>> euro zone finance ministers prepare for talks of greeeece's proposal to extend its loan program. we will be live in brussels with the latest. but we messed up. those are the words from one overall, the biggest pc maker. it left users potentially exposed to hacking and monitoring. >> earnings from the world's biggest yogurt maker. we will bring you news from dan on -- danone.

i am mark barton. >> as london fashion week begins we will tell you how much the industry breaks for britain. we will tell you about london's next generation. >> crunch talks in brussels over greece's proposal to extend its european loan row graham. faxed yesterday the greek -- loan program. >> yesterday the great prime minister said he has a positive conversation with angela merkel hours after her finance minister dismissed the loan extension request. the german rejection prompted an angry rejection from greece's deputy pm. >> we must realize at this moment it appears there are powers that would like greece on its knees so they can impose

their will, and i believe we can all think of what helps our country and what helps these powers. >> let's get the latest from brussels. hans nichols is there. are the germans prepared to negotiate or not? >> they apparently are leaving the door open to negotiations. i am going to give you for data points. two of them are negative in terms of a deal. two of them are positive. they are open to negotiation. they view this letter from yesterday as the basis points for negotiations that start here in brussels at three. also on the positive side, you have this phone call and coming out of the phone call, mr. c tsipris was describing a positive tone, and it was nearly an hour lookng.

an official said they did not discuss a bailout extension. they were only talking about a six-month loan. that is a dealbreaker for germany. the finance minister gave an interview with the telegraph. i'm going to read some of the quotes because they are incendiary and do not suggest a dealmaking finance minister. here is what he said. what we cannot accept is this fiscal adjustment be carried through because the rules say so. there is no macroeconomic argument that can be made for further tightening. talks at the deputy level continued here in brussels and at 3 p.m., finance ministers will be meeting here. that's when i suspect we will have serious and intense final negotiations. >> this is in between the germans and the greeks. what is the other countries

saying? >> we heard from the finnish prime minister. he seems to be more in line with the german view. you also heard from the french prime minister. he seems to be a little more open to relaxing the rules. here is another final note on why things may be pretty tense. in a breach of protocol the greeks provided a readout -- what the germans were saying. the germans were saying they view the current proposal greece has offered as a trojan horse. that doesn't suggest either side is prepared to make a deal. it seems like we have a stalemate. the question is can the finance minister find some sort of solution. >> i will speak to you later. >> lenovo said it messed up i preinstalling software that exposed its users to hackers.

the biggest maker of personal computers has promised to have a fix ready today. john dawson is standing by in hong kong. this is software which was loaded up unbeknownst to the customer. >> correct. this is a bit of a blow. the cheek tech officer said this -- chief tech officer said this -- we messed up badly. we made a mistake. our guys missed it. we are owning it. at least they are being honest about it and transparent. they tell the public what you're doing about it and be honest. the software was preinstalled and may expose their customers to hackers. it was made by a company called superficial. it will be ready on friday.

that is quite encouraging. not only are they giving a transparent statement. they are also giving a solution as well. that's a way to deal with the problem. >> that's encouraging. england's cricket performance not quite so. >> i smile out of shock because i cannot believe what just happened. australia thrashed us. new zealand crushed us. you have first of all the fastest 50 ever. we got 109. imagine if it was a test match. it would be so embarrassing. what do you do? if you don't play well, you get fired. the coaches and good enough, you get benched. >> the west indies -- ireland beat the west indies, some

menaces feeling smug. >> hence the reason i'm not axing -- asking the question. ireland beating you. tragic for you. it's even worse for you. >> england and scotland, the next humiliation awaiting england and the world cup. let's move to more serious matters. today marks the first anniversary of the major massacre when around 50 protesters demonstrating in central kiev around what they saw as a pro-russian and ukrainian government were shot dead during clashes with authorities an event which sparked the beginnings of the current crisis in the country. there appears to be no end in sight to the trouble with pro-russian rebels defying a cease-fire last week to seize an important town in the north of the country. despite the broken cease-fire germany, france, ukraine and russia say they are still committed to implementing last

week's peace agreement. what are the chances of that? >> i think what is happening now is the european powers who negotiated the agreement are desperately hoping it can be salvaged. this week has seen very fierce fighting for this town which is a strategic railway hub between two rebel areas. basically what we are looking for is whether or not the agreement will be implemented. the most important clause is the withdrawal of heavy weaponry. that was due to start on tuesday. it hasn't started. there is a two-week deadline for that to be completed. it is hard to say. it will depend on whether we see progress on that and the

cease-fire holding. >> what about the idea of peacekeepers floated by ukraine? is that a way to shore up the cease-fire? >> it is potentially. the problem is the ukrainians have said they want a european police mission under a you in mandate. you need to have a cease-fire, so the peacekeepers could be something that later on might come in handy. they said another strategic city, a port city the rebels have said in the past they would like to take. now we are looking at whether or not russia has sufficient influence to stop further

offensive. >> thank you. we will speak to you soon. >> let's take a look at some of the other stories we are following. u.s. and iraq are planning a spring offensive to retake the city of mosul. it will require 25,000 troops to defeat up to 2000 islamic state advisors. the battle will mark the first major test for iraq he forces since extremists swept across northern iraq last year. meanwhile, the increasing involvement of middle eastern countries is spurring demand for the support systems it provides. nations have joined with the u.s. and western allies in

launching a strike in iraq and syria in the past few months, while egypt opened a new front with attacks on the group in libya. apple has been working secretly on an electric car and is pushing its team to be in production as early as 2020. that is according to people with eligible to situation. this sets the stage for the battle with tesla and general motors. both of them are targeting a 2017 release of an electric vehicle that can go more than 200 miles on a single charge. the french drugmaker is planning to hire the new chief executive officer. he will start his new job on april 2. the move comes after the board fired the previous ceo in october. it was unhappy about his handling of the business

including the loss of u.s. share with a drug. walmart is set to start paying its employees nine dollars an hour by april. the plan will result in raises for about half a million full and part-time workers at america's largest rabbit employer. it cost the company around a billion dollars. the minimum wage is currently $7.25. warren buffett cadillac has sold for 122000 and a half thousand dollars. it has an autograph on the dashboard. he has offered to hand over the keys to the winner. the car would normally be worth

$12,000. >> join the conversation on twitter. it is know what you think about the show. let us know the stories you are following today. -- let us know what you think about the show. manas has been tweeting about his eating habits. >> what do you do everyday at 3:59? if you are wondering what mark barton really does he want to have a look. >> or @manuscranny. coming up, can greece realistically meet the current demands of its creditors? the numbers say no. we will break it down for you next. ♪

>> austerity programs automated -- demented by greece's debtors. very few countries have been able to meet the troy goes -- troikas. how to measure austerity and how it is unlikely to help greece get out of debt. >> greece wants less austerity. austerity is a word you can measure through the primary surplus ratio. this is what the country saves divided by gdp. if it is positive, you are saving money but inflicting

pain. you are being austere. greece requires for a surplus ratio of 4.5%. this forces it to make decisions about budget. according to the imf, greece would need to hold the number higher at 7.2% or a decade if it plans to pay down its debt to eurozone standards. there is very little reason to believe this is possible. over the last 10 years greece has run from negative to very negative. last year it not positive 3%. encouraging, right? take the eurozone as a whole. all those countries together hit three-point 6% only once in 2000, and now it is back below zero. let's go further back. in 1970 -- since 1974 only three countries have average greater than 5%. belgium spent the 90's trying to meet eurozone standards. greece might have considered during the same, but that's water under the bridge.

according to the center for economic ellis e research, countries that hold a surplus over time tend to have that economic policy research countries that hold a surplus over time tend to have control by one country. these countries tend to have a high level of debt, which encourages them to save. they are likely to have a positive balance of payment. that is more money coming in than out. they are likely to say that a time of economic expansion. can greece make it to 4.5% as the current agreement demands? probably not. can greece make it to 7.2% and pay it's that down? no way, no how. yes, when pigs fly. >> the odds are against greece when it comes to the current bailout demands. let's bring our next guest. it is the senior currency and

interest rate strategist at commonwealth bank. great to have you with us. that puts into context the level of demand being placed on greece by europe. >> over the last few years they have undertaken a great amount of austerity. they have gone from a deficit of -10 up to plus three. in that same time their debt to gdp ratios have blown up once again. i think the focus is on austerity and reducing debt and changing the budget dynamic is something the eurozone as a whole needs to get out of their minds. now is a time to focus on growth. there is more to the ratio than just the numerator. sometimes you need to focus on the denominator. the demands from greece to reduce the targets around 1.5%,

economically it is more beneficial for everyone in the long run. particularly greece. it will help the economy continued to bounce back. it will make things easier politically going forward if they need to renegotiate their debt, but it's now in the hands of the germans, who seem quite against looking to reduce those targets. >> it has been a week of big calls with a 50% likelihood of greece leaving the eurozone. have the odds of greece leaving increased over the last week would you say? >> i would definitely say they have increased. i find it interesting how people can quantify these numbers but a have increased. it is a political debate rather than an economic debate. they have a real standoff coming through. the greeks have moved forward by requesting the extension. they have been a bit vague

which is not so pleasing for the germans. i do think the risks have risen. the firewalls may have eased some of the concerns for some of the policymakers that they could manage an exit, but i still think it is an unknown. the risks have risen. i would think the baseline is they reach a last-minute resolution as they have done. >> we have got a geopolitical map of greece discussing things with their counterparts but there is another big move. we have u.s. interest rates moving away from german interest rates by the most since 1989. does that drives the foreign exchange story more than the greek geopolitical story? >> i definitely think so. what you have seen is the case

agency -- contagion theory that drove the euro has not been there. those mechanisms they have in place will definitely ease those fears. it's down to the yield dynamics and the structure in the eurozone is quite interesting now. you have negative short and rates. the qe program that hasn't actually started by the ecb is coming through. net issuance is actually falling this year. relative to the size of bonds being issued the ecb could be buying up to 200% in germany's case. the shift towards higher yields in the u.s. is going to continue as the fed looks to normalize policy. what this means for the euro it is going to struggle to rally. you would think the downside is the main avenue through which it is going to move.

>> is it time to guess whether the fed will normalize policy after the release of this weeks minutes? >> you can see the case but you need to add to the argument the minutes predated the fantastic labor market report we had. january payrolls reports were great with all aspects of the higher precipitation rate. we will get more next week. i think that is the key event apart from greece. she was more upbeat than normal in the last press conference. it will be easy to see whether the tone continues. she has been very focused on the labor market in the u.s., and i think she will be upbeat again. >> is it the case of listen to what i say rather than what the statement says?

>> i would say so. even in the meeting where she had the last press conference, the statement itself was quite bland. when she started speaking she had a more positive tone. she indicated normalization or the patient's language would remain in place for a few meetings or a couple, so she might get asked about that again. we are looking for the fed to normalize in the middle of the year. the risk around that is delayed. the real debate we are having is when, not if. >> this is the great debate as to whether the fed's actions are very much priced into where we are with the dollar or whether we have the propensity to begin a much bigger move back to the 2002 levels. i'm not even going to dream to go back to 1985.

i haven't even gone to university. where is the momentum in the dollar? >> the big dynamic we have had over the last 12 months has been policy diverted between the fed and the ecb. the fed hasn't done anything. the rates market doesn't believe the forecast. they are pricing in the forecast early next year. >> there is only 19%. the u.s. side has come kicking into gear. the ecb has done more policy than we expected. the u.s. side of the story hasn't come through. i think the dollar side should continue. >> which currencies are best placed against the dollar this year? when you look at the dollar against its major counterparts only the swiss franc, the israeli shekel, the rupee, and the japanese yen are up against

the dollar. which was the one to outperform the dollar most? >> i think it is still a dollar story, but the most constructive looks sterling. you have got positive economic momentum coming through real wage growth has turned positive for the first time in a long time. the broader eurozone is stabilizing. it looks like growth should pick up this year. that is the tail would -- tailwind for the u.k. >> the election quickly? what the election is a risk. >> are you buying those options for sterling to go down? >> i think it is fairly priced. >> great to have you with us this morning. the senior strategist at bank of australia. >> we are going to bring you the eurozone pmi data, all you need to know about what happens later

in the show. >> up next, the french yogurt maker danone after this short break. stay with countdown this friday morning. ♪

>> time to see how the world views the foreign exchange market. joining us to discuss ukraine. there are couple of themes. one is the dollar is the only currency showing momentum in terms of an upward trend. that would be the first weekly gain in almost a month. the row is the only significant low liar. the liquidity extension for

greece is one issue that is dominating markets. you can see as euro begins to assess, the euro-dollar is just coming off. they still short the euro relative to the dollar because momentum is building. we just had that conversation with commonwealth rank, which is next week. yellin and her testimony will be a more likely scenario to judge the next move of the federal reserve. the dollar index is completing its first positive week in almost a month. what you have got is the note from them. morgan stanley basically are saying they are building tentatively. they are adding to their dollar positions. the other point is there is a

good story i am trying to find. german government bond yields over u.s. government bond yields. almost 1.7%. extra premium. that extra premium to have a u.s. bond then german. that differential is important. that is what drives foreign exchange markets. it is the widest and 1989. u.s. bond yields over there g7 counterparts is over 5%. interest rates and the virgins dominate the foreign exchange landscape. >> we are getting some breaking news from danone, the world's biggest yogurt maker. it set a lower forecast this year than last year. weakening currencies in emerging markets. sales will rise for 5% on a like

for like basis this year. last year's goal was 4.5% to five .5%. the company said it expects slight growth in the operating margin on the same basis. trading operating at 3.7%. that compares with 2.6 9 billion euros. this is a company that has gone through a bit of a reshuffle. farber is presenting the earnings for the first time today. a year ago it reported its first annual loss in more than a decade when it fought off bribery claims in china and a false alarm over baby food safety as well. the top stories this hour. euro zone finance ministers will hold talks in brussels today over greece's proposal to extend its european loan program. yesterday the greek prime

minister said on twitter he has had a positive competent -- conversation with german chancellor angela merkel after her finance minister rejected out of hand greece's loan extension request. lenovo said it messed up badly by preinstalling software on its computers that potentially exposed users to hacking attacks and unauthorized activity monitoring. the world's biggest maker of personal computers has promised to have a fix ready today. the french drugmaker is hiring olivier brenda core as its next chief executive. -- brandcourt as its next chief executive. the move comes after they fired the previous chief executive.

>> of course they go over these false alarm scares that some of their products could create. that was a big scare in asia in 2013. this year in 2014 they have recovered from that. it is 4.7% on a like for like races. in the fourth quarter 7.5% better than the year before. the baby food sales in asia was enough to compensate for weaker

demand from their fresh dairy products, because if you actually break down the numbers, the division actually reported a 1% drop in sales in the fourth quarter. the division, which includes act eva -- activa is very important for danone because the fresh dairy is half their sales. danone said deterioration in consumer spending in europe, and they also felt a weaker demand of dairy products in russia. danone the control of the russian dairy producer in 2010 and became the biggest company.

the ceo is very careful this morning in the statement. he says 2015 should remain difficult and unstable. they might have a negative impact from exchange rate. they will also have to face demand that is still sluggish in europe. they even had to close some factories. in germany, italy, and hungry. might benefit from lower milk prices. milk prices rose about 10% last year, but since the beginning of this year they have been dropping. danone is very dependent on milk

prices. we will have to wait for the strategy on acquisition. there are rumors of the nutrition division. they said they wanted to keep this division so we will have to see whether they have more asset disposal coming up or a big acquisition. for now the statement is they want to keep focusing on high-growth in emerging markets, especially in asia and africa. >> thanks. >> we are going to get back to our top story. i want to bring you breaking news on telecom italian. it is in line with estimates. it came in at 8.8 million. in line. we will see whether they say anything about telecom italia meeting.

it is greece, it is the discussions between germany and greece and the rest of europe it should be said. let's bring in our next guest. we are lucky. you are in london. good for us. good for you. the germans are playing hardball, or is that what they want us to believe? >> they are playing the long game definitely because they feel emboldened. they are going to continue.

>> we are running out of time. today was meant to be the day of all days. are we on dd yet or not? >> if you ask a germans we could wait until next week. you have a couple of hard constraints there. if you look at capital out of greece, that's one thing you should keep an eye on. another is the european central bank. i guess they push member states into finding a deal, so i am positive we are going to see a solution. >> i read a piece this morning talking about what the greeks could offer the germans. the surplus reducing the budget surplus. that is reasonable, but exceptional measures, illegal trading, tax evasion corruption. privatization there hasn't really been any privatization.

they haven't got a lot to negotiate with, apart from if we leave you have got a big problem with union. >> these are things like ever the station, tax evasion, revenue collection these kinds of things. these are conversations we're are going to have during the ascension period, so once they establish a deal, those are going to be negotiations tougher than they are now, because you need to address all these issues. now it is a political deal. you need the greek signing a provision. >> it comes down to semantics. rich, trojan horse, a cord, it has been called all sorts of things. what will it come down to? you say it will be an extension, but you have to comply with an existing bailout. what will the ultimate deal look like? >> the ultimate deal will be the greeks have to substantiate their language on commitment to

program conditionality. they have to say, we are ok with these reforms. they hold the course for the duration of the extension. >> which could be up to six months? >> we have to see if they want to extend it through july and august. >> during that time you are going to negotiate another bigger program. >> that is going to be tough negotiations because you need to talk numbers. you need to talk to mr. reform numbers on the ground. that's going to be tough. -- domestic reform numbers on the ground. >> if i was a man or woman living in greece i would be opening a bank account and i would move my money out of it. that is a normal thought for me as a rational person. i know barney might disagree. 19 billion has gone out of the country. what is to stop the cart tipping over before the grand bargain is

done? >> the political deal is going to help dramatically. it's going to keep greece afloat in political terms. you know the bailout is going to be extended. it is going to send a signal of confidence in keeping these together. >> what to germans want? what is the man on the street walk? >> it is all about sequencing. it's about greek sending the signal first. you need them to sign up for this principle. >> is there sympathy for their flight quest -- their plight? but there is as long as they show commitment to reform. >> my perception is that has always been there. i wondered how much was stage setting for his own fight with europe. there is no plan b, and he

warned this was a failure. he was told by the french that is not even a possibility. when you read these kinds of statements, it does sound as if europe has a laissez-faire attitude to getting this deal done. >> we're still playing hardball. you could look at it from a different perspective and say they are -- the louder they are fighting, the easier it is going to be to bring the greek parliament. when it comes to george osborne let's not forget he was facing a crucial election. >> we have had 50%. would we be putting it lower than that? >> much lower. >> we have the freshest number on the market. but 25%. >> we're going to hold you to that.

the senior vice president. >> you can follow us on twitter. this is a picture menace took of me this morning at 4 a.m. what was i up to? >> were they cornflakes? were they crunchy nuts? >> they were brown flecks. that is where the brown flecks have gone missing. there was a negative stockpile. there you go. what is next? >> i think we're going to be talking a little bit of london fashion week. we will talk with carolyn of the british fashion council.

>> here are some of our top stories today. apple has been working secretly on an electric car. it is pushing its team to begin production as early as 2020. it sets the stage for a battle with tesla and general motors both of whom targeted at 2017 release of the electric vehicle that can go more than 200 miles on a single charge and cost less than $40,000. the u.s. and iraq are planning a spring offensive to retake the city of mosul. the operation will require as many as 25,000 iraqi troops to defeat of the 2000 islamic state

fighters. the battle will mark the first major test for iraq he forces since extremists swept across northern iraq last year. the company will start paying its workers nine dollars an hour by april and $10 an hour by next february, striking back at critics who say it under pays employees. it will result in races for half a million full and part-time workers and cost the company around $1 billion. the federal minimum wage is currently $7.25. eric sat down with john chambers as he outlined his plans for the tech company. he told us in the future of digital business it's not america leading the way but rather europe. >> the future of our country will be based upon how effectively we enter this digital age.

every city, every company that comes to a digital company, and this is new for the country. london fashion week kicks off today. let's talk about how much it does for the british economy. very welcome. early start, but we thought the business of fashion deserved an early kick. let me start with you. i caught up with you each year. what are you doing? >> we're trying to make sure the

emerging businesses we have in london have all the business support they need and that they can access senior talent in the industry. it is bringing that to bear on people ready to crack through the barrier of growth and the challenges posed by that. >> caroline, you have in charge for a number of years, and you have seen it grow. you come from gucci. you come from harrods. you come from understanding brands. what kind of thing is he bringing to the party? >> he has brought brilliance truck sure. we are seeing brilliant businesses go from strength to strength. it is about having transparency, sharing the support they can access all whole host of industry experts. there is going to be a picture of james and 40 individuals and

really think about starting right through the future brands they are going to be working with. >> to the young designers have that ambition for scale? have they got that ambition to be burberry? >> absolutely they do. there is a huge degree of creativity and that is what drives them. the creativity creates business. >> it's interesting you pull in a financially ambitious dynamic because it's an incredibly important part of british business. give me an idea of how they have come through on scale.

>> he opened his door yesterday. you see these young designers really deliver creatively to become the stars of the fashion week and then build incredible businesses. there are all these names that are going to be the brands of the future. >> something that caught my eye, there is a great the lux edition -- deluxe edition. this is talking about oliviaer. he has twitter followers. sometimes he says he is more interested in them than in the front row. a mistake or an opportunity?

>> a huge opportunity. >> and for you in terms of using the whole social media, this is evolution, isn't it? where we are now and what social media means? >> in 2009, we started live streaming the shows from london. everybody thought that was brand-new. now everyone is doing that. we live stream 100% of shows. it has blown open. it is a great way for designers who don't have advertising budgets to connect to the consumer and to drive sales. >> the other thing that comes to mind is mentorship. you talk about the people behind him. how important is mentorship to the young designer? >> fashion business is complex.

this industry is particular in its working capital cycles which means you really need to get your act together on the finance side as well as the business side, having someone who has been through that who has made tramps but has stubbed their toe is incredibly important. >> have you had a business mentor in your career? as i have not had a mentor, but i have worked with inspiring people. i think knowing there is someone you can talk to when you have a challenge and you want to talk through what are the opportunities and how to get over the challenges is important. >> what about you? is it something you have encountered? >> it has been hugely important. he was absolutely a mentor who taught me the business, and that was invaluable. >> i remember you went to get some suits made. it is becoming

an incredibly expensive city isn't it? is that a deterrent? i know it is a world of opportunity, but it is that juxtaposition between cost of being here and the pool of talent? how does london rates in terms of the draw? >> it is one of the key challenges for young businesses. the increase in places like toxin and shortage. it is not just fashion. it is other instant -- industries. that is what we have to target. >> we wish you well. what is your #? we have already sneaked a little one in for you. we wish you well. have a great fashion week. make sure there is nobody that compares and that you trump malan and new york.

-- milan and new york. countdown continues in the next hour. we continue to examine the situation in greece, and we will keep you abreast of all the news as it rakes. -- breaks. ♪ . .

>> crunch time. eurozone finance ministers prepare for vital talks with greece to extend its loan program. >> "we messed up." those are the words from lenovo promising to find a fix for preinstalled software that lets users exposed to hacking. >> one year on from the main massacre, still no end in sight for the crisis in ukraine.

>> welcome to "countdown." i am mark barton. >> and i am manus cranny. eurozone finance ministers will hold talks in brussels over greece's plan last night, greece officials said they had positive talks with angela merkel, just hours after wolfgang schauble dismissed their request. >> we must realize that, at this moment, it appears that there are powers that would like greece on its knees exactly so they can impose their will. i believe we can do what helps our country and what helps these powers. >> let's get the latest from brussels. hans nichols is there. are the germans prepared to

negotiate or not? >> yes, they are clearly leaving the door open for these talks to start today. that is according to a government official. they are demanding of greece to submit a new proposal. the proposal they submitted yesterday can be a baseline. that is on the positive side. as well as the conversation between angela merkel and alexis tsipras. he seemed to say that they made some progress in those talks. after those talks, the government officials from greece clarified that they were not talking about the bailout program. they were talking about the six-month loan. the government official also went on to say that it demanded of greece that it completes the bailout program, that is a nonstarter. on the other side of the ledger we have an interview from the finance minister in greece. here is what he told a newspaper in the u.k. "what we cannot accept is that

the physical adjustment agreed by the last government be carried through just because the rules say so. there is no macro economic argument that can be made for further tightening." relations were tense at the deputy level. one indication things are not going that well, the greeks actually leaked part of the conversation, a breach in protocol. in those negotiations, the germans were calling yesterday's offer a trojan horse, nothing to do about completing the imf-ec b-eu program. >> where is the ecb in all of this? are they starting to get worried about greek banks? >> it seems so. the ecb is prepared to ask the greek banks to decrease their amount of greek debt. that is important for a couple of reasons. we have two big bills coming due

. 4.4 billion will be rolled over in march. another 2.4 billion in april. if the greek banks are warned away from buying that debt -- and they are the main buyers of that debt -- that is going to put further pressure on the greek government to fund its self. you could also have a further banking crisis. it is safe to say that the ecb is monitoring all this. their trigger is only if talks completely collapsed. as we have seen from yesterday and today, talks are still going on. >> thank you. hans nichols in brussels. >> lenovo said it messed up badly by pre-installing software on its computers that potentially exposes users to hacking attacks and unauthorized activity monitoring. after coming under fire from angry owners, the world's biggest maître -- biggest maker of personal computers has vowed

to fix it. you buy a lenovo computer and you do not expect you will have something monitoring what you are looking at, what you are doing great you presume that you are free as a bird on your computer. >> first of all internet, never presume that, as you know. software is by a company called superfish. it will send you personalize adverts. that is the concern, that hackers can access your personal -- that is the reason why it became a little bit, obviously, wrong for companies. no market reaction. however, the comment came off from the cto and he said this -- "we messed up badly here.

we made a mistake. our guys missed it. we are not trying to hide from the issue. we are open and transparent and it will be fixed by friday." that was the story. no reaction today because markets are shut. >> john dawson on the lenovo story. >> today marks the first anniversary of the massacre when 50 protesters, demonstrating in central kiev against what they thought was a pro-russian government, were shot dead by ukrainian authorities. the event sparked the crisis in the country. there appears to be no end to the trouble in with pro-russian rebels defying a cease-fire this week to seize a strategically-important town.

joining us from moscow is henry meyer. despite the broken cease-fire germany, france, russia, and ukraine say they are committed to implementing last week's peas agreement. -- peace agreement. >> there is a desperate effort underway to try to salvage that agreement which was negotiated over more than 16 hours in the russian capital minsk by the leaders of germany, france, russia, and ukraine. instrument slang -- interestingly enough, the united states which was not involved in the process, though it has been very supportive, was very critical of the violation of the cease-fire on a key railway junction. it has not written off the minsk agreement either.

that statement, which came yesterday after a phone conversation between angela merkel and the russian president, vladimir putin francois hollande of france, and petro poroshenko of ukraine. the commitment to minsk is that if these agreements fail, we are looking into the abyss. a possibility of escalation in the conflict. united states says it is considering sending arms delivery to ukraine. in europe, this is seen as a dangerous step. they are still trying to salvage this agreement. >> what about the idea of peacekeepers floated by ukraine? is that a way to shore up the cease-fire? >> it could potentially shore it up. the problem at the moment is that the cease-fire is not holding it. obviously, major violations.

ukrainian military is reporting artillery shelling close to the city and this is another target of the rebels that is a key port . if the rebels were able to take that city, that would open up the land bridge between rebel-held eastern ukraine and crimea which was annexed by russia last year. the russians say they are committed to minsk and they do not expect any further rebel offensives. the question is to what degree do the russians control the rebels? we believe they have been supplying them with weapons and sending troops and advisers over the border to help them. do they control them fully? that is what we will find out in the days ahead. >> thank you. >> let's take a look at some of the other stories on bloomberg this morning. the u.s. and iraq are applying a spring offensive to retake the

city of mosul. it will require them to defeat up to 2000 islamic state fighters. it is the first major test of 4 iraqi forces since last june. >> bae systems is decreasing support to these countries. patients including bahrain, jordan qatar and saudi arabia and the uae have joined with the u.s. and western allies in launching airstrikes against i.s. in iraq and syria while egypt opened a new front in libya. >> lower sales forecast for 2014 amid deflationary pressure in europe and weakening currencies in emerging markets. the company said sales would

rise by 4%-5% on a like for like basis this year. that is a reduction from 4.5%-five .5%. -- 5.5%. >> sales dropped 7.8% at telecom italia. that is compared with a 9.1% decrease reported for 2013. >> apple has been working secretly on an electric car and is pushing its teams to get production of it as early as 2020. that is according to people with knowledge of the situation. it sets a stage for a battle with tesla and general motors. both are targeting an electric vehicle who can -- that can go 200 miles on a single charge. >> bayer health care chairman

and chief executive. the 59-year-old will start his new job. the move comes after sanofi's board fired its previous chief executive back in october because it was unhappy about its handling of the business -- his handling of the business. >> wal-mart is set to start paying all of its u.s. workers at least nine dollars an hour by april and $10 an hour by next february. the plan will result in raises for about half of its full and part-time workers. it will cost the company around $1 billion. the federal minimum wage is currently $7.25. >> the 2006 cadillac dts of

warren buffett has sold for $122,000 in an online charity auction. the car has the billion or's -- the billion or -- the billionarie's autograph on the dashboard. it would normally be worth just $12,000. you can find more on that story at bloomberg.com. >> coming up, another round of negotiations in brussels. ken greece realistically meet the current demands of his creditors? the numbers say no. we will break it down for you next on "countdown." ♪

>> welcome back. austerity programs demanded by greece's debt has been pinching the company's economy. -- the country's economy. bloomberg's brendan greeley explains how to measure austerity and how it is unlikely to help greece get out of debt. >> greece wants less austerity. austerity is a word but you can measure it through the primary surplus ratio. this is basically what a company

-- a country saves divided by its gdp. it is positive that you are saving money, but you are inflicting pain in pursuit of some future goal. you are being austere. greece's goal is 4.5 percent. that has caused it to make hard decisions about budgets. according to the imf, reese would need that number to be even higher, 7.2% for a decade if it plans to pay down its debt to eurozone standards. there is little reason to believe this is possible. for the last 10 years, greece has run from negative to very negative. last year, it notched a positive 3%. encouraging, right? take the eurozone as a whole. since the euro zone began, all of those countries together only hit 3.6% once and now it is back below zero. since 1974, only three countries have averaged greater than 5% for more than 10 years.

singapore, norway, and belgium which spent the 1990's trying to meet eurozone standards. greece could have been doing the same, but that is water under the bridge. countries that hold a primary surplus over time tend to have consolidated political control by a single party. believes -- greece has that now sort of. the high level of debt encourages them to say. greece has that, too. but they are also likely to have a positive tones of payments more money coming in than out. and they are more likely to save at a time of economic expansion. can greece make it to 4.5% as the current agreement demands? probably not. can they make it to 7.2% and pay its debt down? no way, no how. >> there you go. pigs will fly at the end of that

video. it says a lot. rising interest rates, 2015. it is being called a transition year. let's go to our next guest. great to have you with us this morning. things will fly, greece will do a deal, yes or no? >> greece will do a deal and pigs will not fly this time, sadly. greece and the eu will do a deal. it could go to the brink. clearly that is what we are seeing in terms of conversations that are being had and the way it is being played out in the media. >> particularly european equities when you compare them to how u.s. equities are doing. does that continue the outperformance by europe to the u.s.? >> we believe so mark. we expect to continue to see strong performance of european

equities over the u.s. that reflects a couple of things. one is dollar strength. a relatively mixed earnings season in the u.s. concerns about valuations in the u.s. market. and of course, the quantitative easing program. for the corporate sector in europe that is how we have been positioned and we continue to be comfortable with that position. >> as you go through the trigger points in your notes, one thing that comes through is that we will have a bumpy ride and that might be an opportunity in credit. they might have opportunities for you in equity. on these drawdowns, pullbacks, reversals, whatever you with like to call it, taper tantrums -- well, it is not taper tantrums anymore. it would be interest rate tantrums.

>> on the equity side, there is an opportunity for positive returns on a positive level. this year, it is something we have very much look to participate in. pullbacks on equities we would be looking to participate further. we see better opportunities on the credit side. one is the view that rates will rise in the united states this year possibly sooner than later. that is going to create a change in investor mindset with respect to the duration of interest rates beyond that point and their comfort owning bonds. with weak inventories or much less strong inventories than before the financial crisis, we have the opportunity to get demers. last year, -- to gap downwards.

last year, we saw the treasury tantrum. >> have we seen the bottom in interest rate yields? we were 1.6% at the end of january. 1.1% now. have we seen the bottom? >> my sense is we have seen the bottom. i would hesitate to say that definitively, because so many of us have been proved wrong, but that is my sense. >> a big call after 30 years of the treasury bond market. >> you have good company. you are going to stay with us. we are going to talk about, what is the difference tween japan today and the last time it touched these levels, 15 years ago? ♪

>> 90 seconds, biggest worry right now? >> twofold. that a great deal is not done. i would not assign a big probability to that but i think there will be a deal done. there is going to see -- going to be some risk if it is not on the terms that people anticipate. that could put a burden on markets. and then the russian-ukraine situation. for that to be weighing on markets heavily, we have got to see an extension into the baltic

states. and then i would say if i could add one thing, it would be a more concerted slowdown in china than investors have been anticipating. people talk about that a great deal. china has been part of the global engine for growth. >> i know that we are always keen to get you in. you have just come back from australia. >> it is a big commodity story. it is very interesting talking to australian investors. what they are having to adjust to is the situation in japan, a lowering of interest rates. it is not 2.25%. to an australian, that is absurdly low.

nonetheless, the dynamics are great in australia for a growth outlook. >> great to have you with us this morning. >> coming up, search for a solution in brussels continues. ♪

>> you are very welcome back to "countdown." is the trend your friend? is there a trend in the markets this morning? it is the only one in this quadrant which is trending higher. that is the very first piece you want to take away from the overall trend. what you have here is the euro-dollar trending lower, just marginally but it is lower. a little bit more maneuvering by the euro-dollar position.

as we go into the -- is it d-day in terms of discussions with greece? we just had a discussion yes, people want to be involved in the dollar, but they are looking at other markets. morgan stanley are building careful positions in their long dollar position against canada and against swiss. janet yellen testifies next week. evil complex is going to be looking for any potential hawkishness coming from janet yellen. also, you are seeing the amount investors demand to hold u.s. treasuries just widening out to a level that you have not seen since 1989. the premium that investors want to hold u.s. treasuries versus their peers in germany is the widest since 1989, something that we will pick up later on.

manufacturing and services data. bnp paribas still shortly euro. -- short the euro. >> talks in brussels today over greece's proposal to extend its european loan program. yesterday, alexis tsipras said on twitter he has had a positive phone conversation with angela just hours after her finance minister rejected out of hand greece's loan extension request. lenovo said it messed up badly by reinstalling software on its computers that potentially exposes you to hacking attacks and unauthorized activity. they are coming under fire from computer owners. they promise to have a fix ready today. santa fe -- sanofi is hiring a

new chief executive. the 59-year-old will start his new job on april 2. the move comes after sanofi's board fired the previous chief executive back in october because they were not happy about his handling of the business, including the loss of u.s. market share for a diabetes drug. >> back to the negotiating table in brussels today as officials struggle to find an agreement that will keep greece in the euro. but one of the best outcomes is for greece to leave. our next guest argues that greece should be the first to defect. gordon, great to have you with us this morning. finally, we have a guest who says the way it should be. why should they bail? why should they go you know what, we are going it alone?

>> that is probably the best for them in the medium-term. i suspect the reason why greece is clearly trying to do something with the european central bank in the next couple of days is because they maybe do not have a contingency plan ready to go. but look at the so-called position it faces. the conventional wisdom is that there are only four positions that could result from this. a. continue to result in a boom in asset prices. we had a pretty strong boom in the last couple of years. secondly, there could be a financial market collapse, not necessarily greece, but the other heavily-indebted countries

who have not been able to rectify the balances and cannot pay their debts. thirdly and this is what people think is most likely, just a lingering continuance of this anemic recession leading to continue levels of unemployment fixed at about 12% throughout the eurozone. still 25% in greece. young people moving from latin america, spain, and so forth. and the fourth scenario is a combination of repos from the european central bank, which seems unlikely to fix anything. >> is europe ready for greece to leave? >> i do not think greece has any contingency plans. the analysis that takes place, greece is going to come off very badly in the short-term, true. there have been many examples of

currency breakdowns, debt breakdowns, and the liquidation. the indebted country comes out very well. citibank is saying that if they are not extended, greece would be perfectly within its right to repeat it -- to repudiate up to 300 billion euros of debt. bulgaria's currency collapsed in 1996. within a weekend, it was restructured. it was linked to the deutsche mark. we have key people involved in that kind of exercise. everybody agrees that, of all the currencies, the euro is one of the worst designed in our lifetimes. the guys behind this have had 5 6, 7 years to sort this out. if it were a commercial enterprise, we would be lost. >> but greece is not argentina. they do not have a commodity-based to build upon.

this is what blows my mind. everybody writing these papers -- they have not got what everyone else has got. they have tourism and shipping and a certain number of industries but a lot of people are dealing in the abstract here. >> one other thing they do not have is financial institutions tracking down there economy in the way that the big banks are damaging economies of the major countries in europe. to cut yourself off from this mess would not necessarily be a bad thing. we published some papers not from the point of view of italian malpractice or malfeasance, but showing that central banks simply do not know the exposures of any of these big financial institutions. in the month passkey -- the montepaschi case, it was grossly

understated because of credit default swaps. the significance of that is that a number of these trades were recorded on the books or accounts. >> have we not moved forward from 2008? i do not know. i am asking you. has the system of disclosure not gotten better in terms of market markets, in terms of disclosure, in terms of derivative positions? >> it has got worse. there has been a boost in level three model assets. data out this week shows that four out of every 10 consumer loans in the u.s. in 2015 for auto loans, credit cards, or personal use -- >> what happens when it does? >> there has been no reform. the banks are as dysfunctional

not transparent, and subject to weaker accounting standards. >> you are talking about the potential for a much bigger credit event. >> if it is so much worse out of lehmans, that is what you're calling for. >> you are calling for a bigger momentous event to happen. >> to refer to your question about greece or other countries in the eurozone, they always have a contingency plan. we cannot see the situation going round and round in a circle for the next couple of years. >> good to see you. >> if you follow twitter, you will be able to take a behind the scenes look at one of the anchors of this show and his daily routine. actually, the kitchen police and weathering -- wondering where the bran flakes have gone? there is mark barton.

>> bran flakes every day. >> greece to bran flakes. >> 4:00 a.m. on the nose, every day. not a minute later. ♪

>> time for today's bar chart. is a grexit likely?

a 50% chance that greece will leave the euro area. barclays is also bears, putting the risk higher than in the 2012 debt crisis. those who hold greek debt disagree. take a look at this chart. it is the bloomberg greece sovereign bond index. those with money at stake right now are seeing a significant increase in the chances of a eurozone depart. yes, it is still below the 121 level it reached on september 5 of last year. that is the yellow circle. that was its highest-ever level since 2010. it closed that day at 90.88. that is still 23% above the five-year average and more than five times higher than the 17.2 level, the red circle in the middle of your chart reached in

june 2012 when a slump in greek bonds pushed the nation to implement the biggest debt reorganization in history. daniel is a strategist in frankfurt. he says that comparing the spreads of movement now with 2012 is a totally different market. in 2012, the risk of a default was priced in it if you look at the yield levels we are currently seeing markets seem to be less tense. still, credit default swaps, bond insurance signal there is a 69% chance that greece default in the next five years. on march 2, 2012, they indicated a 99% chance indicating the biggest investors see no repeat of greece's status. we will finish with the world of

-- with the words of alan coote s. "a grexit is extremely unlikely." >> you are watching "countdown." time for a look at some of our other top stories. apple has been working secretly on an electric car and is pushing its team to begin production as early as 2020 according to people with knowledge of the situation. it sets the stage for a battle with tesla and general motors. both of them are targeting a 2016 release of an electric be able that can go more than 200 miles on a single charge and cost less than $40,000. walmart is to start paying all of its u.s. workers at least nine dollars per hour by april and $10 an hour by next february, striking back at critics who say it under pays employees. the plan will result in raises for about .5 million for and part-time workers and cost the

company around $1 billion. the federal minimum wage is currently $7.25. erik schatzker sat down with cisco's ceo as he outlined his plan for the tech company in 2015. the future of digital business -- it is not america that leads the way. >> the future of our country is based upon how effectively we enter this digital age, how effectively every country, every city, every company becomes a digital company. this is new for our country. >> welcome back. just a couple of minutes ahead of the market open. german bonds and treasuries narrowing from near record levels. all opinions are his own.

you see this as an opportunity. just explain why. >> this difference, currently trading at all-time wide looking for the difference to compress for a number of reasons. in europe we are seeing some signs of growth. for example, spanish manufacturing. eurozone consumer confidence. and credit swaps have improved as well as the potential positive impact of the recent global decline in oil prices. also, in the u.s., the dollar has significantly rose and that will ultimately impact margins and the bottom line of equity markets. so that will, in turn, impact growth and potentially delay the federal reserve hike. at the minimum, make the hiking cycle aggressively slow.

>> touching on this, i was looking at this spread and talking about it in the context of foreign exchange. 1989, the american treasury market. the german treasury market. that widening of yields is telling us something very important. the pace of change. talk to us about china. they said they are worried about china. how does that play into your thinking? >> if you look at the inflation numbers, they recently deteriorated significantly. let's look at euro-yuan. it has collapsed about 20% since last year. the biggest trader with china is the eurozone. exports are significantly more expensive for europeans. as well as the recent and the corruption campaign going on in china. that will impact activity growth. >> what are the other risks that you see? >> two main risks.

in the u.s., with domestic inflation. if domestic inflation is significantly accelerating with the labor market tightening, you will see potential 10-year yields running away and the decoupling story. secondly, the ecb, quantitative easing. if they come in next month with german 10-year paper, that will decrease the german yield and the spread will widen. >> we know they are going to come in. they have already said the topline growth numbers is what they will do. it is set in stone. do you think that they will buy up to the maximum that they can of german bunds. for q.e. to work more substantially, you would presume they would go to the maximum of the periphery rather than bunds. >> a great. -- agree.

the bundesbank would not want to take the negative yields on the short end of the curve. they could aggressively buy 10-year sector which is the risk. >> how can we hedge? >> for the retail guys at home, they can buy a core spread of the bunds. >> great to have you on. see you soon. >> you are looking at live pictures. it is friday, it is bright, the sun is rising across london. unfortunately, equity markets are not. equity markets are indicating lower. stay with us. we will talk about what will drive trade after the break. ♪

>> the scandal -- the standoff between greece's new government and its creditors is leading to a potential exit from the euro that could severely hurt greece financially. tom gibson reports. >> if greece fails to find a bailout solution, it could lose a lot of money. here is how. without an agreement, 10.9 billion euros from a rescue fund

will be canceled. another 5.6 million comes from euro area member states. the money, from profits made on greek bonds, was pledged in 2012. those creditors have no obligations if greece rejects the bailout terms. another 1.8 billion euros come from dealt tightening -- belt tightening. failure to agree with european leaders would also affect a parallel 12.5 billion euros from the spot imf that hinge on the same austerity measures. the largest amount comes from the european central bank which has been keeping greek banks afloat. this will only reach reis if it stays solvent. -- reach greece if it stays solvent. if they reach an extension greece might hold onto the much-needed cash. >> in the remaining 90 seconds, what blows you away most at the moment? the stoxx 600, year to date up

11 percent. when you show the best-performing stock markets in the world in 2015, the top is russia, 16%. >> and a record in the ruble this month. >> followed by italy, portugal sweden, finland, slovakia, france denmark, and germany. nine out of the top 10 best-performing stock markets in the world this year in europe. that tells you a lot. tell me about japan. >> the nikkei, what is different than it was then? let me put it to you this way. the hole in evaluation of apple would wrap up the valuations of canon panasonic and all of those electronics companies are not worth as much as apple. uniqlo, a small, fast retail

company with a domestic outlook. 1990, sony with playstation and al gore was running for president. when i was but a young stockbroker. >> "on the move" is next. >> jonny ferro the is young. he will take you through "on the move." ♪

>> happy friday and a warm welcome to>> "on the move." minutes away from the start of european trade. let's get straight to your morning brief. debt deadlock. greece applies for a six-month loan extension. germany calls that it a trojan horse. the peace agreement and ukraine reaches breaking point after pro-russian rebels seize a town. today marks the first anniversary of the massacre that sparked the conflict. the ftse 250 in london. an all-time high.

germany's daxx starts the straight -- the trading days at a record high. the pmi is coming through for france. i am looking at future markets lower. the stoxx 50 down by nine points. dax futures up by 20 points. let's get to manus cranny. >> it is going to be an interesting day in terms of extend or pretend as i like to call it. an extension in terms of liquidity to stay in the eurozone. to greece. who's going to face who off first? that is the crunch time for european markets. merkel. they will meet and discuss what is going on. equity markets is coming back ever so slightly. you have telecoms delivering numbers. down .9%. 58.64.