>> borrowing time. greece looks for a loan extension. >> the ecb meets in frankfurt. >> a luxury carmaker confirms it will build an suv. do not call it that. >> good morning. welcome. you are watching the polls. >> the question everyone is

asking is if they will make a play as they hurdle. they may ask for the extension of the loan agreement. it stands firm on the renegotiation of the bailout program. confused? we will try to explain. we are joined from brussels and athens. let me start with you. explain the difference to me, if you could between asking for a bailout extension and a loan extension. >> to get the bailout extension, they would have to complete the bailout program that ends at the end of this month. what they are saying is that they want the line of credit and the loan. those seem to be different things. bloomberg got an e-mail from a

greek government official making the distinction. there is a difference and a separate loan extension. the news was breaking with the german finance minister. he did not directly a dodgy saw the request. it is about whether this program is fulfilled. yes or no. over to all of this, you had the minister giving his speech to parliament. he announced the rollback and he had some harsh words for wolfgang. >> yesterday, the german finance minister lost his composure because he spoke against the greek government. that is his right. he spoke to sparingly of the greek people.

i would like to say that he would do better to pity the people who walk with their heads bowed. >> this seems like it is getting a little personal between the germans and the greeks. perhaps there is a better position to adjudicate how much is for domestic consumption and how much is geared towards brussels or berlin. >> we will get to that and talk us through brussels. they are asking for a loan extension that they presented to the commission and the finance ministers. >> it would be presented to the eurogroup. any sort of ratification or acceptance of this would have to be done and ministers would have to agree to it. all the legislators and parliament would have to vote on

it. we have another meeting on friday and we have to see what is in the agreement. the verbiage looks similar to the plan that was offered on monday night. it is that plan that was rejected by the finance leaders and it led to the conclusion of the meeting. what greece was offering had arty been rejected by the finance leaders. >> let's bring in someone from athens with our bureau chief. how is the story playing out? is there an expectation that the deal has arty been rejected and will get traction? is there a belief that this is athens blinking? >> the general perception among the people is that the government negotiates for the

first time and it is saying yes to everything. his stance has been enjoying wide appeal among greek people. lately, a rare sight. now, when it comes to substance, there is no loan without strings attached. asking for an extension without a bailout agreement. the greek government tried this on monday and the first eurogroup meeting was on february 11. most of the greeks know that and expect a compromise to be reached. >> give us a sense -- sorry, go ahead. >> you have to remember the

greeks want the country to stay in the euro area and want the easing of the austerity terms for the bailout. they want to stay in the euro. >> we spoke to a lot of economists here and they say that greece will have to give more than they were prepared to so far. the arguments is that they would like to have negotiated what we have from the eurozone. is it something they will not allow the government to soften their stance little bit? >> the government has already softened the stance. they do not talk about the confidence anymore or a haircut. they barely mention it. they are ready to compete and

will fully honor obligations to the euro area and the international monetary fund and the europeans. so, these are scenes of concession. the government is committed to maintaining the primary budget surplus that is smaller than the bailout and still substantial. that is also a conversation. finally, they are ready to commit from refraining from any unilateral actions in the next few months that could derail the budget. >> thank you so much. our bureau chief here and our

european correspondent in brussels. >> the ecb program provides banks with liquidity and is likely to be shut down. that is according to the next guest. the cash crunch that would follow may result in an exit. what are the chances of that happening? good morning. is it really going to be a mechanism by which the story comes unstuck? it is critical for the funding of the banks. is the ecb prepared for the funding story or the reduction? >> in the end, it will be a political decision at the highest level. clearly, they have been there before and i would argue the

situation is a bit more challenging. if they decide not to provide emergency liquidity, they would implement capital controls and they would have to come up with another measure to limit deposit flight in the country and things like that. in the end, the ecb has a fixed schedule here and had a conference call to provide additional financing. we are in the myths of negotiations and they will continue to do so. time is running out. if they do not have a political agreement, it will continue and they will not be in a position to provide any further. >> i want to find out more about the capital controls. is it something they are considering now?

>> i think it is something -- i would not say it is seeing considered. in the case of cyprus, things have to be done quickly by the country with the liquidity crunch and you have the bank holiday. i think that there is a reasonable chance this could happen in the next few weeks or next. it depends on the negotiations. if there is a sense we will see a breakthrough and the greek government comes around and agrees to continue the current program, we will not need to get there. if they say they want to exit we do not agree with the spirit of it. >> it is a prelude to the act -- to the exit.

>> you can live with it for some time. you would still see capital flight and you cannot do that for too long. there are claims before. repair love government would face a constraint on the budget. >> the migrants are so different.

the ecb is starting. there is no yield of their for investors. what does it mean if we get the exit? do we need a hard correction? >> i think that we look at the market valuations and the greek government may default again. it is very volatile. we have seen so little of it. it does not mean that we see the implementation and are moving towards the greek exits. it is a tricky situation. i think we have better firewalls in place.

and then, the ecb will buy the government bond for the member states. we have all these other programs and there are certain firewalls. you need to see the commitment to the various member states and they will continue the policy and the approach that has been agreed to. >> how does it work if you have that? did takes place post the exit. we have seen a party and it changes the nature of the lack of agreement. why would that not take place elsewhere? >> we saw one the main

transmission channels. spain will watch closely. there is a chance that you will get a government in place. as the euro area level and the ecb. the markets will be focused on that and there is obviously quite a bit of a defense. these things will obviously change. >> do you think they are thinking of debt neutralization? there is some sort of deal with greece to deal with countries like spain.

>> that is a good point. the debate may come up again. the positions have not changed. the german position has always been that we can only agree if they have better common controls and the challenge is the treaty for the institutions. there is a big chance to move forward. >> the annual from frankfurt. >> a new round of funding could have the photo app -- in the world. a lot lot of money if the price is right. >> stay tuned.

>> talking of luxury do not call it a suv. they are not calling it an suv. they're calling it an everywhere vehicle. what you call it? what do you think rolls-royce will call it? let us know. we're taking a break.

>> welcome back. time for the bloomberg exclusive. the luxury goods company shot -- set down and asked about the luxury. >> global luxury is 5% overall. the performers had an amazing year and grew out of the 20%. there are small brands going strongly. in the mild situation it was

flat over the year with a slight improvement. >> you have named this. >> the strategy is to eliminate it. the ambition is to improve the strategy. there is a new chapter around here. it is a new status to the brand with attractiveness and in the near future half -- future.

there are new products and new creations. we will see the first impact in the new management and in the second semester of this year. it will be like all the action plans. this year, we will have the first results. the market will continue to grow and it will be a movement and growth. there is a reason of flows. the impact of the euro is the

situation. mathematically speaking it will put a ceiling on our percentage. that on the improvement of the decline. >> we will have more on the interview later on in the show. >> coming back russia has a problem with the toughest market in the world. >> will breakdown the results when we come

>> the russian turmoil. >> let's get more details. a management shakeup. >> the new chief executive. it is stepping down. >> he is taking the helm and comes from the company. he was ahead. what a brutal time to be taking over the company.

they own all the cuff -- ba ltica. they have the economy working against them. it is regulations. they have profits being dragged out. >> they warned him that next year there would be significant pressure on the performance. it is growing well in asia and europe is looking flat. >> that is as bad as the city gets. >> you can only hope to do

better. thank you so much. >> shaking up beer is never a good idea. we have booked makers and opinion polls having different views of who will win in

francine: welcome back to "the pulse" live from london. we are getting some breaking news from the bank of england. the inflation headline is probably the most important. guy: asset purchase vote 9-0. cpi rising sharply. you get the year on year basis fact but talks that will fade out. once you go a year out, the impact of the lower oil price on

cpi and the affect it is having will fade out of the system. once that data does start to fade, then you get a sharp pop in cpi. that's what you are seeing. the cable rate is charging higher. the assumption will be that it will be raising rates may be a little more aggressively than the market is assuming. francine: this makes more sense after we had two mpc members at pains of saying the next move will be probably an interest rate rise, and talking down the markets saying markets got ahead of themselves and that interest rates will remain low for a long time. guy: this is in some ways more interesting. average wage growth has accelerated to 2.1% versus an estimate of 1.7%. the unemployment rate has fallen to 5.7% versus 5.8%. everybody has been waiting for the point at which we get wage

growth traction in the u.k. economy. nominal wages start rising even more and that is going to play into the election story. francine: and of course the story on interest rates. this is what we were talking to economists about yesterday. he said the benchmark is when that real wage growth increases. if you are trying to find an accurate picture of who will triumph in the u.k. general elections, you might think the best place to look is a conventional opinion poll but -- guy: you could do better. go to your local bookmakers. 40 million pounds will be wagered on the general election. estimates suggest the outcome will be a second term for david cameron. here with more on this political betting story is rob from our political team. before i get to that, can i ask you about this wage story? i think that is quite

fascinating. guest: one of the big narratives in this election from the opposition labor party is that you are poorer under a conservative government. so you kept your job but your wages have lagged behind inflation. so the conservatives on the other hand, they are saying that you kept your job. there is a debate as to which of these is more important. conservatives have been hoping for at some point for wages to start coming back up. david cameron last week said, it is time to give people a pay rise. francine: how much of a difference -- does it mean that from today onwards, the narrative is going to be vastly different? rob: i think that would depend on voters paying a level of attention to small economic numbers that we do.

i wouldn't have huge confidence that they do. the question is whether people feel it. do they feel like things are going the right way? that is really nebulous. the difference between 1.7% and 2.1%, you feel richer. guy: if you get a pay increase. let's talk about the polling. the bookies usually quite an interesting guide to the process. it is real money and people take a clear view on it. the assumption is we end up with very similar government formation, a coalition led by the tories. rob: if you look at the opinion polls, they have labor ahead by anna to put ed miliband in downing street. there have been polls that put the tories ahead, but basically the labor lead has been maintained. the interesting thing is that the bookmakers put the

conservatives ahead. there are theories about why. one cynical theory is that the kinds of people who spread betting possibly are more right wing they are voting their wish list rather than reality. there's another narrative. the thing about a general election is that it is competition to set the question. labor want the question to be are you poorer or richer? they want the question to be, do you want a labor government? the tories want the question to be, who should be prime minister? although the labor party is more trusted than the conservative party, david cameron is by quite a wide margin considered a more plausible prime minister then ed miliband. the tories are purchasing all their fire on ed miliband. their hope is that at some point when the voters engage with the

question, the question they will engage with is, which one of these two men looks like a prime minister? at the moment, they are in the labor column. francine: it is a smart way of looking at it. if you look at the business, it is pretty certain that the conservatives are getting that business mode. rob: yes, that seems fairly clear. there are businesses that support labor and there are good reasons why businesses might want to support labor. if you don't want a european referendum, the way is to have a labor government. if that's a big issue for you then you should be supporting labor. but, if you look at who's coming out for which side, it is generally ceo's coming out for the tories. there was a poll that showed the highest level of british fortune 500 companies are overwhelmingly

wanting a conservative government. guy: briefly, what is the chatter? what are people saying in westminster? there was a bloomberg event down there in the chat seem to be everybody has a hunch that the conservatives win. what is the inside story that is talked about down there? rob: if you were talking to mp's a year ago, they would be depressed. you want to introduce them to each other. both sides were sure they were going to lose. the tories are behind in the polls. i should emphasize, polling science is really good in this country. the polls but labor ahead and labor don't need to be ahead by much where is the tories do need to be ahead by quite a bit. the polls predict a labor victory. nevertheless, the tories think

they can see a way to victory. that is basically to concentrate all their fire on ed miliband. whether that works, that is predicated on a tour review of ed miliband. labor people like ed miliband. that may move them back. one other thing to say about the betting market is, if you look at the betting markets this time in 2010, they had the conservatives heading for a majority. in the end, they were 20 seats short of a majority. the betting markets are interesting but they are not a perfect predictor. francine: thank you so much, rob hutton. guy: now, greece may be requesting a six-month extension of its loan agreement. the request could ease a standoff of creditors over the country's future financing. grease and euro area members have been deadlocked over the formula used to extend the

country's 240 billion euro rescue beyond the scheduled expire at the end of february. we will talk about that in a few minutes. francine: the bank of japan is maintaining its unprecedented monetary stimulus. an annual pace of ¥80 trillion. that is $670 billion. the move continues governor kuroda's attempt to boost japan from recession and counter deflation pressures resulting from dropping oil prices. guy: the federal reserve will release its minutes from the january fomc meeting. that will happen this afternoon. fed watchers are saying they will be looking for signs of how policy makers view the current weakness in inflation as they consider heightening monetary policy. the statement after the meeting reiterated that it would be patient in deciding on such a rate rise. francine: euro star released

results this morning, the company fell in passengers last year. plans for 2015 include the rollout of a new fleet of trains. joining us now is the ceo. thank you so much for being here with us. we caught up a couple months ago and were talking about the new date. -- the new fleet. give us a sense of how business in general is going. overall, the economic situation is quite tough. that must impact passengers. guest: business travel is good. it is quite firm on both sides of the channel which is a good piece of news for everyone. on the leisure market, there is a strong difference between the u.k. market, where there is a lot more confidence. you spoke about the inflation numbers. people seem to have more money

to spend. on the continent, people are a bit more prudent, a bit less confident in the future, so they spend less on the city breaks and stuff. i hope that this year will see an upturn in france especially. they've been very timid for quite a few years now. wait and see. guy: there was a fire in january in the tunnel. there seemed to be some confusion as to whether the tunnel was open or not open. what was going on was unclear. how did it affect the business and how does it affect the relationship with the tunnel operator? guest: it definitely had an impact on business. the numbers are so high of passengers that any hitch with the operation has impact. in that case it was quite a big

closure of the tunnel, for half a day. they are as affected as we are. the restart was a little difficult. there were other incidents in the tunnel. eventually, it all came together. people rely so much on us now that they want the tunnel to the open and they want to get information they can find. we are using a lot of twitter and we try to be very transparent. sometimes, the formation is not that firm. guy: are they going to fix that in the future? guest: they know -- francine: you've had heated arguments about the way it was handled. guest: we had good conversations. they need the same results and good information for the passengers. guy: ok. you are going into a fairly big

year. this is a big year for you. you've got marseille coming up. you are extending the root network. there's a lot of capacity going into the low cost model at the moment. how do you see the competitive environment shaping up? easyjet and ryanair and with lower oil prices, lots of others are going to be quite competitive. how will that affect the business model? guest: it will be even more competitive. we are going to inject capacity with our new fleet of trains at the end of the year. we do that because we are very confident that what we propose for the market is different low cost model and that is what a lot of customers want. they want comfortable, they want customer service, they want no sharp rise in pricing, they want to arrive in the city center of

their destination. we know that we've got a very good demand. we could extend service to the south of france -- [indiscernible] guy: what is the journey time? guest: six hours. there is an appetite for a part of the market to have this type of comfort in their destination. francine: how much are you focusing on price on the leisure side? guest: france, we need to match the low-cost airlines. the competition is very strong. the consumers want -- the low-cost airlines set the benchmark. we've got surge capacity. one of our new trains is 900

seats. guy: what do you need to learn from that route in terms of what you do next? what are the key messages? guest: it is really important for us. the growth is going beyond our current destination. going to marseille is the first step. we need to market -- lyon is not very well known in the u.k. it is a fantastic destination. that's an additional three destinations for our market. whatever we learn in terms of marketing we will apply also to the dutch market. francine: interesting. thank you so much.

where would you go? guy: well i'm curious to know, the marseille train, does that stop at -- [indiscernible] not very far away. coming up, snapchat is the app that is not going away. the newest round of funding may value it at $19 billion. is it worth it? francine: and rolls-royce confirms plans for super luxury suvs, but they are calling it an everywhere vehicle. what would you call it? join the conversation on twitter. we are back in a couple minutes. ♪

>> we see some recovery in europe but this recovery is slow. it may be pushed by the recent measures of the european central bank maybe, but on this we are quite careful and cautious. francine: that was the love our ceo talking to us about the sluggish state of the european economy. guy: let's get you more top stories. the company's ceo revealed the new three-year plan earlier today when he announced plans to split out the video and sound

unit. francine: [indiscernible] the company slashed costs by closing plants. operating income was 905 million euros in 2014. guy: mark zuckerberg is pressing ahead with his plans to provide free internet access across the globe even the poorest areas. the founder of facebook spoke about the internet.org initiative in a bloomberg exclusive. >> we can make it so that free basic services are available in 100 or more countries. that is going to be a huge win for all these people who will have access to new information on jobs health care, and education. francine: snapchat is said to be raising money that would value the company at $19 billion. the company's claim to fame is a

disappearing photo message app. guy: to put that number in perspective, the company would be worth as much as tuulow morrisons and royal mail combined. let's get more on this with caroline hyde. we are about to approach a level on the ftse 100 we last saw in 1999. the height of the dot-com boom. this fits with that narrative as well. caroline: it does indeed. venture capitalists pumping almost $15 million into tech companies last year. the comedies are now being valued at stupendous amounts of money. cross your mind back to 2013. mark zuckerberg went to the founder of snapchat and said, i'll give you $3 billion for the company. two years later, $19 billion is

the valuation. it is the third most valuable venture-backed company out there. it is only behind the likes of uber and a smart phone maker in china, both of which are in the $40 billion amount. clearly, this sort of valuation is phenomenal. last year, it was $10 billion. the fact that it is bigger than fiat ryanair, is quite phenomenal. the reason we know they are valuing themselves at $19 billion is because they are on the hunt for more money. francine: when you look at the valuation, there is a great article on bloomberg business that said, this is fear of losing out. investors are afraid they will miss the next big thing. if you look at the business model, does it support this valuation? caroline: i have to say, the amount of people using it and the use does make it attractive to many at the moment. looking at the scale of this

company, it is important that they've got 200 million active users at the moment. one in three iphone users in the united states have the snapchat app on their phone. guy: do they make money? caroline: they are starting to see how they can monetize this. they are already showing adverts. you start to see the optional adverts disappear as well in the same way the photos and videos do. advertisers are using it. we are also seeing new features. content is becoming key. they are becoming a destination for entertainment. you can go on to the app and there is a discover page. you can access cnn espn, comedy central, all this content being shown by snapchat. so desperate our companies to be associated with snapchat that they are making content for it. you have vice media.

you have madonna exclusively showing her new video. you've even got the daughter of steven spielberg, and emily goldwyn, making an exclusive comedy called "literally can't even be a co-i think -- "literally can't even." you've got to say, $19 billion is quite heavy. francine: and yet you don't want to miss out. it could take over. thank you. guy: 1999. fear of missing out. pretty punchy. maybe this time it is different. let's stay with the corporate news. rolls-royce has confirmed that it is going to build an suv, though they don't want us to call it an suv.

for more on this new and somewhat mysterious vehicle, let's bring in christoph in frankfurt. everybody else is doing it. i guess roles doesn't want to miss out either. >> that's exactly the case. the suv segment is where the growth is for global carmakers. everybody is adding the suv lineup even the ultraluxury carmakers. francine: what are the risks for them to enter this suv segment? what is up with not wanting to be called an suv? christoph: the risks are very limited. the trends continue. analysts predict -- rolls-royce may need a new factory to build a new vehicle. the parent company has deep pockets. the risk for them that something could go wrong with this project

are very small. the reason why they don't call it an suv is partly one of the bmw habits. they refuse to call it suv because they want to make it sound a bit more sporty and active. they actually framed the label sport activity vehicle, for their suv's. but it is essentially an suv. guy: so you've got your ear to the ground in the automotive circles. are there any good jokes? what are people saying this is going to be called? kristof: there is quite a lot of speculation at the moment. there were some tweets this morning asking for suggestions. we have no word from rolls-royce or bmw so far. i guess it has to be something bold. if you want to keep a low

profile, you don't buy a rolls-royce. anything like supersize? spirit of ecstasy? francine: thank you so much. you can continue tweeting us about what you would call this rolls-royce suv. ♪

francine: borrowing time. greece set to ask for an extension of its loan agreement. guy: in frankfurt, the vote on renewing funding liquidity for greek banks. francine: rolls-royce confirms it will build an suv. just don't call it that. 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 am francine lacqua. this is "the pulse." guy: greece looking like it may make a play for time.

the country is hurtling towards a cash crunch. it might ask for an extension of its loan agreement, not the bailout. it stands firm on the renegotiation of the bailout due to expire at the end of the month. francine: we are joined from brussels by hans nichols. go through the distinction between asking for the extension of a loan agreement instead of asking for an extension of the bailout. hans: an extension of the bailout would mean greece would have to complete it. they would have to roll back some of the reforms the tsipras government is talking about in athens. what is crucial for the germans particularly wolfgang schaeuble is that they completely bailout and then you can talk about something the on deck, a bridge loan or an extension. athens made clear that they see a difference between a loan

extension and bailout completion. if they see a difference, clearly jeremy does. the finance -- clearly germany does. as this was breaking, wolfgang schaeuble, the finance minister was given an interview. it is not about the extension, it is about whether this is fulfilled. take that rhetoric and overlay it to what mr. tsipras told his parliament yesterday. he talked about some of the explicit proposals in the bailout. then you have rhetoric from mr. tsipras. harsh words for mr. wolfgang schaeuble. >> yesterday, the german finance minister mr. schaeuble lost his composure. not because he spoke against the greek government because he spoke against the greek people. i would like to say that he

would do better to pity those people who walk with their heads bowed. hans: that seems a little personal. we will see how that goes down in berlin. whenever we get the offer proffered by the greek s in brussels, we will see how much that differs from the moscovici proposal, what mr. tsipras was offered monday night. that was never cleared by the european finance ministers. we will wait to see what the agreement is and then we will see how markets react. guy: can i take you to frankfurt and talk about the meeting today? is there any suggestion that the ela funding for greek banks will be cut? there seems to be noise from germany that the germans are not comfortable with the current program. where do we sit? hans: two weeks ago at about

9:30 on wednesday night we got a line from the ecb that they are not going to be accepting greek collateral on one of their financing windows. they might be making a similar decision with the ela tonight. what the ecb has done is they have followed the eu saying the eu and the euro finance group need to come to an agreement. we are just implementing things. in some ways brussels and frankfurt are organized. unless you have a clear line out of brussels that the agreement and the bailout is over, i do not expect the ecb will go ahead of the eu. the ecb two weeks ago kind of forced greece's hand and they seemed to be talking in conjunction with the eu. the eu line is very much greece needs to stay in the bailout program. francine: hans nichols in brussels with the latest for

what we are expecting from the greeks and the ecb later. guy: let's bring in behrenberg's economist. we seem to find ourselves in a situation where the greeks are requesting a loan extension. similar to a planned already rejected by, amongst others, wolfgang schaeuble. where are we in the process of finding a middle ground? it is clear that some exists but we need to get language right. >> it is more than just semantics. there are differences between the extension of a loan agreement and the extension of it bailout.

they will consult with finance ministers to see if it is worth convening a meeting. there will be a meeting of deputies but whether the heads come together remains to be seen. francine: i am surprised we have not found out what is in the moscovici draft. is there thinking that maybe they are trying to put the germans or someone is putting pressure not only on the greeks but to find a blanket solution for europe? >> in the european meetings there are always plenty of draft statements. everyone has one. depending who you speak to, the agreement is close to are not close to being agreed. the eu commission sees

themselves as an honest broker. in the past we have seen that the eu is more compromising than those who hold the money. you do not have to convince eu commissions that you are doing the right thing you have to convince the german government. that is what counts, not the draft statement by mr. mso oscovici. guy: turning to the issue of the ela. do you see a situation in which the ela will be the straw that breaks the camel's back and cause a crisis? there is suggestion that the germans are not happy. can you walk us through the scenario for the liquidity story surrounding the greek banks? >> first of all it looks as if the ecb today will look at

information that the single supervisory mechanism team has put together which assesses the solvency of greek banks and stress scenarios. one question is what happens if greece exits the program and potentially slides towards a default. what happens to government paper , what happens to tax assets? the question the ecb will ask , whether greek banks only have a liquidity squeeze and maybe a temporary collateral shortfall or if there is a more profound solvency question. if they come to the conclusion they are concerned about solvency that would call into

question the further granting of ela. what i think they might do as a compromise, they basically send a signal. that probably will not be a public statement. they would find it very hard to extend ela beyond the expiration of the program unless they are good faith negotiations ongoing. they could extend ela today, but maybe not for the full two weeks that usually extend it for. emphasizing the deadline at the end of the month. francine: your take? >> if i may add something. the economic crisis starting in greece at the moment. we are seeing economic confidence going down. investment going down. that could force the issue of

solvency. as nonperforming loans go up you could get into a situation where greek banks are insolvent and potentially need to be recapitalized. which would require the government to take on more money. the economic situation is probably degrading by the day. francine: what does it mean for possible capital controls on greek banks? is this a possibility or are people not talking about it because they are concerned it will become a reality? >> if the ecb authorizes ela's of sufficient capacity, we do not need capital controls. if they start limiting them, we would need some sort of capital controls because otherwise we would run out of money. i do not think capital controls would be the right way forward because they would increase the panic and probably be

destabilizing the situation. guy: how would you handicap the chances of capital controls? if you say the ecb may be in a condition where it cannot extend for the full two weeks, capital controls might be required in short order. >> yes. unfortunately, capital controls also means further bad news for the economy, for the business cycle. that could also quickly erode the primary surplus the greek government is still having in its budget. we would put the probability of capital controls at 20% at the moment. the example of cyprus shows that you can temporarily suspend your full membership of the euro by imposing capital controls and th en work out something to get back on track.

in the case of cyprus, we can see how the country is working back to a fault membership in the euro. where the currency is fully fungible and the capital flows almost freely. the government has removed more and more capital controls and thus has been more successful in doing so then the atlanta government's have a lot of capital controls in place. >> that requires the greeks go through the program by the letter like the cypriots did. with the greek government we are still miles away from that scenario. we still need not just to get extensions or a loan agreement but also for the banking system

and for the economy we need more of a u-turn from athens that we have seen this morning. francine: what are the chances -- go ahead. >> i went to add, when you impose capital controls, a dr astic measure, you are hitting the pause button. do you want to work your way back into a full euro area membership or are you contemplating exiting the euro. that will be greece's decision. guy: that point is well made. morgan stanley's elga and berenberg's christian. francine: snapchat could be the third most valuable venture

backed company in the world. guy: rolls-royce delivered letters announcing an suv. it is not calling it an suv. it is calling it an everywhere vehicle. join the conversation @guyjohnsontv and @flacqua. let us know what you think. talk to you in a while. ♪

francine: welcome back. let's get you some top stories. tesco has appointed a new chairman. he moved to tesco from his role at dixon's. the current ceo announced he would be stepping down in the weight -- the wake of the company's accounting blackhole. guy: a billionaire merged france's cable company with a wireless company last year. francine: bank of america cuts ceo pay after profit dropped

more than a half. brian moynihan got 11.5 million dollars in stock grants. his salary was left unchanged and he received no cash bonus. guy: caroline connan sat down with the ceo of kering. francois-henri pinault ruled out selling puma. >> i am not selling puma. puma is in a relaunch strategy. we have had a strong improvement in sales, products and the quality of our distribution networks. the brand is moving in the right direction. i am confident that we will be able to continue to turn around puma and deliver strong growth.

puma is not for sale. caroline: how much of puma do you own? >> 86%. caroline: do you plan to buy the rest? >> it is not currently in our plan. we will relaunch puma worldwide. this is the top priority and only priority. caroline: you said you were confident about luxury in 2015. >> is a market that is not at the same pace but still growing. it's securely growing. targeting younger customers and when it comes to emerging markets those customers are very attractive. they are young. very attractive for sports brands.

sports is very global. what you sell and one part of the world can be sold in another part of the world. the same type of situation inbox repair this is why we decided to go into sport. to take advantage of this demography. to take advantage of the potential of the brand. and to have a scale effect at the group level. i'm confident in the market worldwide. caroline: do you think it will grow faster or slower than luxury goods? >> the luxury market will not grow as fast but puma as a recovering brand will grow faster than the market. that is the target we have. to come back to our market position. we are the number three brand in the world. we plan to grow by implementing the strategy we are currently doing. products, brand image, distribution network.

everything is aligned to achieve that. francine: that was the kering boss, francois-henri pinault. let's get a check on the pound. guy: the u.k. economy might be humming more than we thought. once the base effects of the oil price collapse worked its way through, the price is rising sharply. cpi pick up accelerating. it also told us, we got some data telling us there has been a wage price pick. that is quite significant. in a low inflation environment we are getting wages to pick up. this will cheer of the prime minister, who was asking reddish businesses to give a pay rise. 1.5436 is the cable rate, up about .5%. a sharp spike on the upside.

looks like we are looking at rate hikes and wage growth. two missing pieces in the puzzle, some would argue, from the british economy. the productivity story is going to be interesting to watch. we're going to take a break. we will be back in a few minutes' time. we will update you on the latest from the equity markets, where we continue to watch the ftse 100, currently trading at 68.97. the key 69.30 that we last hit in 1999. ♪

francine: welcome back. russia's turmoil has been hitting some european companies hard. danish we were carlsbad -- danish brewer carlsberg is feeling it. caroline: the leader retiring, handing over the reins to the first ever non dane. cees't hart is his name. he is the chief executive of another company and will be joining carlsberg in june. leaving a dairy company.

guy: a new guy shaking up carlsberg. francine: please do not shake it. guy: all kinds of jokes. milkman to beer man. a progression. caroline: not sure he will have a smile in june. the numbers we've got out of carlsberg along with the management shakeup are looking hard. fourth-quarter sales down 3%. full-year profit down 5%. exposure to russia. russia down 9%. the weakening ruble and the russian government trying to wean people off of beer. regulation has hurt them. 2015, russia is going to put pressure on the performance of the company. the bright spot is asia. francine: caroline, thank you.

guy: another company talking to us spain's iberdrola. we will be speaking to it ceo.

'an headquarters in london. i'm francine lacqua. guy: i'm guy johnson. francine: greece may request a six month extension of its loan agreement according to a person familiar with the matter. the request could use a standoff with creditors. greece and era area members have been deadlocked over the formula used to extend the country's rescue beyond it's scheduled expiration at the end of

february. guy: the bank of japan will boost monetary base at around 60 to $70 billion -- at around $670 billion. continuing kuroda's program. francine: the federal reserve releases minutes from its january meeting. the fomc meeting this afternoon fed watchers will be looking for signs of how policymakers view current weakness. the fomc statement after the meeting reiterated the staff would be patient on deciding on a rate rise. guy: a busy morning for the markets. we've already had minutes out from the bank of england and some interesting data from the u.k. economy as well. plus, watching greece. bring it all together, jonathan ferro. jonathan: the headline is in global equity markets at the

moment. gains of 1% in spain, italy, .5% on the dax. the ftse 100 right here in london, 30 points away from an all-time high. this follows the u.s. close with the s&p 500 closing above 2100 points for the first time on record. big headlines in the equity market. it will prompt talks of whether we are back in the heady days of the year 2000 and what that means. the evaluation of snapchat, not really doing the cover station many favors. the athens stock exchange, 1.47% higher. a stronger session for greek stocks. talk that the government might apply for a six-month extension of the loan agreement. the markets seem be brighter side. equities go higher, yields in greece lower. the 10 year drops back below 10%. a softening of stocks in greece.

i expect this to be very volatile for the two weeks ahead. the headline in the fx market, a sterling up 5%. unemployment drops. wage growth through 2%. put those together and add in a headline from the bank of england minutes. the bank of england expects inflation to rise sharply after the oil effects fade. what does that mean? the perception is you may get a rate hike sooner than you think. you get a stronger pound. a busy session. francine: thank you. in 25 minutes," surveillance" with tom keene. he joins us with a preview. looking at the fomc. tom: michelle will join us from bank of america-merrill lynch. also we will touch upon housing.

housing is linked into the higher interest rate environment that is widely predicted and has not happened. we will talk about the state of the american housing market. as jon mentioned, equity markets afire. a perfect time to speak to howard of gamco. he's been dead right about being in stocks. an update on his affinity of use of cash in his love of apple. jeffrey will join us. i know you love the nigeria thing we did yesterday. today we look at indonesia. very big, very important indonesia. usually underestimated by the west in terms of its economic might. geoffrey dennis joins us and we speak of indonesia. we look at ukraine. we study the great series of headlines coming out of there. francine: thank you so much. looking forward to "surveillance," 25 minutes from now. guy: george soros buying into europe. his soros fund moved to

billion dollars out of the u.s. and into asia and europe. warren buffett is cutting his stake in a thought. let's -- in exxon. let's bring in bloomberg billionaires editor rob. big moves from two of the biggest investors. why? rob: they have very different strategies and they are two of the greatest investors. warren buffett's trajectory has been pretty strong. exxon has gone in the opposite direction. he has a spotty track record of investing in energy companies. seems like a good time to get out. for soros, he's a time oriented investor. all the equity markets around the world over the past year have done pretty strongly with double-digit growth in the u.s.

europe and asia. the u.s. market is the lowest performing of those. if you look at the house and -- if you look at the hang seng, the s&p, and europe. the u.s. is kind of the darling at the moment. they had done well compared to other billionaires. buffett is up 24%, soros is up 14%. bill gates is up in the single digit and europe's richest person is up in the single digits. guy: what's our take a light? -- our takeaway? rob: not like we would aspire to match the investment success. i see discipline. buffett has been focused on one

strategy, value strategy. it is a financial sheet oriented strategy -- numbers, mathematics, finance. soros takes the theory of reflexivity. it is emotional. he has made fortunes betting against currency, which is an emotional forecast. the two men have stuck tried and true to those strategies, which is what the best investors say. pick a strategy and do not try to time the market. francine: as long as you understand the strategy. thank you. guy: let's move on. snapchat on the heels of uber. germany looking at a new funding round. the app could become the third most valuable venture backed company in the world watching markets around the world get to 1999 highs. and talking about tech companies having stratospheric

valuations. this feels familiar. we will talk about that when we come back. ♪

francine: welcome back to "the pulse." live from london. guy: sony predicting its operating profit will reach $14.2 billion in april twice 17 p are did company's ceo revealed

his plan in tokyo today. announcing plans to split the company's video and sound units in october. francine: peugeot has posted its first profit in three years following cost-cutting. the company slashed costs by closing a plant and reducing spending. operating income was 905 million euros after a loss a year earlier. guy: mark zuckerberg going ahead with his plan to provide free internet access across the globe appeared the founder of facebook spoke about the internet.org initiative in a bloomberg exclusive. mark zuckerberg: if we can make it so that free basic services are available in 100 or more countries that will be a huge win for people who have access to new information on jobs health care and education. francine: snapchat is said to be raising money that would value the company at $19 billion. the claim to fame is a

disappearing photo message app. guy: that valuation would mean the company is worth as much as morrison's, the u.k. supermarket, and the royal mail and tos, the oil company combined. last time we had these levels we were at the.com boom. caroline: a wash of cash. venture capital firms pumping in 50 billion dollars of money into tech committee's year. no wonder you are seeing heavy valuations. fascinating listening to mark zuckerberg. he flew over to speak to the ceo of snapchat. evan spiegel. he offered him in 2013 $3 billion. now it is worth $19 billion.

that seems to be a good miss. fascinating talk around that. the fact that evan spiegel would go out and buy "the art of war" book for all his employees. they felt they would be taking on facebook. look at the evaluation's, 2014, worth $10 billion. they are seeking about $.5 billion from investors. that is the third biggest third most valuable vc-backed company out there. only below uber and xiaomi the chinese francine: smartphone maker. phenomenal statistics. pretty -- and xiaomi the chinese smartphone maker. phenomenal statistics. francine: they are starting to

bring in revenue could one in three iphone users in america have snapchat. they have 200 million active users. from what the analysis is, it seems to be at least 100 million active users. they are starting to bring insending 700 million snapchat's per day. this is a phenomenally active social media app. they are showing how it is going to be monetized. they are showing advertisements. you can have the optional click on and they suddenly disappear. companies are embracing this app. you have got mcdonald's chilling behind the scenes content with lebron james p you have got madonna a brand and herself launching her own video exclusively on snapchat. for 24 hours you could view it and it disappeared. you have got vice media showing its chinese bitocoin exclusive first on snapchat peered getting all these firsts. a month ago we were talking

about a product snapchat was unveiling with square. you are seeing the potential. it is not just a quick video. this is something companies want to get access to the youth. i do not think it is that phenomenal. people have said to me in a year's time, uber will be worth $100 billion. guy: it feels very familiar. francine: caroline hyde with the latest on the snapchat valuation , $19 billion. guy: maybe you could buy eight few rolls-royces with that. the company favored by the world's elite is moving on. the company builds cars not designed for utility. that is about to change. matt miller investigates. matt: rolls-royce is the quintessential luxury automaker.

it does not make sports cars, it does not sell trucks, it's cars are not built for utility. at least until now. in a manner of upstanding tradition, rolls-royce announced its plan to build an suv by hand delivery post. why would a century-old automaker famous for providing the world's elite with a posh ride try to re-create that in a vehicle popular with soccer moms. >> if we do it, we do it perfect. we do it in a non-compromised form. matt: maybe the news should not come as a shock. one could say rolls-royce built the original sport utility vehicle in the 1930's. rolls-royce's motive is not memories, it is the moolah.

suv sales soared 88.5% from 2008 two 2013. according to ihs suv's will make one of every five vehicles sold next year. drivers love them because they can take them anywhere. that is the fact that rolls-royce plans to trumpet by calling its suv the everywhere vehicle. automakers love them because they are big margin behemoths. rolls-royce' as competitors have stepped in to the utility waters. porsche built a model 13 years ago, now suv's makeup plenty of its profit. rolls-royce is known for luxury on another level. the real question is, what will the gazillion dollar gargantuan cost? what will it look like? francine: what are they going to call it?

what is it going to be called? we are focusing on the important things. guy: i think it is important. we have had a few great answers. some of them really stand out. "the highroller" is one that we liked. francine: another one "zeitgeist." finally, "overpriced." guy: attractive though. francine: the tractor. guy: let us move on. we are going to take a break. we will be back in a couple minutes. keep the answers coming. what will rolls-royce call its new suv? we will see you in a moment. ♪

francine: time for a bloomberg exclusive. the ceo of the french luxury company kering sat down with caroline connan in paris. she started by asking about gucci and the year that was. >> global luxury did well. plus 5% overall for the year. in our portfolio you have strong portfolios and an amazing year. growing plus 27%. we have also small brands

growing strongly. stella mccartney and alexander mcqueen. of course, we are in gucci. a flat improvement in q4. caroline: you have named a new creative director. how have you turned it around? >> strategy is still to elevate the brand, considering the size. if we want more potential of growth at gucci, which is the -- of the brand, we need to bring that strategy. what is to be improved significantly is the execution of the strategy. in particular, we think that by opening a new chapter in terms of creative direction we can give a new status to the brandt

in terms of attractiveness that would be beneficial in the future. we are working on that direction. a new image, new products, new creation. as i said, we will seize the first impact of the new management, of the new creation team in the second semester of this year. we will be active first semester by all this action plans. this year, 2015, we will have the first results. caroline: how would you describe the luxury markets in 2015 compared to 2014? >> the market will continue to grow structurally. it will be very complicated. not only geography are moving in terms of growth. america will continue to grow. japan will still be a strong market to grow. we will have a strong improvement in europe thanks to recent flows because of the euro

situation. of course, because of the four -- the forex impact in different countries. the price difference between asia and europe. we will have a positive impact on our sales. a positive impact on our ebitda line. mathematically speaking, it will put a ceiling on our percentage of profit of. -- percentage of profitability. not on the improvement of the ebitda line. francine: that was kering boss francois-henri pinault. mary to salma hayek. guy: we are watching greece. watching the equity markets and trying to figure out what is happening. watching the fed as well. jonathan: where do you want me to start. francine: greece. jonathan: talk of them applying for an extension of the loan agreement by six months. it is very light on details. guy: they want the money but they do not want the fiscal and

structural reforms to go with it. jonathan: whether these two sides get together and agree on that remains to be seen. the market, looking on the bright side, 30 points away from a record high on the ftse 100. headlines in the equity markets at the moment. francine: equity markets, when the ecb is standing firm and investors have nowhere to go because yields are so low. that is one way of looking at the equity market. guy: here's why i think we have a fail. the pound has gone up so much. if you are a equity investor you are looking at the relative levels of trying to figure out what is happening there. the pound, which happened at 9:30, may have an effect on the valuation of the equity markets if you are a full an -- a foreign investor. francine: can we talk about wage increases ahead of the election and in terms of what the boe will do? jonathan: fantastic news a

strong labor market. you put that in the context of the federal reserve appeared federal reserve minutes later. the conversation going on inside the fed. we should also remember that this predates the blowout jobs jobs report in early february where there was a significantly revised number in that. you add the jobs report, the conversation of the labor and the fomc later. right, i was confused -- after the wages and thank you so much, jonathan ferro. wages, the boe, andy fed later. guy: we did the boe, we are waiting for the fed and we are waiting for greece. we have been asking you what you think is the answer to the question what should rolls-royce name its new suv? they do not want to call it an suv. i have a winner. an e-mail, just tweeted through -- "the off-color." francine: we also said overpriced. we had some pretty good responses. keep them coming.

that is it for "the pulse." guy: off-color. tom keene is next with "surveillance." for our viewers in europe, we will be talking to the ceo of spain's electricity coming iberdrola that is coming up shortly. ♪

>> this is bloomberg "surveillance." tom: war continues amid cease-fire in ukraine. kiev evacuates 80% of soldiers from debeltseve.

the ukrainian currency depreciates. s&p 500 drives to a record high as well as of worry come tumbling down. the careful pricing of luxury is aspirational. america would not be caught dead without it. good morning. bloomberg "surveillance," live from new york city this wednesday, february 18. i'm tom keene. joining me, olivia sterns and brendan greeley. top headlines move this morning. olivia: greece could request a six month extension of its loan agreement as early as this morning. after the eu issued an ultimatum to ask for the extension by friday or leave the negotiating table. a step that could ease the standoff with greece's creditors over its future financing. prime minister alexis tsipras insists the status quo is acceptable. alexis tsipras: we do not