minsk. a collapse in oil prices. and paying six digits for a six-caret diamond ring. olivia demanded we do this -- valentine's day, it is upon us. good morning, everyone. this is "bloomberg surveillance." we are live from our world headquarters in new york. it is thursday, february 12. join me olivia sterns and brendan greeley. we begin with top headlines. here is olivia. olivia: breaking news in minsk where the leaders of russia, ukraine, and france have reached a youth-iron agreement after all night talks. -- a cease-fire agreement after all-night talks. ukraine entered the worst crisis in more than two decades between russia and its former cold war foes. a truce beginning at midnight on sunday. now to brussels where talks between greece and its euro-era creditors broke done once