guy: blame game. blaming each other as the payments low. francine: new figures show china factory orders stabilizing. further measures to clean up local finances. guy: the fifa scandal continues. more charges and banks linked to the alleged payments. ♪ guy: welcome to "the pulse." we

are here in london. i am guy johnson. francine: i am francine lacqua. breaking news. the manufacturing pmi at 52%. the preliminary figure was basically what we saw with the germany. a little bit below. it is -- guy: kind of flat. francine: as expected area -- as expected. guy: partly greece and a bunch of things and the mix. a little bit of a selloff within the last hour. we are down 1.09. francine: greece and its creditors have blamed each other with the lack of progress. prime minister alexis tsipras saying it is absurd. guy: with payments due friday, the patience is wearing thin.

hans nichols is here. we are resulting to -- newspapers is slamming doors. hans: it would be on the creditors' first station. now frustration for mr. tsipras was usually the conciliatory actor. you look at some of greece's hopes and it looks like they want to cleave off the imf from and they think they are driving a hard bargain. there was an interview this morning. let's put to the quote of. -- let's put to the quote up. it is game theory. francine: this for me is southerly europe. compared to may be more mature northern europe and i can say that because items other europe. hans: i cannot say that. they want to have a

non-geographic-based discussion. i cannot imagine we would continue by ourselves and without the imf. he is a clear signal. the imf needs to be part. francine: what does it mean for the banks, how healthy are they? hans: the central banker, we saw 5 billion and outflows from the last month. all of these numbers are so flexible, so what you give. the general fear of the deadline and we talked about on friday. you can pay the imf at the end of the month. he was not going to comment on whether they were going to. now parents to the ecb and the real number. is very hard to tell. -- now the payments to the ecb and the real number. -- it is hard to tell. there will be see bridget but a lot more in a place like greece.

guy: if you were a pensioner in greece, would you be expected to get paid? hans: not oh monthly payments but decreased down the line. this is according to official, a 3 billion in the gap. it looks like at the end of the month, pension payments will be fine. they have been clear they will pay pension before they pay the imf. remember a couple of weeks ago either pay imf or compromise their principles? tsipras won the vote. members would rather them not paid the imf and not compromise their principles. it is principles. they had the big meeting on saturday down in athens. tsipras having difficult problems. did he write it is to shore up

his point? is he plan privately? francine: and the problem down the problem. hans nichols. guy: he brings his -- [indiscernible] francine: that brings us to the twitter question, the first of june, will greece still be in the euro after the end of june? you can tweak us. -- tweet us. happy first of june. guy: when are you leaving? [laughter] hans: not soon enough. guy: in china where official pmi numbers have showed factory numbers rose last month. let's get more ways chief asian economic correspondent. the view from hong kong what are they seeing? what does the data tell us?

reporter: good morning. maybe a bit of good news for one. a can't of things stabilizing like you said, has not gotten worse and economists are saying maybe the central bank is taking the steps along with the government is starting to work and help factories. we know in the bigger picture is still in china and economy is slowing, a lot of overhang can overcapacity in a real estate and exports are sluggish. the current is week against the yean. -- weak against the yen. no signs of a dresser turnaround yet. francine: we saw a news on local government that. can you explain? enda curran: to the very complicated debt in china, in essence what the central

government was to do is ensure the local government can borrow and finance themselves. and to build infrastructure projects and keep the economy from spilling over. during the pros crisis he years borrowing off balance sheets. and trying to sell bonds ion -- in the public market. so far, it is gaining traction. and they get credit for the projects. today's message is that yes, it looks like it is working. as continuing to make sure the credit keeps slowing and people building projects is that keeps the economy going. a signal that the reform is working so far. guy: thank you very much. enda curran chief economic correspondent.

francine: great to have you the program. give us a sense of how worried we should be from everything we heard and the past two to three weeks in china. there are still worrying signs that investors should be worried about. guest: i think the situation we can only call it a very soft stabilization. and we should not set our expectations to high and the pressure on the downside. and the government will have to submit a you can see the government because it is much more committed to reform. so i guess the picture -- the

growth pitcher does not look very good. guy: what is the next policy move? wei yao: excuse me? guy: what does the next move from the authorities? we are saying soft stabilization as you say. wei yao: i think the pboc could do more and cut interest rates but the more important thing is actually how to generate credit demand and an investment demand and consumption demand. it means it is the fiscal side more. over the past few weeks, web send the government is somewhat and adjusting the pace and allowing local governments to borrow a bit more for infrastructure projects. that is much more critical right now that monetary policy and like cutting the consumption tax and it will all help. i think the degree of help and

recovery what not be that great. francine: over ball, should investors just be confident that whatever is going on in china, the regulators have a pretty firm handle of what is going on? bankruptcy orchestrated to be seen in the economy or something more sinister? wei yao: umm, i think we always have to be a bit more careful about this kind of complacency. the idea of all of the reform going on is about the government letting go control of the economy, especially stabilization. the most difficult thing which the government is trying to do is allow bad things to happen. like the risk, the creditor risk of that was suppressed in the past, the company's cut not go

down -- companies could not to go down only because they can get more debt from the banks. this kind of thing may not be able to continue. the chance balance the risk will increase and the near term along with reform. guy: wait, how nervous are the authorities on a scale of one to 10? is is something they feel they can manage and understand and a process they need to go through? where are we on that scale? wei yao: i think right now probably are around six or seven, they are worried but not that worried. you can see some of the rhetoric they are talking about. it is difficult but by and large we are doing the right thing for the economy and the long-term. i think that is the right

message to have. the difficulty is the grossest celebration and what could happen -- growth's acceleration and what could happen. we stick to this sense. it is the most important thing for china in the long run. francine: how concerned are you in china? wei yao: umm, the stock market is very puzzling, i have to say. as an economist i cannot see the reason for such a rally. a lot of people are quite excited but it is really not that much. i ring given the pace of rally some corruption probably is inevitable. nevertheless, talking about long-term picture for the chinese economy a given the reform and china's gross

efficiency is slowly getting better and the government is taking to the reform. if we talk about the 10 year the stock market could do that are. right now, a little too fast. francine: wei yao, thank you. guy: secretary of state john kerry has cut a european trip short after breaking his leg will stop it will limit his travel is a critical stretch in negotiations to curb iran's nuclear program for economic sanctions. francine: 89 people prohibited from entering russia. the list from nations that push for sanctions. guy: we will talk more later. irs chief investigator said

alleged corruption at fifa is moving to a new phase of that will bring charges against new people. banks have launched internal probes into any roles they mail played in the scandal. this according to "the sunday times" newspaper. francine: we get manufacturing data from may. guy: at 10:00, a founder and -- francine: one of the 89 officials entering russia. the parliamentary group who has been tweeting. he is not that upset about it. we are back in 2. ♪

guy: welcome back. you are watching "the pulse." we are streaming on bloomberg.com. we are on your tablet and a phone. the irs chief investigators say the probe into corruption at fifa is moving into a new phase and that will bring criminal charges against more people. inc.'s including -- banks including barclays have launched probes into any roles they may have played in the scandal

according to "the sunday times " newspaper. a new phase, what does it mean? mark: they will study procedures to make sure everything was ok. if not, they will hand over evidence to u.s. investigators. standard charter on probation with u.s. regulators. they could face fines and use -- and lose u.s. banking license if they did not do enough to stop suspected money-laundering. hsbc has declined to comment. they said we are aware that 2 payments cleared by house are mentioned in the indictment and we are looking into the payments after this time. the u.k. banks could be dragged into the scandal that runs and runs. in make sure as i guess no sleep. francine: none of us get any sleep area seep blatter was

voted back in. the u.s. said there might be more names. mark: they u.s. irs chief investor greater spoke to us -- chief investigator spoke to us is that it is moving to a new phase which will bring further criminal charges against all 40 people 14 have been indicted. he said how the case develops hinges on the fate of those 14 people charged already. seep blatter spoke on friday and was reelected. he spoke on saturday. he was asked at a press conference on saturday if he was concerned he would it be arrested as part of these investigations taking place in switzerland and the united states. arrested for what he said. next question. he said he was not involved in the bribery scandal including the former head of the body that oversees north america and

central america. jack warner. an alleged $10 million bribe. the suitcase full of $10,000 stacks of notes. he said i have no $10 million. he has been critical of the united states and critical of uafa the european ruling body will meet in berlin on saturday. the talk of the town isuafa could boycott the next world cup in russia. we spoke to andrew of the bbc as said no point in the u.k. boycotting the world cup. he does not think it will last. [indiscernible] i am getting all of my days mixed up. friday, blatter was elected. i said, why didn't you go for

it? he said, i am too old. mr. blatter is 79 a you are younger than mr. blatter. also in the car was david gill the u.k. official. he said i will not take up my place on the fifa executive committee. prince william on saturday, he supports the -- he said fifa must reorganize and reform. royalties speaking against fifa. going to the highs as shall london. as the bank he is head of the -- francine: he is head of the iaffa. thank you. the latest on fee for. guy: will have the latest on moscow banks. that story is next here on "the pulse." ♪

francine: welcome back to "the pulse streaming on your tablet and phone and bloomberg.com. russia has disclosed the name of a benign european officials it has banned from entering the country. -- name of 89 in european officials it has banned from entering the country. whole is russia targeting exactly what the so-called stop lists? reporter: it is people they feel

like criticized russia in the wake on the annexation of crimea and a movement in eastern ukraine. nick clegg in the u.k. is probably the most prominent pre- he called for russia to be stripped of the 2018 world cup in the wake of the annexation. there are various other eu officials, european officials in 16 countries who have been targeted. guy: it seems like the cold war. what does the real reaction to this in brussels? jones hayden: yes, some people have talked about it as kind of a new cold war. i do not think we are anywhere close to that level yet. it is true it is tit-for-tat where the eu has imposed sanctions, travel bans and asset freezes on russian officials and this is russia coming back on at that.

the names have been disclosed this week but the list has been there for months now. there's been several officials most prominently from the european parliament who was driving into russia in the past few months and have been denied. the eu has been complaining a russia has come out with a list. the eu said well the list are not the justification or legal basis for this. the eu sees it as a legitimate. francine: what does it mean or what might it mean for the new sanctions against russia? these are coming out in july. jones hayden: that is right. the eu has sanctions against russian officials. it looks like they will be renewed in july. this kind of activity for -- from the russians it does not do anything to have the situation. the eu was pushing for the minsk accord. they were looking for a long-term solution in eastern

ukraine and left a wait and see if we can get that. guy: thank you for your time. jones hayden, joining us. francine: we will speak to a person on the list. stay tuned. ♪

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francine: welcome back to "the pulse.' i am francine lacqua. guy: i am guy johnson. we are getting data from the u.k. somewhat better than expected but worse than they were. the number is 51.8%. previous estimate was 51.5%. the manufacturing sector is not the bulk of the economy. it is having a detrimental effect on the pound which is

that session lows. francine: earlier we had manufacturing pmi data out of the eurozone. that data it is at a sluggish pace of but not able to pass on. guy: i thought you were going to talk about the italian number which was amazing. francine: i was. [laughter] guy: the focus on the u.k. last week, david cameron visited leaders as he push for eu reform. could the so-called in norway option be an option for britain? it has membership of the european area. find out, we are joined by the norwegian foreign minister. good morning. glad to see you. the question we are trying to figure out in the u.k. right now. should we be more like you? is it a good idea?

guest: i have to admit norway is very much relying on the eu when the eu and the euro area does well euro -- norway does well. it is crucial we are successful in reviving economic. britain is important. in many ways britain had a no-nonsense attitude when it comes to the eu focusing on economic reforms. and for britain, it is important that the eu does well. the most important export market. do you want to be there around the table as a big power, as the united kingdom or do you want to go for another kind of option that norway has opted for? our histories are so different it is difficult to compare. francine: would it make a difference to you if a britain

was to leave the u.k.? germany wants pro-economic reform and very liberal and business that does business. if it left, would norway have something to lose? borge brende: it sounds -- it is a sound argument. it is for the british to decide. we are not going to interfere in this. we do see britain as a positive force in europe and i think that europe needs to go through additional economic reforms. it is about competitiveness. if europe does not get competitiveness right, we are not going to see unemployment falling and also more investments and the british voice is important. britain has no positive examples to show. the positive growing economy in

europe and also relying a lot on of the eu. that is the most important markets for britain -- that should not be forgotten. guy: the relationship is different a you are not advising because -- your since is there's a history because of the way the u.k. has interacted with the eu over the year. the status quo is more desirable than changing things? borge brende: it is up to britain but it is in europe's interest that britain stays engaged in europe and in the eu. and in norway -- guy: is a different from being a member of? borge brende: it is for the british people to decide. it is a europe's interest that britain stays in the eu. norway is in a different situation because well twice turned down joining the eu. britain since 1972 has been a

member of the eu. i feel prime minister cameron has started is a tour of arguing for a more agile more competitive european economy. and that i think is a positive thing. if it turns in to a breaks it discussion -- brexit discussion, it could turn the attention away from not only economic challenges but on the bigger security we are facing in libya with isil. we need a europe that stands firm and stands together in solving these challenges. you cannot rely on the u.s. on all of this a europe has to take more responsibility for its own security. francine: you are here talking about a conference call a search for global leadership. how does europe deal?

borge brende: i think of both of those are boring developments. russia is not only the original one and we have been very firm and norway being a neighbor with russia. we are very focused on the importance of respecting other nations' territorial integrity. britain has been saying if additional territories are taking just taken, there will be increased sanctions. this has led to the fact there has been no new territories taken. then on isil's violence we see thus spreading not only in syria but also libya and the boat refugees coming in africa. even on a deal in the future and results, you have to stand together as europe.

it is also during -- before the second world war, these kind of wars were happening in europe what we seeing in the middle east. one of the reasons they manage better after the world war a built the european union. guy: is nato spending enough on defense? borge brende: i think we should do more to reach 2% of gdp for defense. we have to step up. allocating to defense. security landscape has changed and the new reality is what we are now seeing with all of these global challenges and europe has to take more of her responsibility for its own security. the u.s. is spending 70% of the nato budget today and this cannot continue. francine: precisely, where would

you spend and now? fighting isis? borge brende: i would make sure we have a national military and defense system that are really take into account the new security landscape. left to do more infighting isil through the coalition against isil. and exchange more intelligence when it comes to foreign fighters. guy: does the european union need a nuclear pact? if you look around europe and the nuclear countries that exists here, is it the best way to spend our money? how should countries be spending money? the big debate raging on whether we can live with a or without it, a big chunk of our defense. borge brende: that is a real big question about the nuclear

portion. what i do hope is we see results in that area where we can see less -- being less relying on it nuclear's. that cannot only apply for nato but part of a global deal. in reality, we have to have the navy and also the military force and there is no fact that russia has increased military expenditures to 60% and the last four years. nato has reduced its 40% during the last few years. that cannot continue. we have to spend more money on defense to make sure we stay safe in europe. for citibank minister, thank you for joining us. the foreign minister of norway borge brende joining us. guy: greece and creditors are no closer to reaching a deal. alexis tsipras wrote the deadlock was "certain

institutional actors and their absurd proposal." [indiscernible] francine: china's output stabilize. there was easing supporting the economy. official pmi reading at 50.2% and improvement of 50.1% reading. guy: the probe into fifa is moving to a new phase that the brink more charts to more people. banks including barclays have launched internal probes into any role they may have played in the schedule according to "the sunday times." francine: how will john kerry's accident of fact nuclear deals with iran. ♪

francine: welcome back. as greece and its creditors blame each other over the weekend for the lack of progress, our next guest said a grexit would be beneficial for the greeks. we are joined by richard. thank you for joining us. it seems the markets are brushing it off. first of all what is the

capital controls and what does it mean for equities? richard: for greece to pull out of the euro would be complex and cause market destruction. if you're asking should we be afraid, it is going to cause market volatility and no doubt about that but in the longer run, would it be beneficial for greece and the eurozone for the separation to take place? i think the info both of those is yes. guy: how does mr. tsipras a balance his people wanting to send the eurozone and at the same time different economic deal? richard jeffrey: if you want your own economic deal and take responsibility for your own economic future, you do need to have control over fiscal policy and more importantly monetary policy inside the eurozone, you have no control over monetary policy. and less control over fiscal policy. it is incompatible with wanting to direct your own future.

francine: are you expecting them to default and officially a grexit? what is the likelihood it will actually happen? richard jeffrey; a 50/50 event and it is unpredictable. nobody europe at knowles. it is not like there's somebody out there that has the answer. -- nobody in europe knows. francine: what is in a party chief investment officer? richard jeffrey: we have to analyze the situation and says it greece holds outdoor stays in, what are the consequences? we are thinking more in greece were to exit the eurozone, could there be contagion with the southern european countries? i think that is unlikely. we are looking at a small part of the european economy trying to make its own weight. i think eventually that would clear the air. anybody who has not written greek debt is crazy. guy: will there be an event?

i am trying to map out how it will happen. does there need to be an event that crystallizes my side? we see in that we seem to be having endless deadlines and discussions and every body is frustrated. i struggled to see how that struggle ends without one party going enough is enough. you do not pay us any money and we have some sort of referendum will stop something needs to happen. how do you model it out? borge brende -- richard jeffrey: they could just be defaulting on a payment or people getting fed up. somebody get on the wrong side of the bed one morning as saying would've spent enough energy and time on this tiny little issue and need to be thinking about bigger things within the eurozone. perform with the eurozone economy and french economy and

italian economy. those things are much more important than spending all of this intellectual effort on a tiny bit which is greece. francine: if you look at athens, with had so much volatility. equities may be overvalued at this point, where do you make money? richard jeffrey: bonds certainly look overvalued. we see vulnerability and volatility. to what the level, we do not know. that's a looks unsafe. within equities there is value but you have to be careful about how you exploit that. probably more value within europe and north america. north america, they have a peak level of barges and i do not think they can expand anymore. and that could cause a marginal contraction in markets. america is not a massively overvalued, you still want exposure but will not be the

main focus. in europe, looking for expansion. coming to the sweet spot and our earnings cycle and you still want exposure is there. it does not look cheap. guy: europe is a little less than coming out of the periphery of europe. italian pmi was nice and strong. richard jeffrey: looking at pmi's, though more north you go the more disappointing. surprises out of spain and italy. a disappointing read out of germany. what we are trying to do is analyze noise all of the time in too much into these. we take a step back from the eurozone and it will show stronger growth this year than most people anticipated after the start of the year. it is gaining momentum. it is still restrained by the euro itself. the outlook is improving and that is good news.

to be honest, the german economy is -- has the most momentum, the most trustworthy momentum if you like. the stroke of growth will probably, out of southern europe. probably out of spain. francine: is a real momentum or better gdp figures or slightly better because of a weak euro and oil price and qe? richard jeffrey: it all depends on your expectations. if your expectations that the world economy should have exorbitant growth rates that we saw prior to the financial crisis, no, you will be disappointed. we saw massive imbalances as a result. there is going to be a new normal and that new normal is going to be characterized by much slower average growth. we have to lock that into our minds. markets have not tuned into it. francine: thank you for joining

us. richard jeffrey. a word of warning. thank you. guy: our top stories. they will sell shares in lloyds banking to individual investors. this is after david cameron was reelected and part of his plan to return lloyd to the private sector. they said they u.k. government's stake is below 90% full press a bank has seen from a cow has plunged. -- francine: casino revenue in macau has plunged. [indiscernible] guy: a smoking ban.

talks between the u.s. and iran took a twist a break. secretary of state john kerry broke his leg and could complicate plans. hans nichols has more of the story. it's kind of art of the [indiscernible] perhaps as a poor choice of words. what kind of impact? hans: if you take secretary kerry at his word, he has racked up a lot of air miles and hot spots especially on the run issue. having him out of pocket will be hindrance to getting a deal. on saturday he has six hours of talk with his iranian counterpart and we are waiting on how it is received and what the senate republicans allow or do not allow in terms of how much a want to get negotiation. francine: the nsa spying program has expired.

hans: they will reach a deal. it's a single senator senator rand paul from kentucky. he is passionate about this. it catapulted him earlier in the year and a bit filibuster he did in 2014. we'll have a new section 215, which will allow mass collection of data. it will be stored by the phone companies and not to the government. the larger issue is a u.s. senator running for president and not just senator cruz from texas was running but an interesting senate and republicans have a very think majority. there will be big votes coming up. if one senator wants to rand stand. they will be given the opportunity. guy: i am assuming john kerry things will improve. what he will be listening or not is another story. do we know what his recovery rate looks like? hans: it is a couple of weeks.

when you have a deadline of june 30, 30 days in june or 31? let's put 31. it is official now. look, the deadline recovery time is a couple of weeks. guy: 30. has been only 30. maybe he can get on a plane and hobble around. he is going back to boston. he is in his 70's. you know -- not exactly easy procedures. francine: we spoke for norwegian minister who was disappointed he will not be in paris. guy: you wonder whether or not -- we will talk to him on the phone or if we'll get the deal done. this guy is pretty critical to this. let's agree that deadline gets pushed back by a week or two

weeks. hans: the deadline is tough to push back. people say this secretary kerry this from his time in senate. they say nothing in vertebrates a senator like the smell of jet fuel. francine: a russian investor is taking a big bet. his collection is worth as much as five hundred million dollars. ryan chilcote reports. ryan: socialist real estate art was created by joseph stalin. russia's richest cannot get enough of it. he has more than $100 million on soviet art. his collections worth $500 million. >> the most profitable investment you can imagine. a french impressionist can cost

up to $300 million and a masterpiece over 100 million and soviet paintings over $1 million. it can go up tenfold. ryan: andrei had divisions are world war ii to the gallery this year. in the future, the plan is to open his own museum. andrei: i grew up in the soviet union as saw how people made art there. i want to show the work of soviet sculptors and artists to the world. ♪ wideband many collectors shun it as poorly crafted propaganda. before 1917, the artwork is hard to get hands on. andrei: some buy what they like from their childhood and somewhat to share what -- with their kids. ryan: a former minister walter

this and the 1990's when russians do not have the money or appetite for art. andrei bought them back. keeping the real money has yet to come. ryan chilcote. guy: focusing on bloomberg radio, first word is next. for viewers, a second hour of "the pulse." francine: plenty, golf. we will speak to two important newsmakers. -- we have plenty coming up. if we will see capital control and greece. guy: and we have a purse on the russian no-fly list. he is in venice. -- we have a guest who was on the russian no-fly list. francine: we will drill down what it means and why he think he knew was put on the list. you can follow us on twitter.

i'm going to throw in hans nichols. he will be joining us for the next hour. guy: we will see you in a moment. ♪

francine: blame game. greece and the creditors point fingers at each other as patience looms. guy: p.m.i. around the world. china's manufacturing stabilizing while europe shows a modest increase. francine: and the fifa scandal continues as the u.s. chief investigator warns more criminal charges and banks looking into transactions linked to the alleged payments. guy: so good morning. good evening to those in asia and a very good welcome to

those waking up in the united states. i'm guy johnson. francine: and i'm francine lacqua. this is "the pulse" in london. guy: let's get to greece. they're blaming each other for the lack of progress to unlock more aid with the prime minister slamming the demands as absurd. francine: with an i.m.f. payment due this friday, patience is wearing thin. let's get more with hans nichols. it's difficult to say because nobody knows is this negotiation tactics or the end game that everyone is fed up. hans: seems we're getting close to the end game but can't rule out owl sides are negotiating. the economy minister in germany is saying you need a decision soon but says all the options are out there. greece just needs to take a decision. what's interesting about this coming from gabrielle, the junior partner in merkel's government, the german government is united greece needs to make tough decisions.

that was the overwhelming line we heard over the weekend on thursday and friday. we all know what the decisions have to be but they're hard ones and the question is does the greek government ledly tsipras have the political will to do it. guy: what do you think of what he penned in the french newspaper? it was a fairly hard lined one. hans: normally tsipras cleans things up and they had a phone conversation for 35 minutes yesterday. what's remarkable about this article, he's talking about almost german and european perceptions of greece. at a certain point he says we're the supposed intransient ones and yet over and over again you talk to greek creditors and talk to the i.m.f. and e.u., they're blaming greece and saying greece isn't making the tough decisions. we heard this morning from jean-claude unger who gave a interview and said, i can't imagine we'll continue buy or sells and won't work completely without the i.m.f. the idea there's daylight

between the i.m.f. and e.c.b., jean-claude laid that to rest and looks like everyone is united on that side continued united pressure on greece. francine: what does it mean for the banks? are we going to have capital controls? we don't know at this point. hans: the latest is we're five minutes to midnight and the bank has members of the e.c.b. and get a good sense of in-flows and out-flows and the month of april had $5 billion leaving the residential or household banking accounts and a lot of money has been drained, liquidity has been trained and regardless of the figure, no one disputes it's been a drag on the economy and greece won't have groke and clearly didn't have growth in the last quarter and will it affect this quarter? probably. there already has been a casualty and that's the greek economy because they can't grow nlts they have some certainty they can pay their bills. guy: what do people say in berlin how the e.c.b. will have to handle the story because it

will get very political. hans: the germans are concerned the e.c.b. is straying from the mandate. when you see what they do about the liquidity assistance, you try to divide what the better than position -- german position is. they don't want the e.c.b. buying up or taking collateral that isn't worthy. the next big move we could have from the e.c.b. is it they impose class value haircuts and means greece could have less collateral to get them through. under the old rules they have $95 billion but the imposed new rules, $88 billion. francine: hans nichols with the latest on greece. guy: that brings us to our question of the day. it's the first of the month and we've ascertained with hans nichols there are 30 days in this month. by the 30th will greece be a member of the euro zone. let us know what you think. francine: @guyjohnstv. the u.s. secretary of state

john kerry has cut a european trip short after breaking his leg in a cycling accident in france and will limit his travel as the u.s. and other world powers enter a crucial stretch of negotiations on a agreement that would curb iran's nuclear program in exchange for an easing of economic sanctions. guy: russia disclosed the names of 89 people from the european union who are prohibited from entering their country and targets officials from nations that pushed sanctions against russia after the invasion of last year. we'll be talking to one of them within the next hour. francine: michael fuchs. sepp blatter still remains in charge at fifa. the i.r.s. warns more charges are immeant and bring you the latest on fifa after this.

francine: welcome to "the pulse" live from bloomberg's headquarters in london. joining us for more on the situation in greece and of course the creditors meeting we were hearing from hans nichols is not going to plan. we'll talk about it with the finance partner. greg, thanks for joining us. we talked a couple months ago and seems like we say with greece it's just negotiation tactics, we're so to the wire,, what will go on? is it two sides that can't and won't get along or do you think we'll get some kind of agreement? greg: i think the key today,

there is a cost on bank run so the greek borders are voting against their own government because every month they pull out $2 billion euro and the e.c.b. has to keep replenishing by the central banks liquidity and eventually has to stop and what is they are finding hard is the average spanish, french, italian and german family has already lent between $1,500 euro and $2,000 euro to greece. that's already happened. each family on average. and they got very little back in terms of reform. if anything this government has arrived and rehired public workers and canceled privatization and increased minimum salary and most of the reforms haven't happened so far. and as a result i think it's very hard for politicians elected democrat creatically to say you know what, here's more money against what? and hence what is in the debate. in all this, the only one

keeping greece alive is the e.c.b. without the e.c.b. greece would have faulted a long time ago because you have the silent bank run which is what's happening the last six months in greece. guy: are the greeks acting rationally, the greek depositors. davide: they're taking their own money from greece and putting it in germany or elsewhere so basically they hedge. they are acting rationally because basically they take the money away just in case and deposit it in france or germany or whatever and at the same time their own politicians keep asking for more money. so this becomes a black hole where basically european taxpayers pull their money in and the depositor puts it back in. francine: there have been huge outflows and there's quite a bit of money left in the bank. whose money is that, why would you keep money in a greek bank? david e: whoever has the

possibility of opening a bank account abroad has done so and most of the population with $5,000 $10,000 euro most people on the have a greek bank account because the transaction costs outweigh the savings they have and as a result they don't. what i think is the key issue is that in my view, you know greece as a system has so far in reality done very little in terms of reform and you can say it on the privatization. it's shocking. they had on the table a credible offer from a chinese which could account for 4% or 5% of greek g.d.p. and they cancel it. now, if you want to invest in greece in create employment and create jobs on the simple argument the price wasn't fair. you know what? it's significant to the g.d.p., take it, get the economy going and then you may leave a bit on

the table because clearly someone is investing under their own terms, too. guy: is greece a smoke screen for other european leaders to do less? davide: my view on greece, the issue is i came to the conclusion if you go back to 2011, the beginning of the european crisis, the european institution didn't have the shield to deal with greece. the e.c.b. had not engaged in the kiwi and were basically susceptible at risk meaning a conteenageon. you're sick, we'll die but since then said hold on a second, we need to create a hospital room, a emergency room and you created the institution with shield. today i think greece it's like the lehman brothers moment back in 2009 with the opposite results. we need, in my view greece, to lead europe so the remaining, the rest of europe can actually say ok we had a failure and need to fix it and most

importantly people inside the euro will see what it means to live outside the euro. watch what happens in every other country. once greece does well then it's fantastic and probably we shouldn't be in the euro. and it's a fair point. at the end of the day, the test is are we better off or without? the market within the euro has grown so much since the creation of the euro the intratrade between germany, france and even the u.k. with the e.u. zone has had such a positive impact on people well since it's not recognized and in my view we need to see what it means to be outside the euro and we shall see. francine: if we get capital controls in greece, will we get them and will they work because it's not an island and bigger than cyprus? davide: it's a question of the e.c.b. will they stop increasing the e.l.a. and at that point you have capital control and it's automatic. every week when the e.c.b. with

$1 billion $2 billion, that pop-up is preventing capital controls. francine: thank you so much davide serra. we'll talk about russia next. guy: the i.r.s. chief investigator has alleged in the probe of corruption against fifa in a phase that will bring more charges against people. 's and barclays and other banks have launched internal probes to what role they may have played in the scandal. we've been tracking this story. mark let's talk about the banks first of all because these are names we've heard before getting in hot water with u.s. regulators and i guess they want to make sure they're not engaged this time with the story in the same way they have been previously. they need to make sure that they're transparent. mark: you said it, guy. h.c.b. both remain on probation with u.s. regulators and could

face fines lose u.s. banking licenses if they didn't do enough to stop suspected money laundering. what's happening according to the sunday times hsbc barclays, standard chartered have started probes amidst these fifa allegations and starting transactions to ensure proper procedures are in place and will hand over evidence to u.s. prosecutors if necessary. now, barclays and hsbc have declined to comment to us. standard chartered has commented and said we are aware two payments cleared by us mentioned in the indictment. we're looking into those payments and we won't be commenting further at this time. francine: mark give us a sense, we had an interview with the i.r.s. investigator, what did he say, more to come, more names will be dropped? mark: you said it, francine. a new phase could be in the offing. we spoke to the i.r.s. chief

investigator and he told us the investigation is moving into a new phase which will bring further criminal charges against most people. he said the case hinges on the development of the fate of those 14 people remember, in this 47-count indictment, 14 people were indicted nine current and former fifa officials, four marketing executives and an intermediary as well. don't forget also, francine, it's a three-pronged investigation, you have the i.r.s., the f.b.i. and the d.o.j. essentially looking into the activities of american officials. listen to mr. webber he says further criminal charges will probably be made. guy: mark you look how uefa is responding and it's amazing the sense is there isn't a

story here at least that's what you get from sepp blatter. his response to any questions on this is what are you talking about? mark: exactly. you said, guy, he was asked in a press conference in zurich on saturday if he was concerned that he would be arrested, to quote him he said arrested for what? next question. he then was asked for he took part in this alleged bribe which allegedly took place between south african government officials, south african bid officials, high ranking fifa officials with regard to the award of the 2010 world cup. he denied he was involved in this $10 million payment to concacaf, which is the body which oversees north america caribbean, and central american football. he said, i have no $10 million. so blatter is waving away all accusations right now, and of course he's also been attacking

uefa which is the european ruling body and the united states as well. he's won a fifth term, guy, and he's full of beans. francine: certainly is. for how long we don't know. mark barton there with the very latest on fifa. up next, russia retaliates and we'll have the latest as moscow bans 89 officials from entering the country. guy: we'll speak to one when we come back.

francine: welcome back to "the pulse" on your tv or ipad. russia has disclosed the names of 8 officials who are banned from entering the country and the list includes those who pushed for sanctions against russia after the invasion of crimea last we're. who is russia targeting with the so-called stop list? >> the most prominent name tends to be nick clegg. they are going after people who criticized russia in the wake of their annexation of crime yeah last year and after this last year clegg said russia should be stripped of the 2018 world cup and there's other officials on that including former belgium prime minister who is now one of the leaders on the european parliament. it's mostly european parliament focuses on the list and they've been some of the most outspoken

critics of russia in the wake of what's happening in crime yeah and in eastern ukraine. guy: what's been the reaction to this? do people really care about it? reporter: they care to a certain extent. the key is the list has been there for months now. for months officials going to russia have been stopped and turned away but there hasn't been a real explanation. we could guess what it was but now russia has come out with the list. they still say it's confidential but it's been leaked to the press so we have it and we have the names. the e.u. officially says that it doesn't have a basis in law or at least russia hasn't disclosed the basis in law that underpins the list. so they're saying it's illegitimate, that it's not worth anything. but it is a tit for tat because the e.u. has sanctioned asset bans and travel freezes on russian officials and is vladimir putin doing the same

thing on e.u. officials. francine: thank you so much. guy: a lot of people -- russia is on the radar, off the radar and from an investment point of view, when you look at russia, is this a sign you think will have a meaningful impact on my book is it something you worry about from a geopolitical point of view, how do you equate it back into what you do? davide: the issue of russia, as usual, my view is follow the money. they have about $140 billion out of their own people anywhere into any way they can which clearly means the people in russia don't trust the system. guy: i heard this conversation about five minutes ago. davide: exactly in the case of greece it's normal people and in the case of russia they are milking the system and the wealth concentration in russia is the highest in the world and the reason is because they

handle the privatization in a very diplomatic way. you have a system that maybe you invest in russia and you know basically there is very little rule of law and they do as they wish and you're just a passenger. and hence, i think suddenly it becomes a tradeing market. everyone is a tourist, people get in and get out. no one is there to stay. i think the fact you see so many of the long-term established investors globally that actually refuse to enter russia shows you the real story. once you're there and a local, you're stuck. suddenly they can blackmail you, they can ask for taxes, and that's the reason why there is very little global capital going into russia. and hence, i think as public mark participants over the last three or four years we have little exposure if none. recently, you know you have the odd opportunity for

example, last year the beginning of the year one of the hybrids which is the essential bank went up 25 cents on the dollar and was yielding about 40%. yes, we tried to buy some but basically the gain is a very tourist approach, a last minute offer and seems too cheap, you try to invest and as soon as you make the money, you get out. you cannot invest with a three or four-year investment rise in russia because you don't know what will happen and certainly given the action taken literally have no interest in international rule of law. francine: when you look also at -- that's your view on russia. we talked about greece and a little about the euro zone what's your view on bonds because we've been talking about it day in and day out and had so much volatility, there's nothing to buy there, is there, in bonds? davide: my view is see today, the most difficult decision for an investor is which markets have been manipulated by central banks and regulation. francine: all of them at the

moment. davide: which ones haven't is the key question and some have and some haven't yet. what's important is an investor try to go in markets which have not yet. and in my view, some of the private markets, not some of the distressed markets, the ones that don't have a easy liquid access, if an easy liquid access to do advertising for a broadcasting has been manipulated because it's electronical driveable. what i'm saying is it's leaked, it's global and efficient and cheap, you can analyze it and invest in quickly and as a result, the wall of $12 trillion that has been printed by central bank has hit it. while it's something that is harder private, harder to buy, you need to have a team on the ground. you need to do more work and suddenly that becomes, in my view, a more investable asset class. francine: thank so you much. it maybe goes with more

political risk the c.e.o.. and we speak to michael fuchs about being put on the russia ban list.

francine: welcome back to "the pulse" i'm francine lacqua. guy: i'm guy johnson. these are the headlines. francine: depreeze seems no closer to making a deal. the prime minister wrote the deadlock is not the fault of his government but because of certain institutional actors and their absurd proposals. a senior driven lawmakers said the onus was on greece to implement forms despite tsipras coming to power. guy: they suggest the money

easing arguments supporting the economy and the official p.m.i. came in at 50.2, an improvement from april's 50.1 rating. anything over 50 implies expansion francine: the i.r.s. said the probe is moving to a new phase that will bring criminal charges against more people. banks including hsbc and barclays have launched internal probes to any role they might have played in the scandal according to "the sunday times" newspaper. the head of the c.u. party, michael fuchs is one of seven germans on the travel ban of u.s. citizens. michael joins us on the phone for more. thanks for making the time. i know you were in holland and italy. how did you find out you were on the list and what's your reaction to it? michael: the german foreign office gave me the information last friday that i'm on the list and ok, well, that's it.

i am on the list but while russia is not my favorite place to go to. i can't stand it. guy: you can't stand it. ok. have you any plans to go? michael: no, not at all at the moment. i think my last journey was three years ago. of course on the political issue by for the time being i did not have plans to go to russia anyway. francine: why do you think you were put on the list? michael: definitely i was -- while in the german bunedes talk -- in the german parliament saying the russians did not do what they did do with the crime yeah crisis including eastern ukraine and was very clear on sanctions. i said sanctions should be and as long as russia isn't

following the rules then we will not cut on sanctions at all. maybe that's one of the reasons. i mentioned even it's not very clever from germany to buy so much gas from russia because 38% of our gas is coming from russia. maybe these kind of sentences are not to make the russians happy, i guess. guy: how would you describe the relationship at the moment between angela merkel and vladimir putin? michael: i think angela merkel is really one of the very few people capable to talk to mr. putin and maybe she can convince him at the latest age to come back to the table and to come back to a negotiating table and make sure what happened is going to be changed. and it's necessary because it's not acceptable that one country in these days is just invading another one and just taking part of the other country like crimea or the eastern ukraine. i really think it has to be changed back.

francine: do you think that we need to continue with sanctions? will we have fresh sanctions from the e.u. in july when these expire? michael: i think we have to continue as long as russia is not changing its attitude towards these part of the world. and we have to make very clear it is unisable at all because one country is invading another one. we are going back to the cold war times and i don't want it and want russia to be a reasonable member of europe and talking to us in europe and making business with us and doing business with all the world but not in a way they just do whatever they think is good for them. we are living in a very complex world and it's not acceptable if russia is invading other countries. guy: michael, can i take you to another question europe faces now and that remains greece. have you read --

michael: pardon me? guy: if you read mr. tsipras' "lemonde" article? mike ell: i only got a few words through my office and is not acceptable at all and it's crazy. we are the creditors and we're giving them money but under certain conditions and these conditions have to be fulfilled and we have a clear contract with greece as far as the second bailout package is concerned and all the conditions greece has to fulfill. as long as they don't do it, they will not get further money. we are not even talking about a date or package but if they want to have the rest of the second one which is $7.2 billion, they have to fulfill and go along with the ride which we have agreed with them and it's fully not acceptable he's not putting the blame on europe. it's not europe but greece. greece alone. francine: do you think that officials in the e.u. now

michael, have come to terms with the fact that it's very, very likely that greece will default and does it mean they'll also have to leave the euro zone? michael: we don't want greece to default or leave the euro zone but it's fully up to them because they have to follow the rules. they have to go along with all we've agree with them and i do not see that europe is the one making it difficult for greece. greece government, now including those in cyprus, they are the one, they don't want to co-op with all we've agreed with them. it's a legal contract, binding contract and i cannot understand that now all of a sudden they're starting to blame us. and ok, we are much more prepared than we've been a couple years ago because now we have e.s.m. and banking union and done the bank stress test

including looking into the books as far as the exposure to greece is concern sod i'm not very much afraid anymore. guy: do you think the german people who lent the money, every household in greece, do you think the german people will get their money back? michael: that might be very difficult in the situation right now. but on the other hand, we cannot just pour money in again without having any chance at the end of the day we get it back. and greece has to come back to the market to be competitive again and if not, then we have to stop to pay. francine: do you think we'll get capital controls michael? do we need capital controls? michael: that is a question what greece has to do. but in europe maybe they're needed because i'm quite sure there is a lot of outflow of greek money of europe into switzerland and everywhere in the world.

i don't have the feeling the greek people are trusting their own government so they're signing away whatever they have in their pockets. guy: one final question, talk of a compromise in greece is deceptive. what are you hearing? people are talking about a deal being close. what are you hearing from your colleagues as they negotiate and as they interact with the greek leadership? michael: it is very difficult because they don't want to understand the situation. while they are in a trap on the other hand, they've told their voters they definitely will change everything and nobody is controlling anymore and they don't want to have european rules anymore. but then you have to just give up and get money from europe, it's either/or. and i know all the negotiators are in a very difficult

situation, and he is not a reasonable man. francine: thank so you much, michael fuchs. he is saying he's not reasonable and he also says it's fully not acceptable the greek government is blaming the e.u. because of this impasse. can we still call it an impasse or deterioration of talks? guy: i hope michael enjoys his holiday now. francine: me too. let's check the markets. johnathan farrow has more. johnathan: looks like we were shaping up for gains after friday perhaps a rebound and it was up about an hour ago and the ftse down by a 1/4 of 1% and the ftse in london, ..2%. i'll take you to the f.x. market very quickly. the story through the morning is a weaker euro, off by .7% against the dollar. one europeo $1.0913.

let's switch quickly to the commodity market, w.t.i. heading for an 11th straight week of gains, biggest run since the late 1980's. crude is lower at $59 a barrel on w.t.i. going into a busy week for that one. opec at the end of the week, and a massive week across the board, really, opec e.c.b., bank of england and greece have got to pay back that $300 million euros to the i.m.f. back to you. francine: will be quite a week. guy: nuclear talks between the u.s. and iran, a good little twist this weekend. twist may not be the right word, break is probably the right word. the state of the state john kerry broke his leg in a cycling accident. do this mishap complicate plans to reach an agreement by june 30 with iran. hans nichols has more. hans: if you take john kerry's word which personal diplomacy

matters this will be a setback. the question is how quickly will his leg heal? they said a couple week and we have a june 30 deadline. there are a lot of obstacles to getting a deal done with the united states and their nuclear program. no one disputes that. how big an obstacle is this? is it minor or is it what the senate republicans are saying, where are the real row bucks? not having your top guy being out of commission -- francine: is a set back. we talked to the norwegian minister and he's thoroughly disgusted. hans: we have to take him at his word and john kerry himself said personal i did promise seas important. guy: are we honestly talking about a major historical event being derailed by a man falling off his bike? hans: history doesn't disclose alternatives but maybe. if this deal doesn't happen i don't know people are saying but for that nasty curb, the curb was in regulation the

french curb. had the curb been in switzerland, clearly he would have been able to navigate it. give the guy credit. he has a busy day. he spent six hours negotiating and the next day he's on his bike doing some pretty fast stuff. you know. francine: don't know we see the curb. hans: impossible to look cool in your biking helmet. a middle aged man in lycra. hans: enough about our next show. francine: i'm looking forward to your show. i will not be a part of it. the programs have expired. because the senate basically can't reach a deal. hans: in a weird limbo for a reasonable matter because senator rand paul running for the senate forced a delay and even rand paul acknowledges this isn't lasting and the senate will vote on a package

to restore section 215 but amend it. there's a serious conversation in the states about what the u.s. government, what sort of data it should hold and collect and now the data will be stored with the phone companies and not the government, six months with the phone companies. it's an indication what a single senator can do if they want to gum up the works. i feel like sometimes i'm here explaining/defending the u.s. political process. guy: i think explaining. francine: i think defending is more likely. hans: the senate is a tough place and any senator is supposed to cool down legislation but any senator can slow things up if he or she wants to rand paul certainly does. francine: when you say you really have to get your house in order -- hans: calling the kettle black. guy: translate that for us. what he really means is -- hans: middle-aged men in lycra.

francine: calling this show "middle-aged men in lycra." we'll get on to a little bit of luxury. hans nichols, it's dangerous having him in the studio. one of london's exclusive restaurants is reopening today after undergoing a major refurbishment and comes ahead of the centenary celebrations and bloomberg went to meet the ivy's director for a look around. >> i think there was a moment in the 1909's if you weren't unbelievely famous or connected you couldn't eat at the ivy at peak time because it was like a club. can i get a small espresso? thanks. ok. i'm ready for my close-up. the truth of the matter is it looked on the face of it fine but the ivy was just tired. the way i looked at it, i'd

been here for 15 years and in that time, i'd seen a lot of change in london and in restaurants but not in the ivy. the biggest change is the bar, which seats 20. before we had a tiny bar you couldn't sit at, whereas now as soon as you walk in, the first corner table is in the ivy and already people have specifically requested to sit right in the first table on the left or the right. if you want it done, do it yourself. the ivy is one of the few restaurants where you can see in a row of three or four tables a cabinet minister sitting next to a middle-aged couple with their son who is 18th birthday and an actress next to them. o god, i remember a night when sylvester stallone was in with -- who is the other one? arnold schwarzenegger and i

agreed to do it. we didn't have a table but i thought it's going to be big news to get them in. good for the ivy. and that turned into about 16 or 17 people on what was really only a table for 10 when you pushed things together and then you had the beef cakes in the bar and constantly was pushing them outside. creating a really excellent dining room when you know what you're doing as a maitre d' is a bit like painting and don't know quite how the painting will end up but know it will look good ined end a bit more blue here and a bit more red over there. francine: the ivy. he's always been a founding member of the ivy. guy: years ago, declined. up next we'll meet the russian tycoon who is wetting -- betting half a billion on soviet art. up next here on "the pulse." ♪

francine: welcome back to "the pulse" live from london on bloomberg tv. guy: we'll talk you -- walk you through blerpg's top headlines. the government says they'll sell shares and comes after david cameron's re-election and is part of his plan to return lloyd's to the private sector and said they take in 19%. francine: casino revenues in macau continued to plunge 12

straight months and revenue fell to 37% better than the estimators 38.5% lock. the losing streak comes amid an economic slowdown and government crackdown on corruption. guy: a ban on smoking in public places in beijing starts today and covers all workplaces, schools, hotels private transport and the city's tourist spots. enforcors can issue fines for $32 for smokers refusing to comply with the ban. francine: a russian billionaire taking a big bet on russian art. the artist's list his collection to more than half a billion dollars. guy: ryan chilcote went to take a look. ryan: socialist realist art was created by joseph stall ton glorify communism. today russia's richest canada get enough of it. andre has dropped more than $100 million on soviet art and

reckons his collection is now worth half a billion. andre: it's the most profitable collection you can imagine. a french impressionist can cost $3 million and an average masterpiece over $100 million and a soviet painting $1 million and the price can go up tenfold. ryan: he brought depictions of world war ii to the gallery in london this year. in the future, the plan is to open his own museum. interpreter: i grew up in the soviet union and saw how people made art there and want to show the work of soviet artists and sculptors to the world. many collectors shun soviet art as poorly crafted propaganda but russian art before 1917 is getting hard tore come by and soviet nostalgia is on the rise.

-- on the rise. interpreter: some buy what they like from their childhood and some buy to show their kids where they grew up. ryan: helmet cole bought these paintings in the 1990's when russians didn't have the money or appetite and he just bought them back and thinks the real money in soviet art has yet to come. ryan chilcote, bloomberg, london. francine: all right. russian art, some like it, some don't. i do like it, guy, not so much. guy: i like italian art and should cheer you up. francine: up next, some parts of the patriots act expired at midnight and no more searching through the phone records of american citizens but for how long? find out with hans nichols after the break.

francine: welcome back to "the pulse" live on bloomberg tv and streaming on the ipad and bloomberg.com. guy: hans nichols is there in the action. hans: we have francois miland and angela merkel having a meeting and it was reported mr. tsipras would be there as well and would be significant but the german government shot that down and there is no plans for mr. tsipras being in berlin. the sheet music has been clear.

we've had people saying something inflammatory and greeks saying positively they'll have a deal and then you have not just the germans but pretty much anyone within the east saying no deal. then you have a hope tsipras can clean things up and has been altered. this tone of the op-ed tsipras wrote for "lemonde." it will be hard to assume the role of the deal-saver and the rescuer of the cooler, calmer head because optimism was based there's daylight between the two parties and unclear that's true. francine: doesn't look like it once you read the op-ed. guy: i'm racing a car around the track. hans: what's the top speed? guy: it goes fast. francine: 200? hans: 200 k.p.m. francine: i'll say k.p.m. hans: we do that on the autobahn.

race into france and come back. that's the way we roll. francine: we'll talk about the n.s.a. hans: there will be a vote. the house will clear it and senate will do it, procedural matter. but we're in limbo.

tom: bridges are burned in the

name of camera -- presidential fundraising. in the next hour, conversation with glenn greenwald on the patriot senator from kentucky. you have heard it before. alexis tsipras takes a phone call from miracle and -- from merkel and hollande. how come he never takes a phone call from madame lingard? are you injured or her? we speak to a navy seal. we are live from our world headquarters in new york. it is monday, june 1. i'm tom keene. joining me, brendan greeley. a lot of international relations this morning. the markets are fairly quiet. brendan: russia still, china, still. tom: we will get your brief for the week on international relations. there is other news as well. let's get to top headlines with vonnie quinn. vonnie: programs aimed at stopping terrorists have expired. for now, the national security agency can no longer collect american phone records in