>> athens commits. greece submits a plan to improve budget management. >> the equity market is up more than 5% on the news as yields drop. >> carney and yellen will address lawmakers in london and washington as investors look for crews on the first hike in interest rates. good morning, welcome. you're watching "the pulse" live from bloomberg's european headquarters. we're here in london. i'm guy guy. >> i'm francine lacqua. it is jum day for greece.

we know -- judgment day for greece. we're starting to get a little bit of leaks i guess of what is in the plan not to roll back privatizations. and they are also more strict on the budget. >> this is not the full and complete plan but what we have had leaked to us thus far. we are watching carefully how the banks are going to react to all of this. the outflows have been fairly spectacular. is this enough to stem the story? let's go to erik schatzker, our colleague in athens. so we're starting to get an idea what the greeks have inside up to? >> yes, guy. good morning to you. the information has been dribbling out since yesterday but now we're getting a much firmer idea. what they have submitted to the eurozone for approval.

if this gets approved they will have a further four months to the program that expires this saturday. my guest served as the chief can economic advisor to the previous government through last union. thank you very much. >> welcome. >> you seen the first details of what it is the greek government submitted to the eurozone. what you to make of it? >> it is not official? >> if it is, i have a feeling this is -- reforms and it may -- euro group members. >> how precarious is the current situation? >> possibly some kind of a conflict with our european partners.

this was evident in the fact that it was quite considerable withdrawal of deposits from the banks and this was something quite serious, i would say. if there is no agreement -- >> give us some insight into the challenge that he faces satisfying his eurozone counlt parts on the one hand, people like mr. schauble in germany. at the same time keeping in line the left wing faction of the governing party. >> the agreements of greece -- european partners. it would be a very delicate

balance from now on and wish them luck. >> you wish them luck. what is the point of maximum tension? >> the most important -- from the point of view being a left wing party the labor market from the troika -- independence of -- secondly the product market. doesn't look easy. >> so let's make the assumption that this submission that was made late last night to the eurozone is approved. what happens next? >> as you mention before

negotiations with the greek government and the institutions -- completion to have -- of the current review. going for a program with our european partners. >> what are the prospects for debt renegotiation? >> actually if you go back to the statement of euro group in november it was clear measures will be taken to ease greece's -- >> but how? >> i have a feeling that -- >> it is not going to be with a haircut. >> no, definitely not.

there are several other ways. something quite important for us. fiscal space. substantially higher than what it could be otherwise. all this must be in tandem with the -- sustained for a very long period. the difference being that in those countries the bonds were held by the banks. in greece's case it should --

>> all right, panos, clearly if, the submission is approved, it is only the beginning. he is a business professor. he is a professor at the athens university of business and economics, former advisor on economics to the previous government. back to you in london for the time being. >> thank you so much. we'll cross live to erik throughout the day for any new developments. we're getting new developments. >> everything is just in time. we'll muddle through and do it just in time frrmbrit also do it well ahead in time. >> i'm not sure that is even close to being true. my sense is that if you a teleconference, you already have -- what looks like is a done

deal here. the greeks have done enough just in time to get over that. let's go to hans nichols who is joining us from berlin. teaths talk about how they are -- let's talk about how they are viewing this story. >> they -- mr. schauble sent this letter asking for a vote. we know the vote is going to be on friday. what is going to constitute the list? the e.u. seems to indicate, the e.u. commission means they are pleased with the list. i just reminded you that last week we had out of the e.u. commission some positive sentiment and then the germans weighed in. until we hear something firm from mr. schauble, or there

dudsslebloem. i'm not confident saying that is done deal. i think we need to learn more about what is in this list. >> what about elsewhere in europe? are parliaments prepared to pass this? they have to sift through delays and see exactly what is in it. we're getting positive announcements from the european union. that could change very quickly. >> it could change quickly although if it continue tobs positive technically it might be easy to get this through all the various parliaments. finland talked about having a 25-member committee doing it pfingt yesterday mr. dusselbloem -- there may be a few outlying votes against it. if mr. schauble is fundamentally for this i expect this to sail through parliament and that will just be proforma.

mr. dusselbloem apparently is speaking now. he is among the most important people to listen to. perhaps i should throw back to you and we can dip in and hear what he has to say. >> hans thank you so much. he is saying that the greek reforms arrived just in time. >> he is speaking before the european parliament's committee on economic and monetary affairs briefing them on what has been happening over the last few days and giving us an understanding as a result of where we are in this process as we look to get an idea of what is in this greek reform package and whether or not it is likely to see approval. >> yeah. that brings us to today's twitter question. as europe examines greece's plans should market bs nervous? we're back in a couple of mince. ♪

>> welcome back now. in a world where growth is scarce and prospects are not improving, an unspoken currency war has broken out. >> according to bloomberg there can be no real winners the end. >> we have come out of an economic crisis and global economies have not recovered to the extent that yoult have expected.

>> ---yard line have expect. -- you would have expected. we have a lot of countries, weaker currencies as a panacea almost. currency war. there is no two ways about that. you the european central bank trying to introduce monetary policy. where do they go? they go to the swiss franc. sudden think you have the swiss franc strengthening. it then implements policies to weaken its currency. sweden centered. it is trying weaken the kronor. on it goes. there is a race to the bottom. what you're doing when you devalue your currency is you're stealing exports. the most straightforward and direct way is you turn on your printing presses, print your own currency and sell it in the open

market against some of the other currency, you buy euros or dollars. second sway through interest rates. if you make your interest rates negative you are charging for the privilege of holding your currency. the nuclear option in any currency war is something called capital controls and the way you do it is impose taxes and levies on people trying to move currency in and out of your country. if these currency wars persist i really do think in the coming weeks and months you'll start to see more and more talk about capital controls. it is kind of an admission of failure that -- weakening its currency. that overseas holiday you were going to take just got a lot more expensive. citizens want to be in countries that seem strong and can talk big. if your currency weakening it is doing with to give the impression that you're not such a great country.

you have to trade in paris. not everyone can can be weaker than everyone else. the big victim in this is the u.s. the dollar has been strengthening massively in the past year. you're starting to hear squeals of pain from u.s. companies like microsoft, even apple, the world's biggest company now have said the strong dollar is crimping our earnings and we don't like it. the u.s. is carrying the burden with the global economic recovery and there is a strong argument that says that is just not fair. problem with war is nobody wins in the end. you can have periods of the upper hand but the u.s., it is the world's largest economy still and at some point i think it is going to say enough is enough and it is going to start trying to talk down dollar and you would hope that other scruns a better growth outlook that they will be able to cope with that reversal if and when it comes. it doesn't end well. this movie, i've seen it before, it always ends badly. >> it doesn't end well.

i've seen this movie before. that says it all. i guess first of all, if we just take a step back, currency wars is what's happening. but a lot of -- everyone is reluctant to call it currency wars so there is not the finger point torg blame game that we had five or six years ago. >> but u.s. earnings season is fast approaching. the more companies you hear complaining about the strong dollar, the more this is going to come bubbling to the surface in terms of u.s. growth. deutsche bank reference, 44 central bank easings this year. there have been 20 interest rate cuts of which at least 10 were complete surprises to everybody. you really can't have that backdrop and not really acknowledge that cups are fighting a -- countries are fighting a currency war. it is an acknowledgment almost

they are not doing enough at home for their domestic economy. there is not enough fiscal action taking place and they are trying to do it through currency and that is not really aen efficient way to try to get growth back into the economy. there are problem is if you look at the alternative, which is what effectively some parts of the eurozone are having to go through because they don't have the opportunity to deal with the currency the way they would have done it spain, portugal. the flip side is massive unemployment and very painful structural reforms. >> some positive signs. if you look at what france has done recently. hollande saying we just have to do this. if you look at what ram say has done in italy. a lot of people saying that it sli finally waking up and smelling the coach. my question is can they do enough to get the

growth outlook better? you have mark carney speaking today and janet yellen speaking today. two countries where if you're going to see an increase, that's where it will be. the pound is up 5%. the u.s. dollar is up 16% in the trade-weighted basis. you might think your economy needs an interest rate much higher. maybe just to stop it from getting more in depth. you might think you want an interest rate nod so you have something in the ammunition. >> 25 basis point hike is already priced into the market. if they said we're doing one and we're doing it for the reasons that you just talked about would the market then assume they were one and done or that there is more to come? >> doesn't matter. if you 40 central banks all easing the effect of the bank

of england and the fed nudging rates higher is negligenceable gheaps from all of the -- against that. >> would you say that janet yellen entered the currency wars? >> it has to be on their minds, if for no other reason than that list of companies mcdonald's, apple, microsoft. if they are squealing, central bank has to listen. it is in charge of the economy. the economy is largely people and companies stand the companies are hurting they need listen to. that >> are they squealing because their exports are hurting or because their subsidiaries overseas -- is it a translation effect?

we can't export as many of our widgets. that we're not seeing the bang for our buck that we once did? >> it is both. it is definitely both. this is not going to be a good earnings season anyway. talking about rev high in falling actually on an overbay sis for the s&p 500. that is not positive for the u.s. growth outlook. if you're janet yellen and your job is to deliver growth and employment and wage raste rises. if you're mcdonald's and on a global basis you're not doing as welled a you should because of where the dollar is, the propensity to raise wages is lower and the propensity to raise interest rates is going to be weak. >> as we take you to preak, let's show you what's happening in brussles.

talking to the economic committee at the european parliament taking questions. we will bring you the headlines. >> he was saying you can look at the stabilize situation in greece. he hopes the process will help restore trust in general. he said he received the plan from greece just in the nick of time. we're going to take a break and will be back in two. ♪

>> welcome back. this is a quote. nobody needs an armed conflict on the periphery of europe. that was a quote from putin. >> now we are in moscow and we have more. we have a big meeting taking place later today. we're trying to understand where moscow is on the story of the cease-fire in ukraine. what are we going to find out? >> putin made these interesting comments yesterday basically emphasizing that he doesn't see any -- a need for any additional diplomatic measures in order for the truth to keep holding in eastern ukraine. he thinks that the truth that we find in minsk is sufficient and at the same time we have got quite strong comments coming

from cameron and from the head of -- the e.u. warning that they are considering new sanctions against russia for its aled involvement in the activity -- alleged involvement in eastern ukraine. >> did he mention extra sanctions or the threat of extra sanctions? >> putin did not mention sanctions. that is really interesting. i don't think he will comment on sanctions unless they are actually imposed. that is usually his style. so now we just have to see whether the u.s., the e.u. can come to a united conclusion and actually at this time and not just impose sanctions against individuals, which are seen as laughable by russia the last sanctions for instance included -- from the russian parliament.

we'll have to see. >> thank you. >> coming up, we're going to talk about burberry. we'll bring you the highlights when we come back. ♪ .

>> it is a game. greece in my mind is part of the international grid. if you want to remain into the grid, you will have to ultimately conform. if they don't conform, they will become argentina. >> dallas was larry fink talking to charlie rose about greece. you can catch of the whole interview later. kabuki is a little bit like -- we are here and then we are not. >> right. let's carry on talking about what is going on with degrees and more group. schaeuble said grexit, the greek

exit is not on the table. joining us now is he had of european strategy -- is the head of european strategy. it seems like a brief hiatus before we go to the real event. we have to deposit and a period when they have to figure out what they can do and what they can't do and then we'll get down to the red negotiations. >> the crucial point, the greek government is very new and probably have to get their head around what the real situation is. and if the agenda and have to assess of the reality and that is what is happening now. they put some form up her postal and they will go to the april deadline. -- some sort of proposal and they will go to the april deadline. and then another crutch point. >> they have to -- i'm not

really sure. they put the proposal and were not sure it is enough to appease the europeans or the germans. the lawmakers will vote on this on friday. you think even if we get an agreement on all sides, we have to wait for a couple of months before we can see if they can push the reforms through? >> let's visit the sequence. as you say, that will be a vote if way except the current proposal. it may say so. one of the stumbling blocks is whether it gets through not only the german party but the bit parliament. we have a very hostile opinions out there already. if you look at what happens and take it as faye's value, and april deadline at which point the greeks will have to put a lot of -- flesh them out and see if they can implement and only

then, will money flow. even if we get an agreement, it is not entirely sorted. >> talking about the fact that greece will still need eight after the program is concluded. how the program is concluded is a conversation having as of the moment. can i ask you an interim question -- how does greek carry itself from now until april? the ecb will issue more t-bills. how does money get dispersed? what do they do in the main time? what's the point were just discussing is what needs to happen so the money being held back and getting dispersed and once it has been dispersed sorted of the next couple of months. >> the next 4 months. >> and repayments and crucially

for the ecb held a bond repayments. the only point you are raising is how to get there the medium-term? there are money requirements and not entirely clear and we do not know exactly how much money they effectively have an other sources of funding they can come up with. we don't know how that tax receipts are in through the interim period and dropped quite a bit. where the money ultimately is going to come from is not clear. we can speculate about the ceiling will be raised and if there will be well role in how they repay some of the imf loans. -- wiggle room in how they repay some of the imf loans. >> and mr. dusselbloem saying the eurozone, crazy when you think the markets are focusing so much on the short and medium term. what happens afterwards? and we were talking a little bit

before. how is this going to become a affordable? we are focused so much on the next four months which are crucial and we do not end up a longer term plan. >> i'm not so sure about that that. i've said it on your show before. when you look at that interest-bearing cost of the greek debt, it is quite low and i could imagine in a forthcoming program it could be lowered even further. >> pewter, no one has ever gotten out of it unscathed. that is fair. >> it is entirely true, but at the big problem that agrees has is a growth problem. that is the big issues that if they can keep growing to any minimum degree, bearing the debt, even over a long pedal of time is not the issue. getting growth and people and getting the debt level down through the gbp level is the

crucial point at hand. >> the debt is still going up. that, i guess, is still the problem. they are running a primary surplus in a period when there is no coupons attached. when they kick back in, the slur plus comes down -- the surplus comes down. how do we get to the conversation, which were not close at the moment, where we started talking about a way of dealing with the debt other than through growth and repayment but rather through restructuring? how do we do a greek restructuring without talking about a greek restructuring? >> that is a great way to talk about it. we've done it before. through officially held that on numerous occasions. one of the crucial things that came out was basically the 10 year low interest payment period.

in a couple years time, we do the same thing again. and i am pretty reticent in calling for actual reduction in face value of the data because that will be very hard to swallow for everyone else in europe. >> if you took the interest points, you would not need to run such a big surplus points. >> very true. >> and get it down to 1%. >> a very true. i could well imagine in the forthcoming discussions about the next program it will be part of the discussion. >> peter, where had people say we are pro-this plan or against this plan. what with had has not worked. -- what we have had has not worked. and the money wasn't funneling through the right industries. >> we have to take a close look of what has been proposed and

there are 2 elements. one is how much actual fiscal savings and do they have to do over the last couple of years? and we can all agree that was probably too much. that could be -- and the other bit is much more structural reform and the current government is now talking about tackling corruption, tax evasion and out of these types of things. they would have to happen anyway. the big and has probably been the skew toward the front of the fiscal say. let's say it has been done, a thing of the past and going forward, same kind of savings and austerity is not required anymore. >> peter schaffrik rbc capital markets. >> opec has no concrete plans to hold an emergency meeting on

falling gas prices. opec's the next regular meeting is june 5. >> investments will draw by half -- drop by half. the move comes as of the falling oil price and high taxation force energy producers to cut costs. crux of the justice department is -- crux the justice department is investigating if -- at least 10 banks including barclays, jp morgan and deutsche bank are being probed. the matters confidential. >> caroline hyde. the u.s. is looking into this. >> it as indeed. the u.s. justice department's. it could be the 10 biggest banks and a prior agreement prompted this.

we knew the investigation what a come in terms of currency inflation and libel of the lights. bank of america have made previous agreement of how to settle and came to light and hasn't happened in other asset class and precious metals brought. allegations have been happening in the u.s. and yesterday in fact, disclosing documents have been asked for by the regulators in the united states to do the commodities trading. clearly, we are in the early stages of but at least 10 banks currently being investigated. >> to make clear as well that gold and silver is plenty compared to the foreign exchange market. gold and silver, not so much. >> and a very old-school way of doing it. it comes as no surprise that

last years was regulators have already find ubs on the back of this saying they felt there was concern that ubs trader in term of precious metal trading and indeed fines for barclays last may related to again, gold fixing their and a particular trader named. it has been building momentum. as then you look across the entire board of which has been undertaken by the london metro and they are trying to bring it into the new world. they started to make it online trading and used to be very old-school and on the phone basically. if you are the traders together. and then there were talking about how and that supply and demand and they come together and decide the price. of course that is manipulation if you have such few players in an old bowl manner. as palladium has been

overhauled. and now you could check it twice a day. gold was set for march and we will likely see it overhauled. when baking industry -- banking industry is starting to be reported and the cloud from those on the outside saying manipulating things again. it is not a very good for pr. a much smaller market than foreign exchange. >> caroline, thank you. caroline hyde. the manipulation probe. >> we will take a break. yesterday, talking is losing with the chief creative officer christopher bailey. here he is, telling us how the fashion show and why -- ♪ >> i quite like things that make you smile and that's what we try to do at the end of the show

where we have singing and dancing. it is ok to smile sometimes and sometimes we take -- take things a bit too seriously. relax. ♪

>> those stores -- the stars were out at burberry's latest catwalk show and we caught up with the creative officer christopher bailey. we talked about technology.

>> i think it went well. the atmosphere is wonderful. nothing kind of window wrong. it was ok. >> what is the moment? >> i've never been anything else. i have nothing else to compare it to. what to do this collection is celebrate all things the british from architecture to music and of course, fashion. it is wonderful being british. we are surrounded by such creative industries that from where i am sitting, we are in a great place. >> burberry has always we are headed the social movement and you're gone a step further in japan. what is it like? >> it is really exciting. i've got an amazing organization, they are very dynamic, very flexible. it almost feels as when you are

with that team, it almost feels as the energy of a start up. that is exciting. that's how we always try to keep burberry and keep that energy and something new. and that idea and that is what it feels like working. we've done a couple of different things. as some have clue want to talk to our team. >> and engagement is so much stronger eu messages through the app. >> it works on so many different platforms. a classic social media platform and you can do your -- you can basically are range of your life online. -- arrange your life online. what i love about them is they have those wonderful stickers and animation, a big part of that and i quite like things that make you smile. that's what we try to do with

the end of the show. we have 60 singers and dancers and it is ok to smile sometimes. sometimes we take things a bit too seriously. it is ok to relax. >> it is ok to relax. a question on japan, a huge year for you guys. >> a huge year. we take japan fully in-house. well-built and amazing team in tokyo. we have shinzuku coming up. with great physical store -- we have great physical stores. we have started working with people like lion and maybe sure we have all different platforms are ready, including great outdoors. >> the first time chinese lunar new year is the same time as london fashion week. exciting or challenging? >> you cannot do anything about these dates. the oscars were yesterday.

some things are on a movable and lunar new year is an immovable. it is fine. you learn to move around. how i often talk about things slow, slow quick quick. i like things that move quick was something's need to be slow and thoughtful. that is what made it successful to be in business today. >> that was the burberry chief creative officer, christopher bailey. the show was wonderful. and the online. they had snapchat and that goes out to 100 million people. >> yeah. no longer do have to be the fashionista sitting on the front line. it goes out instantly. >> going there is very cool. >> of the corporate front. earnings jumped. they also spoke about iaeg's bid.

they are bidding for the company. let's start off with what air lingers delivered at the time -- airlingus deliver this time around. the ceo is leaving. >> is seem to be a good year for airlingus, they did a bit of contract and that helped and of course on the long haul they had a 20% on traffic and that really helped boost the operating profits. kristof moeller, the outgoing ceo, i think he is feeling the pretty positive about what he's done over the past five years. >> have we heard anything about the iaeg bid? >> the board is in favor of the bid and what was interesting today was to hear kristof's comments and yet been fairly quiet and came out and said he was feeling positive and they

began discussions with the unions yesterday. he was saying there generally a lot of enthusiasm and also mentioning the fact that while there's been a political rhetoric and concerns voiced from lawmakers about the deal he was saying something that may have taken the position that struggling to climb down from. he's going to be -- >> how do they convince and how do they convince politicians in this what they should be doing? >> willie walsh a couple of weeks ago, he was there and presented his package and improved their package and they offered to not sell that heathrow slots and offered five-year guaranteed on keeping an irish routes. a very big guarantee on airline terms. that is a lot about jobs and a lot of our regional conductivity. what kristof was saying today, going to the unions and talking

to them and making sure everyone is aware it is a now subtly about slash and burn and -- quest not what he is known for. [laughter] >>/or walsh. his situation -- slasher walsh. his situation is different from iberia. a lot has been done at aer lingus and fairly lean. willie wants to grow the airport. he has nowhere to grow in heathrow with a limit on the runway. he'll to abide dublin been the third. -- she was talking about dublin being the third. and whether the labor, government, with election if it will pan out. that is yet to be seen. >> kari with the latest on aer lingus. >> at they are waiting to see what their rival air ryan is

saying. still has a 30% stake and we will get a wider view of ryan air's view of the world including the aer lingus story. ken jacobs will change the face of this company. very significantly over the last 18 months. >> that is a bit on thursday. wanted to update you with head of the eurogroup trying to keep our finger on the pulse. dusselbloem seems to be suggesting that change is possible if greece respects targets. that is being broken at the moment. he said to reporters on the ground and we were plenty more from that in a couple of minutes. ♪

>> you have no knowledge as to how mr. putin will perform. i believe he miscalculated quite a net -- quite a bit in terms other european response to his invasion or support. and i think that is the problem. what chancellor merkel did was very powerful and immediately fly to the united states. >> that was larry fink talking to charlie rose about greece and you can catch in the whole interview later today.

that was on russia. >> anyway. bloomberg radio, first word is up next. for our viewers more of "the pulse." ♪

>> athens commits. >> stocks have jumped as a result. the greek equity market is up as pf tjeof the news. >> investors will look for clues on the first rate hike from janet yellen. >> good morning. a warm welcome to those just waking up in the united states. >> this is "the pulse."

we are just getting final figures of inflation bang in l ine with expectations. cpi is at -1.6% year on year. eurozone data. absolutely. in case you thought it was chinese or thai. eurozone data for the month of january. confirmed. >> judgment day for greece. let's go to athens. erik schatzker is live. it is wait and see mode, isn't it? >> the ball is in the court of the eurozone, that is absolutely right. greece has submitted its final proposal for economic reform to the eurozone finance ministers. a call is scheduled for 2:00

p.m. gmt. it may be some time before we find out exactly how this deal is going down. i can give you a sketch of what greece has submitted to the eurozone. as we have heard over the past couple of days, greece made some commitments about improving public finances. it is going to do a better job of tax collection. it is going to crackdown on smuggling, corruption, tax evasion. it is going to attempt to achieve a closer link between pensions and income and consolidate pension plans to achieve savings. it is going to close loopholes that have allowed greeks to retire early costing the government far too much money. there is going to be an effort to remove barriers in line with practices recommended by the oecd to make the economy more

competitive. it is all about structural reform. what has been made clear is that this is not about spending cuts. this government came to power in the strength of a pledge to eliminate austerity. what is not clear as to what degree there will be any less. does not seem as though the finance minister was able to make any progress with the eurozone other than some loose commitments around fiscal targets. that is now in the hands of the eurozone. we will find out in a few hours' time whether they approve what the greeks have sent them. >> we spoke to when economist a short while ago and we are focusing on the eurozone and the german lawmakers voting on friday. it is important to said that the greek parliament will have to vote on this. when you walk the streets of athens, are they still behind

them? how dangerous confections within the party become? >> it appears as though it is not too dangerous for the moment. there is a cabinet meeting that is starting very shortly. the prime minister does have to keep his party in line. there are certainly a number of factions within the party. sure, it is fractious and there is work to be done, but the government has been in power for only a matter of weeks. it would be nothing short of tragedy if there were an internal rebellion such that the government collapsed before the four bailout extension could be completed. it is going to be a difficult for months, that is sure. i don't get the sense and i don't claim to be an expert but i don't get the sense that this

government runs any risk of collapsing before these reform measures are voted on. >> thank you so much. erik schatzker in athens. >> in the next few minutes, we will be talking to a former member of the european commission task force to greece. in the meantime, let's have another conversation with on snow goals -- hans nichols who joins us from berlin. it looks like we are going to get a vote scheduled for friday. the timing is a little difficult. >> the timing is tight. that is a logistical measure. substantively, we have not heard

whether or not the proposals or list from greece is enough. without directly commenting on the proposed list, the germans do see that the greeks do want to stay in the eu. he does not see a grezxxit on the table. we have this conference call at 3:00 p.m. local and that is when the euro finance groups will have a vote on whether or not they accept it. i expect if we do not hear anything from the germans before the conference call that it is a strong indication that things are going smoothly, in part because last week the germans were pretty quick to come out and say this is not acceptable and then everyone got agreed and we had the late night and friday.

i am taking the silence from germany to be a positive sign. logistically, they are making preparations. >> what about the rest of europe? >> they are prepared to pass it and in some cases, they do not even need to. in finland for example, they just need a 25 member executive committee. it looks like if you actually get agreement from the finance leaders, the technical aspect of getting the countries to formally agree will not be a stumbling block but we still need to know what is in the substance of this list and whether or not it is going to pass muster throughout the eurozone. >> thank you so much. >> that brings us to our twitter question of the day. should the markets be nervous? do we think this deal is going

to get the green light or will he have an 11th hour disaster? let us know how you read the situation. >> coming up, we talk exclusively with burglary's boss -- burberry's boss. ♪

>> welcome to "the pulse." >> time for the top stories.

david cameron is warning russia of further economic sanctions if russian separatists push for more territorial gain. vladimir putin said the truce signed this month is on the path toward stability. >> russia must be in no doubt that any attempt by the separatists to expand territory will be met with further significant eu and u.s. sanctions. >> staying on russia, president putin said that there is no need for emergency measures in ukraine. he was responding to a question about whether there needed to be further peace talks. >> the u.s. fed chair janet yellen takes to the podium today . she begins two days of testimony to congress.

investors will be watching for any clues about the timing of the first interest rate rise. >> greases list of commitments has been submitted and is officially under -- greece's list of commitments has been submitted and is officially under review a european finance ministers. we now go to erik schatzker in athens. >> thank you, frans. thank you, guy. we are speaking to jens bastian. he is currently an ambulance -- analyst who has been studying the greek and regional economy since moving here in the late 1990's. will this proposal be passed? >> yes, it will be passed for all intents and purposes. it is possible. it has been communicated on time.

what is the difference compared to the confrontational style two weeks ago, this proposal has been in consultation with european partners. anything short of rejection would be a surprise >>. . >> you describe it is plausible but how sincere? >> it is a reality check. it is in an knowledge meant that you cannot move ahead without -- acknowledgment that you cannot move ahead without having the support of your european partners and the international community. it is communicating this now to a domestic audience and this is where the heart of the problem will rest in the coming weeks. >> it is all about structural reform. can it be done in this country? >> it must be done.

the government has no time to lose and has very little margin for error. that is part of the learning curve for the past two weeks. get together with the international creditors. rebuild trust so that you have a constructive working relationship at the european level. >> you say structural reform must be done. does this government know how? does the finance minister did does the prime minister know how? >> it will have to learn fast. my impression is that they are starting to learn. any structural reform needs greek ownership. you have to take the greek population with you. you have to explain why we are doing this what are the benefits of this? in particular, can we deliver? can we execute? >> you are a german who has been

living here for 16 years. what do germans think when they are looking at greece? >> the overriding impression is one of fatigue and frustration. they want this to be done with. one way or the other. they are in favor of a constructive relationship with greece. it has been always communicated that they want greece to remain in the euro. but greece has to deliver. you should do that without a confrontational approach, as has been documented far too often in the past two weeks in athens, but equally also in berlin. >> how quickly can this country change realistically? it has a legendary bureaucracy. >> it can only change if you take the population with you. if you take institutions and organizations with you that is part of the ownership part. you will need international

support one way or the other. for example, from the oecd from the european commission. greece cannot do this on its own . it cannot do the heavy lifting on its own. it needs political and financial support. it needs to make sure that it asks in the right manner for that. >> the government must bring the greeks along with it. it has been in power for a matter of weeks. is the prime minister doing enough to bring the greeks along with them such that he can accomplish these reforms? >> so far, it appears yes. the biggest challenge for the government is the opposition inside the senior party itself how you manage expectations among that constituency. that will be the real challenge of the prime minister and the finance minister. >> can we overstate the

magnitude of the challenge that the finance minister faces over the next four months during this bailout extension? >> not at all. if the past three weeks were seen as difficult, the next 3-4 months will be a major challenge for all parties included starting with this new government. >> is it realistic to believe to suppose that greece can renegotiate its debt? >> that remains to be seen. the debt burden is not on the list right now. i think it is smart politics to keep all issues regarding debt relief or debt restructuring out of an already very overloaded agenda. don't further burden it. focus on the essentials today. if you can deliver in this area and rebuild credibility, you can subsequently later address issues regarding debt restructuring. that is part of the longer-term agenda. >> do you feel better about this

country's prospects than you did on friday? >> indeed, i do. >> thank you very much. jens bastian is a former member of the task force for greece. back to you. >> thank you very much. erik schatzker in athens. >> let's go from one canadian to another canadian. bank of england governor mark carney testifies. he has been talking about the risk of a greek exit. let's have a listen. >> the time horizon over which to bring inflation back to target. the predominant cause of inflation being as low as it is our food -- are food and energy prices.

it was three quarters of the movement relative to target. we have the ability to look through deviations from target whether above or below. the committee will look through a series of one-off shocks. rightly so. in order to not cause undue volatility. said differently, to not cause excessive increases in unemployment when the economy was slow. we have these moves in oil prices and energy prices today that are principally driving inflation down and will likely bring it further down and possibly below zero. we can look through that

provided that we do not see signs more generalized -- >> what are the key indicators? >>savings? >> the first thing we will look at are the components of inflation. we will look at the d-up various -- the various diffusion indices. when we look at them on a weighted basis it is the same as the components that are above zero as was the case during the period of 1997-2007. we look at diffusion indices. we will look at wages and other principal causes of inflation. average weekly earnings are growing. the other suite of indicators

that we are very vigilant in looking at our estimates of an flechette and expectations. survey estimates and market estimates. >> deflationary expectations? >> in the short-term, yes. in medium term, the expectations are for positive inflation. the expectations are broadly consistent with the 2% inflation target, but we will continue to be vigilant in monitoring those indicators. >> i want to bring in the external perspective. professor miles. >> i think the expectation story is one where over the next year expectations are clearly low. inflation is pretty close to zero for much of this year. beyond that expectations look

pretty consistent with inflation moving back to the target. they don't seem consistent with an expectation of consistent deflation at all. >> there is not much talk about the effect of it period of deflation on consumer behavior and consumers deciding to save. [indiscernible] are you happy with that assessment of savings? >> yes, i am currently happy with that. at least the evidence i have seen suggests that the behavior of a lot of people is influenced by money interest rates at least as much as real interest rates.

they're feeling is that this is giving them a bit more money to spend. i think the cash flow effects are quite important. more generally, i think the sort of example i gave is that many people put off visiting in december because the petrol was going to be cheaper in january. >> price fall's will pick up that effect, you are saying? >> yes and there is a long-term tendency of goods to become cheaper. >> good. >> [indiscernible]

governor, have you viewed the video of the testimony? >> i have not. we are having a session on this next week. >> perhaps i can request that you look at it before next meeting, governor. it says that we aim to be courteous both externally and internally. you are expected to pay courtesy and consideration to the public and your colleagues. do you think that lord grabner's testimony to us was up to the standards of behavior exceptional to the bank or do

you think it fell below that? >> lord grabner was contracted by the oversight committee of the court -- she is not an employee of the bank of england. i would stress as i pointed out in my letter to you, that lord grabner is part of the independent directors of court. that is the arrangement. i'm no answering is a member of court. i think it is important that we make that distinction given the amount of time and thoughtfulness and effort that this committee has spent on the governance of the bank and how the governance arrangements have been put into place and how independent investigations of been conducted. with that context with the

second point of context being that lord grabner was contracted by the oversight committee, he is not employed by the bank of england i'm not going to venture an opinion on his conduct. >> so you don't think that the banks stand of -- standard of behavior should extend to its public contractors? >> that is not what i said. i said i was not going to venture a judgment. >> [indiscernible] >> i don't have a fully formed view. i have not viewed the video. >> that is the governor of the bank of england mark carney talking about the governance procedures surrounding the bank of england. earlier wrong, he was referencing what was happening in greece. he has been talking about inflation. >> he says that we have to look

through the deviations from the cpi target on greece. he was saying that anything that happens in europe was going to hurt the u.k. are you worried about greece? ♪

>> it is a game of kabuki. greece is part of the international grade in my mind. if you want to remain in the grid you will have to ultimately conform. if they don't conform, they are going to become argentina. >> a game of kabuki. that was larry fink talking to charlie rose about greece. >> let's check in on the markets . maybe they are playing a little

bit of kabuki. >> i think the word is fragile. the fragile agreement between greece and their creditors. the markets are looking fragile. we are coming off all-time highs on the dax. we are north of that. the ftse 100 is often all-time high. we talk about which side blinks. markets have not blinked with the exception of greek markets. the knee-jerk reaction to the agreement for now is stronger greek market. this is the greek athens stock exchange, it goes higher. bond rally over in greece, as well. go with the short end and look at the three-year. we are done by 100 basis points.

the overall yields are still around 13%. investor yield curves remain concerned about greece's long-term ability to fund itself. the general agreement, it is optimistic somewhat. i strip out the noise and go to this one right here. this is the stage for mark carney and janet yellen to play on. the governors of those two central banks testify today. mark carney is speaking now. janet yellen is testifying a little bit later. in a world of easing these two central banks stand alone as the two major central banks that could possibly hike interest rates later this year. this pair is going to be in focus in the fx market. outside of that, i leave you with this one. turkish lira against the euro. the majority of economists are spending -- expecting a rate cut

from the turkish central bank today. that one is a little bit more political in terms of what we have seen around the world. >> thank you very much. in about 25 minutes, it is "surveillance." what we looking at today tom? >> we have hans nichols in berlin. we have been talking to him about the back-and-forth and forth on greece and a little bit on ukraine. ethan harris will join us. dr. harris is with bank of america merrill lynch. we will speak to him about janet yellen. we will talk about global deflation. london and washington separated from the other economies. global deflation is front and center. john silvia from wells fargo will join us as well.

also, gideon rose will join us from "foreign affairs" magazine looking at the domestic affairs of the united states. we will talk about race and racism in america. a lot coming up, francine. >> looking forward to it. thank you so much. tom keene with "bloomberg surveillance" in 25 minutes. >> we are going to be speaking exclusively about structured capital. >> you are also looking at pictures of mark carney talking about inflation. that is not mark carney. he is offering a question to mark carney. [laughter] the impact of the euro crisis does have an impact on the u.k.

he has been talking about divergence in terms of inflation. >> the inflation story is interesting. they expect inflation to return to the normal area of policy within probably a year. dr. carney continues to give testimony in westminster. in the meantime, we will see you in a couple of minutes. ♪

>> welcome back. >> mark kearney is continuing to testify. he is saying that the lower inflation rate is temporary. he very much expects that to dissipate. that is not mark carney. let's talk to antonio pascual. very nice to see you, antonio. is the bank of england correct? >> we believe so. we believe inflation will be close to zero.

as we approach year-end, we think inflation could be as high as 1.5%. by year-end 2016, we will be close to 2%. >> antonio we had another economist saying that there was no chance that the u.k. would go first. that the fed would have to hike rates before the u.k. did a move. is that a fair point? with the firepower be eroded if they went first? >> they must depend on the data in the u.s. they will have to pay lots of attention to what miss yellen will say today and tomorrow. the market is pricing in a 50% chance of a first hike in june. that would fit well in what you just mentioned.

the bank of england could go by the end of the year. >> one of those on the committee that had been voting for a rate hike said the boe hike may need to come earlier than markets expect. he also talked about the risks to the pound on the downside. due to the trade balance. he talks about that risk to sterling as being substantial. how serious a threat is the trade balance? >> it has been a persistent structural issue. it is something the u.k. will need to a dress through structural policies -- address through structural policies. while it matters it is not critical, in my view. >> at the same time, we have the

u.k. elections and we have mark carney mentioning that there are big repercussions from a euro crisis how much are they looking at the political element? the u.k. elections. i know you are not expecting an interest rate hike before the end of the year, but things can change depending on who comes into power. >> no doubt. i think the election is too close to call. i have no doubt that it will have some implications on the timing of the bank of england's decision. think about fiscal policy. what is the envelope of the fiscal policy for the next couple of years? i think the political composition of the next government will have an implication on the bank of england.

the bank of england would like to have some time to assess policies and make decisions. it will be a factor in the decision. it will have to be. >> antonio, what is your view of where we are with the greek crisis? we have a decision later today whether or not the interim measures are enough to keep the story on the road for the time being. how does this one play out throughout the rest of the year? can we say we are done now or is there a lot more argument still to come? >> it is difficult to say that we are done now with these -- this crisis. we do expect some form of agreement today on some fundamental policies to be discussed by the finance ministers. discussions will go on. this is just trying to conclude the previous round with some

agreement. they will need funding over the next couple of years. they need to engage discussions into the next program. what they are doing now is to buy six months to give themselves time to discuss the next program for greece. they have substantial funding needs in the next couple of years and they will need another program. and that will not be easy, based on previous experience. there has been reform fatigue overtime. >> how do you see it all panning out? do we need to actually ask questions about the longer-term? at the end of the day, will we need debt neutralization? >> i think greece will need some further debt relief in the form of debt relief.

i believe they will get it. i have no doubt. more importantly is the potential focus of attention that markets will shift from greece to spain as there are political parties of a similar ideology. i think that is where policymakers are going to focus to send a message that greece is actually delivering. so that other countries receive similar messages. i think it is an important message that the eurogroup would like to deliver. >> antonio, thank you very much for your time. we are going to take a break. back in a couple of minutes. ♪

>> welcome back to "the pulse." >> what do uber tesla, and salesforce have in common? structure capital. jillian manus is a partner at the firm and she shares her investment criteria with us now. good morning.

it is nice to see you. you are focused on zero waste. >> underutilized capacity. excess assets. you think about the sharing economy and all the things that we don't use very well, but if you shared them, we would actually use better. maximize and monetize what we already have rather than creating more and more. do better with less by applying technology. if you look at that, everyone has cars. and yet, nobody really was sharing them. this is enabling people to get back to work, to use what we call space. we think of assets as space time possession.

now, you layer that with trust. you layer that with instant gratification, which is where we are all headed. [laughter] we have a philosophy in the united states which i believe is somewhat creeping into europe , which is the magic wand. that is your phone. the philosophy is such that if you cannot do it with your phone, you cannot do it. because if you cannot activate something on your phone, you cannot activate it. forget about it. it is getting a car. it is getting dry cleaning. it is finding a dog walker ordering food, finding a photographer. >> how did we ever live without them? >> i have no idea. [laughter] you talk about a smart phone. you talk about people who have so much that it is a most irresponsible for us not to use

what we have more. >> there are hundreds and thousands of propositions that would fit into that criteria. >> yes. >> what makes you pick the companies that are now huge and very successful? management? execution? >> there is definitely a criteria. the first thing we think of when we look at a company we go around the table and say, do we automatically have 1000 users? what is the barrier of entry? who else can get into the market fast on this? is the technology proprietary? we have those types of criteria? can it scale fast? can it scale globally? europe is somewhat behind in terms of the criteria in terms of the ability to activate fast and fund fast and to scale fast.

that is a problem. that is one of the key differentiators. zero waste is a mentality. in davos, you talk about doing well and doing good. investing in zero well -- waste is doing well and doing good. we have a social responsibility to do better with what we have. >> will they get in line or will they not get in line? >> i think it is the other way around. i think technology and innovation will create a new type of regulation. it will break the laws, which it has in the past. where there is demand, where there is innovation comes certain types of restructuring and revising. it has to be.

>> you think restructuring will change? >> absolutely. >> they are looking at regulation right now, but it may not be the right regulation. how much do you look at that? >> that is one of the key criteria. but we look at that saying, we have a company that is basically a virtual coin and it allows gamers to share video games peer-to-peer, zero waste. instead of buying more and more it allows everybody to buy and sell together. because of regulation they would not allow it to be able to take a transaction fee because you are not allowed to do this. so they created a virtual way to get around it. the coin that people buy when people get onto the site and it will also have a mobile app soon , that enables them to circumvent the regulation.

my grandfather used to say, where there is a will, there is a way. >> regulation is there to generate trust. how do you generate trust when you are trying to get around regulation? it is a circle, but you've got to figure out which side of it you are on. >> i think trust is also part of the demand. trust is a key driver in all of this. it started out with ebay. ebay created this trust. now we have trust with uber. get into someone's personal car good luck with that. now, we do. now we are trusting each other more and the government has to follow. the government has to give us credit and support the trust that we have created an order to activate our economy. that is really what it is. it is putting people back to work in many ways. it is enabling technology, right?

it is activating technology and applying technology to help people gain more assets. more wealth. >> utility for their lives. >> that's it. that is very well said. it is wrong for any government to hold back. in europe, if you talk about the funding models between europe and startups we talk about entrepreneurialism -- the government provides a barbell. we have the funding model that is very dysfunctional. you have the scis, which provides seed funding. good on them. if you don't do well, your company goes bottom-up, you get half the money back. that is unheard of in the united states. if you go belly up, goodbye. good luck with that. now you have seed funding and on the other side of the barbell

you have really great five major funders who are going in and they are creating very big buckets of money. if you do very well and you have many users and huge revenues what happens between? there is really no b funding. with that funding in the united states you also get the tools, the marketing, branding that is what we do. we bake in the branding at the very beginning. it enables the companies to position themselves with strength to get the next money and then the next money. >> it is one of the most crucial things. thank you so much for your time. we could talk for hours. >> absolutely. love it. >> let's talk about the rest of the day. we are joined by hans calls -- nichols.

we're talking about greece and janet yellen speaking later today. >> in some ways they are two sides of the same coin. how much risk is out there in the financial markets? we want to hear this conference call in about three hours time on greece. euro finance ministers. they will have a discussion on whether or not they approve this package. if they approve it, we are in the clear for the next couple of months. janet yellen the one thing i am curious about is how is she going to be asked about oil prices. it could be a hostile audience. republicans now control the senate and the house. we will see how hostile the questions are and if she gives anything up in terms of inflation. >> thank you so much. of course, our focus is greece. our focus is janet yellen. that is it for "the pulse." >> "surveillance" is up next

live from new york live with tom keene and the team. follow us on twitter. join the conversation. ♪

>> forward guidance is so 2014. janet yellen reports to congress. there will be no slack of debate .

everyone is a critic. all is quiet on the ukraine and greece front. headlines this hour. "foreign affairs" magazine looks at the domestic burden. good morning, everyone. this is "bloomberg surveillance ." we are live from new york. it is tuesday, february 24. joining me, olivia sterns and brendan greeley. we have breaking news on home depot. home depot, right now. >> we have home depot fourth-quarter net sales coming in at 19.1 6 billion the dollars -- $19.16 billion. sales are up 7.9%. >> wow. >> the