guy: friendly and constructive. merkel's words to describe this meeting with tsipras and hollande. the three leaders didn't walk out with a deal for greece. worth tweeting a picture though. the ecb president is about to stay at the forum on central banking in portugal. we are going to bring you all the news as we get it. and we are going to take you back to riga. we speak to the ukrainian finance director, natalie jaresko. that exclusive interview right here on "the pulse."

9:00 in london. good morning. you are watching "the pulse." i'm guy johnson. francine lacqua is not here today. she will be back on monday. we are speaking on ifo, but right now i'm going to bring you the numbers. hans will be able to break them down. ifo confidence may number at 108.5. median forecast 108.3. the current assessment index 114 point -- i think we are seeing a slight dip. essentially, fairly stable numbers being generated. at the moment, what you're seeing is while you are seeing a reduction in things like pmi and maybe headline gdp numbers what you are starting to see is a pickup in investment again. we will break that down further in a moment.

let's talk about greece. let's talk about what has been happening over the last 24 hours. speaking in riga, angela merkel has reiterated their is "still a lot to do" regarding talks with greece. >> i will have some bilateral talks and have already spoken last night with the french president and the greek prime minister. it was a very friendly constructive exchange, but further work with the institutions is necessary. there is still a good deal more to be done. france and germany have offered the greek prime minister help. the agreement must be made with three institutions. guy: the german chancellor's comments came after talks in riga between her, alexis tsipras, and the french prime minister. those talks broke up without any

sign of a breakthrough. let's talk to because crystal norris. -- nico's chris alarmist. everyone seems to have had a nice time, but no real progress. we saw the twitter picture. what we didn't see was progress. nikos: we didn't expect much and that much happened. angela merkel said that greece has a lot to do, but we already knew this. we have seen this play several times. each time the negotiation between greek officials and creditor institutions hit a stumbling block, greek leaders escalate and take the market to political leaders. the answer they get from political leaders, from the german chancellor, is always the same. first, strike a deal with

creditor institutions. the imf, the ecb, and the european commission. only when you strike a deal with the technocrats from the institutions, then we can disperse money. the answer that mr. tsipras got yesterday was no different. guy: is there any softening? is there any change in the town beginning to emanate from paris, from brussels, from berlin? we are getting very close now, and maybe there are bits of light for greece. nikos: the mood music is definitely better. officials from creditor institutions report some progress in the process for sure. significant differences remain in key areas including pension system overhaul, labor market reform, fiscal targets for this

year, and sales tax reform. we are not close to an agreement for sure. the german chancellor, the french president, and the greek prime minister have said that we should aim for an agreement by the end of this month. we have said this several times before. always, hopes for an agreement have been rebuffed by lack of complete action. we will see if it is going to be different this time around. guy: what happens next? nikos: well, patience is definitely wearing thin in the governing council of the european central bank. if the deadlock persists, sooner or later, euro area central-bank governors will raise in exchange for emergency cuts. this emergency liquidity assistance that keeps greek banks afloat.

we know for sure that the greek banks don't have much time. also, greek state coffers don't have much time. their payment is coming due to the imf. their position is so tight that the next that can happen at any time. guy: nikos chrysolaras joining us from our athens bureau. let's take another quick look at that picture of merkel, tsipras and hollande. the body language is absolutely fascinating, particularly with mr. aland on the right-hand side. this brings us to our twitter question. if this is a game of poker, if these guys are sitting around the table, who would have the best hand? the obvious answer is angela merkel and francois hollande but is that actually the case? let us know what you think. if this was over, who has the best hand? is it about playing body language? let's talk about greece.

let's talk about europe. mr. draghi is speaking at that event in portugal. we have some analysis on that as well. we are joined by jacques. friendly, constructive, but no deal. i'm getting a bit bored of this. jacques: they are still far apart from each other, and i think that every side is sticking to his own view on this. clearly, there's not enough pressure to reach a deal. pressure has to increase much more for a deal to be reached. we haven't probably reached a peak in that political crisis. guy: who do you think has got the best hand? jacques: i think the greeks have a number of cards that they can put on the table. unfortunately, i think the greeks have a few more cards to

play and they will probably play them. on the same side, the europeans have their own mandate. guy: what are the cards? what will they put on the table? jacques: they've already started playing the default card. i think that is going to continue. that is a painful one for the europeans. the second one is refusing essentially to put to the greeks what it is the europeans want. the sovereignty of the greeks allow them to make the decision on the referendum. if they refused to conduct the referendum, that is also painful for the europeans. you cannot put that card on the table. the europeans tried to impose it on them, but they don't want to use that. that will be a turning point in the crisis.

we think that is the ultimate outcome but we are not there yet. guy: the final hand has yet to be played. let's talk about what is happening in the european story. draghi is down at the ecb even in portugal. he's going to be talking about unemployment and inflation. the consensus seems to me that europe is getting back on its feet. we saw the pmi numbers. germany was disappointing. the rest of europe is starting to show traction. is the optimism in the market at the moment about europe overdone or underdone? where is the middle ground? jacques: optimism is overdone, i think. if we try and analyze what was driving the recovery of until march, we think the nine months of declining oil prices, that is gone. if that is the true story and we think the data suggests that this might be the case, a peak

was reached already in the business cycle in europe. from here on, we are growing but not as fast. second-quarter gdp might be slightly weaker than the first quarter. that's very difficult for those who have acceleration in their forecast from here on, i.e. the ecb which has a non--- a 1.9% gdp forecast. i'm closer to 1% for next year. i think there are dynamics in the system in terms of the 45% increase in the oil price, the lack of depreciation in the currency, i think they all add up to a slow growth environment. the confidence in portugal, very interesting. the topic is unemployment. when one looks at the unemployment situation across europe and when one looks at the under employment situation, the

euro area has 20% of youth unemployment, twice as much as what the u.s. has. the idea that you can generate wage growth as most observers seem to believe, seems to me a low likelihood scenario. i think they have to be able to generate this 2% inflation. that is probably the message we get out of portugal. guy: draghi has just started speaking. governor kuroda is going to be attending the event. draghi or kuroda, which one is going to get to 2% inflation first? jacques: if you take the package of the reflation strategy that japan has put in place, there is far more focus on reflation than in europe. there is a lot of coordination between the boj and the minister

of finance. there is communication around waging -- around raising wages. in europe, there is a focus on competitive devaluation. as long as that is the case, it is very unlikely that europe will be able to reach anything comparable to the package that japan is trying to put in the system. not to say that japan hasn't got its own challenges, but still, there is far more emphasis on reflation strategies in japan than there is in europe. guy:? you joining us -- jacques cailloux joining us. a great deal has been achieved in structural reforms according to mario draghi. i wonder whether hans-werner sinn feels the same way. we will find out later. he is coming out in around 10

minutes time. we will continue to bring you the headlines from mario draghi. what else is on our radar screen? the bank of japan has refrained from increasing monetary stimulus and signaled a more optimistic view on the economy as governor kuroda that's on stronger growth. the central bank will continue to boost the monetary base at ¥80 trillion. u.k. prime minister david cameron wants to start talks on european union reform at the meeting in riga. cameron says there will be "ups and downs" in the negotiations. >> it is in britain's interest that it is a success. it is in britain's interest to start some of the discussions. there will be ups and downs. one thing throughout all of this will be constant, and that is my determination to deliver for the

british people a reform of the european union. so they get a proper choice in that referendum before the end of 2017. guy: coming up, we speak to the ifo institute for economic research. that as climate week wraps up in paris. we will speak to the ceo of axa about what his company can do to reduce the impact of climate change. we will speak to the ukrainian finance minister, natalie jaresko. ♪

guy: welcome back. you are watching "the pulse." we are live on bloomberg tv. you can get is everywhere. the european partnership meeting in riga is focused on the eu's relationship with post-soviet states. leaders have released criticism of russia's actions on ukraine. russia has been making accusations about outside forces interfering in another eastern european nation. let's find out what nation we are talking about. ryan chilcote joins us now. ryan: the country is macedonia. the story in a nutshell is we've had a good amount of unrest over the last month.

over the last week, we've seen protests, violence that preceded that, a lot of turmoil. the russians say what is going on in macedonia is the west trying to foment a revolution. because the government, the prime minister in macedonia, is for, among other things, a pipeline. this is something i discussed yesterday with russia's ambassador to the eu. >> the pattern of events and the pattern of statements coming from both the opposition inside the country and those from neighboring countries, and those from other countries further outside, they create a picture which is quite sinister, and

quite resembleant of what happened in ukraine last year or in a number of other countries who became the venues for so-called revolutions. i can admit that macedonia is not void of corruption. that is probably in the the case. but this doesn't make the country unique in the balkans, or in the broader geographical context. but other countries of the region are being invited to join the european union. they accede to them. in spite of similar corruption allegations. but the protests being fomented

in macedonia creates a picture of a deliberate effort to punish the government for its fairly independent stance on foreign policy issues including its decision not to abide by eu foreign policy rules for candidates and subscribe to restrictive measures against russia. also, if you look at the geography of the region macedonia is the best place for constructing the extension of the newest energy infrastructure project in the region, the so-called turkish stream towards europe. it is a suspicion. i don't have any facts.

neither does my foreign minister who alluded to this as well. but, i think this is a logical suspicion. ryan: so you think the united states and the european union are trying to topple the government in macedonia because let's say the government in macedonia is pro-russian in a nutshell. is that it? >> i wouldn't call the government of macedonia pro-russian. some people -- some people would say that the current government in macedonia is center-right as compared to center-left, the opposition. ryan: so there you heard the ambassador to the european union from russia saying he has no hard facts. the u.s. and eu deny that they are fomenting revolution in macedonia. this is one to watch.

we did see macedonian yields yesterday rise to a record amount. something to keep your eye on. guy: what are the other nations in this region saying about it? this country borders some fairly interesting nations. ryan: it is all about how you get russian gas into the european union. first, the gasas goi to come through bulgaria. then bulgaria said no. the new plan is the turkish stream. it wou go through turkey, to greece, although the geks sa that it can't be called turkish stream. greece would be the hub, but then its got to go rth. it has to go through macedonia now we are in our balkans young worthy. we are going through serbia. guy: my question on this is,

europe doesn't want more russian gas via this in a of the woods, so what do the russians think? i struggle to understand how you sell something they don't want. ryan: there is a conversation to be had. this would be a pretty elaborate, sinister plan, to block russian gas. the reality is, the eu still has a final vote on these pipelines. when the eu talks about diversification of gas supply they are not talking about russgas supp. ey want gafrom other parts w thank you very much indeed ryan chilcote. germany's fio number out. is there evidence that we -- german economy? . >> this is too elyo make but has

improved, and the internal economy construction is strong. so, we don't make too much out of one month. if such a change in the indicator occurs for three months in a row, we would say it is significant. hans-werner: -- what have you made of the bond market action that we have seen inb unds? what is your sense of what the market is signaling about europe? hans-werner: this seems to be more a speculative attack coming from special deals but i'm not sure this is already a turnaround, because the ecb has just begun with its program. yes, it is always the case that

the anticipation of the program leads to market reaction and then comes the normalization phase, but there is still a lot of government bonds to be bought by the ecb. 60 billion per month, and that will go on for quite a wild. i don't think this is a turnaround. it is just a normalization. guy: is your sense -- do you think we are going to get wage growth inflation in europe anytime soon? youth unemployment remains elevated. do you think we have to see qe for an extended period of time in europe? hans-werner: for two years or so, we will have it. the euro will stay low because all that money that the ecb pumps into the european economy has to go somewhere. some will try to go into the

stock market. that's why the stock market is high. a little bit will go into investment of companies. much more will try to escape into other continents. that keeps the euro low. i think the revaluation -- the devaluation effect of the euro is the driving element here in the efficiency question about qe. i think it will be efficient. guy: very briefly, what happens with greece? hans-werner: if only i knew. this is a political game where the greek government tries to postpone things because they are improving their threat point. guy: hans-werner sinn, thank you

very much indeed. we will take a break. ♪

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guy: i'm guy johnson. here are the bloomberg top headlines. the company behind coffee and hotels has turned to the finance industry for its new chief executive. it is appointing the current group director of lloyd's retail division. he will replace sandy harrison, who is stepping down in february. richemont reported an unexpected decline in april sales. retailers delay purchases. 's shares are down more than 1%. climate week comes to an end in paris. today is climate finance day, where business and government

leaders will be discussing how to finance a greener economy. caroline connan joins us from that event. caroline: yes, good morning. i'm joined by the ceo of axa, one of the biggest asset managers in europe. we are here at the final day at unesco headquarters in paris. can we ensure ourselves against women change? >> the answer is not an easy one. as long as global warming and climate change is not too strong, yes, we largely can ensure ourselves area -- ourselves. if the warming goes beyond two degrees, it is going to become probably impossible. the way to insure yourself is not only to buy protection. it is to change your behavior. caroline: axa has commitments to

fight climate change. could you tell us what axa is doing? >> insurers have very large balance sheet. insurers often mirror what happens in the economy and society. climate change is really embedded in what we see. it is embedded in the risks we see among our clients. what we do is, we try to increase what we do on the prevention side. we try to improve what we do on the resilience and recovery side. today, we are announcing very significant commitment on both sides of our balance sheet. on the investment side, we are announcing that we are going to divest the remaining part of our portfolio which was invested in coal. we are tripling our green investments, will be troubling our green investments between now and 2020. we are announcing two other

things. before the year ends, we will have embedded esg criteria in our general account portfolios which will enable us to have a much better view of what our exposure is to these risks. alongside today, we have been signing a pledge that we will disclose the carbon footprint of our portfolio this year. these are the four things we do on the asset side. on the liability side of the balance sheet, where you have all the commitments we take from our clients, we do something which is very significant. we are going to join what is called the african risk capacity, which is the capacity to enable african states which will have been hit by natural disasters to have a better resilience. caroline: so the key for you is

to decabrrbonize the portfolio? >> it is one of the elements. basically, the idea is to use the balance sheet we have to try to foster better behaviors on the side of the corporate. it is also a way to try to have a better allocation of the savings. it doesn't make any sense for the world to foster investments in industries, and practices, which we know are going to destroy value long-term for the planet. caroline: what is the risk of climate change for the financial industry in general? how much is it going to cost insurers? >> as you well know, an extremely large risk. the reinsurers are disclosing the amount the industry is

paying to try to cover the claims. not everything is covered, so it is only a fraction of what it costs. if you look at axa last year we paid more than one billion euros in climate related events. climate is representing between 15% and 20% of the risk, which is huge. and it is just going to be growing if we do not change the way we behave. caroline: we have mario draghi speaking in portugal today. the ecb bond buying program, how much is that hurting a company like axa because of low yields on government bonds? >> i don't think you should universally relate the two things. the qe problem of the ecb is there to try to help the european economy recover.

we have a second issue which is one of the consequences of qe in europe, but only in europe we are seeing it. why do we need to have such low rates to foster the recovery of the economy, and why do we make the choice of having the economy recover at the cost of long-term savings? we think it is sustainable for a short while. we think it is sustainable if it goes alongside significant structural reforms. long-term, it would be a mistake to foster policies where you only have very low rates without reforms. it leads to a very poor allocation of the long-term savings. it could create bubbles because people are going to look for yield and very strange places. and it would not be good for the sustainability of this recovery. caroline: many thanks for being

with bloomberg tv this morning. live with the axa ceo from paris for the climate finance day. back to you. guy: great interview. thank you very much indeed. up next, we are going to speak exclusively to ukrainian finance minister natalie jaresko. see you in a moment. ♪

guy: welcome back.

you are watching "the pulse." dealmaking in spain has slowed dramatically as foreign buyers worry that elections could up and decades of political establishments that run the country with two parties. the rise of other parties may force the prime minister and his party to form a coalition. we are joined by the head of economic policy for spain's socialist party. good morning. thank you for your time. spain is seen as the poster child for economic reform. it is often held up by policymakers as the country that has delivered the most over the last few years. would you carry on with what has been delivered thus far by the wrong way administration -- by the rajoy administration? >> i think we are coming out of this recession and we cannot

deny that there is economic growth picking up and there is some job creation, but you have to take into account that the type of economic growth we are seeing is not shared evenly by most of the spaniards. most of the jobs that have been created are low pay and very precarious. in our view, even though there is economic growth, most of the structural reforms that we need remain to be done. most of what we see is fueled by the conditions, and when they are gone, we remain skeptical that growth will remain. we might be coming out of this crisis in the same way that we went in through construction, low-paying jobs, so there is a lack of fundamental reforms that

put the country in a sustainable growth pathway. guy: that sounds like a very sensible economic narrative. do you think the people of spain want to hear that story? we see the rise of new parties in spain and they are feeding on a desire not to have a continuation of the current economic policy. guy: the thing in spain is it is not all about economic policy. people feel that there is inequality, that growth is picking up but is not being felt by the people. most workers are poorer than in the past. that also combines with problems of corruption, of political disaffection, of the challenge of nationalism and the lack of response from the government and in some of the parties.

they need to undertake major reforms in our democratic system to step forward. all of that combined seems to point out the need for changes in the political spectrum. the dominant political party seems to be fading away and we are coming to a new era where all the parties are rising and we have to form coalitions and learn new ways of functioning and governing in the country and the region's. guy: do you have any sense that what we saw in the u.k. when many people were expecting coalitions to be formed and fringe parties to be making more headway, will turn out to be true in spain as well? we ended up with a majority government led by the conservatives. >> i would say the situation and the current context in spain and

great britain are very different. the crisis and the levels of unemployment in both countries are very different. the massive corruption scandals that have affected mostly the conservative party in spain i don't think were happening in great britain. in polls, we have seen acceptance of mr. cameron and mr. tajorajoy very different. i suspect there will be major changes in the political spectrum. i think this party will be at the center and will have the key . guy: final question. the economy is recovering. great news. debt to gdp is still going up. how easy is it going to be to stabilize that number? >> could you please repeat the

question? guy: i want to talk about the debt to gdp. that is a very high number in spain. i'm wondering what you would do to stabilize that figure. >> absolutely. the level of public debt is certainly worrisome. it has not stopped increasing since rajoy took power. almost 30 gdp points increased in the last three and a half years. i think the way to stabilize it is by growing high levels of growth, sustained growth, and by controlling and having a sensible and sustainable fiscal policy. but i don't think the type of cuts that we have seen being done by rajoy's government are the way to do it. they are undermining future growth. we need more growth and we need sustainable fiscal policy to

control the public debt. guy: we will leave it there. thank you very much for your thoughts this morning. the head of economic policy in spain's socialist party joining us from madrid. the european union has signed a financial assistance program for ukraine. the deal was inked in riga where leaders are gathered to discuss cooperation with europe's eastern neighbors. i am joined from riga by the ukrainian finance minister natalie jaresko. ryan chilcote sitting next to me to join in as well. thank you for taking the time to join us this morning. my sense is that over the last few days, we started to get more progress in the talks to deal with ukraine's debt. you talked about the fact that you think we can get a deal done on the debt by the current deadline. how much more optimistic are you now than you were a few days back? ms. jaresko: i remain confident

that we will reach an agreement. i think the date is not specific in terms of one day or another. i am confident that our creditors understand the difficult circumstances we are in. we will come to a collaborative agreement. ryan: minister, the creditor group as obviously said they don't see any need for a reduction in principal, a haircut. have you come back with a counterproposal? can you give us a sense of what kind of haircut you think would be appropriate? ms. jaresko: i'm not going to get into the details of the negotiations, but we are in constant talks and constantly making progress. the issue of whether or not a haircut is needed is pretty clear. you see statements from financial leaders globally from

larry summers, from current secretary lew. i saw goldman sachs reporting yesterday. i don't think there are many institutions that would agree that at this stage, given the difficult straits we find ourselves in given the fragility of the cease-fire, and given the incredible load that this debt is on our people, that a restructuring is not necessary. ryan: you threatened to stop coupon payments. what would the trigger be for you to actually do that? would it be june 15, the deadline the imf has given ukraine to come to some kind of deal with creditors? ms. jaresko: i haven't threatened. what i have done is asked my parliament and they have granted the government authority to suspend payments. i'm very hopeful and confident that our creditors will come to the table and have collaborative

discussions and reach an agreement. i need to make sure all the tools are available to protect my nation and our taxpayers. ryan: have you had a chance to speak with the russians about their eurobond, and the first payment on that on june 20? are there any talks planned? do you have a sense of if they are willing to negotiate with you? ms. jaresko: i've heard the same statements that you have heard. as of today, we've gone through the very very equal treatment of all our commercial creditors and eurobond holders and contacted everyone through the clearing system. we have not heard back from the three russian custodians. i am willing to speak to all of our creditors at any time. guy: you talked earlier in the interview about the messages coming from washington and

brussels. i'm interested. this morning, we spent a lot of time talking about greece and ukraine. we got the southern flank of europe when it comes to greece in nato, and we've got a very important geopolitical position for you in where you sit geographically. do you think there is a sum of the parts argument the fact that greece and ukraine are being talked about at the moment, that nato and europe can't afford to see both of these areas fail at such a critical moment that that makes your position that much stronger? can i link these events? ms. jaresko: that's a very interesting argument. i've actually john moore the contrast -- drawn more the contrast between ukraine and greece. ukraine has a very good relationship with our creditors.

we are getting nowhere near the level of support that greece is getting on a per capita basis. however, the argument you make that both are important is true. i couldn't argue more. ukraine is a critical member of the european community. it is a critical member of the transatlantic community. it is a critical member of european safety and security. guy: so the more tense the situation in greece gets, that plays to your advantage? ms. jaresko: i don't know. i think sometimes that we would like to have a little more support, and sometimes the more the situation gets tense in other areas, it takes attention away from the sacrifices being made by the ukrainian people. i would like to focus the conversation on ukraine. that is my responsibility. ryan: talking about shifting attention, one of the things

we've seen over the last couple weeks is the beginning of a re-engagement between russia and the guidance states. we had secretary kderry seeing the russian president. what is the danger of the u.s. and europeans re-engaging with russia? ms. jaresko: i don't think there's any danger. the united states has clarified that they are a full partner with ukraine and they are engaging because engagement is important to achieve a full solution, to achieve implementation of the minsk agreements. the united states and europe are very strong and solid partners of ukraine. i don't fear that changing. ryan: you don't think there might be a shift in attention away from ukraine? ms. jaresko: no, i do not. i think it shows a greater attention being placed on ukraine and on the situation and

ever more intensive efforts to bring those minsk agreements into reality. guy: thanks for bearing with us. i can see that it is hard to hear given the helicopter. can you give us a sense of what is happening on the ground right now, not where you are, but back at home? you talked earlier about the fragility of the situation. can you give us an update on how fragile it is? ms. jaresko: well, financially we've received $3.1 billion of credit support from our international partners and have paid out $2.4 billion in principal. that means we are not making a great deal of headway. that debt restructuring is ever more important. we are still seeing a large amount of support and continued unity between our president, the prime minister, and most parts of the coalition in parliament, to move forward with reforms and

the obligations we taken on. this eu agreement that we signed today, only the first tranche today comes upon signature. [indiscernible] i think that so far, we are seeing continuous support for these reforms. today is another session of parliament where we are looking for more support. it is a continuous effort. the fragility of the situation is one, the cease-fire, which we hope will be lasting and true and second, that we achieve this stability that we intended with a $40 billion package. guy: you've also said this morning that it is $40 billion then $40 billion plus if you want to grow. can you give us an idea of what that plus is? ms. jaresko: i can't.

there is no way for me to make an estimate for you right now. it is tens of billions of dollars. we have investment needs in infrastructure, energy, agriculture i.t. it is a country that everyone expected to achieve a great deal more of foreign direct investment. i don't have a particular number to put on it. my country is now in a perfect position to be a major manufacturing platform to the european union as well as other parts of the world, given full implementation of the free trade agreement as of january 1, and given the unfortunate depreciation of the currency which plays well in terms of competitiveness of our exports. now is the time for investors to take a renewed look at the 93% of the country not occupied by terrorists. ryan: if we can go back to the restructuring process for a moment what is your biggest concern there?

you made it very clear that you are not threatening creditors with a moratorium on coupon payments, but if it came to that, what you have said is that the imf would have to make a judgment on that as well. have they given you any indication as to whether they would be ok with ukraine stopping payment on coupons? ms. jaresko: that's a question for the imf. i'm confident that if we are involved in good faith negotiations the imf will continue to be a partner. i'm confident that if we meet all the other obligations we have, that we will continue to move forward with the program. we will provide everything possible to ensure that the judgment is in our favor. guy: natalie jaresko, thank you very much indeed for your time. for those listening on bloomberg radio, "the first word" is next. for our viewers, it is another hour of "the pulse."

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guy: friendly and constructive were angela merkel's words to describe the meeting spirit they did not walk out with a deal for greece. drug he speaks in portugal. he says that low growth increase the likelihood of an con -- unconventional policy. an exclusive and agree -- interview with the ukraine finance minister. is it enough to stabilize ukraine it? did morning to our viewers in europe. a warm-up come those waking up in the united states. i am guy johnson and of this is "the pulse."

we are live from london. we will be talking about greece all morning. angela merkel has reiterated there is a still a lot to do regarding talks with greece. >> i will have some bilateral talks at have already spoken last night with the french president and the greek prime minister. it was a friendly and constructive exchange, it's clear that further work is necessary. there is a good deal more to be done. branch in germany have offer the great prime minister help when there are questions to be answered the agreement must be made with three institutions and the work must be intense. guy: more to be done, the talks did not have a sign of a

breakthrough. they're going to stay in close contest. let's go to athens. did we get anything from last night's talks? guest: it's a story that we have seen before. this is not the first prime minister to go into a meeting with merkel looking for a big breakthrough. it seems that when there are talks they have been stalled. it they were told to go back and hammer out whatever differences exist and reach an agreement could they are keeping the imf on board in a key stage. there has been frustration on the greek side in terms of the list of demands required from each institution is different. that keeps everyone happy from all of the institutions is impossible. there is a need for political agreement, but that does not

seem to have gained any traction. back to try to find a deal that does keep everyone happy. guy: if you go around the corner and talk to the guys in headquarters, what are they saying? we heard that there is a warlike tone. what is the back story to this? marcus: there is a lot of frustration. they are a rambunctious lot. it they are known for not being shy about voicing opinions. this is one of the wildcards. they are very unhappy. the question is, is this just noise? will they fall in line when it comes to the current area some of that is achieved.

a few probably won't. one thing that they have going for them is the arithmetic is in favor. the big question would be whether he wants to defy his party. perhaps going down the cause. that is the question for him. guy: what happens next? there was a talk of an emergency meeting taking place is that going to happen? how does it fit together? marcus: they will need to rubberstamp any deal.

once the conditions are in place, once it has been agreed the eurogroup will approve it. that is the body through which the approval happens. before that meeting can happen it, and agreement will be reached with the brussels group in the institutions. it will then go to the eurogroup. it happens with happens in negotiation. if there is a deal, it could be convenient to approve it. there are a few ifs there. guy: thanks very much indeed for your time. he is joining us from athens. let's take a look at that picture that was tweeted out last night. he could be relaxed. angela merkel is looking quite relaxed as well. he is leaning back in his chair. i think the question everybody is asking is if this was a game of poker, who has the better

cards to play and what cards are still yet to be played? who has the upper hand here? is it the greeks or it's at the rest of the eurozone? let us know you think. the central bank question has been speaking in portugal could alexandra is joining us. where the highlights? this was convened to talk about unemployment. unemployment is something of a problem for europe. esther draghi is talking about the album being the brightest in seven years. guest: he painted an optimistic picture. at the same time, he made ap for -- a plea for government to structure reforms, not just to

deliver higher growth and lower unemployment, but also because it will make delivering on the ecb policy much easier. with low potential growth, you have to reach an resort to unconventional tools like to eat. -- qe. guy: a lot has been made of the policy over the last few days. out of curiosity, what is it like covering this? we saw the druggie speech earlier and there did not seem to be the normal transcript for that on the website. compare and contrast how much access you get to an event like this. guest: the ecb has changed its policy on official high-level speeches like this. in the past, we used to receive the speeches embargoed so you

could go to the dance text with a lot of figures and delicate messages. this was delivered live and we got the text when he started speaking. you are frantic at the first moment. guy: you are definitely capable of delivering on that. i am curious about how it's changed in this knee-jerk reaction that we are getting from the ecb as they figure out the communication strategy. in terms of what else we are expecting for the rest of the day, we are going to be hearing from mr. carnegie. how much news to you think this will generate? guest: the most important topic is unemployment because it's the biggest headache for politicians and central bankers. the u.s. is doing pretty well

and the u.k. is doing pretty well in this respect. they will bring their experience and discuss the main issue. the ecb feels that it has done as much as it can do to support government delivering it lower unemployment. they will say they have done our deal and this is our part. now it's up to the government. guy: great reporting and great work, thank you very much indeed. here's look at what else is on our radar this friday morning. the bank of japan has brought a more optimistic view of the economy. it are betting on stronger growth. the central bank will boost ¥80 trillion. david cameron us says he once to start talks on european union reform. he is at the leaders meeting now is starting that process.

there will be ups and downs in the negotiations. >> it's in our interest this is a success. we want to discuss reform. there will be ups and downs. you will hear one day this is possible and the next day something is impossible. throughout all of this, i am determined to deliver a reform of the european union for the british people so they have a choice and that referendum before the end of 2017. guy: retailers had markets linked to the u.s. dollar. this is a company that makes watches and other luxury items. shares are down more than 1%. still ahead, we will take you back to paris where we will be live for the climate finance state. we are going to talk about

climate change impact and how businesses responding. stay tuned for that conversation.

guy: but make -- let me take you back to paris where it is the last day of climate week.

good morning. thank you for taking the time to join us. you have created three funds which are there to track the carbon index. give us a sense of the demand that you give for those funds. guest: i would say it's huge. it's huge for three reasons. the first is long-term investors are realizing that climate change has risks. their fiduciary responsibility to the companies that are exposed to the risk and try to reduce them. we serve a fascinating moment we

have a shift in climate change before we talk about saving the planet. it leads to the equation that investors are looking for instruments to reduce the risk. the good news is you can re-carbonized portfolios pretty easily. two of our clients asked us to look at the new low carbon indexes. you can now reduce the weight of companies having positive feel reserves. it doesn't affect the market exposure. you reduce your risk and you

don't increase your market exposure. technically, we have invested one billion euros. in his work pretty well. it has delivered 100 points and 45 in the u.s.. guy: a lot of early interest. is there an issue in too much money coming into the fund. are there enough places to invest to make this work? guest: that's a good question. the point is to say we don't ban. we reduce the weight of the worst performers. the worst polluters are the companies that are most exposed to assets. it's not on a permanent basis.

we will exclude the two of the worst performers and one year later if these companies have changed their behavior they can be back within the group. my point here is to say there will always be a worse polluter compared to the others. the only moment we should stop is when it is correctly priced. it all depends on the application that for the moment the markets are not pricing correctly. if they are offering the premium that you should pay, then we can be back. guy: ok. and i investing just to the carbonized my portfolio?

-- d carbonized in my portfolio. guest: you are d carbonized in it because you think you have risks that are not correctly priced. that is your food initial responsibility. the point is if you can reduce industries that are not correctly priced, you will outperform. that is what we start to observe with the -- europe. the index has over the last five months delivered 100 basis points. we observed -- guy: carry-on. i interrupted. guest: my point is to say that

we serve only the beginning of the understanding that climate change means financial risk for investors. the earlier they reduce the risk, the better it will be for them. the better it will be for the planet as well. if suddenly you have pressure coming from a government and industries, the combination can be extremely. we know that the initial investors being interested in climate change represents $95 trillion. for the moment, they are doing almost nothing. we can have a shift from uninterested into taking action. it means $100 billion

reallocation. my point here is to say that we are observing a fascinating moment. it represents new venture products a lot of innovation. interestingly, there are some major investors doing something. under the umbrella of the united nations, we have created a coalition that gathers all investors taking action from sweden, france australia, they are committed to the carbonized in -- d carbonized in. guy: i am running out of time. thank you. we will leave it there. that is genuinely fascinating stuff.

we're going to take a break oil is having its best run ever. crude is heading for its tent weekly gain. all eyes turned to the opec meeting. ♪

guy: welcome back. let's talk about oil. the most powerful man in oil spoke to francine. in the not-too-distant future he or whoever has his job will be less important. >> we recognize that eventually one of these days we are not going to need fossil fuels. i don't know when. we have embarked on a program to develop solar energy. when we look up, we have the sun every day. we have acreage to late panels out. that sounds like a very attractive project. we have embarked on developing a

major integrated industry to the panel to the electric company. hopefully one of these days instead of exporting fossil fuels, we will be exporting gigawatts of power. does that sound good? [applause] francine: one of these days in 30 years? guest: i think there will be major gigawatt production in the next five years. guy: in the meantime, oil is going up. it is heading for a 10th weekly gain. >> the records go back further

for wti. we are headed for the 10th week. that would be a record. there are two reasons. the first is the supply glut. it looks like it might be easing. the last three weeks, the inventory numbers saw a drop. at that suggests that they are not running out. there are still 100 million barrels above the five-year average. the bigger thing is the hughes report. it comes up every week. last week, the number fell like it has for many weeks to 660. if you look at the curve in terms of the rate, it is flattening out.

things may get user. guy: we will take a break and see what all it. ♪

guy: welcome back. it you're watching "the pulse." deutsche bank received 60% support come the lowest level in more than a decade. the shareholder meeting yesterday gained knowledge that the bank has failed to keep to keep prices and resolve litigation issues. they are appointing a new chief executive. he will replace someone who has run the company for five years. the luxury guest company has reported a increase in sales.

shares are down more than 1%. that is one stock story for you to do with played. jonathan ferro, tell us more. jonathan: this is the biggest rally since january. i could is heading for the biggest week since january. we are at about a 10th of 1%. the performance is right here. half of 1% this morning, i will list the lid of his index and show you why. vodafone has quite the week, ever since olivia global -- liberty global flirted. that is giving it a lift.

this is all on the back of a note from goldman sachs. everybody is doing the thinking on vodafone at the moment. it was a euro weakness against sterling pound power. we go to 7130. german business common -- confidence, it was mixed this morning. this is a drop in the first time in seven months. it changed the trajectory of the euro through the morning. a stronger euro is seen in the moment at the moment. it has been a volatile month. yields are pushing higher but that is flat. we have quite a week. guy: it has been an incredible week could volatility, some people like it, the ecb is not

so sure. tom keene joins us now from new york. tom: we go into a three-day weekend here. it is memorial day, different from the fourth of july. memorial day goes back to the american civil war when you decorated the graves of soldiers that had fallen in combat. it was called decoration day and now it is called memorial day. this is why the boston red sox are so lousy in the month of may. we will do on tuesday what you are doing this morning, looking at greece. to see them move and how this links in is important. we will move that discussion forward a. it's a fluid. what do you see? guy: i am glad that you are moving it forward. that is the problem. we're looking at pictures of the meeting now. all they could agree on was we

will stay in touch. that tells you everything at the moment. belgrade a great deal of progress is being generated. tom: it's not a plunge or a panic. my major message is what's up front and center this morning as we look into other markets. we will focus on the too big to fail banks. guy: let me be honest, greece is not going away. we talk about it every day. its deadline after deadline after deadline after deadline being delivered. let's talk about the weekend. the grand prix is sunday. this is one of the highlights of the formula one season. the teams are looking for any edge they can generate.

they spend a lot of money doing that. even if you have the best car it still might not be enough to take the checkered flag. this is tom gibson's report. tom: one and two in the driver standings and a first place in the championship. mercedes dominated formula one last year. the battle is not just thought by the driver in his car. >> you basically have almost an unlimited amount of channels you can have. data is the new way of life. i can imagine how they lived in the past. tom cole and engineers can make the difference from behind their

desks. >> they are allowed to have an intercom. we will have all of the data in both directions. we also have live audio casts. they will be talking to the driver or other engineers. tom: the team relies on data tons of it flying in at lightning pace. >> it's all about computing nowadays. the more computing you can give to an enterprise, the more effective it's going to be. it helps them understand what to do when they get to the racetrack. tom: and shanghai or monaco, valuable information comes through a server rack. we are not allowed to know who's is whose.

with the world's largest submarine fiber network connecting 240 countries, 24% of the internet roots go through them. a gigabyte tenet go through the servers every second. mercedes can monitor tire pressure or whatever they can figure in real time. >> if you feel hesitation in the engine, you can't really remember all the way back, you push the button when those things happened and that's the reminder. tom: a maximum of 60 staff are loud trackside. mercedes has another pit lane working to keep the drivers at the front of the race.

>> this car is pushed to the limit. we have all this information coming from the car and the changes that you make. these changes are recorded and analyzed for the next time you come out. >> we will be analyzing what did we do and how successful was the car? we want to make sure that we might have one could we have done more? guy: data is everything. it used to want to be covered in champaign at the end of the race. as wind week draws to a close, we will talk to a winery from new zealand about the latest trends in fine wine.

guy: welcome back. you're watching "the pulse." we are live on bloomberg television. wind week is wrapping up. this week it's wine tasting at the chelsea flat show. carolyn hyde is joining us for more. good morning. your brand is increasingly exclusive.

is that the right relationship you want to form at the moment? guest: i am here for the flower show. we also had a number of trade engagements. it's the premier opening of the social season. it's an incredible cross-section of london society. that links to the occasion. the summer shining. a glass of seven young block was perfect. the kiwis know a bit about rugby as well. i was born in south africa. i am very conflicted when it comes to rugby. guy: the flower show is probably the right option. caroline: you want to keep this

aura of luxury and aspiration when it comes to cloudy bay. it has become more of a mass product. you can buy at the supermarket. how can you balance that? guest: we understand lecturing. we define what luxury is. seven years ago our luxury does not deal with possessions. what is luxury? the fascinating thing is that it is moving to the idea of experiences time, space environment. we have all of those things in spades in new zealand. we live in this world of luxury. we are positioned to where the next phase of luxury is going.

aspirational, possibly. the key to being relevant is being authentic. we make real things. what is happening at the moment is scarcity. that of the remaining things are relevant to us. our wine comes amid a very specific part of the valley. there really is a natural scarcity. as new zealand is less than 1% of world right direction. supply and demand is moving in the direction of a value over time. the land has gone from $2000 in 1973 and now we are sitting at 200,000. there is a natural scarcity around new zealand wine.

if you are a craftsman, there is that divide. there is scarcity. guy: does he come down to see his grapes? guest: i think he knows they are there. i had a great discussion about the investment. the vineyards of been there since 1990. you've got this new zealand winery and we had the french linkage since the early 90's. guy: that's what i was curious about. do you work together? how much do you actually get from the branding and the ability to produce the stuff? guest: one of the great things is at the core is creativity. no one is telling us how to make our wine. what are the main things is

distribution. the key is good distribution. we have that. there are all the other benefits. it works very well to have that combination. if you met the founder of cloudy bay, he was this practical australian. i went back and talk to him. he said they were making a drink. one of the things is the success in 1985. guy: how important is the u.k. for you? guest: it's a very important market. you have to get the u.k. right.

it is a domino effect. caroline? where are you finding the dominoes toppling? guest: china, hong kong, singapore. that's where we see the next wave. the u.s. is very here and now for new zealand wine. this is the fastest-growing market. we had a lot of vintage this year. last year we had a 445,000 tons as a nation. it starts with nature. guy: what does that mean in terms of managing a business with that kind of volatility built into it? you kind of learn to cope with that. do you have people saying you've got to make targets this year? i guess you can't. that's part of the process. guest: we hedge by having more

grapes than we need. we are very focused on being able to deliver the quality. if necessary, we will make less wind if we cannot deliver the quality. because of the short vintage we have had in new zealand guy: i'm not going to ask you about rugby. our thanks to caroline hyde as well. a company in iceland is plotting a new set of prosthetic legs that can be controlled by a person's brain. here is a little bit more. as soon i put my foot on, it took me 10 minutes get control of it. i could stand up and walked away and come back and sit down.

it was like you could not believe the feeling. i was moving my ankle. i cannot explain it. >> the muscle contracts. we put in sensors into the muscles that picks up the signal. that signal moves and the prosthetic reacts as the brain wants. it is safe to walk around. to go up and down stairs and inclines and so on. >> i was moving it with my

muscles nobody else was doing it. the foot was not doing it i was doing it. guy: ok. that is great stuff. we are watching a historic referendum in ireland. will they realize -- legalize gay marriage? ♪

>> this is the toughest group at

the world -- rugby world cup. it put you in good standing if you get out of it. we have to wait and see. that is why we play the games. i think there is no reason that those teams can't beat them on any given day. guy: that was the former captain and coach speaking to us a little bit earlier. he has a little bit of experience lifting the cup. it's going to be a tough challenge. judging by the six nations england and ireland will be battling it out. talking of ireland, let's look at what we are watching for the rest of the day. let's go to dublin. the debates about gay marriage of been going on for some time in ireland. today, we get to the decision on that. the referendum on the subject

will change the constitution. where are we expecting this to go? guest: if we look at opinion polls, it looks pretty clear that the yes side has a lead of 30 percentage points. there will be concern on the yes count that their vote would go younger, which may not be as likely to go out and vote. they are offering one to 14 on a yes vote. it on that basis, you have to say the yes side at this point looks like the favorite. guy: i'm assuming the church has had a big role to play in this. guest: that probably has not been the case the catholic

church has voiced opposition to the referendum. they have not played as prominent a role as you would have imagined because they know that by being too vocal it could backfire. it's a very interesting campaign. referendums in ireland are very divisive on issues like abortion. with these cultural issues mostly settled, this has been more reconciliatory. most political parties have come out in favor of gay marriage. most big companies have come out in favor of gay marriage. we kind of have an consensus. some say that this can affect the yes side in a negative way. there may be an antiestablishment vote. there is some concern about that. we will know more by 10:00 tomorrow morning. guy: looking forward to the

reporting on the story. let's wrap things up for "the pulse." what a week it has been. stocks have really jumped. today we are selling off a little bit. we are going to carry on the conversation we will transition from our coverage from the united states. surveillance will be with you live from new york. i want to leave you with this picture as we transition towards greece. this was the meeting room last night. these are the three people that you need to watch when it comes to deciding greece's future. all they could agree on it last night was that they will stay in close touch. no deal yet for greece. there are still plenty of cards to play. we will carry on the conversation in a few minutes

time. i a great weekend everybody. ♪

announcer: this is "bloomberg surveillance." tom: greece is close to sealing a deal. wade, germany says -- wait, germany says intense work is still needed. and too big to jail banking. graduates follow their dreams

are just do not expect a raise for the first, the second, or the third job. good morning, everyone. this is "bloomberg surveillance ." it is friday, may 22. i'm tom keene. joining me, brendan greeley. let's go to the single best chart. brendan: it is a huge deal because what you were when you get out of college, that sticks with you the rest of your life. so we are talking about the cohort and the consequences of that cohort for the rest of their careers. when i say cohort, i mean all of the people in the control room. tom: we're seeing young lads and women in their gowns and they are walking around and you are looking at them like really? brendan: they still