francine: european leaders and the head of the imf step up the intensity of talks over greece's fate after burning the midnight oil in a meeting in berlin. hans: india cuts rates for a surge time this year and attempt to preempt the u.s. interest rate rise. francine: we bring a live interview with the russian foreign minister sergei lavrov just days after details of a travel blacklist of eu officials emerged. live from moscow this hour.

francine: welcome to "the pulse" live from london. i am francine lacqua. hans: i'm huntsman nichols. breaking pmi numbers. you want to bring those up -- i'm hans nichols. francine: we had some german unemployment numbers of couple minutes ago. we are looking for greek manufacturing. the pmi number rising to 48. better than predicted. hans: which is good news. it seems like this morning we are on hunt for optimism. we had this late-night meeting last night in athens. not a whole lot came out of it and yet euro is reacting is that we have a deal. hans: i like that. hunting for optimism. that is what we are doing on "the pulse." european leaders and the head of the him and -- international monetary fund have in green -- have agreed -- let's cross to

athens now. has there been any reaction to the news out of berlin? >> we haven't had an official reaction so far. we have had the deputy prime minister varoufakis saying greece will not succumb to blackmail and not accept any ultimatums. so, if what european leaders in the head of the imf agreed yesterday is some kind of a take it or leave it proposal to greece, then the communication especially from the administration to the greek people will be of the essence. now, especially if we see no burden, no debt relief on the proposal which is something that tsipras has been looking for for so long, to be able to pass it internally.

i think there could be an issue on whether the whole of the series of backstop disagreement at the parliament. hans: last week, we heard that if there is a payment on june 5 it will be coming from new money. the idea that they would have an agreement and be able to pay. is there way for greece to pay on friday with their own money? >> our understanding is that, indeed, greece has this money set aside. the thing is that out of the money to be paid to the imf within this month, on june 5, on friday, it is only a 320 million payment. the wise thing is to go on and make the payment. and buy yourself another week. i would do not think we will have any issues this week at least. francine: give us a sense -- the real concern is what? tsipras was a little more pragmatic than the finance minister. the concern is that now, after he has written in -- he does not

really want to deal? >> i think both sides want to deal here. now, it is very important, especially for the tsipras administration, to save political face. we have to remember on what kind of election rhetoric the government was elected. to me the real concern is some sort of grexit. as the negotiation is not broken. really problematic. you could have a failed payment to official debt. which will not be the case if you did daughter -- did not want to meet it. if you do not have the cash flow sick or nice. other than that, if we do strike a deal, it is back to greek

politics and wherever there is room for the series and the current coalition government to back up this deal. a few officials from the party saying this is not a good deal for greece. francine: thank you so much. in athens. hans: we are now joined by j.p. morgan asset management chief market strategist for the u.k. stephanie -- thank you for joining us. as well as jim, the managing editor for bloomberg. we know that because he does not wear a tie. it seems like there is optimism this morning. is it because there is a late-night meeting? stephanie: the fact they care enough to stay up late and talk about it is a good sign. there is a schizophrenia and the markets. on the one hand, people have been you might say surprisingly relaxed about the continued bad state of negotiations, the fact

we still do not have a deal with greece. you say that is because people think even if something terrible happens in greece, somehow the rest of the system is insulated and it would not cause the same damage we had before. on the other hand, we seem to want them to really care and reach an agreement with suggests it is important to have an agreement and there is something at stake here it we cannot decide whether it is not such bad news or something -- or just good news if they are trying hard to prevent that bad thing. what is misunderstood in the way in the negotiations have played out is that the international been portrayed as playing a hard-line. i think that is true, but one of the reasons they are holding this hard-line is because they do not want to sign up to a deal they june not think in the long run will be sustainable. i think many of the senior figures in the imf think they have in the past agreed to too much debt and a deal that did not add up for greece. they would like to see more debt reduction as part of the deal. hans: yet they are couched as

the hardliners. francine: what exactly do think was discussed? have they sent anything over four greece to review? jim: they were talking through the night after the leaders left. and i suspect nothing has been transmitted to athens yet because nothing has been leaked. we would know from somewhere ifa message had been sent. if there was a proposal we would've had a hint of it. hans: that is an editor who is confident in his reporting. if we have not heard about it, it did not have it. jim: those of us and have been added since 2009, we have seen this before. in 2011, there was a secret meeting in luxembourg that juncker had to lie about. and similarly, along the same parallel track, this is shortly before angela merkel is to host the g-7.

she does not want greece there is a school of thought that she wants greece settled. you'll recall in 2011, sarkozy hosted a g-20 where basically greece dominated those few days. and it knocked him off the world stage. and it really annoyed him. francine: what you are suggesting is they did send a proposal. jim: not yet. the fact that the meeting happened and got out. the fact that the meeting was leaked suggest they are trying to send a signal, tsipras in athens once there to be a political level deal. he was this out of the hand of the finance ministers because the politics are for a deal. if merkel and draghi would tell their underlings settle this. here is our redline.

if the only red line is no debt write-downs, then just -- hans: yet wolfgang schaeuble was not at the meeting. stephanie: one of the reasons why you might take some optimism from this in terms of the determination to reach a deal is that if you at this stage of the negotiations you need to have the top guys and women ther e. that is more the point as to whether or not wolfgang schaeuble will is there. francine: what happened to the markets? there is a deadline on june 5 friday. it is a deadline that could be extended. if i am a market participant, do i stay put, do i sell, do i buy euro? stephanie: it goes back to the difficult balance people -- we had a lot of volatility a few weeks ago and european markets.

i think there is a nervousness. we think that the world is safe for some kind of greek mishap that we are not quite confident enough, especially when we have still some disappointing noises from global growth. we have not just the u.s. growth disappointment but other parts of the world as well. europe surprisingly resilient. we are hoping to see a change from last year with the second-quarter growth still remaining decent in europe despite a slowdown in other parts of the world. we have not quite seen that yet. there is a nervousness although we do not think greece by itself can cause a major problem or as much of a problem as it did a couple years ago, we are conscious that there are vulnerabilities in the system which might be triggered by a problem in greece. hans: you have been through one or two of these rodeos. how many times have you been wrong? francine: this is like payback.

jim: can i borrow your tie? hans: how many times have you been wrong when you thought the deadline was final? jim: in 2012, we took a pool of reporters covering it, is greece -- cups of coffee. whether greece by the end of 2012 what greece be in or out? i confess i was wrong and that pool. francine: to be fair, at the time most of the markets were wrong as well. i'm sticking up for you. hans: i like how the confession was done and a lawyer voic -- a lower voice. francine: we will talk about the u.k. next. jim getting a growing from hans nichols. unfair, i say. we will not have them in this seat anymore. hans: we will kick the animus aside. here is a look at what is on our

radar tuesday morning. hsbc will announce a plan next week to cut 1000 more jobs according to skye news. ceo stuart gulliver and will disclose a target when he update shareholders on the strategy june 9. the reduction will probably affect between 10000 and 20000 people. although the number is still being worked out. francine: india's central bank has cut interest rates for the third time this year designed to boost private investment and take the benchmark rate to 7.25%. the 25 basis point cut is expected by majority of the congress. hans: the chinese premier has arrived at the sight of a capsized khrushchev that overturned in the yangtze river with more than 450 people on board. the vessel capsized in the swamp and 50 rescue boats are involved. francine: still to come, the

exclusive interview with sergei lavrov. that brings us to today's twitter question. what would you ask mr. lavrov? #the pulse. back in two. ♪

francine: welcome back to "the pulse" live on bloomberg tv and radio and streaming on bloomberg.com. the scottish first minister will

set out her ideas on how the european union will set out her idea and make the case for the uk's continued membership of the 28 nation bloc. this comes after david cameron visited several european leaders last week. stephanie flanders is with us. great to have you on the program and thank you for sticking around. give us a sense, when is the ideal time for a referendum? if you have it too soon, it does not give you enough time to renegotiate it if you have it too late, we could have a year and a half of uncertainty on the markets. stephanie: there is a consent as it would be better to have it in 2017. that is also, you remember there are a lot of important elections happening in europe which would make it much harder for the likes of angela merkel to be giving any apparent concessions to britain. you are quite right. it is hard to say that you have achieved a great deal in europe

in a very short time when no one ever achieves anything in a short period of time. that will be what the prime minister is weighing up. today we know he has a higher cabinet of people who will be involved in that negotiation. and a couple of quite high profile euro-skeptics putting on that including ian duncan smith. it shows that he is working in the knowledge that they have quite a small majority and that he is going to have to bring his own party on side, even if he cannot convince everybody in the public. hans: we talk about the political risk of the u.k. exit or some sort of dissolution. is it being priced in? are we too far way to get a sense of it? stephnie:anie: in general, over the last year and a half, a lot of us have talked about political uncertainty being an issue. yet, in that same period where we had the referendum in

scotland and the general election, you had a rise in business confidence. investments finally starting to come back. so i think it is one of those things where you would see at perhaps closer to the referendum. but over the long term, the big things that affect markets and certainly the big things that affect the economy tends to be brodader forces. francine: what does it mean for sterling? it is a little bit like the scottish referendum. in the run up to that, is there a danger that the government gets distracted by the referendum question and does not focus on domestic issues? stephanie: there is official opinion around sterling that has changed. they were relaxed last year. there has been greater official nervousness about it this year every time the pound goes up. the bank of england not wanting to be the one country in the world that has its currency appreciate.

not to be in the same category as the u.s. there is a bug i -- a benign neglect of the pound. frankly, i think those broader global forces where are u.k. interest rates relative to the rest of the world are going to be much more important in determining sterling and gilt marks. hans: blind neglect, beautiful phrase. stephanie: benign. the definition of what you can do and currency is changing by the minute because what they sign up to at these g-7 meetings that we are not going to do currency manipulation, try to talk down our currency. we have seen a bunch of countries violating that including the european union and japan. no, desperate times call for desperate measures. francine: will the boe do anything before 2016? it seems before 2016 because it seems crazy they will do anything before the fed.

stephanie: it is funny because we were talking about that last year. it would be very surprising if the bank of england acted. it would be surprising if they acted this year. but i have emphasized all along that you have two central banks talks about -- talking about being data dependent. the bank of england is looking at the data productivity in the labor market pretty good argued that the labor market and the u.k. is further along in the process. it is at a slightly different stage. we have seen more wage growth than in the u.s. you can imagine in six months time we are talking about a bank of england rate rise but not anytime soon. francine: thank you for joining us. stephanie flanders from j.p. morgan asset management. now let's, we are going to take a quick break and then we have sergei lavrov coming up next. it is an exclusive interview. what would you ask the russian foreign minister? ♪

francine: welcome back to "the pulse" live on bloomberg tv and radio and streaming on bloomberg.com. the reserve bank of india has cut its benchmark interest rate to 7.25%. the governor says the move came after weeks of corporate results and tepid investment in india. >> with low domestic capacity utilization still mixed

indicators of recovery and subdued investment in credit growth there is, therefore, a case for a cut in the policy rate today. francine: for more, let's cross live to mumbai. how much does this move have to do with preempting the fed? >> india's monetary policy has been defined by local factors largely falling inflation. on consumer prices and wholesale prices at all time lows. it's indicators such as industrial production. this was a classic definition of environment for interest rates to head lower. most economists expect the 25 basis point cut. that is exactly what the governor delivered. governor has taken the opportunity to explain that the risks to inflation persists. in this part of the world was raining and rising inflation. three studies articulated -- one

is over uncertainty over the monsoon. second, is rebound in oil prices. oil is a large part of india's import bill. and third, volatility in the export environment. so, given the environment we are in the governor believes there is a case for cutting in the interest rates. the markets, however, have reacted negative. the benchmark index has sold off 1.5%. most market men are anticipating -- more. corporate india has been clamoring for a higher interest rate cut. as the governor pointed out there is a case for dividing the investment cycle. it is not happening. francine: very quickly, the governor is considered to be a rock star in the central bank world. is he perceives like that is home as well -- at home as well? >> yes.

he is a rock star pity only trouble is that at this time any people expect awesome things out of the rock star he is incapable of delivering. his hands are tied. he is looking at the future and saying he's able to cut interest rates only by so much. but this is india becoming impatient with the governor. they want to see corporate earnings deliver. they want to see investments kickoff. you've seen the government of india take a series of measures on the fiscal side. a higher interest rate cut was what the market was anticipating. and that not happened -- that has not happened. he might be at loggerheads with the government soon. francine: thank you so much. in mumbia. ai -- in mumbai. we heard from fifa saying a lot of their officials and managers were not involved. and also we speak exclusively to the russian foreign minister sergei lavrov. hans: that brings us to today's twitter question. what would you ask sergei lavrov ?

i think i know what you are going to ask him. we will get some responsive and put them directly to him. francine: continue tweeting us. back in two. @thepulse. ♪

francine: welcome back to "the pulse." i'm francine lacqua. hans: i'm hans nichols. let's cross live to ryan show called who is in russia for an exclusive interview. ryan, let's head to you. ryan: he's vladimir putin's right-hand man for foreign policy. and at the helm of russia's dramatic arm at a time when relations with the west or at a

post-cold war low. thank you for joining us. i want to start by asking about your recent meeting with the secretary, u.s. secretary of state john kerry. you met with him for several hours in sochi. the three of you sat down with the russian president. is this the beginning of a thaw in relations between russia and the united states? minister lavrov: i believe this is a realistic approach, getting the upper hand. i was a bit surprised that people paid so much attention to the fact that john kerry spent several hours with the russian leader and washis counterpart because if you take 2014, the year of the crisis in ukraine, which was used by some people to try to derail the relations between russia and the theweset t last year, john kerry and

myself met 17 times. more than any of my counterparts. i saw john kerry. and every time it was several hours. and it was a businesslike discussion on syria, yemen iraq, afghanistan, ukraine, of course. and the fact that another round of talks took place on the russian soil, i mean it is a welcome sign but more symbolic rather than substantive. ryan: i guess the issue is not the quantity of time you spend together but the quality of the time. in 2009, we had the so-called reset in russian-american relations which did not go very far at all. i know your said that what we are seeing now with russian-american relations is not a reset. why not? minister lavrov: well, if you

take the original reset, it was not our invention. it was the invention of hillary clinton. and the obama administration. because -- george bush jr. vladimir putin had very good personal relations. i was on good terms with condoleezza rice. but somehow this good chemistry did not go down to the practical political level. and the american administration when barack obama became president, they reassess the state of bilateral relations with russia. and they decided that it is much better to have more forthcoming approach. it was a reset of the american policy vis-a-vis russia. then the presidential commission was created. 21 working groups covering each

and every imaginable area of human activity. and then all this was abruptly stopped because we could not and did not accept the coup which was strongly supported by the united states. the coup in ukraine. now i believe i tell you we are quite realistic. president putin talks to president obama over the phone. they are very pragmatic. they discuss specific areas of cooperation. where both countries could benefit. and we do the same with john kerry on a much more detailed level. i wouldn't call it a new reset. i would call it the realization of the new normal. ryan: if we get into the necessity or the need for normalcy in relations and

working on issues where you can find common ground, you mention one of the issues is syria. last week you said you effectively called on the u.s. to work with assad in syria to combat islamic state. nice idea. immediately rejected by the united states. is there anything, peace talks aside that rhetoicoric aside, where russia is working with the u.s. to counter islamic state? minister lavrov: we would prefer to do this on a collective basis, on the basis of international law through the security council. on forcefully, the americans when they announce the crusade against isil in iraq and syria, they never came to the security council. they just announced the coalition.

and they announce the iraqi government gave its consent to airstrikes on its territory against the positions held by isil. they also announced they would do the same in syria without asking the syrian government and without going to the security council. i believe it was a mistake. i think that just obsession with the president -- assad is not making any good to the common cause of fighting terrorism. whne our =-- when our american colleagues say he cannot beat considered a legitimate partner. we remind them that he was perfectly legitimate when we went to the security council to adopt a resolution on chemical weapons disarmament. the resolution supported by the united states was welcoming the decision of the syrian government to join the convention on chemical weapons. and the cooperation of the syrian government provided.

ryan: one of the things you have long demanded is that the u.s. drop this idea of regime change in sryria. have you gotten any indications whatsoever from the u.s. that they are prepared to leave president assad in power? minister lavrov: it is not for the united states to decide. it is not what -- that we want them to change their mind. ryan: if a return to sochi, he spent several hours in the room with john kerry picket issue would have come up. did you get any sense -- minister lavrov: i cannot get into the nitty-gritty of what we discussed. but we certainly believe that the resulting political settlement, which is possible for syria. and we also believe that you need a communiqué -- geneva communiqué of three years ago is "the" basis, especially since it was endorsed by the security

council. this resolution in the geneva philosophy provides for creation of transitional governing order on the basis of the usual consent among the syrians. the efforts we are now taking. and i understand united states is ready to go along with the efforts of the special envoy of the united nations. these efforts are intended to build ground for all the syrians, all parts of syrian society, to be able to participate in the political process. some countries are categorically against starting this process while president assad is in power. i believe that this would have to be resolved by the syrian people. those outside players who can influence the syrian groups, they must make a choice. what is a bigger threat? the personality of the syrian

president or isil? ryan: islamic state. meanwhile in paris, you do know there is an anti-islamic state coalition meeting. why aren't you there? minister lavrov: we would prefer to have a coalition which is based on international law. ryan: but this is a coalition that exists of arab nations and western countries that are interested in resolving the conflicts. the question is, is this a rhetorical conversation or can russia provide partnership with other countries to resolve the issue? minister lavrov: we are not against with the coalition is doing, of course. they're trying to weaken a very bad group of terrorists. but we have been conjured into the fight against isil long before this coalition has been created. we have been providing the necessary weapons to iraq government when the americansi were reluctant to do this because they wanted some you

know, conditions to be fulfilled by the iraqi separatists. and the conditions were related to the need to rectify that mistakes made 12 years ago when the american governor general, paul bremmer dismantled structures in iraq under the pretext of wmd. we have been providing weapons to the syrian government to increase syrian and iraqi ability to fight terrorists on the ground. public admits that just airstrikes are not going to do the trick. ryan: if the current strategy for dealing with islamic state. doesn't work. how far do you see islamic state getting? minister lavrov: very far. they already make a lot of progress in iraq in syria.

ryan: do you see islamic state taking syria? minister lavrov: they already have the emissaries seen in libya. and -- in afghanistan. which is close to central asia which is next door to russia. we want to cut the financing of isil, and not only isil but others, and it was the russian federation who proposed the resolution recently adopted by the security council on the need to cut any oil purchases from the territories controlled by the terrorists. i believe in you to make another step on the security council and create some mechanism to a tribute who is buying this oil. we have to fight not the symptoms but the root causes. we propose last september to

have a collective effort under the umbrella of the security council to analyze, to have a comprehensive analysis of the terrorist threat in this region and to make sure we address this terrorism the same way irrespective of where they appear. not to repeat the situation when many countries publicly routed the security council, arms embargo on libya. they were supplying arms to the rebels who wanted to topple qadhafi. and they weere arming these rebels. then a few months later, they were facing the same rebels armed by europeans in mailli. if it walks like a duck, looks like a duck. it's a duck. ryan: if we can return to how bad you think things could get? could islamic state take syrian? minister lavrov: if people

continue to acquiesce is what is going on. and continue to acquiesce with those who refuse to start the political process. until assad disappears, i am not very optimistic for the future of this region, because these people put the fate of one person whom they hate on top of the fight against terrorism. we have been through this repeatedly. saddam hussein was a one person after whom the united states went and they ruined the country. qadhafi is the same. ryan: you say that airstrikes are not working and what would be affected are ground operations. this is a hypothetical question -- and i know you do not like hypothetical questions. would you support american troops on the ground in the middle east bring peace to the region? yes or no? airstrikes are not working. minister lavrov: do you believe the american troops on the only troops that can do it? no, no.

look, they have been to afghanistan. they have been to iraq. look where iraq and afghanistan are now. i said it is absolutely clear to me it was a mistake, still is not to coordinate the airstrikes with the activities of the syrian army. that's what we believe must be done. that is what our american colleagues cannot accept from ideological considerations. ryan: i will take that as no. minister lavrov: if the syrian government invites the coalition to come then the volunteer certainly would have to be found. ryan: let's talk about iran. russia ias a party to the talks. how certain are you that we will have a do? minister lavrov: if each of the participants, including the six and the iranians, stick to the political framework, agreed a

couple of months ago, then we are perfectly within the timeframe announced as a target by the end of june. we can do this. if people would try at the 11th hour to get a bit more than the political framework provides, then, of course, it might not be possible to finish by the end of june. ryan: you sound much less certain than you have in the past. minister lavrov: i said if everyone sticks to what has been agreed by way of political framework in laussane. it is probably possible to do this by the end of. june ryan: what is the danger of no deal? minister lavrov: we have always been putting the substance of the deal on top of some deadlines. and when the ministers decided that the end of june should be the target date, it was made absolutely clear that this is not --

an ultimatum for ourselves. ryan: the sticking point appears to be the u.s. and the european union demanding there is a verification process before they lift sanctions that have a post o -- have imposed n ion iran. minister lavrov: we support the verification process. ryan: you do not agree with the ukrainians of that the center should be lifted immediately -- you do not agree with the iranians? minister lavrov: iaa cannot respect any -- related to the nuclear program. some participants from the western group insist that not only nuclear sites must be open for inspections but also the military sites. and this is something which they have to discuss between themselves. we are ready to help, but we do not believe that all military sites should be open to, for

inspection, because this relates to the security of iran. experts know what are the sites which ieaa needs to inspect on a permanent basis. the second block of problems is how you live to sentience. all in one go or step by step. we think by the time the security council endorses the deal, there must be lifting of all sections which have been introduced by the united nations. not related to the proliferation risks and the sanctions which relate to proliferation risks, this bunch hofof sanctions could be lifted in the second stage when iaa provides its first performed after three months. this is subject to discussion how this deal is going to work. ryan: economic sectors against

russia. the prevailing view is that the european union will extend them when they meet to decide this. do you see any chance of that not having? minister lavrov: we are not thinking about this. we are concentrating on how we must use this circumstance to diversify our economy. and we are basically thinking of working in this regime for a long time, knowing how the american sanctions worked. remember -- they were kept for three decades and then disappeared. ryan: define very long time. how long do think this sanctions will be around? minister lavrov: we are not thinking about that. ryan: you are. you just compare to -- minister lavrov: we learn from jackson benning. this could be the case.

we concentrate on restructuring our economy and living and this circumstance where we have more partners from latin america, from asia then we have from europe and the west. ryan: so far, all of the talks when it comes to ukraine that the russian president has participated in have involved the german chancellor and the president of france. what we have not seen as president obama at the table. do you think that that would help the peace process in ukraine? minister lavrov: the americans at the negotiating table? ryan: correct. minister lavrov: we discussed this with john kerry. i believe john kerry and his team understand that the process is very fragile. the group, the subgroups in the four areas. normandy format. if each and every participant of the group and the normandy format is in favor of changing this, we would not object. but i believe the americans

understand that it is so fragile that any newcomer could -- ryan: derail the process. minister lavrov: un dallas this process. we agree -- unbalance this process. they have huge influence on the authorities in kiev. we agree to keep a bilateral channel between moscow and washington to exchange views and see we both can influence the parties on the ground in the direction of full and copper has its implementation of the mi nsk agreement. ryan: let me ask you about fifa. the russian president has said that the accusations are aimed at taking down sepp blatter and derailing russia's hosting of the world cup in 2018. is that what you think this is about? is this about targeting russia? minister lavrov: he said quite a different thing. he said he cannot speak on the substance of the accusations. things might happen.

but the timing of the action undertaken in switzerland -- yes. he said, he couldn't know about these accusations and whether they are true or not. it is up to the investigation and the court to decide. but what he did say was the timing of this show was certainly scheduled to derail the electoral process in fifa. i do not think that anyone thinks of targeting the world cup in russia, no. ryan: a lot of people talk about qatar. do you think that is what this is about? my question is do think that this is -- minister lavrov: i'm thinking about world cup in russia. it is not my business what happens in qatar. rayan: russia has more of a chance of hosting the world cup

then winning the world cup. minister lavrov: but unless you try, you never know. ryan: will russia continue to support the president of fifa, sepp blatter, even if he is indicted? we understand there will be more arrests from the united states. minister lavrov: we cannot be in the guessing business. and we supported sepp blatter during the selection. we did not hide this fact. as did the majority of the executive committee of fifa. ryan: your sports minister is a person of interest. is he going to cooperate? minister lavrov: i do not think he was interested. ryan: swiss authorities, if they asked to speak with -- minister lavrov: if they want to speak to him, they have to address, officially -- ryan: will russia cooperate with that? minister lavrov: this is up to the office of the prosecutor general because it is through the prosecutor general that any

request must be channeled. ryan: did suggestions that russia may have done something untowardly to win the world cup, what do you make of that? as a part of this investigation that russia did bribes -- minister lavrov: i do not take note of this stuff, because we never saw any reasonable proof or anything resembling proof. ryan: everybody is talking about greece in western europe. is it an issue for russia what is happening in greece? minister lavrov: well greeks are very longstanding spiritual, cultural, historical front of russia. we got our religion orthodox christianity, from byzantium. and a thousand years later, by the way, we recognized the modern greek state. so we have a very long common history. we wish the greek people all the

best. ryan: -- to stay in the european union or not? your advisor be to stay in the european union or not? minister lavrov: you are contaminated by the american philosophy. you always want to tell people what to do. ryan: no, no. minister lavrov: what might -- ryan: do you think that greeks might be better served? minister lavrov: what might be your advice to the european union to get to the european union or two nato? ryan: there is a lot less talk about that. about ukraine joining the european union and joining nato. presumably, you see that as one of your successes. minister lavrov: this american way of telling people what they have to do. ryan: russia has no advice to greece? minister lavrov: it is up to the greeks to decide. i wish them all the best in

their negotiations with the imf and european central bank. and, of course, with germany and france. ryan: thank you very much for your time. it has been a pleasure as usual. back to you. francine: ryan chilcote in moscow speaking to sergei lavrov . at the end, there was a little bit of the minister quizzing ryan. there is a standup between the u.s. and russia, and russia telling the u.s. they are too meddling and they try to give too much advice. hans: to be fair to ryan he did not answer the question. it is not as though russia does not try to increase its sphere of influence. maybe we will give mr. lavrov due diligence appeared a little bit on fifa. a technology russia is not going to take on the world cup title -- acknowledgment that russia is not going to take home the world cup title. francine: we will speak to ryan. the interview with sergei lavrov

lasted 25 minutes. they talked about fifa and secretary kerry and the sochi games. hans: sanctions? francine: he did not want to go there. hans: "we are not overly concerned." he did not seem to spend a whole lot of time trying to game out the russian economy also sanctions are crucial factor. maybe ryan will get a little bit on oil. obviously, they have been affected as much as anyone. francine: what was interesting was asking him about the syria situation. a lot of people have been asking russians to step up and being tougher on russia. he said he would go along with the u.n. led syria peace process. hans: he wants to do other things with the security council which is what their position has been but there may be a little bit of give there. looking forward to hearing what raynyabn n has to say.

francine: we will be talking about greece, the fed. for our bloomberg viewers, the second hour ofp' "the pulse" is coming up. ♪

francine: upping the and the. stepping up the intensity in talks after burning the midnight oil. hans: india cuts rates again. francine: and a bloomberg exclusive. sergei lavrov is not telling us how long u.s. sanctions will be against russia. hans: good morning to our sflures europe and good evening

to those in asia and a warm welcome to those just waking up in the united states. i'm hans nichols. francine: and i'm francine lacqua. consumer prices for the month of may rising. economists estimated a figure of 0.2%. so it is ooh a little bit higher than expected. with the ecb meeting we were worried about inflation. but you can see the euro/dollar up a touch. hans:.2 versus.3 -- francine: clutching at optimism. hans: it's pessimistic if you are wanting to see qe at least in the euro zone. making it easy for relatives to

visit from the states to europe. francine: i think he was quizzed after this and he said guys, i just started. so give me a break. so being quizzed by hans nichols, he would probably say, give me a break. hans: we have kristin schultz, a strategist banker. give us your -- i mean you know the greek and german story. a, what do you take that he was not there? do you take it as there's daylight between the two merkel and schwartsical? >> his consent needed in any vote we may see in the coming weeks or months.

cloin i think he was not there last night simply because there was not more space, if you like, the two leaders of germany and the heads of imperioli the e.c.b. and the european commission. i think there was if you have people there. 23r0eu7 we had a huge meeting yesterday. it was our scoop. any leaks about what was in the meeting? about the proposal to depreast but it's significant because we know they are talking and they want to meet face-to-face so i guess that means something is going to happen. >> yes. the one thing that is more likely -- since we are talk about europe it will be something ugly no one will want to take credit for but it will han.

james: we've seen it time and again i believe we saw anytime cyprus. the cypriot bailout. no one wanted to own it because it haas had some controversial bank measures. no one -- it was approved but everyone pointed the finger at somebody else. christian:also no one wants to own defeat. hans: do either of you get the idea that in some ways the outcome of this has been preordained? christian: as in at the end of it there's going to be a compromise? i think most people around the table have been thinking that the greeks will eventually tone down their rhetoric and take away some face-saving compromise that will allow them to sell it to their public at

home? i think we have gone quite some way in that direction and a lower austerity will offset that with a little more debt relief. francine: and so that will be accepted by the greeks? christian: now i think there's something in the economy that will want to capture the big delay we have and it's frustrating for any businessman to look at where spain is and where depreast was last year just where spain is now. so i think that regret will get them over the hump there. i think a big problem will be the process in europe. we have to have the vote and i think we have to have political support to get that vote through. hans: could be a speech by merkel. we will have to spend some time

looking into this. james: but by the same token her vote strolves democrats. if you get past the noise of the hawks, the folks who are against any sort of bailout for depreast, you still have a substantial number of those who want them in the euro zone. christian: but there's boxes full of letters of constituents saying do not give noun greece and if they foote give money to depreast there has to be something where greece if it has any chance of being a growing economy again in which it lives up to its commitments. irrespective of disagreement. james: the one thing we know is how risk averse european

leadersare. francine: and at the end of the day if there's negativety on her watch, it will be her legacy. thank you so much for joining us. now, we just heard from the russian foreign minister sergei lavrov, and he was speaking exclusively to ryan. who joins us now from moscow. give us a sense of what it was like in the room. you talked about fifa and sanctions and secretary kerry. he didn't want to answer a lot of questions but you actually got quite a lot out of him. ryan: you know i think it's -- it was a very different conversation that we had a year ago when we sat down in may or june of last year, relations between russia and the united states were, to say the least -- contentious and you heard

the russian minister tell me they are now pragmatic which of course is what russia is hoping for to sort of turn the corner after ukraine. he really sounded quite hopeful that while there wouldn't be a reset in the kind of relations russia had say, in the 1990's with the united states, that there could be a multilateral relationship broader than the relationship over the ukraine. you heard the russian foreign pin minister say that russia was prepared to allow ooh u.n. peace process effectively take place for syria and on iran, i think interestingly there was expressed a little bit of concern that the deadline of june 30th might not be met because united states and the

european union demanding that there's a verification process that would allow them to exec that indeed iran is complying before they lift the savengses. so a very different atmosphere than when we met a year ago whether what he wanted to do was talk about ukraine today. to where as his goal today was to talk about how russia could clearly work with the united states. hans: do you get the sense they are girding for a long-term sanction regime or do they see daylight around the corner? ryan: you know that's a good question. i think they are concerned that it could go on for a very long time. i also think they don't want to be seen saying that they hope it might be lifted soon because i think they feel it would protect the united states to

keep their resolve and keep imposing the sanctions. i think the russians feel that the best way to deal with the sanctions so not talk about them , do not ask for them to be lifted and pretend they don't exist and pretend they are prepared to go it alone but clearly they do want them lifted. he said -- i was very sfridse see him compare it to jackson van it and those restrictions changed over time from the united states. it's clear come the end of this month the european union is going to extend the sanctions by six months. is -- are they going to extend them two years or six? francine: let's have a listen from putin. >> they are very pragmatic.

they discuss specific areas of cooperation where both countryings could benefit, and we do the same with john kerry on a much more detailed level. i wouldn't talk it a near reset. i would call it the ratization of the new normalcy. francine: that was wrine our exclusive. thank you so. you can hear the full interview. we have a full half-hour look at 7:00 a.m. euro time. hans: and according to sky news they cited unidentified people close to the matter. hths ball club -- herself ball club and the reduction will probably effect between 10,000 and 20,000 people although the number is still being worked out according to skye.

francine: and a cruise ship overturned with more than 450 people on it. what chicago white sox -- chinese state television reports many are on hand to help. hans: and taking the benchmark rate to 7.25% the lowest since 2013. it was expected by a majority of economists in a bloomberg poll. that is what we will be discussing when we return from the break.

hans: welcome to "the pulse" from bloomberg's european headquarters in london. the reserve bank of india cut its rate to 2.75% from 7.25% after weeks of corporate results and tepid investments. >> with lower domestic capacity utilization, still mixed indicators of recovery and subdued investment and credit growth, there is therefore a case for a cut in the policy rate today. francine: now, for more let's go to mumbai and harsha, this was pretty much expected?

>> yes indeed, fran own. they suggested a 25-point basis cut. one you've seen growth indicators pausing on most fronts for example, the growth has been weak fivepb take consumer prices falling as well. more importantly, in the policy statement today, the governor traded three risks to inflation going forward. one, a rebound to oil prices which may have inflationary consequences and secondly, the uncertainty here in india over the monsoon output and thirdly, the external volatility i.e., he is talking about what the federal reserve might do with

the rate hike. but markets were disappointed because most market men were expecting a much higher quantum of the rate cut therefore you have seen a cut of about 25 basis points and more than or as high as 00 is expected in the next few months. francine: so harsha are we expecting more? >> yes, francine, but they have a target of over 47 by 2016. his core is focused on getting headline inlocation down these levels. they are much lower than targetsed.

he is going to be waiting for data going forward see if he will this monitoring cycle. but rate cuts that the point in time is pretty much ruled out. francine: harsha give us an example of the hope that he had depeat ambitions for the country and was very self confidant and was going to run the country as a business person. so far he hasn't really delivered. hars ahh: it'sen been one year since he took over and there have been gradual steps. the leadership has been exactly that, garage lyrics not huge game change hears the have changed in the overnight. he has made several improvements as far as opening up capital and they have put in place a very clean, transparent

spectrum to sell -- so yes, there have been important and significant development on the economic site put irnot seeing corporate investments on the ground and india is getting increasingly impatient. people are wanting those big things to downey what indian capital really means. transhas been steps. they have been slow. if you look at the device on g.d.p. numbers it makes india look good, but having said that. the task for the prime minister is he will have to walk the walk and walk the talk. but you have to wait and see his actual results. francine: thank you harsha. hans: and breaking news out of

athens. looks like they are saying greece will stand up for its rights for the first time so strong words from mr. crip plus. he also says greece is willing to make some tough compromises since greece submitted a planned stays government has a plan represented by the majority of greeks. it doesn't look like he has received any formal proposal in that gym which means the -- hate to say it on air but jim hurling was right. froich the managing editor was right, as always. coming up details --

francine: welcome back to "the pulse." live on bloomberg tv and streaming on your ipad and bloomberg.com. a can a made inian court in two smokers class-action lawsuits. what is the i'm sorry to >> this goes back to 1998 when the lawsuits were originally filed but they only went to trial recently and the court decision covered two class actions one seeking damages for addiction and one for smoking-related diseases.

the court ruled these companies had to pay $12.5 billion and $8.4 billion in the ruling covered by one. british americans back fallen as much as 2% but it's been a limited impact because in general in past appeals in cases of this kind it does lead to vags-reduced payments in the end. so what's seen today may not be what's paid out in the end. hans: there was a litigation risk in canada to sue companies. we spent a lot of time talking about deutsche bank and litigation risks and now china is sort of clamping down. at what point are back or food companies going to be challenged? the dollar amounts whether

canadian or american amounts are not small. francine: exactly. and you always wonder if this has sort of opened the floodgates because the plaintiffs are saying the smokers didn't know about the dangers of zprets. obviously it's written on the packages and the companies are appealing and think they have the strong legal ground for that and pointed to a gallup poll that found 96% of canadians were aware of lung cancer riskt. the plaintiffs are saying look, we didn't know about the dangers, and we are suing you for that. francine: here you have the warnings saying this kills this is harmful and now you can't even see the brand fing so it makes it less cool and less appealing to the younger kids. if you're a back company, you wouldn't be in a comfortable

place right now. >> no. i guess not, and on the other side you've got everything to think about as far as the e cigarettes impacting the business. so there's a lot for them to take into account and this ruling might be putting some companies on edge. francine: thank you with the latest on back and cigarettes in canada. hans: coming up, find out more about the interview with sergei lavrov. and with the senator kerry biking accident. stay tuned. we will have more in just a bit. ♪

francine: welcome back to "the pulse." live from european headquarters in london, i'm francine lacqua. hans: and i am not guy johnson. try as i will his twitter may be flashing. francine: sergei lavrov feels fleament his country will be fair after discussions over greece's future must intensify. and the secretary general told bloomberg he thinks a deal will happen.

>> when you have so many people so intelligent and smart important and and influential trying to get a deal, my experience is you normally get a deal. now, it may be extended to the 119 hour. it's always about human nature extending it to the limits but i think it will be a deal. hans: and cutting interest rates for the third time this year, is india. they take the benchmark rate to 7.25% the 25 basis-point cut was expected by the majority of economists and bloomberg polled. francine: and a cruise ship overturned in the chinese sea after traveling westward. while chinese state television has reported nearly 60 rescue boats are involved in the rescue operation. now john with the latest.

john: let's wrap things up. the ftse near london down 4%. the biggest losers on the index. the dax still off session lows . the ftse just coming into positive territory and a lot of noise about what's going to happen with greece and toss between credit suisse late last night. if you want to look at news with hard economic data look at that news. the euro up .4%. inflation climbing to 0.3%. a low bar. we were expecting 0.2%. but it's core inflation. up from 0.6%. you strip out food costs and energy prices and it rises to

0.6%. the deflation fear the pushed yields to record lows. you take some of that out and you've got higher bond yields. a yield of 0.61%. but spain in focus this morning. a yield and november high. 0.02%. we go north by six basis points, so that inflation data feeding across into higher bond yields. back to you. francine: thank you john with the latest on the markets. sergei lavrov sat down with our ryan and ryan mr. lavrov: i really believe it's a realistic approach. i was a bit surprised that people paid so much attention to the fact that john kerry spent several hours with the russian leader and with his counterpart, because if you take 2013 of the euro of the

crisis in ukraine which was used by some people, you know, to try to derail the relations between russia and the u.s. last year, john kerry and myself -- we met 17 times. more than any of my counterparts. i saw john kerry. and every time it was several hours. and it was a business-like discussion on syria. yemen. iraq. afghanistan. ukraine, of course. and the fact that another round of talks took place on the russian soil i mean, it's a welcomed sign, but more symbolic rather than substantive. ryan: that's what i was going to ask you because it's the quantity not quality of the

time. 2009 we had the so-called reset in russian-american relations which as you know didn't go very far at all. i know what you've said is what we are seeing now between russia and america is not a reset. why not? mr. lavrov: well, if you take the original reset it was not our creation, it was the creation of hillary clinton and the obama administration because of the successors. putting forth very good personal relations. i was on good temperatures with condoleezza rice but somehow this good chemistry did not go down to the practical political level. and the american administration when barack obama became president, they re-assessed the state of relations with russia and they decided it is much better to have more forth

coming approach. it was a reset of the american policy vis-a-vis russia. then the presidential commission was created to work in groups covering each and every mention of activity, and then all this was abruptly stopped because we could not and did not accept the coup which was strongly supported and accepted by the united states in ukraine. now i believe we are quite realistic. president putin discusses specific areas of cooperation with president obama over the phone and we do the same with john kerry on a much more detailed level. i wouldn't call it a new reset. i would call it the realization

of the new normalcy. francine: that was russian foreign minister sergiy ratify love speaking to our ryan heathcote. hans: let's shift gears and talk india. the central bank cut interest rates for a third time. taking the benchmark rate to 7.25%, the lowest since september 2013. joining us now is prognov. looks like business is a little disappointing. wasn't this built in? and do they have a right to be disappointed? pragnov: when it comes to india, indian stock market doesn't have a debt. appear rashant: and also

because of the space by the governor about the monsoon. and the monsoon is likely to be delayed, likely patchy and that will lead to a height in inflation and to the fact that businesses are expecting lowering interest rates sooner. it will be more later. that is disappointment mainly. hans: so it's monsoon-related? >> there is more of an impact to foreign flows to india. we are looking at the economy pointers in the u.s. and they may take a bit more time.

also it won't be as centered as people are expecting. and that also gives a bit of breathing space for russia to decide about his monetary policy going forward. francine: it means there's going to be outflows from the emerging markets. are you expecting them to do more even if the fed zrunt hike rates until 2017? pranshant: i think so. if there is still a chance of implementing the inflation rate. francine: all right thank you so much for coming in senior economist at maples croft. coming up we will speak to chef daniel huong, just won an award

for being one of the best restaurants in the world. keep it right here. ♪

>> francine: welcome back to "the pulse." live from london bloomberg tv. if you want to know where the euro is headed just look at oil. it is tracking crude oil prices.

let's bring in tim culture who has covered the commodity markets. why is this gaining attention now? tim: well, it's all about inflation. people are looking at where the the euro going and what's going to happen with inflation? the expectation is the oil prices are going to klein and the e.c.b. can keep prices lower which is not good for the euro. hans: so tim we have this opec meeting later in the week. i know it's hard getting these things out beforehand but are the saudis going to play the usual crucial role they do? tim: well, i think what seems to be emerging is the steady as she goes to continue seeing what we have been seeing. the saudi minister arrived last night and stayed strategies are working and they are comfortable and we've seen that

the worst may be past for the market and it's picking up seasonally. so certainly the saudis are comfortable with where things are and as we know, they often call the shots. francine: so going back to the correlation ranks which we have never seen quite so similar between the oil and the euro. every day there's parity with the dollar what's your guess? tim: i wish i knew. the forecast we've been seeing, i think the median is 1:05 and people are talking about parity and would be exciting to see if that actually comes to pass. francine: tim, thank you so much. hans: now, here are bloomberg's top headlines. fifa said jerome vol can i was not involved in the $10 million payment thought to be a bribe and the second in command to

sepp blatter authorized that transfer from the account to the north american head of the soccer federation instead fifa said another approved the payment and that person died last year. francine: and scottish snp's death is not thought to be suspicious. he lost his seat in last year's election. hans: in northeast spain named the world's best restaurant the high-end eatry zooped prize at the 50 best restaurant awards at the awards that went late. the french star chef won the best female chef award. francine: i don't know why they have to have a special female

chef award. hans: are you the chef in your home? francine: i'm just saying. our next guest is one of the top five chefs and the highest-ranked u.s.-based chef on the list and won his first michelin star at the impressive age of 14. let's welcome chef daniels. welcome. we are really excited to have you on the show as we know there was a lot of partying. number five, does that make a difference on your bookings? >> yes. we have been important to we have been on the list for the last five or six years. and when we first entered the list, it made a huge impact. especially for all the international travelers. hans: are big spenders back? you've been in new york for 10 years. when did you really start feeling them back? daniel: i mean i think like in

2007 we would call them wails. they would come into the restaurant and spend $30,000-$40,000 on wine. it was crazy. it was going like market. the market was going well that day -- they would spend. but that has changed. i think we have definitely -- the restaurants are going very well in new york in general. but -- and the spending is definitely up. but that kind of spending has never come back. and i also feel it's healthy and much better -- hans: to only spend $20,000 a night on wine. you should be able to get a decent bottle for that. [laughter] i know we should talk about the list and whether or not it's fake. but should i order the cheapest bottle of wine? when i go to a restaurant i

always is second cheapest. because i don't recognize anybody's label. is my strategy going to -- daniel: that's a tough question. hans: where are your margins the highest? daniel: our margins are cheapest on the cheap wine. the most expensive wines have the least margins, but also, i know the wine and i always go somewhere in the middle. and you know, i think rone valley is always adequately priced. therefore certain regions that get you good wine for a good price. francine: daniel you are one of the most talented chefs of your generation. we have a lot of c.o.'s on and they say the most difficult

challenge so motivate a team and keep talent and what happens in the kitchen is similar to a trading floor. you have to motivate people, it's always under pressure and you have to keep talent. daniel: i always talk at meetings about how is the morale? we are always very sensitive that morale is high because that's the most precious thing because when the morale is high, it just works so much better. hans: there's been this rival movement 50 best restaurants. do you feel the numbers are is that right are the numbers corked? is there something wrong in the sauce? daniel: there's so many rankings these days, and that's a good thing. because in the old days it was always about michelin and if

you didn't get recognized by them, your restaurant just wasn't full. that has changed a lot. there's so many different lists now, and err list has its ways, and you can argue it. and to be honest, people -- you know are there politics involved or not? but in everything in life, politics are involved. so you know, you can either fight it or you can be on -- you know? hans: i certainly hope so, that's why i am asking you, tell me why your su anyways are so -- daniel: i can always say this, when there's a ranking i much rather further up than down. francine: of course. your viewers love fine dining. is it easier to find a table in

new york or london? daniel: well, they are both amazing cities. in new york i don't eat much out because i'm always in the restaurant. i'm luck you to travel quite a bit and when i'm on my travels i always try to find the best restaurants. but the best restaurants, i always ask the locals, where do you eat? and i always try to find things that i cannot find nils. and that's what we are trying to do at eleven madison park to really create a sense of place and experience is that would only make sense in new york. hans: waiting list at lenn madison park after the list? daniel: we are lucky very full. 28 days in advance reservations. francine: daniel, thank you so much coowner and chef at eleven madison park flaunt new york

and congratulations on the award. daniel: thank you. hans: up ahead with a what to watch including the anti-islamic meeting in paris.

francine: welcome back to the spulls pulse live on bloomberg tv streaming on ipad and on bloomberg.com. 40eu7 there is this meeting in paris, an antti islamic

meeting. when the u.s. looked at this a while back, some of the u.s. military men said they needed to study this much more. francine: and the french minister said they wanted to focus on iraq but others said they needed to concentrate elsewhere. it will be interesting after saudi had two attacks on mosques. hans: iciss knows no borders or boundaries and -- francine: and that meeting starts in a couple hours. ministers from 20 countries. hans: also we could be on an analyzed rate big numbers. you see the auto industry coming back. it's good for corporations. people are buying cars.

francine: talking about cheap money, we have the e.c.b. rate and the number throughout, a little bit of optimism that we are not going to see that deflation narrow sprirle. maybe makes draggy's life a little easier. hans: is he going to be able to dance around this because expectation was 0.1? always interesting to watch mario draggy when he speaks. hopefully they have increased security. francine: you're talking about the confetti bombing. the glitter bombs rock. of course watch the opec meeting. it was interesting to hear tim coulter talk about the correlation between oil and the -- between europe and the price of oil. francine: that's it for "the pulse." stay tuned for "surveillance."

that team is coming up from new york.

announcer: this is "bloomberg surveillance." tom: it is next ordinary midnight meeting. the meeting with angela merkel on the fate of greece. which way america is a global economy struggles? searching for any kind of landing. can america go it alone?

and struggle or not, america needs a new set of wheels. 17 million units signals boom times for jeep and detroit. good morning, everyone. this is "bloomberg surveillance " live from our world headquarters in new york. it is tuesday, june 2. i'm tom keene. joining me, brendan greeley. i do not know where to begin. it is like a movie in berlin. brendan: are we talking about berlin? i cannot believe what happened. for me, it is the troika finally meeting. mario draghi, lagarde, all meeting together. tom: the other rumor we will start here this morning on "bloomberg surveillance" is christine