francine: airbus takes off. the company posts a 15% gain in profit and shares jump on the news. we speak to ceo tom enders first on bloomberg. all data created equally. galatians stop companies from slowing down certain online traffic. voting on greek aid. welcome to "the pulse "the pulse " live from london. i'm francine lacqua. guy johnson is in munich talking to airbus. german lawmakers vote today on

the for-month extension of greece's bailout. hans nichols joins us from berlin. this is expected to pass despite growing concerns in berlin about greece's new government. hans: it is being debated right now in the bundestag. there are about 22 defections expected from merkel's party. francine, what you are hearing right now in the german parliament is basically a predebate, a debate that everyone expects they will have in four months time about whether there is going to be more a sent in greece's direction. what is clear from all the parties talking now is they are willing to give greece a chance. they want four months to see what this new government can do. it is contingent on what greece's moves are. it is expected to pass, but there is pressure on merkel's party from the alternative for deutsche land, a new anti-euro party. the next four months are going to be determinative.

everyone is trying to prepare their arguments for the battle to come. francine: hans, if you look at the hurdles, the germans were expecting this vote to go through. we are almost 99% sure. it has to also pass in other european countries. not all of them, but most of them. what is the biggest hurdle facing greece? hans: it's -- since some of the regional parliaments like finland have said they are not going to have a vote, it doesn't seem like there are huge hurdles. we will see what happens in athens, but it looks like athens has everything lined up. in some ways, the biggest hurdles are financial. how does greece fund itself next month, let alone in april when it tries to get additional bailout money? they are going to have a hard time financing themselves next month. they could raise more money through t-bills.

they will need ecb approval for that. there is some indication that the ecb would allow those other credit facilities that were closed off. it seems to me the biggest and most immediate hurdles aren't necessarily political, but technical and financial. francine: thank you so much, hans nichols. for more on the crucial vote in the bundestag let's get an insider perspective. we are joined by michael fuchs. michael, thank you so much for joining us. great to have you on the program. you were there at the bundestag. what is the discussion focusing on? you've been fairly critical of this. does it mean you will vote no? >> no, i will vote yes. greece has fulfilled all of what we told them they have to do in order to get the bailout package. we are doing an extension of

four months. we will of course supervise and control on a tough basis whether they fulfill what they have promised to do. that is one of the reasons i'm voting yes. i'm a little skeptical that they will do what they promised. as a matter of fact, they told us many things already in the past and they never did it. while we look into it, and if the extension is positive, it is ok. if not, then we have to talk about it in 3, 4 months again. francine: michael we will get back to greece in just a second. i want to understand from you if there is any political ramification for angela merkel. the election is 2.5 years away but do you see any political risks because of this ongoing greek saga? >> no. i don't see it at all. if you see all the polls at the

moment, her party, my party it is within 43%, 42%, 41%. the people support her very much. i don't see any risk. at the moment, we do an extension of four months, which is necessary because we all -- we already decided to make this for months. we offered it to the prime minister to give a six months extension. he wanted to have only two months. now we are adding the other four months, which we have already decided in december last year. it is not a question that we will help them forever. the facts are ok, we can talk in the future. if not, this is the last bailout package. francine: michael, you're

talking about this for months extension. what happens in four months? >> that is a good question. it is really depending on the greek government. if they come up with reforms which show they are on the right path -- look at last year. it was not too bad. they had for the first time a primary surplus. maybe 6, 7 years ago was the last one. if they really keep on going this way, it might be positive. if not, no more bailout packages. francine: do you think that greece will need a third bailout? >> i'm afraid yes. but they will get it only under certain functionalities. these conditions will be even tougher than now. francine: and so, you think they are going to have a third bailout. you say that what happens in four months depends on whether the reforms are put through. answer me this, why is there so

much optimism that they will be able to fund themselves in march? when used because the greek finance minister, he says, the ecb can always give us the money. how will they pay their bills? how will they pay the imf? this is three days away. >> with the second bailout package first of all, they are entitled to have -- [indiscernible] there is the interest which they are paid. that is another 1.9 billion. we are talking about almost 4 billion available instantly. i think that is something which they can negotiate with the imf. the imf is one of the former troika. now it is just another word.

anyway, it is the same kind of people. these people are going to supervise the whole situation. if greece is following the rules, then money is available. francine: what concerns you about the situation? it seems that investors are placid. you don't have the market that forces politicians to get down with real reforms. is this what worries you overall? >> of course it worries me. the altercation in greece is worrying. nobody really knows whether they are capable to manage. they are now talking about, they want to change the smuggling situation in greece. very good idea, but this is not so easy. even the germans will not be able to avoid cigarette smuggling. i doubt whether the administration it is good enough.

that is something we have to see in the next couple of months. then we will see how they are going to perform. it is a question of performance and whether syriza is really doing different than they promised during the election campaign. they have to explain to the world that they are not doing what they promised during the elections. francine: michael, we also have breaking news that the italy-germany 10-year spread is below 10 basis points for the first time since 2010. what does this tell you, that we are not pricing in risk properly or because qe is there at the same time? >> it has something definitely to do with qe. but on the other hand, the situation in italy, if i got you

write, the situation in italy is getting much better already. italy is on the way to change something. we just saw the german finance minister in the bundestag saying that italy is one of the countries which are really starting to do reforms. such has been done by ireland and even portugal. portugal is talking to the imf to repay their loans which is a good sign. it shows that it is possible but it is necessary to make reforms. the only country in europe which is not on this path yet is greece. i hope they are going to do it. francine: michael, it is interesting to hear you say a couple optimistic outlooks for the eurozone when certain countries are trying to push reforms. i'm trying to get from you a sense of how you are seeing the bond market. germany is negative yield, for example on the 10-year.

is this normal? we hadn't predicted that a negative yield could happen six months ago. >> that is something which has never been the case. for the german government, it is easy because they are making money out of borrowing money, which is kind of ridiculous but it shows that everybody is trusting the german situation. we have a very low unemployment rate. we have a very low inflation rate. mainly because of energy prices which are much cheaper than they used to be. that is the reaction of the market. the market shows how they're thinking of germany is. we have a budget surplus. this is even growing. the situation is pretty positive.

it looks like in certain countries in europe, the same situation is getting better and better. i hope even the critical countries like france, italy spain, are in a better position. it might be that the euro is recovering, although many german exporters are pretty happy with the low euro at the moment. francine: michael, you were mentioning the u.k.. economically, this is a country that is doing a lot better however this is a country that faces uncertain elections. the general election is so difficult to predict. what does it mean for political risk? are you concerned that this is a country that could, if put the referendum, leave the eu? what does it mean for how you see the dangers within the european community? >> this is something which i really don't want to see and i

don't want to even think about it. i think the u.k. needs to be in the eu. it is absolutely necessary. for us, the u.k. is very important because they are -- let me put it this way, a liberal market economy. we need somebody in a market economy. some of the southern hemisphere countries are different and believe much more in a state-driven economy. we need the u.k. to stay with us in europe to come to a better solution, to come to a market economy, a more liberalized market economy than the other countries. i don't want to think about u.k. leaving the euro -- not the euro, but europe.

francine: michael are you most concerned about greece and the greek banks or russia? we talk a lot about russia. we talk a lot about sanctions. it doesn't seem the markets have fully priced in what could go wrong. >> i don't think that russia is going to help greece, if you put it this way, because they have their own problems. the situation -- we have to see. from berlin ticky a is closer than berlin to rome. we are very much afraid about the ukraine situation and the situation with russia. i hope that my chancellor isn't the only one who is on speaking terms with putin at the moment but she is able to convince him to fulfill what he promised to do with minsk. francine: the u.s. is still in favor of providing weapons the people on the ground in ukraine

to help if the situation doesn't get better very soon. would you be completely opposed to that? >> well, we are not very positive as far as that concerns -- as far as that is concerned. we think sanctions are better. at the moment, the low price of gas is really against russia very much. the russian budget is based on about $100 per barrel of crude oil and at the moment it is almost half. the russian budget is going to be in trouble very soon. all the other sanctions which we have imposed are pretty tough but we could even do it worse. then russia is really in deep trouble. that is much better, because i don't think we have a possibility of solving that problem in a military way. francine: thank you so much,

michael fuchs. coming up airbus stock takes off this morning as the company reports a 15% gain in annual profits. we will speak to the company's chief marketing strategy officer next. plus, all data equal. we will look at new regulations out of the u.s. that will stop broadband companies from slowing down online traffic. that brings us to today's twitter question. does net neutrality answer to you? ♪

francine: welcome back to "the pulse." we are live on bloomberg tv and radio. here are some of bloomberg's top headlines. the u.s. federal communications commission has voted to adopt new rules of ensuring that neutrality. in a three-to vote, the regulator voted to approve measures that prohibit companies from slowing online traffic or offering faster service in return for payment. the rules had been backed by president obama, but opposed by cable and telephone companies. speaking to bloomberg, ahead of nigeria's election, the opposition leader pledged to defeat the boko haram insurgency in his country and accused the current government of focusing more efforts on politics than attacking the extremist group.

>> we made a statement by our election. the police and other security agencies -- over 220 girls have been taken in the last 10 months. [indiscernible] francine: the research group "open europe" has put a 71st -- 17% chance of britain leavin g the euro. open europe is a think tank that campaigns for a reformed eu. breaking news this weekend, we

also have the biggest mortgage lender lloyds swinging into a full-year profit. here with more is caroline hyde. a notable profit, and george osborne calls it a milestone. caroline: it is a milestone. you have the first full-year profit in five years, the first dividend in six years. this is a company that is showing it is turning around. they've gone through so much pain. we had back in the third quarter cutting costs by a billion. thousands of jobs still to go. some 9000 over three years. still having to make huge cuts to this business but suddenly managing to turn a profit. the really symbolic thing for investors is the dividend. if you are looking at the profit underlying, they are still being hit by these huge cuts.

ppi provisions that they are having to make. 12 billion pounds. that is one hell of a miss cell if you ask me. the profit is looking better so they feel they can once again start paying a dividend. it is only 0.75 pence, but they say we see the importance of increasing the dividend. they are saying, we are going to have 50% of earnings going to a dividend. francine: and at the same time george osborne is hoping that this means a step closer to returning to private hands. caroline: if we are being cynical, look at him saying what a good news these it is. they still own just under 24% of lloyds. they magically managed to sell another -- they raised 500 million pounds since september

without anyone knowing. he now needs to get rid of the rest of the 24%. you do that by saying, look how well lloyds is doing. francine: caroline, thank you so much. we are going to take a break. ♪

francine: welcome back to "the pulse" live on bloomberg tv and radio. airbus reported a 15% gain in

annual profit after increasing commercial plane deliveries. for more, let's get the guy johnson. guy: good morning, friend. the airbus aevent running through numbers which were a beat. let's talk a little bit about what happens next. there are lots of moving parts when you make airplanes and defense equipment. let's talk to the man who's got a pretty good grasp on all those moving parts. he is marwan lahoud airbus' chief of strategy, let's call him that. good morning. let's talk a little bit about the headlines this morning. we got a beat on the top line and that is great news. let's talk about what is happening with how you are going to build airplanes on the civil side. you are going to be upgrading the number of a320's.

your competitor, starts with a b is going with 52. talk us through the dynamics of how this is going to work? >> we have always been very prudent when it comes to increasing the rate of production. this is what we have done in the past. this is what we are doing right now. we need to ponder the commercial dynamic and our ability to deliver against that dynamic. the decision to go to 50 was assessed, analyzed, pondered and was taken because we have enough orders, enough overbooking, and we truly believe that we will follow that increase in rate both in our factories and in our supplies.

we are assessing further our approach to avoid ups and downs. we owed that to our suppliers and our employees. we don't like too hectic evolutions. volatility is the worst thing that can happen. it creates trouble. we are studying to go further than 50. we take the decision when the time comes. guy: so you are looking -- you are talking about 60. that is a huge evolution in terms of where you could go. are you getting any sense from that study about whether it is possible? >> it is too early to say but let's go back five years or 10 years. if we were told five years ago that we would deliver 50, we would have had a lot of issues arising. so let's keep studying. the decision will be made on time. guy: let's talk about the

defense side of the business as well. mr. enders talking about the fact that you are not giving up on the euro fighter. is there a time coming soon, and this is a jet fighter that has components that have to be made much before final assembly is created when do you make a decision? when can you make a decision on that? >> the euro fighter, we have together with our partners we have three streams. one is supporting the fleet that is entering into service. both in our domestic countries and for the export orders. we should not forget that we have already aircraft in service in non-domestic countries. in saudi and soon in iraq. this is the first one. supporting that. this stream is going to lift.

the second stream is to deliver those new aircraft that are under order. movement domestic nations and on the export market. we still have to deliver to the u.k., germany, spain and italy. the second stream. the third stream is looking for new orders, new campaigns in asia, new campaigns in europe. like you would expect for combat aircraft. not all nations can afford to have a fleet. you have a few of them. these campaigns are different. airlines take a few months. here, we are talking about long-haul effort. it started years ago and may require more years to come.

still confident we can deliver on the export market, new orders, and therefore increase the production. this is a moving target. i cannot tell you now or in six months or 18 months. we are watching what we are doing, knowing our business will be supported. this is going to allow us to -- it is not just spare parts and small repairs. on military aircraft, it is more important. guy: do you have critical mass necessary in defense to stay in defense? >> let's look back. we have made a decision about defense. what is slightly shattered by the divestment as we have decided that we wanted to stay a

player. airbus group will remain a defense company. we are still the largest european supplier. what we have decided is we want to focus on flying objects. military aircraft, missiles, satellites, launches. this would be too short a description. to give a short description, this is where we want to focus, because this is where we are able to make the difference where we are able to be a world-class leader. we want to divest those businesses where we cannot be at the world dimension or the alarming can be better performed if the owner was different.

it is a matter of developing the businesses we own and we can grow. we have decided to develop mobile radios some civil communications services this is where we are going. guy: let's move on. i was talking to tim clark and he told me that he has 100 order ready. do you need other people to get on board?

15 years investment, 15 years of trouble. we are continuously improving the aircraft. we need to continue improving the aircraft. we will not make a decision that does not provide us with a business case that is solid. all of this would support those business cases. 2015 will be focused on starting to earn money. we will look into the improvements that are required in those improvements will be decided when we have a business case. it is a bit like the 50 rate. we have many improvements on the table. we are looking into them.

we will make the decision that makes business sense. guy: let's talk about the space business. we have private contractors in the mix. can space continue to compete? private sector companies are coming in. how do you compete against these guys? >> we believe we can. when you want to compete, you have to play on your strengths. we have the most reliable launcher and the teams that have developed and produced the most reliable launcher in history. we have the ability to innovate. we needed to reorganize and reshape the industrial landscape.

the environment was almost 60 in the late 1970's. to be fair to our private competitors they showed us the launcher business is liable in the fully private environment. we have decided to move from this mixed environment agencies funding, having state role and governmental role, and also industrial role into a situation that is like the airbus situation where industry designs manufactures, sells and operates launches.

guy: it has been a pleasure speaking with you. francine, i will hand it back to you. later, we are going to talk to the ceo of this business. for now, back to you. francine: great work. thank you. i am looking forward to the interview. from airline manufacturers to manufacture -- iag saw a big turnaround. let's bring in carrie lundgren. carrie: iberia, they increased profits. this is the first time they have returned a profit -- the first time they have posted a profit in six years. it is something they have been working hard at.

transatlantic, doing well. all of that brings down what is going to happy -- what is going to happen this year. some very pleasing numbers for iag this morning. francine: have you heard anything more about the iag bid for aer lingus? kari: they want to keep the focus on iag. they are interested in aer lingus, they think a deal would be good. he did not say anything negative about wanting something to go forward. it was interesting to see him make a point of the success they had today in terms of the results, what they are seeing in iberia and the possibility that could be a similar story for aer lingus. we are using today's numbers to analyze the potential for aer lingus. francine: we have had a couple

of figures. how does iag fit? competition is stiff. kari: the discount carrier did not grow quite as much in profits as it might have done. that suggests strong competition from the likes of easyjet and ryanair. other legacy carriers, they are struggling with structural issues. they have been doing an excellent job of developing an airline model where they do not drag one another down. something lufthansa and air france is struggling to come to grips with. francine: time for other top stories.

apple has sent out invitations to an event in san francisco where it is expected to unveil released details for the new smart watch. tim cook first unveiled the watch in september. weight watchers losing the race against fitness gadgets revenue. they fell to 10 -- they fell 10%. fitness tracker such as sit bit -- fitbit has been loring dieters away from traditional dieting programs. airasia has posted a loss of almost $119 million. speaking to bloomberg, the ceo paid tribute to his staff and how they dealt with the tragedy and expressed optimism about the year ahead.

>> thailand is booming at the moment. indonesia, despite what happened, when we started re-advertising, sales have gone ahead. it is a tough period for all of us emotionally. the team has held up well. business looks strong for 2015. francine: the united states considers web traffic to be equal. the fcc voted to adopt a sweeping measure to ensure the internet stays and open medium. let's bring in caroline hyde. it is huge because it net neutrality means broadband says if you are netflix or you have your own webpage i am not going to put one forward over another in exchange for payment. caroline: it is huge. it is strict. the fcc has come down saying web

traffic should be treated equally. if you are netflix, you should not be buffered if you are running through a cable tv provider, equally if you are trying to use skype, they should not make your skype caller slower. that is the idea to prohibit internet companies providers from making that difficult. also preventing them from a two-tier solution. raging a decade, this argument. 4 million people have been going to the fcc with their opinions. this will protect innovation, a level playing field. >> more than anything else, this is a victory for the people against the big people, the

suppliers who have the power and the wealth. they feel hopeless and helpless. i see it -- communication that people can sometimes when. once in a while, we get a win. caroline: you could ask yourself what leg companies had to stand on. their argument is pretty valid. they are saying we have to manage traffic. we have to increase the amount of investment we are spending. how are you going to innovate? we are not going to be able to cope with the huge data load coming towards us if we have to make it all things equal. i think this will run and run. this could come back to haunt us. we could have another legal fight on our hands in the likes of verizon.

they could come back and say we are providing speech you are compelling us, you are compelling us to make certain voices heard rather than others. i think this is not the end of it. francine: one about here in europe? caroline: same argument is waging. we have 28 different markets and the overall head of digital commissioners trying to say we want one market, like the united states. he is a proponent of net neutrality. he wants us to move the way u.s. has. in november, there was a law a draft law passed by the european parliament saying we want

strengthening to net neutrality. in november, came back and said maybe not so much, we might need compromise. this will rage on the side of the atlantic as well. francine: caroline hyde with the net neutrality debate. that brings us to our twitter debate. does the neutrality matter to you? tweet us. we are back after this break. ♪

francine: welcome back. we are live from bloomberg's

london headquarters. the whistleblower at the head of a tax scandal spoke. he faces up to five years in jail for leaking documents from twc. his actions created a scandal. he spoke to tom mckenzie. >> you could end up in jail. >> possibly. >> you are preparing yourself that could be an eventuality. >> i prefer not to think about it. >> he may not strike you as a renegade, but in 2010, working at price waterhouse coopers, he copied thousands of documents containing confidential tax agreements. antoine: i did not know what i would do with the information. tom: they asked those -- they

expose secretive deals between luxembourg and multinational corporations. deals that allowed them to cut tax bills to as little as 1%. in became known as the lux -leaks scandal. antoine: i pay taxes, why shouldn't corporations do the same? tom: what surprised people was the scale of things that was happening. >>antoine: they are not taxed in luxembourg.

tax rates below 2%, 3%, or even 1%. tom: they funneled money into the country, saving billions in tax. david clinton is a -- david quentin is a barrister specializing in tax law. david: there is a pressure to stay competitive on tax and it is not really competitiveness. it is war. it is -- luxembourg has done its best to bend backwards and make itself the place to use to avoid tax. tom: the government refused to comment for the story. they have said the system is being reformed.

we set out to find some of the subsidiaries central to these allegations. you have twc's brand-new offices. over here, you have a business office service, home to what looks like dozens of subsidiary companies. many multinationals based themselves here almost in name only. this office alone was home to dozens of subsidiaries. on another street across town -- this is disney's home in luxembourg. a very nondescript office. disney is a company based out of a single office. we are looking for apple's luxembourg subsidiary, itunes. this is it. not really shouting out there presence here.

a tiny slip of paper. now, they are under pressure to reform. european parliament is set to investigate the deals. the scandal has cast a shadow over the presidents of the european commission. most of the deals were done when -- was prime minister. back on the streets of the city he insists his actions were justified. antoine: eight creates a special committee proves that -- because it creates a special committee it it proves that it was not in the general interest. tom: that not have -- that has not stopped him from being charged of theft in violation of business secrets. he faces up to five years behind bars.

the last time i came here, it was to get charged. tom: he doesn't know if his case will come to trial, but he remains convinced he did the right thing. tom mckenzie, in luxembourg for bloomberg. francine:'s will follow the story closely. later today, we will talk to tom enders. ♪

>> my only plan since the beginning is greece in the euro zone. i refuse to consider other solutions or other issues because it is our common interest. everyone knows that. francine: that was pierre moscovici speaking to me in an interview. we will have more throughout the hour. bloomberg's the first word is him next, for our viewers, the pulse, second hour. a vote is ongoing. we are expecting to have the

results in about 20 minutes and then we are talking net neutrality. our twitter question of the day does net neutrality matter to you? ♪

francine: airbus takes off. a 15% gain and profit. weeks the to the ceo first on bloomberg. all data created equally. new regulations out of the u.s. stopping broadband companies from slowing down online traffic. the bundesbank -- the greek --. we will bring that to you shortly. good morning to our viewers in europe. welcome to those just waking up.

this is "the pulse." we are just getting some figures. the spread between german yields an italian yields at a record low not a record low, the lowest broadband band since 2000 10 means it is going through the right reforms. an interview spoke about the value of a more confident greece in the euro zone. >>'s program has to be given the stance of confidence. it is important for greece if we want confidence to be back. confidence is the key for everything, for growth, job

creation, and active economy. francine: joining us now is jonathan ferro. jonathan: the issue is there is not much confidence in greece particularly in the greek banking sector. the ecb has to play a big role. there was a delicate moment during the interview. the president of the european central bank penned a letter to the irish government to enter a bailout program in order for the ecb to continue carrying out liquidity. even though we have a huge installation in the bond market, the banking sector's role in providing liquidity to the greek banking sector is critical. things have not changed.

one thing has the commitment on the ecb's banishing. they have not bought a bond. record low on deal. negative. you will talk about that. that makes the role difficult when they try to buy bonds. the other issue i want to talk about is other commitments. some of those commitments are huge, unquantifiable. going forward, are we pushing on a -- with yields upat record lows. we are talking about that before they have even bought a single bond. it is quite encouraging if you are italian. this spreads are collapsing below 100 basis points. you are seeing record low yields across the eurozone.

you see the irish 10 year drop below 1%. how much longer can this go on for? a third of your zone -- a third of eurozone carrying a negative yield. a tough time for investors. the ecb as well. they will have a problem. francine: i caught up with a key official in the bailout for greece. he says that while greeks voted for austerity the economic situation is under control. >> we met and it is always when you face elections and there is a choice the democratic choice must be heard and respected. it is normal that this government want some changes. in those changes, how to find

the social crisis. if these changes are about better public administration, better rule of law a stronger fight against tax evasion and tax fraud everyone should and will agree, but for the rest of it, we know that reforms have to be funded and that commitment is taken with europe had to be respected. this is what the discussions will be about. we went through a possible crisis. we avoided that. we have a common ground of discussion. let's move on. my only plan since the beginning is greece in the eurozone. i refuse to consider other solutions or other issues because it is our common interest. everyone in the eurozone knows that.

it will be difficult. we have a lot of ground to pursue together. we must do it. francine: you do not like speculating. tell me this, why would anyone have money in the greek bank? >> i am not a speculator. again, we want a strong greece. we want a greece capable of creating growth and jobs and a country on which everyone can rely. francine: i have a lot of people that ask me will greece need a third bailout. they say what do you think the solution for the european union for greece will be because we are not talking about debt neutralization anymore. what would you tell them? >> we are going to discuss it. in order to define. the next up, the new

arrangements, some call it a new program, new contract. we have time to do that. we know how to do that. the difference with the previous window is now -- the previous period is now we have the tools to resist any kind of shock. we must be confident. in four months, not tomorrow. i do not have to answer that. i know where we are going. francine: that was the economics commissioner. for more on the vote, let's bring in our guests. let me start it it seems my interview with the commissioner was a reality check for me. he did not want to talk about what could go wrong. he said we are optimistic and we

have this covered. how worried are you that we are not going to see greece be able to finance itself over the next five weeks and we will have to find another bailout? >> there is no clear plan for greek funding in march. it is likely that headline risk will come back. there is also an agreement and it is unlikely that core governments will make greece -- over a liquidity problem. greece is being held on a shortly's. in -- is being held on a short leash. revenues are going down. they have a -- around 11 billion that needs to be bridged. banks have a lot of bills and

there is a limit of 15 billion which has not been lifted. there is potentially a shortfall there. how could they bring to that? they could raise the limit or they could get a grace. -- a grace period on some of the it. francine: it seems the markets are not saying that. are you concerned this is a disaster we are not seeing? are you more on the pessimistic side than the optimistic side? >> i do not think it is a done deal yet. the government should go through some financing providence and maybe pile up arrears. there is a reason there is a shortfall in the next several weeks and months. the agreement is on the process that greece has to follow.

they approved the reforms in their own parliament. there is no clarity of what will happen after the four months period expires. there is ecb qe a plan that is needed could -- and the rest of the periphery as rebalance. they are no longer to be subject to budgetary crunches. francine: we have the backstops in place and i tried to pin the commissioner on this, why would you keep money in a greek bank? if you think about that, do we need to say, we either find a solution longer-term or we stop this project.

>> i think you keep money in the great bank. that is what we need to see. to me it is appalling that countries not getting paid to borrow are not reaching -- not talking about it. the core european countries have over half of their bonds in negative yields. they are getting paid to borrow and invest. politicians are still resorting to central banks for near-term help. there is no plan for greece to fund itself in the next few weeks. i do not believe in the bad apple theory. if you push a country that wants to stay in the euro out of the euro, you are creating a perverse game where investors are going to ask themselves who is next. you transfer the monetary union

where countries can get kicked out when they do something wrong. the same thing can happen to other countries. there are backstops, but the bad apple theory is simplistic. to kick someone out, others can be kicked out. francine: i do not understand why we are not talking about this. maybe we will find a solution and leaders will talk about it in june and july. do you think they have a plan b on how to get the union together and avoid this being repeated? do you think they are not talking about it so they do not spend the markets? alberto: i am aafraid they believe there is no contagion and you can isolate a bad country. in an environment where you kick a country out, a can happen to italy later on, the market will challenge the other countries.

we are in a good situation because with qe, one third of sovereign bonds are in negative yields. this creates an opportunity for governments to invest long-term. for greece, there should be more flexibility. their debt is not sustainable. they have to do reforms. when a creditor cannot pay, you cannot put them in jail. you need to have a credible plan. that is not the previous plan. daniele: i do not agree. it cannot be a one-way street. greece has to reform, but there is a lot on the table for greece. if they were to comply, they would amend the plan. if i o u a million pounds at zero point --

you can see the shock for now. bond yields -- in the south. francine: we need a more permanent solution. you start from scratch. alberto: we need a more permanent solution. it has to be a two-way street for greece to comply and a plan of structural reform also. the official lenders have the next tended -- have been extended. i think we will have two major pressure points. one is an intermediate by april in one way thewhen we approach jim. fra-- approach june.

they want to look different. they don't want to be associated with greece. on one hand, if you give help to greece that looks like free lunch, you are encouraging countries to ask for the same thing. you also cannot squeeze population where one out of two young people is out of a job. conditionally, it is important. what we proposed was to swap the greek -- into bond, which gives interest payments linked to the growth rate. that is a real equity swap. that is what to do with a company when a company is in distress. you give the company more breath.

at the same time, creditors have a chance to get their money back. it cannot be a free lunch. we proposed politicians to get paid and some of these bonds. francine: it cannot be a free lunch. i like that. alberto gallo and daniele antonucci thank you. on the corporate front, shares took off and airbus announced the continuation of its defense unit. guy: they are ramping up the aircraft we spend most of our time on. they are upgrading it in terms of the expected number of builds to 50. they will be doing that by 2017. boeing is talking about going to

52 by 2018. airbus is studying the possibility of going to -- pair that is a meaningful move from airbus if they can do that. the other takeaway the fact that they're going to accelerate the exit from certain defense units. they are slimming the business down. they are focused in on -- they are focusing in on things that fly. i spoke to the head of strategy the guy in charge of the move to sell off the defense units. he said we are not giving -- we are not getting out of this business. >> we have made a decision about defense, what was slightly shadowed by the divestment is that we have this -- we have

decided that we wanted to stay a player in defense. airbus group we are the largest european supplier. guy: that was the head of strategy at airbus. later, we are going to be talking to tom enders the ceo of airbus group. summoning questions to ask him about what is happening in his sector now. -- so many questions to ask him about what is happening in his sector now. as the euro goes down, what does that mean? lower fuel prices, people will not be taking as many air planes. are we going to see new engines? tim clark would like to see that happen. you have a battle between the u.s. carriers led by delta against the gulf carriers. what does that mean for tom

enders and his business? he sells to both does he get sucked into that story? i am looking forward to that story. francine: we are looking forward to the interview with tom enders. coming up one nation with liberty and internet speed fraud all. details behind the latest web rules out of the united states. does not neutrality matter to you? you can tweet us. we are back in a couple of minutes. ♪

>> this is a victory for the people, the consumers against the egg people, the suppliers who have all power and the wealth and make decisions for them. i see it as -- an indication that the people can sometimes win. once in a while, we get a win. francine: that was steve wozniak streaking about no neutrality. the united states considers all internet traffic to be created equal. a wide open internet. caroline: at the heart of it who owns the internet? u.n. mean me who have to pay to get access to it, -- you and me

who have to pay access to it appeared in the u.s., they have come down strictly. they have defined the internet service as a public utility, like water or electric the. they are allowed to regulate and have strong walls and measures on top of it, saying web traffic should be created equal. they are no longer allowing the likes of comcast or at&t to block or slow traffic. say you wanted to make a skype call, suddenly and has to run the same speed as a phone call. they are not allowed to offer a two-tiered system. barack obama was pro-this.

netflix, unsurprisingly, excited about this. they are able to get their content across and not come across bay area zen -- and not come across barriers. why were they saying we should be able to buffer and slow some things down. their argument is we need to control and manage traffic. that is why the republicans came on the side of at&t saying if you allow all freedom to everyone, we are not going to keep the upkeep as much as we should. francine: what about the winners and losers on the back of this? caroline: the winners, companies like netflix, companies being charged for access to the internet. the losers, consumers. if we get charged more for it. if verizon and at&t are hurt by this, verizon saying this is a radical step that imposes badly

antiquated regulations. it is coming back again to whether or not they start charging more to internet access. francine: speaking to bloomberg ahead of the election, opposition leader pledged to defeat the boko frharam insurgency. >> for example, we made a statement [indiscernible]

francine: a 17% chance on britain leaving the eu. it is based on contingencies of including the makeup of the next government. the likelihood of it holding a referendum and the potential outcome. coca-cola's bond stamp eat. -- stampede. breaking news in terms of what we are hearing. the bundes have voted on greece.

500 42 yes, 32, no votes. germany gave its stamp of approval for this extra greek aid. ♪

francine: welcome back to "the pulse." live from london. we just had the results of the vote in the german parliament on the 4-month extension of greece 's bailout. hans nichols joins us from berlin. they have approved the extension. hans: they approved it by a majority. who were the 32 no votes, how many from angela merkel's party? once we get a sense of how they the faction is, that could influence things moving forward. there is likely going to be

another vote, potentially over a third bailout package in 4 or 5 months' time. that is the issue when there is more money on the line. the germans were not talking about additional money for the bailout. if there is more money, what will that look like and how nasty will that fight be? this gives us some indication that those within merkel's party are willing to go against her. francine: is this more of a question on whether greece gets the extension or is this a political situation for angela merkel? the elections are not for another two years but this might become difficult for her if me greece saga continues. hans: if it does continue and it looks like it will, she will face pressure from the right. there's the alternative for germany party that wants to get out of the euro.

it is important to see how many of the 32 are from merkel's party and compare that with the vote in 2012. 20 billion euros is the number thrown a lot in the press here. we do not have any confirmation. what they agreed to hear what basically the old program. he extended it for a little bit more. if greece continues with reforms, there will be verification in april, they could get the left over money 7.2 billion euros. for an additional program that would have to be a third bailout . an entirely new vote. that is no sure thing in the german parliament. francine: thank you so much. hans nichols from berlin. let's check on the markets. it is all about yields. jonathan: it is about equity markets as we wrap a chaotic month for greece. approval for a4-month extension. hans nichols is looking forward to doing it again in a couple months. a record-breaking week for

equity markets and bond markets. record highs enzymatically markets. the dax, a record high. back by .1%. the ftse 100, we broke an all-time high. we are back by .1% again. raising gains in the equity market. a record-breaking month for equity markets and bond markets. euros and bond yields, this has been the story of the week. the rally in euro zone bonds, negative yields come all the way to seven years in germany. rbs pointing out that a third of euros on sovereign debt now carries a negative yields. remarkable. this morning, we go to germany and look at the yield on the 10 year, .34%. there it is. german yields a little higher. coming off incredibly low yields in germany. is the spread between germany and italy that is bringing the headline this morning.

the extra yield to compensate investors to hold italian debt. that difference is under 100 basis points. italian yields at 1.3%. the difference of 100 basis points is the lowest in five years. the difference between italy and germany. quite remarkable. record-breaking week for the bond market and equity markets alike. as we chased the yields lower, as we fight lowflation and central banks introducing negative rights, no different. suite integrates negative the other week. this -- sweden took great negative the other week. gdp crashed estimates. a weaker dollar, a stronger swedish krone. as we go forward, what is that mean for central-bank policy? tit's clear you can generate strong growth even with low inflation. maybe sweden is the exception to the rule. francine: thank you, jonathan

ferro with your asset check. 25 minutes from now is "surveillance" with tom keene. we are focused on u.s. data. tom: lots going on. we follow up on the excitement from jonathan ferro about movements in the foreign exchange market. alessio from oppenheimer funds. and jim will join us from principal group for a very important discussion about what is negative rates mean within europe and new effects within the foreign exchange market. dollar-renminbui going to new weakness. that's remarkable. tennessee will join us from bnp paribas. we will talk about the bond effect in the u.s. we will speak about his expertise in the housing market. an odd housing market here in the u.s.

we will go to phil mattingly and peter cook as they look at the fractious politics in washington. part of that is the present of shutdown of the department of homeland security tonight. that is very unlikely to happen. even if it "shut down," i'm not sure what that means. we will learn about that from peter cook and phil mattingly. francine: looking forward to "surveillance." nigel farage, the leader of the u.k. independence party is kicking off his campaign. he outlined what he calls the great threats to british culture and the british economy. immigration and the european union. mr. farage: should we be in control of immigration or not? we've had the latest immigration figures showing a year on year increase of 300,000 people. a gross of 600,000 people. the biggest ever.

the point is, our government aren't doing things. we have an open door. we in ukip are not against immigration, we are for an australian style system where we can choose the quantity and quality. francine: stephanie had a feature on ukip in april's bloomberg market magazine. he reiterated his opposition. we heard the party arguments opposition to the eu. what do we know about his economic lands? >> he's managed to push immigration to the top of the political agenda. can he do the same for his economic plan? he is a classic free-market libertarian. i'd say in recent months ukip

has become more fractious and has tried to court the labour vote. trying to broaden their appeal. they are advancing more populist economic policies. he has said he thinks the tory party has not cut the deficit quickly enough so he will push for that. he's come out with a populist policy saying he wants to inject another 3 billion pounds of cash into the nhs. his overall plan does not really add up. he says he can pay for all this including deep tax cuts, by exiting the eu, getting rid of 8 billion pounds a year and membership dues. and slashing 9 billion from the foreign aid budget. overall, it looks unaffordable put together. francine: is ukip the british version of the tea party in the u.s.? >> there are parallels. the difference is the tea party is the far right of the republican party. ukip is a separate, independent

party with a charismatic leader that is having a huge effect on the election because he's stealing votes from both the tory party and labour. one of the main reasons why we are set to have a hung parliament come may. francine: is it likely he went a parliamentary seat? >> it is looking positive. the latest poll that came out is putting him at 39% versus 27% for his conservative rival who happens to be a former ukip member and a fellow eurosceptic. it reflects the campaigns locally. francine: ukip is trying to go after votes, labour voters but also conservative voters. it is unclear if this election means that people will vote for economic plans or whether they will do it for personalities. and how would he fair in that?

you say he's charismatic. how much should we actually believe the hype around him? stephanie: the polls indicate, because of the electoral system here, they probably will not gain more than five or six seats. more than that, they would be doing very well. they are launching a credible campaign and more than 20 constituencies, they could impact the outcome by stealing votes from either side. they are still viewed as a protest party but it seems like more of the electorate is willing to cast a protest vote at the general election, which is a new thing. usually european elections are considered the throwaway vote. there's a lot of disaffection where they could have an impact. francine: thank you so much. this is the most uncertain u.k. election since 1928 when women had the vote. stephanie with bloomberg markets magazine. follow stephanie on twitter.

the u.k. general election is taking place on may 7, these are the main parties taking part. we will be talking to these parties in the coming months. they're on your screen. more on the general election after the break. polls point to the closest race in generations. we speak with one of the country's top pollsters. an interview is coming up. ♪

francine: welcome back to "the pulse." the u.k. general election is less than 70 days away. shaping up to be the most uncertain race since 1928. the most recent yougov poll shows the labour party holding a one point lead over david cameron's conservative party. let's dig into the power of polling with yougov's founder and ceo, stephan shakespeare. thank you for coming. in the past polls have been pretty accurate. this time it is so close. we are not sure if we should be looking at polls from the parties or whether it is personality polls. how do you see this panning out? is it more difficult to predict this election? mr. shakespeare: it is hard. the parties are so close. on their flanks from ukip

the greens and other parties are drawn support. small differences will make a big difference in the outcome. anything can happen. the parties are slightly different from the leaders. the parties are fairly close but if you ask about the leaders cameron is well ahead of ed miliband and george osborne is well ahead of ed balls. which is making some people think that if there is a change over the next 70 days is going to be towards the conservative party rather than the other way around. francine: how do people vote? today but for personalities, policies -- is it half-and-half? it changes from year to year. mr. shakespeare: it is changing every time. the trend has been against party loyalty. in the past most people voted the same way, there was a fairly small swing group.

now you have swings not just between the two main parties but also conservative's splitting off to ukip. in scotland, a huge swing away from labour to the nsnp. francine: what is your take on the outcome of the election? we had alastair campbell on two days ago. he said it is so difficult to predict. he said he has never felt so uncertain about the future. mr. shakespeare: that is right. if i was betting, i would that on the smallest lead for conservatives you can get. they will be just about the largest party. maybe a bit more than that. how that works in the after negotiations is another question. francine: do you have a poll on asking people whether they see in election after this election? we cannot actually form a viable government. mr. shakespeare: we ask them to

predict what is going to happen next. people protect a stronger conservative government than a lot of pundits do. they do not think there will be a majority but they think it will be strong enough to make a coalition. francine: do people go into election gear closer to the day. with the scottish referendum, nobody really cared until about two or three weeks when people started noticing and then made up their mind. mr. shakespeare: it was different in scotland. you had an enormous historic thing you are deciding. in general elections, we like to think it is a big deal but he difference is not that huge. in the case of scotland, it was massive. you are going to change history forever. there was no easy going back. we saw that people toyed with change. they were homeless negotiating with the government to say what can you do to bring us back. at the last moment, the

establishment came out from london and said here is a new offer. people did what they wanted to do, which was the back to the status quo. francine: because we are 70 days, the parties are still trying to make voters think the right questions to ask. which would play in their favor. if we take emigration, eu and the economy, which one do you think voters will care about the most? mr. shakespeare: the economy. i don't think they care much about the eu, that is not what they are voting for. it's the economy. the question is not straightforward. they think the economy has gotten better but they do not think it has gotten better for them. the tories as the party of the rich is the problem they have. if they were not that, they would get more credit for economic recovery and be in a stronger position. that is what labour is going to be playing off of. if things got better, it has not gone better for you. francine: we saw a tiny wage

increase in the last two weeks. is that going to be the decider of the election? if we get a wage increase? mr. shakespeare: that will help a bit but the big thing is march 18 when the chancellor has his final budget. he brings rabbits out of a hat. francine: thank you so much. stephan shakespeare. the ceo of yougov. coming up. plenty more. a first interview with the ceo of airbus. my coanchor and partner in crime guy johnson has traveled to munich to do that. we';lll take a break. ♪

francine: welcome back to "the pulse." live on bloomberg tv and streaming on bloomberg.com. top headlines. germany's parliament has approved the extension of greece 's bailout. the biggest dog -- the bundestag approved the extension, despite disapproval from members of angela merkel's party. the expectation that greece will meet its commitment. the head of the u.k.'s largest mobile operator has expressed confidence his company's acquisition by british telecom will lead to benefits for customers. >> consolidation can unleash investment.

b with the integration of bt and ee we will be able to create an even better mobile and fixed infrastructure in the u.k. francine: airbus has reported a 15% gain and profit after seeing an increase in commercial deliveries. the company has benefited from higher demand for fuel efficient aircraft. airbus announced plans to boost monthly production of its a320 aircraft. stay with bloomberg for more on airbus. guy johnson will be speaking with the airbus ceo live from munich later. guy joins us now. it's going to be a fascinating interview. guy: i'm looking forward to talking to him. from the get-go, airbus' shares have a nice pop. analysts on as awe speak.

the investor base seems happy. financial stoppingacking up, can they deliver in terms of what they say they can do on the aircraft front. they are going to manufacture more a320s, that is the narrowbody most of our lives whizzing around the world on. downgrading the a330s they're going to be building. question surrounding the a3 80. the boston emirate -- the boss at emirates wants to see new engines. he said he'd have a order for airbus.

that's a huge commitment. airbus is not sure it wants to make that decision. we were talking to airbus' head of strategy. this is what he had to say. >> 15 years of investment. today we start harvesting. it's time. those 15 years were not just about building. we were improving the aircraft. we will need to continue improving the aircraft. one of these improvements is reengineering. there are many others. we will not make it decision that does not provide us with a business case that is solid. guy: waiting to see what is going to happen with that aircraft. when can they make a decision? when do they think the supply chain, the engine manufacturers will be ready? when can i make a business case,

that is the most critical thing that needs to happen for putting new engines on the aircraft. big decisions and i will be talking to tom enders about those. francine: looking for to the interview, and an hour and 15 minutes. guy: it is coming up in "surveillance." it's 12:45 gmt. he's gone a little bit varoufakis on us. he's wearing a bavarian jacket. blending in to the background in munich. he looks fantastic. looking forward to that conversation. we need to talk about the defense business. he is and ask paratrooper. a bit of an affinity for it. we will see whether or not airbus will continue in the defense business and what he sees that business doing in the future. the jacket, watch for that. francine: i feel like i am going a little varoufakis every day.

i like the way you coined that phrase. guy johnson with the great interview on "surveillance." that is it for "the pulse." keep it right here on bloomberg. ♪

>> this is surveillance. tom: the euro plunges. jean claude trichet asks where

is confidence in athens. chris christie maintains solid. president underwood and the first lady "house of cards" season three is upon us. live from new york. friday, february 27, i'm tom keene. joining me, i think the color of her dress is pink. olivia sterns. the dress uproar in a bit. olivia: congress may kick the can on it comes to homeland security. house republicans plan to vote on a bill that would fund homeland security for three weeks. that would avert a shutdown fidgeted lace tonight when the spending -- whatever a shutdown said to take place tonight. republicans say any spending should block obama's