guy: there will be an attempt to convince merkel that he is a good bet. it the greeks point their finger at the ecb. it we speak with christian noise a. of 10 china move closer to taking over for rally? good morning to our viewers in europe. a very warm welcome to those just waking up in the united

states. this is "the pulse." we are live from bloomberg's european headquarters in london. francine is here and you will see her later. it is a decisive week for greece. the prime minister kicks off with a visit to berlin to meet angela merkel. this is the second meeting in five days between the two leaders. greece is slipping closer to bankruptcy. we've got coverage from greece and germany. let's go to hans nichols in berlin. hans: she is rolling out the red carpet. neither side is elevating expectations. they are both saying this is a get to know you. he thinks it's important to have

conversations outside the pressure of negotiations. the great media is reporting that he will bring up privatization and slow down the privatization efforts that have been a priority. mrs. merkel will ask greece to implement the reforms. that is the issue. the meeting in brussels began asking for new bailout money but one it immediately. he says he will not be able to make it until the end of april. that is the crucial question in all of this. when multicast run out? -- when will the cash run out? they would not be able to meet their debt repayments because of the crushing burden. they will need new money and a new influx of cash. a local newspaper is putting the date at april 9 when greece

could run out of money and not be able to pay pensioners and government workers. guy: these are two separate issues. it does seem to be a sense that more money is owed when it comes to world war ii reparations. hans: there are elements of the german left that are open to the idea. that includes the christian democrats. this issue has been settled and this should not be reopened. there are parts of german society that are open to the idea. they are more sympathetic in general to the anti-austerity push that has been led by merkel's government. you are hearing this out of brussels and the dutch. everyone has this 18-1 approach.

it seems like the non-greek side is unified. guy: great work. thank you very much. let's go to athens. we still don't have a handle on the cash crunch. is there any sense of what kind of number we're looking at? guest: the greek offers are adding up quickly. it's a matter of weeks if not days that the cash crisis will reach its limit. pensions are just north of one billion euros due on thursday. if they manage to do that, the first two weeks of april will be demanding. nobody knows the exact date that greece will run out of cash.

any cash flow is variable. the greek government passed a bill last week to enhance tax collection of overdue payments. we are not sure how that's going to go this week. one thing is for shoe, -- sure the meeting will have to have helped on this crisis. guy: we believe it there. thank you very much indeed. that brings us to our twitter question of the day. should merkel beware of greeks bearing gifts? the fun answer to this is flowers. a program that will convince. he's not talking about negotiations. he's got to bring something to this meeting that will convince

her that he is a man it she should do business with. what should he bring to merkel today? let us know what you think. join the conversation. make sure you watch bloomberg tomorrow. we have the first interview with the greek finance minister. he will be joining us in morning coverage. we're looking forward to that conversation. we will get a sense of how the meeting went from him. we will get a sense of how much money is still left in the 10. we have a lot of questions to ask him and we're looking forward to that conversation. what else is on our radar? the spanish region had elections. they won 47 seats in the local parliament. the victory contains the recent rise of the anti-process -- austerity point of view.

the right-wing front took 26. the unp and the french national now are you can. the deal will lead to a takeover valuing the carmaker at 7 billion euros. cam china -- coming up, we have a great lineup of guests. from paris, we will be joined by the president and the bank of france. you don't want to miss those exclusive interviews. they are right here on the pulse annex couple of hours.

we will be talking about advertising. we will be joining francine for a conversation later. we are looking forward to that conversation. we will take a break. it's a busy morning and we will be back in a couple of minutes.

guy: we've got some great guests coming up. she is going to be joining us. we will also be hearing from the governor of the bank of france. we have a lot of questions. manus cranny will be asking those questions. he is having a great morning over in paris. manus: thank you very much. we had a nice dinner last night. we've got the chief economist for wells fargo. it's an american interpretation of where we are. let's get it out of the way. the fed is not going to be impatient. you talked about what of the biggest banks in america, what does it mean? guest: we are looking at june or september.

we think the fed needs to go to normalization in terms of financial market pricing. manus: they downgraded the growth forecast. they have guidance in terms of where they think interest will be. why is everybody freaking out? if the recovery is strong, why? guest: the challenge is you have this modest growth with zero interest rate. what happens if those rates rise just a little bit. especially when we look at housing and auto sales. a small change in interest rates may mean significant changes in actual housing starts and auto sales relative to what people are expecting. manus: that would shake the recovery. that is the two areas of people have been effusive about. guest: they depend on a

financing. you have to change the activity. manus: i was around in 1994 and i had a terrible time in the bond market. you have said that this is different. this won't be like 1994 or 1995. it won't beat what the fed did in 2000. for those people who were not around and need to relive the bond market torture, talk us through it. guest: fed policy raised interest rates aggressively. sometimes 25 or 50 basis points or more. i think the fed is concerned with economic growth. they don't have a rapid pace of inflation. there is concern about the dollar and its negative impact in economic growth in the united states. manus: the other report that i looked at last week said the

dollar has been mentioned. if this is so important? guest: the dollar is not the fed's responsibility. when the dollar starts creeping into the discussion, it signals that they are talking about this problem. manus: if they begin to tighten rates you've got a tightening in rate cycles that gives more fuel to the dollar fire. guest: this morning, the governor of the bank of france mentioned unintended consequences in pursuit of monetary policy goals. there are implications for changing policy and interest rates. one of those is the dollar. how much do you weigh that? at this point, there is not big weight.

there is some way going on. manus: the average american has a car and a home loan. they have changed the car to a truck and they have cheaper gas. life is sweet. it's important for the oil price to remain so on the floor. guest: that is another uncertainty that you throw into the calculus. if the oil price moves up, then you will see the real disposable income decreasing. that will put another damper on economic growth. manus: michael was here and he was saying phase one in the oil movement, where are we in terms of how you look at oil prices? opec is not playing ball. there has never been as much of a drop.

how does this play in to your bond market? guest: swing producers is essential. not since the 1970's have we seen the lack of a swing producer in oil. that means over time there is no bounceback. we are looking at something more sustained around $50 or $55. that is a challenge to some shale production in certain areas of the united states. manus: you said the world is a different place from what it was in 2000. what does that mean? when the fed goes to normalizing, they are not dealing from the same deck of cards. tell me what that means.

what does this mean post dodd-frank? guest: it's a transmission mechanism. the fed changes the fund rate. that is supposed to change all of the interest rates along the way, including the activity for banks. we know that banks don't act the same as they did in 2006. that process is quite different. we know that capital requirements look different. the important point is a lot of the balance sheets are concentrated in long-term treasuries and not at the short end of the curve. that tells me once again that that transition mechanism will impact long-term interest rates. we can talk about monetary policy getting back to normal. how that affects the economy

will not be like the past. manus: we will catch up later. they have a heck of a balance sheet. do they use the fed funds right? is that still a holy grail? guest: from what i can understand the answer is yes. it is still the primary tool that they will work through. there's not much discussion on how you shrink the balance sheet , just an idea that will use the front rate and i think they will be cautious on the balance sheet. the balance sheet is treasuries and that is a benchmark for a lot of bond financing. you change the long end of the curve. manus: we've got this colossus of a balance sheet.

do they just hold to maturity? guest: at this point, unless inflation picks up, the answer is yes. they can go for maturity. manus: thank you very much. back you go. i'm sure they can't wait to hear what you have to say. the american view from wells fargo. up next we've got the cleveland federal reserve. we will see what she has to say in terms of normalization. later we will catch up with our host today. back to you in london. guy: thank you very much indeed. we have two sides of the atlantic. manus cranny is getting into both of those issues. we are going to take a break. after that, we will drive into the egg deal of the morning.

we will give you the details when we come back. ♪

guy: we are live on bloomberg tv. that may get you up to speed with the top stories here it ted cruz has become the first republican to announce his candidacy for president.

the tea party aligned crews said he asks followers for their support. the socialist president one of 47 seats in the local parliament. the victory continues the recent rise of the anti-austerity party. they are allied with greece. elections were held in france. the former nicolas sarkozy party. the unp and the french nationality were running neck and neck. pirelli is going private. let's get some traction on this deal with caroline hyde. it seems like a complicated

number. guest: 15 euros per share. that values them at 7 billion euros. it is complicated. chemchina is looking to buy the majority holding. that is 26%. they are going to buy 26% of the rally -- pirelli. they want to spend up to 7 billion euros. they may want to get skin in the game. one of the men is the chief executive of pirelli.

he will probably remain as chief executive. he can reinvest in the country -- company. whatever happens, they are getting in there and taking the 26% stake. we understand the cap he will be taken private for at least four years. why do they want chemchina behind them? they already have stake in tires. they could double the volume in the truck tires business. thereir competition is michelin. they want to be able to reclaim some of that market share with the backing of china. this deal is one of the most

substantial we have seen from a chinese company into italy. it is potentially 7 billion euros. this is a historical moment p forirelli. they are going private for at least four years and have a big chinese backer. guy: the stock is up today. we will take a break. we will talk europe versus american startups. stay with us for that. you can follow us on twitter. francine is not here today, but she will be talking later on. ♪ ♪the big meeting later on is with angela merkel.

what do you take to germany? we have a lot of financers already coming in. i will see you in a moment. ♪

guy: welcome back. it you are watching "the pulse." i'm guy johnson. yemen's slide toward civil war continues. the third city has been seized. the leader is calling for more money to broaden the fight against the militants. the offensive comes after 140 people were killed in friday.

norway's fund is making final plans for the first asian real estate investment. the wealth fund has held 2.2% of its assets in real estate. they are seeking to build that short -- share to around 5%. the founding father of singapore has died. he was 91. he helped transform singapore into one of asia's most prosperous nations. a state funeral will be held on sunday. there will be a week of national mourning. m bns has launched a robot. this is complete with a mechanical brain and red eyes. you've got to have flashing red eyes. we talked about pushing the

boundaries of clock making. i was an only child and lonely child. you have imaginary friends. mind was a robot. 40 years later, i created my own little robot. i created it. that looks like a robot, but it's an incredibly mechanical watch movement. it has a 40 day power reserve. the energy is going to come through the system under the dome. that brain is going to send information it down and you've got an hour disc and sweeping

minutes. if you look at the eyes they are turning red. this is a warrior robot. you have to be able to play around with a robot. one important factor is high-end clocks always have a key to wind them up. on hinge this you wind your robot up. there you go. i create for myself. i never think of who is going to like this or want this. i am amazed that people i never expect will purchase one of our pieces. the beauty is we create for ourselves. that is an extremely important part. guy: right.

old-school tech. you wind it up. that is the story of today for those who love it yesterday. let's talk about today for those who love tomorrow. the european tech sector has made great strides. our next guest argues that they have a long way to go to match the performance of the united states. good morning. you're not impressed with what we do over here? guest: i wish i was. there is such a different mentality. the main concern here is the word disruption in the united states is opportunity. we target disruptive markets. transportation, automobiles, hospitality. the worker is able to reach their earnings capacity by on boarding into these marketplaces or whatever marketplace

technology provides to reach their maximum earning capacity. we put workers back to work because they put themselves back to work. they don't pretend to hide behind the government and the union to somehow provide them with wages. what's going on here is a shame on this government for choking the worker. you have zero contracts here. how can a worker sit by the phone and wait for some of the call them and tell them what they're going to be paid at how many hours they are going to work we don't wait for the phone to ring. american workers have marketplaces and technology. guy: the biggest problem with the u.k. economy is productivity. it is embarrassing. how does technology solve the u.k. productivity story? guest: it gives them the ability

to be productive. guy: is that what we need to be looking at? how would you go about it? guest: i would tell the government to back off. they perceive innovation as something is going to replace the worker. that's simply not true. it's there to create opportunity for the worker. we have marketplaces in the united states. we have a system where people can get to work anyway they want. we have massage therapists or dog walkers or contractors these are places where people can be more productive because we give them the opportunity to do so. how dare the u.k. or europe slammed the door on uber. we were one of the first investors in huuber.

we thought this would be putting people back to work. taxi drivers were offended. we have a large proportion of taxi drivers who are uber drivers. they can maximize their earnings and set their own schedules. that's productivity. we have the next uber. it's disrupting aaa. that's roadside service. it is a model of productivity and efficiency. i talk about the magic wand being the phone. you hit the button and your toe truck comes to. this is the fastest time in the least amount of money. the tow truck driver finds more than they ever did. they are out of this monopoly of the market which is aaa. we have workers that write

letters that say we saved their home and they can put their kids through school. that's productivity. guy: how is that being allowed to take off? is it the consumer adopting this quickly? guest: i think the consumers mentality is such that we embrace disruption. that is our mentality. there is a marketing problem. perhaps europe is perceiving disruption -- anything that disrupts the status quo. anything that changes the status quo, europeans cringe at. the european worker is ready for this. the european government is not. guy: there is a debate taking place in this country about whether or not we should be part of the eu. if the u.k. was free of the eu,

with that go along way? guest: you look at france and italy you look at those countries and they are choking more so. they are not investing. the u.k. is investing at least in these innovations. they are investing in these and some monocle of money towards innovation. the fact is if they were able to act -- extricate themselves, they would do more. guy: there are areas in which the u.k. is doing phenomenally well. guest: just the innovation around financial services, we are looking to you and seeing what are you doing over here? i think they could do so much more over here. you need to get unstuck. you need to gain more freedom. i think that once again, it's bottom-up and top-down.

the workers and consumers are acting and requiring, but in the united states they are demanding it. the workers want more opportunity to make what they should. they should be able to have the freedom to do so. here, i think the u.k. is trying to do this. other areas that they are investing in is in -- enabling them. thank you for the invitation. guy: we will take a break. when we come up, we will talk to the global ceo. stay with us for that conversation coming up next. ♪

guy: the conference takes place in london. one of the major players is the ceo. he joins us now. it is nice to see you. is this business where you want to be right now? guest: it is 180 years old. i think this year we can say that we have never been as healthy as we are. we have profitability increase.

all the accelerator lights are green. guy: how much of that is the external environment improving? guest: we are trying to get a strategy plan together. this is a combination with the low euro and the drop of the oil price. we have low interest rates that help investment. it is a combination. guy: how does the euro affect you? guest: two things. mathematically, it's a strong improvement. it is a much more profitable region. our clients are producing to the

united states. there is much more oxygen. there is more space to invest in advertising. it impacts our business unit --. guy: your clients are saying they can export more to the united states. guest: prices are much more competitive in the united states. it's a big discrepancy. what's good for our clients is good for us. guy: our clients in the united states doing the opposite? guest: it is a booming region for the last three years. we can see the united states having a fast pace of growth. we have the benefits in europe. guy: do you feel that europe is

turning a corner? you talked to people year ago, do you think the economy with low oil prices, is the economy beginning to turn? guest: we have a strong environment. we hope europe will recover. united kingdom is doing well for the last two years. we can feel it in the forecast. it is up 5%. we have a better germany as well. some countries are still in between. it could be a good year, it could be the turnaround year. guy: there are others that lead big advertising companies. you're not in that cap? guest: we maintain our

investments. we are stronger today. we have maintained all of our investments. we can take advantage of the recovery. i would say i am reasonably positive. guy: you are hedging your bets a little bit. where is the innovation now? we have seen so much change the balance between content and advertising. where do you go next? what does the next 12 months deliver? guest: it fascinates me how fast the industry is changing. after the content and mobile you are spending more time on

their global device than watching television. we are still very focused on how to transform this into smart and meaningful data. we are bullish on content and trying to prepare the internet of things revolution. guy: how does the internet of things translate to advertising? does everything become a vehicle for selling us something? guest: the distribution change will be completely disrupted. they need to be part of this system. they need to maintain their market share hold. guy: it changes the point at which we advertised in terms of distribution and how it links back. guest: it will change completely

the way we organize the consumer journey. the way to see products, a brand can talk to. we want to create meaningful connections between brands and consumers. it is the right person and the right time of day on the right device. they know how you live. it will be much more meaningful and advertising will be much more perceived as a service. guy: how do you invest in that? who do you talk to? who do you employ? guest: creativity is still the key. we are adding a layer with mathematicians. we took that and media reach.

guy: it's a very different business than the one that was 200 years ago. guest: it's changing. you need to keep being forward thinking. you need to be open and embrace innovation. guy: just on the content story, content is becoming a big part of advertising businesses and you are buying up content. how does that all? you become content companies in your own right? do you understand the ultimate endgame? guest: fragmentation -- it's becoming hard to catch people's

attention. we need to be part of the content. a brand can be part of this. you can talk directly to consumers. we are producing content for brands. we started this six years ago. it was quite visionary. now, people are investing in producing content and forecasting what content will be relevant for a brand. guy: we can spend a few minutes talking about politics. had you see the political story in france evolving from here? as a senior businessman, what are you seeing? guest: the relationship between

citizens and politics has changed. we were complaining against the political people. after having seen this in paris it was crazy for an entire week. we have changed our point of view. we have been able to gather the country with this big march. we have been able to come together. this national getting together attitude could lead to a turnaround in the economy. that is making french people more optimistic than they were

three or for months ago. guy: is this a major contender in 2017? guest: i hope not. it would be a disaster. people are not happy with the current policy situation. i hope that we have a party in two years. guy: that is still a long time away. so generous of your time, thank you very much indeed. let's stay with that french election theme. we are joined from paris. talk us in the significance of the election.

they were expected to do better a huge vote in favor of the national how. guest: we said the national front would be 25% of the vote. that is the case. there were polls before the election that with the national front at over 30% and making them the largest party in the country. the sarkozy has won his that. he took over his old party a few months ago. they are clearly the top party in france and the main opposition party. a good score. it's not the breakthrough that a lot of people were expecting. guy: how can we extrapolate from

this? they are up 10% on where they were last time. people are beginning to talk about 2017 and wondering how the lay of the land will look. can we extrapolate from this realistically? guest: i think we can. the one point is 25% sounds a lot. if you take the socialists and the unp one reason that sarkozy did well is because he struck alliances with other centrists before the vote. that is why they are leading in all departments. the socialists did not do that. the socialists don't have analytes alliance with ecologists or some of the other parties. they will probably win the presidential election. if you add up all the scores of

all the center-right parties they are nervous -- not as far apart as it might appear. if you take all the leftist parties they came in with a combined score of 35%. the national front -- the national front did 25. the national front is here to stay. it's a major force. we are a long way away from seeing it when the presidential election. i just of the cuts possible in 2017. guy: thank you very much indeed. now for our viewers in the united states, that's it for "the pulse." up next is bloomberg "surveillance."

we're going to speak exclusively with the cleveland fed president. ♪

tom: greece may run out of cash by the end of april. the stock markets are higher and yields to send particularly in germany this morning.

the prime minister of singapore has died. good morning. this is bloomberg "surveillance." we are live from new york. i'm tom keene, joining me is brendan greeley and olivia sterns. olivia: ted cruz is running for president. he has become the first republican candidate to officially throw his hat in the race. he announced just after midnight on twitter. he will launch his campaign in a few hours at liberty university in virginia. he is the canadian born son of cuban immigrants. he was backed by the tea party. he has been an outspoken critic of obamacare. he spoke against it on the senate floor. singapore is mourning the