francine: greece continues to remain at risk. 50% -- that is what george soros told me in an exclusive interview. pound under pressure. sterling continues its two-day drop. we will look at election risk. good morning to our viewers in europe. good evening to those in asia.

welcome to those just waking up in the united states. this is "the pulse." we are just getting pmi figures out of the eurozone. it is a little bit better than expected. the strength is coming from germany. the eurozone manufacturing for the month of march. services also a little bit better. germany doing rather well. france not doing so great. let's get immediate reaction from hans nichols in berlin. hans: it looks like germany is strong enough to carry the rest of europe. we have the disappointing french numbers. we had the much better than expected german numbers. almost a full percentage point. clearly the german economy is taking off.

23 months of expansion in germany. we have a surprise on the upside for the eurozone number asas a whole. the french news is disappointing, but mostly reason to be encouraged. francine: moving on to merkel's meeting with the greek prime minister alexis tsipras. lots of smiles, little progress. did alexis tsipras gain anything from merkel? hans: the meeting went five hours into the night after the press conference. we have a greek official saying that greece is going to submit their reforms by monday. we could have the eurogroup get together, take a look at these reforms, and figure out whether they pass muster. then we have martin scholz, who is talking about that there is

likely to be a deal by the end of this week and that the funds will be on lost -- un-lost. you want to talk to euro leaders and heads of state. that brings us back to mr. tsipras. he said it is important not to stereotype area -- stereotype. alexis tsipras: neither are the greeks lazy or the germans responsible for the drawbacks. we have to work hard to break these terrible stereotypes. hans: mr. tsipras said it would be a simplification to blame all of greek -- greases problems on external -- greece's problems on external forces.

again, the meeting went on for five hours after that press conference. francine: mario draghi also weighed in from brussels. is he a sympathetic central banker? hans: he is a frustrated one. he was asked about whether he was blackmailing greece and he had a strong answer. he thought it was a bit rich. he noted the ecb's total exposure to greece. this keeps with the thursday night meeting that was in brussels with mr. tsipras and euro area officials. it was really mr. draghi who was pretty firm and pretty harsh on mr. tsipras for not giving ecb officials access to the relevant books they need. mario draghi seems increasingly frustrated and that is important because he will be among others determining the raises. francine: thank you so much.

i also asked billionaire investor george soros about greece. he said the situation is now a lose-lose game. george soros: the situation is quite serious area the situation has deteriorated -- the situation is quite serious. the situation has deteriorated. the desire to hurt the other greece's performance has deteriorated. they are hurting themselves doing what they are doing. europe, also. if it pushes greece out of the euro would hurt itself. francine: is it a 50-50 possibility? george soros: i would say so,

yes. it does not need to be there. it has to terrier rated. -- it has deteriorated. the basis for compromise is there but it would require a full month of negotiations point by point. then you don't need to write down the debt. now, you can just keep on pushing it back almost indefinitely and just keeping the primary surplus between 1.5% and 3%. in the meantime there will be no primary surplus because greece is going down. francine: that was billionaire hedge fund manager george soros. we will have more of that

exclusive interview throughout "the pulse." that brings us to today's twitter question. do you agree with george soros that there is a 50-50 chance of greece leaving the eurozone? for more on greece been joins us from athens -- ben joins us from athens. ben: i think george soros is on the more aggressive end of the spectrum. the last few days have seen a bit of a shift in tone in terms of the language coming out of the greek government, the german government, as well as the french, the ecb, as well. what other has not been any material progress -- while there has not been any material progress the atmosphere has

definitely shifted and, as you can see, the markets there is a certain degree of positivity about the way the process is heading at the moment. francine: why is the greek government still resisting to embrace the reforms that the eu wants? ben: what you've got to remember is that the reforms the eu wants have been on the table since before the greek election and tsipras was elected on a mandate to reverse the austerity program. to just cave in now and implement the bailout conditions would be abandoning all of the promises that tsipras has made to the greek voters, which would put his government in a very difficult position. he needs to find a way within that framework to at least show the greeks that he has made some progress toward getting what they want. francine: in terms of money,

what is greece's financial predicament? when does it actually run out of money? ben: nobody really knows for sure, in part because the greek officials have been very reticent to open up their books and let the troika in to find out what the situation is. what we know from the briefings we are getting is that they are getting down to the crunch roundabout now. -- round about now. they are stalling on payment of bills. they are shutting the deck. they are pulling in little parts of cash from here and there the pension system, public companies. they are scrambling to get the money together to meet the payments as they come update today. at what point the process runs into buses is difficult to say but there are a lot of people watching very closely every time one of these big debt repayments

comes up. francine: thank you so much. here is a look at what else is on our radar. china's economy. the preliminary purchasing managers index was at 49.2 down from 50.7 in february. this sent chinese stocks lower. it was the first u.s. company with a value above $700 billion. according to one analyst, apple will keep on growing. cantor fitzgerald says apple will hit $1 trillion. the british prime minister david cameron who is campaigning for reelection, has rolled out standing for a third term in 2020.

he named potential successors to lead the conservative party. coming up, more from my exclusive interview with billionaire investor george soros. we will also hear from the ukrainian prime minister -- the ukrainian finance minister. ♪

george soros: that will tell the russian people that russia's problems are actually due to putin's policies. francine: that was george soros speaking to me about the message a successful ukraine would send to the russian people. back to grace. -- back to greece. george soros said he sees it as a lose lose game. and he said there is a 50-50 chance of a grexit. a 50-50 chance. this is a huge chance of a risk. we don't exactly know when greece will run out of money. i still don't understand why it is so difficult for greece to push through the reforms. >> obviously, they have had an

election. they have not managed to achieve everything they have hoped. on the same side there was more acceptance that some part of the issue has been the huge fiscal austerity that has been weighed on them. that was during the rounds last year. you need forgiveness of some description to generate growth. that is what germany saw. the narrative has changed. francine: why not tax the rich? if you tax the billion or shipowners, that seems like a win-win situation. david: yes i agree but you have to have the systems in place to do that successfully. the ecb is borrowing bonds in

size. we saw that confirmed in the data yesterday. markets have rallied. bond spreads have come in. at the end of the day, they can live with the problem. george soros talked about that they could live with this but the compromise will be struck at some point. francine: but you don't want to live with it for a long time. is the fact of a grexit 50-50? david: no. it is as high as it has ever been. obviously, it would bring the whole system -- some issue is credibility. i think we all know that there is some form of debt write-down. they are going to have to live with greece is a very high level of debt, not paying any interest for a very long period as long

as they push through these reforms. greece, last year, was recovering. it was moving in the right direction. it was between 2010-2013 and there is no reason why they cannot recover going forwards. francine: talk to me a little bit about the pmi. as germany strong enough to pull together all of europe? david: around the edges, we see that spain has outperformed. we don't totally rest on the pmi's. we look at the whole thing. there is a recovery occurring. that was recovering right through last year. the pmi data will be consistent with eurozone gdp at 0.4, 0.5. not a great figure, in the scheme of things, but it is encouraging and a step in the right direction.

francine: encouraging figure, especially when we have the massive qe. david: yes. the benefits of qe were being seen before the been -- the bonds were bought. it was real household income that started accelerating last year. that is what has been driving the eurozone recovery, it is consumer spending. even in germany, the recovery was based around consumption. that is what has been leading in part, this recovery. francine: in terms of what we need for the next couple of months, when you look at qe will it kickstart growth or is it putting a blanket of no risk on the eurozone? david: the eurozone was recovering anyway. unlike the u.k. and the u.s. which turned to qe in the midst of crises they did qe two pounds of money back into u.k. banks, this is a very different scenario -- to pump money back

into u.k. banks, this is a very different scenario. the eurozone was recovering anyway. francine: can you really call it a recovery or just green shoots? david: it was a recovery, yes. it was actually moving. you are hitting the system with qe at a time when it was actually recovering and i am optimistic that the eurozone will see a reasonably good recovery this year. the goal is to get investment going in 2016. you need investment to start going in the eurozone in 2016. the eurozone is two years behind the u.k. and the u.k. is two years behind the u.s. that is the timeline here. it is going to take the eurozone another two years to get back to where we are in the u.k. right now, maybe three years. francine: how do you calculate all the political risk?

there are those who are saying that the pound will be going down because of the political risk. david: we agree entirely. fiscal risk will be a major theme as we go into the elections. i put out a note on friday highlighting that maybe the tories will be a minority government and that could actually be successful, according to history. scotland has had a minority government that has been successful. if you get a minority government elected in may, that would be a buying opportunity maybe, particularly if the u.k. is growing strongly. francine: david, what is your plan on currencies? david: euro-dollar is one of the major players. the euro is going to continue to go down. it is purely down to divergence. francine: thank you so much for

your time. join the conversation on twitter. do you agree with george soros, is there a 50-50 chance of greece leaving the euro? coming up, we hear from ukraine's finance minister about access to capital markets. stay tuned. we are on "the pulse." ♪

francine: welcome back to "the pulse." live from bloomberg tv and

radio. ukraine's finance minister natalie jaresko sat down earlier with ryan chilcote. she said that her war-torn nation was seeking access and told ryan how they would achieve that goal. natalie jaresko: we are listening to our major creditors, listening to their concerns, trying to talk to them about we see our future and we see this as a common interest. ryan: did you get the sense, i know you were in california and you have been talking to franklin templeton that this cocktail that you talk about this extension of maturities and a coupon reduction on principle -- and principal reduction was something they were willing to stomach or did you get the sense that they did not want to have that conversation with you? natalie jaresko: there were a wide variety of investors with a

wide variety of interests. if you look at the market pricing of the debt, the market has already accepted the concept that this is going to be necessary. the imf program is public. the targets in this consultation are public. with regard to the savings we need to achieve over four years. as well as the percentage of our gdp that we can in and the average year, used to finance the debt. i think anyone putting the pieces together has gotten a clear understanding of the situation and i think most people understand that the ukrainian people have borne an extraordinary burden over the last year and a half and this is part of making sure that ukraine moves forward as a sovereign state with a renewed and restored economy. ryan: the imf gave you a deadline of sorts to kind of come to some understanding in good faith, with creditors, by the end of june -- or at least have some talks. do you have to do a deal, do you

have to have a restructuring in place by the end of june? is that a must? natalie jaresko: yes it is. the end of may is when it would be. we do need to reach agreement with our creditors. francine: that was ukraine's finance minister natalie jaresko talking to ryan chilcote. tune in to bloomberg tonight where ryan will have a special report on the ukraine conflict. you don't want to miss that show. coming up, we will have the latest read on u.k. inflation after the break. we will take a look at the pound ahead of that report. in terms of what it has been doing in the last couple of days, there you go. 0.7352. we have had quite some pound going up in the last couple of weeks. it has gone down over the last couple of days. we have had a couple of reports from the foreign exchange economist saying that the

weakness of the pound will be because of the u.k. elections. we will keep a close eye on that story. ♪

francine: welcome back to "the pulse." live from bloomberg's european headquarters. we are getting breaking news. u.k. february inflation coming in at zero you're on year. we were expecting -- coming in a t 0% year on year. we were expecting 0.1%. let's get economic data with manus cranny. manus: we are coming off a seven-year low.

it is letting these markets breathe a little bit, in terms of reaction. dollar sterling is coming back. that number is a lot lower. i know you will discuss that in more detail. is this good low-flation or is this a gripping cycle will prices start to deteriorate? that is the challenge for the monetary policy committee. they said, if these numbers get any worse in terms of disinflation or no-flation that there may be the case to get more aggressive on rates. let's look at the european equity markets story. we have london coming off the record high. that was a psychological level. china is slowing down. is it yin or yang? should we be more concerned about the level of slowdown in

china? french manufacturing is literally crumbling. germany is back in the fast lane. that is the information we could take away from the services and manufacturing later. shock. germany is back in the fast lane. that is the critical issue. you are seeing this attempt in the currency markets to say, we have tried to hit parity. we are going to head back to the 1.10 level. do the people in dallas really care what they think in washington? that is what i overheard at the conference yesterday. that the fed should be shy about repeating their faux pas of 1937 where they had to raise rates and then they had to backtrack. that is what the bank of england don't want to have to do either. join that easing party again.

manufacturing is slowing down in france. germany pacing ahead -- shock. your great interview last night francine, with mr. george soros. the crunch time, in terms of liquidity, is coming. my conversation yesterday was that the ecb will support the banks not the government. that was the message. there you go fran. 1.0988. let's see if it has moved. what a tragedy. francine: it is that incredible figure. thank you so much, manus. we have to keep an i on the u.k. -- an eye on the u.k. february inflation rate. we have not seen that data at zero in five decades. david cameron's decision to

announce a timetable for his departure is the most rheumatic -- dramatic news in the u.k. politics recently. i love this story. >> i think it may be a mistake to call this a decision. what seems to have happened is that the prime minister was giving an interview to the bbc and it is one of these cozy interviews with your kitchen -- in your kitchen with your kids and your wife and he is asked the standard political question how long do you want to go on? he engaged with it. he said, well, i don't think i want to serve a third term. he is just finishing his first one. he said prime ministerial terms are like shredded wheat, three

is too many, to was about right -- two is about right. it seems to be a slight misspeaking and his office is trying to roback -- row back from it. this was not the situation you had with tony blair in 2004, where he called in the cameras and made a specific announcement and this was the announcement and it was all premeditated. the prime minister was chopping carrots, is the line. and misspoke. francine: it is still significant. what does it mean that he should not have spoken at all -- what does it mean, that he should not have spoken at all? >> as i say, this was a standard question and it is a question to which there is no good answer and the answer that the prime minister gave is one of the not get answers. what does it mean?

in the short term, it means that you suddenly get a lot of speculation about who will succeed him and he, helpfully as he has done before in in in to view with bloomberg, listed some of the people who might succeed him. you get a sudden sort of flurry of speculation about that. now let's be clear the big question hanging over david cameron right now is not and has never been whether he would be prime minister in 2021, the big question is whether he will be prime minister in june. francine: this gives him the headlines and it gives them confidence. he is already talking about his next term. >> this is the masterstroke argument. you take the next election off the table and say, that is in the bag. that election, as i keep saying is really, really not in the bag . if anyone out there thinks that

they need to listen. it is not. [laughter] >> that is the masterstroke argument. the miscalculation argument is that you've got a very limited amount of time that the public is paying attention to politics and, in that time they are paying attention to politics, do you want to appear to be arrogant, to be talking about the 2020 election when you've got an election that is right in front of you, the tories have got a message, and this is not the message? i think he went off message, at the very least. francine: what a great story. thank you so much. staying with k politics, i asked -- u.k. politics, i asked george soros how worried he was about the upcoming election. george soros: i think that just as scotland, in the end, didn't part ways with britain, i think

that britain will also find some way to stay in the european union. actually, the threat from russia ought to be a powerful inducement for britain and europe to stick together. francine: now, in other stories corporate stories, shareholders turn up the heat on tesco. this is the latest of tesco's troubles. charles joins us with the latest. what exactly is the problem here? charles: my view is that the misstatement was a symptom of the falling profits. if we look at the consensus estimate for this current year, it has gone down from about 3.7 billion to 1.7 billion. a 250 million overstatement is not a huge drop.

there were many other reasons profits were falling. francine: in terms of share price, they recovered from the profit warning. charles: yes. it went down quite a long way afterwards and then subsequently, in december when the was another profit warning it subsequently recovered back up. francine: in terms of this action, can we call it a class-action? charles: i don't know the exact details and whether they exactly have a classy it to make it a class-action francine:. thank you so much. for more on tesco, the spokesperson for tesco's shareholder claims joins us on the phone. is it a class-action? >> it is not a class-action. in the united kingdom, we don't have class actions, we have group actions. the fundamental difference being that you have to take positive action to join in the u.k.

you have to opt in. we are representing a large number of institution shareholders who have lost their clients' funds because of the statements. francine: you say a large number of institutional investors. how many shares today have in all? can you quantify that large? >> we have had very strong expressions of interest from the u.s. and europe and we think that our claims size will be something in the order of one billion shares on current estimates and that is before we have really gone public. to put that into context, they are 8 billion an issue. that may rise. francine: how is this last suit different from the u.s. one? >> it is not fundamentally different. the problem is that a lot of our institutions in the u.k. cannot join the u.s. class-action because of the decision some

years ago. we are pursuing the company for exactly the same issues, the misstatements of profit and the misrepresentation of the share price. the core legal principle is the same. the methods of getting to the end are different. francine: i was speaking to one of our analysts here and he was pointing out that your share price, the share price of tesco is up modestly just since before the overstatement warning. >> there are two reasons why we believe that is not the case. in this statement of profits, it led to a permanent destruction of shareholder value. an institution that bought shares in tesco last june in reliance on the information they put out has lost money and they will not recover -- that they will not recover, except through the courts.

we think companies need to be brought to account for this type of action. they cannot be allowed to do it. all of our members have fiduciary responsibilities to their pension holders, etc. we will pursue this. francine: one final question. i was talking to charles allen and he was saying that there were plenty of warning signs that something was wrong at tesco well ahead of the overstatement warning. we heard from warren buffett. >> yes, that may well be the case. it may well be that the share price would have clipped down. however, they misled our investors by misstating profits. iran investors would not have pay those prices for those shares had they been in possession of the truth -- our investors would not have paid those prices for those shares had they been in possession of the truth. our investors have lost a great deal of money. francine: thank you so much.

fred campbell, a spokesperson for tesco shareholders. we will have plenty more from charles allen on this story throughout the day. let's take a look at top corporate movers. deutsche bank and h&m. we just spoke to the spokesperson bringing the claim against tesco. the tesco shareholders claim that they will seek to bring an action against tesco. it was quite difficult to get from fred campbell how many of the institutional investors he will have behind him. the share price is down. let's talk about h&m. this is europe's number two clothing retailer. the stock is down by 2.4%. 80% of the products are sourced from asia. we saw a little bit of hit on the mergers. finally, deutsche bank.

it is gaining from 1.1%. this is the bank that runs europe's biggest investment bank. they may wind down some of the bank. it may review options to boost the firm's profitability. ♪

francine: welcome back to "the pulse." live from bloomberg's london headquarters. the greatest minds in the

finance world are gathering at the u.k. forum. >> good morning, francine. we are kicking off this week on the banks of the river thames. we are with a professor from the london school of economics among other things. one of the topics on the agenda's monetary policy normalizing monetary policy. you have been teaching economics since the 1960's. what advice do you have for policy makers on how to go about normalizing policy? >> what i notice is that almost everything we taught -- [indiscernible] monetary policy is operating in an environment where we don't quite know what the transmission mechanism is. when you print too much money, you get inflation.

clearly, the problem of central banks right now is how to get a bit of inflation into the system by quantitative easing. whereas, on the other hand, for the fed, the problem is how to reach a point where the economy is sufficiently recovered before you inflate interest rates. >> do we know all of the consequences of quantitative easing? will they continue to creep out of the woodwork? >> they will creep out of the woodwork. one thing that people are noticing our asset bubbles. it has to go somewhere. it has not gone into the economy. it has gone into assets. you are not generating new investment. it is generating asset bubbles. >> to you think uae has failed in all of its guises?

-- qe has failed in all of its guises? >> monetary policy is not an instrument for reviving an economy. it allows people to postpone the bad news of being back in debt. in the meantime, something else may happen. it certainly has not been a success story. >> do you think there is logic in getting started with interest rate hikes in the u.s. context? >> that is definitely my own instinct. my own instinct is that they should have begun slightly earlier. you do it gradually. so you don't have to do it all of a sudden. you don't have to give a big shot to the market system -- shock to the market system. you never let realtors traits go

negative. >> with inflation is low as it is can they really look people in the eye and explain an interest rate hike? >> ultimately, inflation is likely to remain low for a long time, in my view. it is a lawn cycle -- long cycle of the downswing. we are in a long contract of cycle. -- contravtctive cycle. certain sectors get out of control. we could go through another financial crash if this goes on because equity prices are rising. they are rising entirely because the market -- [indiscernible] the money is not finding productive channels for investment. >> george soros told bloomberg

over the last 24 hours that he thinks there is a 50-50 chance that greece will leave the eurozone. are you kept awake at night by what is happening in greece? >> i wish they would go. seriously. the journey for greece is not a pleasant one, but if they are going to pay back for debt, they have 40 years of down payment a whole generation would be lost. they will not be able to do anything productive for the economy. or they leave the eurozone suffer badly for five years, and then get out of it. >> you believe in the short sharp shock. >> yes. >> let's talk about the u.k. economy. what do you think of the plan about deficit reduction? all the major parties in the u.k. want to cut the deficit, but at different paces with different emphases.

how fast you think the deficit should be cut? >> i am a hard man in that respect. my view is that all the parties are [indiscernible] for example, we will reduce it [indiscernible] i think there is a problem. debts have to be paid back. you can't go on growing on debts. >> does the party of today need to commit to the faster deficit reduction? >> they have got to stick to the plan. it is easy to find all sorts of reasons why you should not do it. >> to paraphrase the early 1990's, will it be [indiscernible] >> no.

there is no difference between the two parties. >> thank you so much for joining us. professor at the london school of economics. back to you. francine: thank you so much. we will be speaking to members of all the u.k.'s main political parties in the run-up to the election. ♪

francine: welcome back.

let's take a look at the pound after the u.k. inflation data. this is what the pound has been doing since that data. the pound has been weakening. u.k. inflation dropped to zero. in terms of the largest downward effect to the annual rate in february, that came from food also, nonalcoholic drinks, furniture, household equipment. the inflation rate will drop below zero in the coming months, mark carney said. policy makers will try to look through this because it is driven by temporary factors, particularly the slump of oil. for our u.s. viewers, that is it for "the pulse." up next is "surveillance" with tom keene. for this side of the atlantic, we have another hour of "the pulse." we will be focusing on greece and focusing on what george

soros told me. is there a 50-50 chance of greece leaving the euro? do you agree with the billionaire investor? you can follow us on twitter. we are back in two bang. -- we are back in two. ♪

tom: devastating consequences if the fed keeps rates lows. vice chair fisher gives ace defense is the fed will move.

you should be in the stock market. biking to work is all the rage. good morning everyone. this is "bloomberg surveillance." we are from new york this morning. i am tom keene. joining me, olivia sterns and brendan greeley. top headlines, here is olivia. olivia: angela merkel has a message for the prime minister of greece. you need to follow the terms of the bailout agreement. george sir says is a lose lose game. he says the possibility that greece leaves the eurozone is a real threat.