guy: don't greek primeinister is all smiles despite rejecting another deal from creditors. francine: european equities fall ar the e.c.b.'s mario draghi warned of what is to come. guy: top officials took -- for almost two decades. guy: good morning, everybody. you're watching "the pulse" live from bloomberg's european

headquarters. i'm guy johnson. francine: i'm francine lacqua. we're joined by a prize winning economist. we'll be talking about the u.k. greece and the fed as well. guy: let's talk about greece now. tsipras rejected proposals that would unlock bail-out funds. francine: following a meeting, tsipras said the basis for an agreement must be a greek proposal to avoid spending cut and tax increases rather than a plan drafted by creditors. guy: this was his reaction when asked whether greece would be able to make the i.m.f. deadline. >> don't worry. >> how many days until agreement? >> we have already paid 7.5 billion.

francine: for more, we're joined by hans nichols and from brussels by ian. hans, let's start with you. you are on your blackberry when we come to you? hans: i would never check my blackberry. when you look at the public proannouncements, they are in opposite places. a lot of this optimism seem to be ok, now we have a new deadline later on in june. this will be discussed at the g-7. what they are saying publicly they are so far apart. take a look at this quote from mr. tsipras. ideas for cutting benefits for low-income pensioners or raising the rate for electricity by 10 percentage points can't be the discussion. one place where there may be some give, at least from the

creditors side is on the idea how much of a budget -- it looks like the creditors have moved a little bit on that. take a look at what some of the numbers are. 2015 they want -- this is a new proposal. only 1%. under the old program it is supposed to be 3%. you see quite a bit of climbdown. at least from what the greek official stays proposal is. when you get at the causes of what is causing this. pension reform, labor reform and tax raising which is are they going to have a value-added tax? guy: let me bring you into the discussion. we're trying to understand what last night was all about in some ways. given the fact that there was an agreement and we are still somewhere away from making an agreement, what was juncker trying to get to last night? >> the european commission will play -- expectations as much as

they could. they were distancing themselves from speculation that last night was going to be a make or break deal. they wanted to talk to tsipras face to face. they didn't want to waste any opportunity to get him across the desk. there is speculation he may be coming back on friday. they need to find out exactly where his red lines are and they need to tell him where europe's red lines are. last night was all about saying, look it is getting very close. time is running out. you have got to make concessions. francine: hans yesterday, the deputy foreign minister was in paris. they see person that varoufakis was -- dispatched to paris. he was questioning it. he was quite aggressive in his tone saying i don't understand why creditors don't ask us to get more tax from the rich instead steady of the pension

reforms and labor reforms. sometimes they see things so differently that they have to come to agreement on -- for europe. hans: that has always been tsipras' hope. you would have a agreement and the technical deals would be worked out by the finance minister. they are so far apart, it is hard to see how they are going to come together. yet, you know, people -- they talked about a good, positive mood coming out of the meeting. you saw tsipras' body language. that was not a man who looked overly concerned about his country being defaulting and yet what he is saying publicly, you cannot expect that free form and pension reforms and yet the creditors are saying you already sign on to that. guy: what happens next? do we think these talks on friday are going to happen? how does the process work over the next few days?

we have the payment tomorrow. >> that's right. tonight there is a euro working group called that is the -- finance ministry officials from all over the eurozone. they will get together and try to work out where things stand. we have a g-7 in germany over the weekend where the leaders might be able to discuss . there is another summit coming up next week in brussels between the south american leaders. that is just an excuse to get together. the next meeting is in luxembourg on june 18. but people say even that is too late. there has got to be a deal before then. with the sides still quite distant is anybody's guess whether they are going to make it. francine: ian, thank you so much. guy: let's get another voice on this discussion. the it is quite a voice. we're joined by a nobel prize winner. he did so for his labour market work in 2010. great to see you.

the thank you very much indeed for taking the time to come and see us. >> my sense that is as i watch tsipras and the body language you talking about is his character. he is a politician. that's what brought him into power. i think he is very worried. maybe he is not very worried about the -- tomorrow. his main concern is how the control his party because there are different views within the party. even if he is prepared to give some concessions there will always be some faction within the party that will not want to give it. therefore he is being threatened with losing a vote in parliament. and he also tries to give us a positive -- to everything but time is running out. not tomorrow, though. because a, they do have 300 million -- to pay tomorrow. today or tomorrow. but even if they don't pay, the

i.m.f. can -- together for payment at the end of the month. francine: most likely if something happens, we don't find out about it for a couple of weeks. does he need to call -- is he worried about his so-called batch bankers, the obvious way would be to call a re-referendum and say do you want in or out of the eurozone? >> i think that would be the best thing. call a referendum. no austerity. no compromise. it is obvious lenders are saying there can not be a deal on that basis. he wants to stay in the euro. they are saying to him to stay in the europe, you to do things that are completely compatible with what you campaigned for and what got you elected. democracy should work and get him a mandate to deal with his own party. all the people.

he should get referendum and give them a clear choice. we either make some for concessions and we stay in the euro and get all the money or we don't and we'll have to face the consequences which would be dreadful for greece. guy: why dreadful? walk us through dreadful. >> the dreadful part is the easiest way politically to get out of the situation if they don't get the money is to issue i.o.u. note or something that will be acceptable by the banks as liquidity and by people at large. now it will not quite be a second currency but it will be more or less -- along those lines. now that kind of note will depreciate enormously against the euro. it will not be clear how many the greek government will have to issue.

they will be using those notes to pay civil servants, to pay for pensions and to pay for contract s of the public sector. noif thoseare going to get a haircut of 40%, 50%, then it means that instead of doing an orderly debt restructuring where those who are holding debt, mainly sovereigns get a hit it is the greek pensioner and -- guy: and it is uncertain. >> exactly. consumption is already suffering. howly l they get the economy moving again? it will go further down. guy: do we need a public sector debt restructuring? that is the best outcome? >> they need that. where i think the international -- lenders went wrong was to give greece that platform to argue. i mean, the debt has now after

the 2012 p.s.i., the haircut it is obviously unsustainable. that restructuring failed to the extent that it didn't produce a sustainable debt level. greece does have a platform to argue. you left us with this debt. we cannot deal with it. we cannot have all of these primary surpluses. now we will never be able to pay. restructuring, giving them more and more favorable repayment terms, they are saying, even under these conditions. if they restructure the debt or at least if they say they will restructure the debt, if you agree to some reforms to the economy that will keep you in the euro without problems in three years, five years forever then even tsipras will have better growns to go and argue

with his own party. but they are not giving him that. you have to exhaust everything that they can argue. like the unsustainable debt. francine: chris, thank you so much. from the london school of economics. he will be staying with us and we'll be talking about the u.k. and the global bond market. guy: let's walk you through what has been happening. chinese stocks make a come back. the shanghai index ended the day up. shares tumbling on news that a brokerage -- financing smaller companies. francine: a former fifa official has admitted for almost two decades he and other senior members took bribes on kickbacks for broadcasting rights.

kruk blazer made the announcement two years ago. it has just been made public. guy: a sudden military build-up comes ahead of an e.u. meeting to review sanctions imposed on russia. we'll find pictures and bring them to you a little bit later. francine: we're just getting news from jean-claude juncker saying they have long and -- talks with tsipras. supportive, like you know, it is -- it is like a long stretch. they were substantial. it required quite a lot of effort. i think. unless there is a problem. guy: he does speak french.

francine: i think there has been a little of euro/dollar movement if we check this that out for you. the last couple of minutes, euro $dollar. we're going to get it for you. on the backor juncker comments. i'm not sure whether the marks have interpreted it as supportive. we'll see. guy: i think the currency markets are on a little bit of a hair trigger if this is where we are. francine: we continue our supportive talks. guy: let's do that. it is going to be a long and interesting couple of hours. we'll be crossing live to our economic forum in africa. cape town is where we go to speak to africa's finance minister. and at 10:00 we get greek unemployment numbers. we'll bring you those numbers as soon as they break. francine: time for today's

twitter question. later we'll hear from a co-author who thinks if you want a better standard politician you should pay them more. should politician bs paid more? tweet us at guy johnson tv or flacqua. we're back in two. ♪

guy: 17 minutes past the hour. welcome back. you are watching "the pulse" on bloomberg tv. german bonds slipping for a fourth day. let's bring in nobel prize winning economist. yesterday sip rasmussen was talking -- tsipras was talking about the fact he may consider q.e. . how hard is it for central banks, a central bank like mario draghi to actually communicate to bond market when he is such a big buyer in the bond market, exactly what the e.c.b.'s intentions are? >> it is difficult and it is good that they are looking at the forward guidance and to being more transparent because bond markets could -- they are upset about small things.

the problem that they have now is however he communicates something, what he is doing depends on what's happening to the real economy and to fiscal policy and what's happening in the states. neither he nor anyone else can predict that accurately. we saw international organizations getting -- so many times. so however clear and transparent he is, there will still be uncertainty in the bond markets and there will still be volatility. that is where the problem lies. that's what -- that is the problem that the central bank has in that what they are doing depends very much on things that are completely outside their control. francine: chris, what do you see it is a biggest market worry out there now? you just mentioned financial bank independence. is there a danger that the fed hikes interest rates too soon?

>> to me that is the biggest worry actually. when and by how much the fed will do. once they do it, then of course that will be a signal that it will continue for a while. so the question is exactly what are they going to do? they are obviously going to do it before europe does or anyone else. in europe we are behind in recovering from the recession from the financial crisis. and sometimes i get the impression that no, no there are more months left. other types it sounds more imminent. the economy in the united states is doing well. then you get the wholesale like the last quote it wasn't good. i think that is the biggest -- that is the biggest worry. the biggest necessity i should say rather than worry. it is going to happen. guy: at some point the fed is

going to raise rates. >> then there is more and more talk about secular stagnation. very low interest rates. that is going to be the norm in medium to longer term, should they be raising and if they do would it be by a tiny amount? guy: we'll take a break. we'll come back. i want to talk to you about the labor market which is something you know a little bit about. francine: and productivity. up next we look ahead to the u.k.'s first rate decision. stay with us. ♪

francine: now bank of england is expected to leave interest rate it is on hold today following its first policy meeting since u.k. inflation had turned negative. jen, what are we expecting today? >> no change which is not going to cop as any surprise. we have the decision to make about greece. if you have that happening less than a day away then policy makers are going to take that as a big headwind. that would be a mistake. it would be an interesting leg spifment guy: the bank of england -- those guys are sitting around the table.

what are they talking about? >> in addition to greece, you this enormous question about u.k. productivity and the question of how much slack there is in the economy and the inflation picture. there is uncertainty about what the strength over the rebound will be from the second quarter. that is going to feed into when you think the first rate increase will be. guy: this is good because we have somebody with us that knows about the labour market. >> just something. guy: how bad is it? >> it is pretty bad. if you look at it on its own merit, it is not doing well. it should be doing a lot better. also if you look at this relation to the performance of the rest of the economy, it is the one variable, the one statistic that is lagging behind and it should be rising.

francine: i have heard some people say that there may be a drag in regulation and the financial services. the u.k. is expodeined to financial services. that drags down the productivity as a whole. that seems to me like maybe 5% of the equation. >> i don't think that is reason actually. i mean, we have come out of four or five years of policies dealing with deficits and investment, investment infrastructure is the one that took the most of the beating. i think the reason for the productivity growth being so slow is to -- the real economy, not in the financial sector. then there is a -- it is the structure of change is still taking place in the economy where we're moving more into service sectors that do not have a high productivity growth. they are more labor intensive

sectors. and those when you -- with rest of the economy will keep it lower as well. then there is the investment in schools. in the digitalizeation. in providing deregulating the service sector in europe as well , our biggest trading partners. when you try to study and we did have a study alongside -- productivity. you realize that it is not one factor that you could just put your finger on and say that is it. we'll fix it. it is a number of factors. if i wanted to start somewhere, where it will have an impact, it

will be infrastructure and vem. the energy. the supply of energy. push more toward carbon free economy which will help actually probably. you know, the transportation system. do more on the digitalizeation of the education system and the way the public sector feels, the service sector feels. all of these things have been neglected the last few years because of the programs that were followed. >> one question i have for you is you mentioned at the beginning this is a function over the austerity program. if you say that infrastructure investment is needed more espning on transport how is that going to be compatible with continued austerity which is what we're going to be expecting with the new conserve i.d.f. government? >> it will not be here especially since we have a

commitment there will be no more taxes on income of consumption. the income tax which is what labour campaigned -- if you like. it will be difficult to bring it about. there has got to be involvement of the private sector as well. that's why i think it is a big problem. you look at all of those things that can be done, then they do involve more spending inevitably or they do involve the difficult decisions that bring in other factors like what's happening in europe for example. what is going to help. but you need those and we have -- we have examples in the past. one that -- germany 2002-2003. they realized they needed --

they couldn't keep to the low deficit policies that germans traditionally had. for a period of three, two, three years, they broke the -- and the deficit. the reason they did it was to support the reform program and their infrastructure programs and they started get the g the payoffs. that's why they are doing so well now. we are starting a new parliament single party majority. they could say it is so urgent. in the long-term it is going to have payoffs which will make it easier to reduce the deficit. spend it all on investment projects rather than consumption and transfer. francine: chris, thank you so much for your time. from the london school of economics. guy: let's run you through some

of the bloomberg top stories. tsipras says his government is near an agreement with creditors and signaled greece will meet its first june i.m.f. payment tomorrow. he told a reporter "don't worry." francine: jack ma's pictures group has joined the growing rank of chinese companies hoping to market for cash. guy: fifa official chuck blazer pled guilty to arranging and accepting bribes for the 199 and 2010 world cup. the admission come a 2013 u.s. hearing only made public yesterday. francine: let's get more on that story. what is new about this we found out the transcript s of someone

admitting to wrongdoing back in 2013. >> yeah, that is absolutely right. of course we had the indictments last week when there was an insinuation that chuck blazer was in there because they refered to a co-conspirator number one and the description matched chuck blazer. what we have had now is the actual transcript of his guilty play made public. in that of course he admitted he used his position to enrich himself through arranging and agreing to accept these bribes to influence the voting for the world cup in 1998 and 2010. he also said that he didn't pay income taxes between 2005 and 2010. there were a number of things he admitted to. pled guilty to 10 crimes at the hearing with the most serious carrying a maximum sentence of 20 years in prison. his attorney has so far declined to comment on that. what this shows is that the

revenues of the big five european leagues rose by 15% to 11.3 billion euros in the year 2013 to 2014. all five leagues reporting record revenues for a third year. a lot of it to broadcast rights and revenue from that. one thing i found interesting was the wages and revenue ratio. we always talk about how much footballers get paid. for the first time, each of the big leagues since 2007 reported a rage or revenue ratio at or below 70%. guy: so there is money in football. who would have thought it. francine: i didn't know. at all. breaking news. guy: let's move on. let's run through the financial markets. what are we seeing this morning? let's start with stocks and show you what is happening. if you can see the main markets

down pretty hard. we have seen obviously a bond market route but we're seeing it reflected in stocks that didn't get there yesterday. bond markets look a little bit like this. there you go. yields higher pretty much across. 10-year germany. above nine. we moved. quite a big move reflected pretty much across the european markets. it will be interesting to see how the states open later. francine: let's have a look at euro/dollar. swreb wondering whether that was on jean-claude juncker's comments or not. he said he had long and sported discussions. when you're french, you know this word. spotty. it implies they are long. painfully long. guy: like a tennis game is how you described it. francine: it is a little bit of hard work.

the dax was down some 200 points on the back of it. some maybe misinterpreted it because it is not really a familiar english word. guy: mistranslation. we're going to take a break. after that we're going to ve yena. we'll see you in a moment. ♪

guy: welcome back. you're watching "the pulse" live

from bloomberg's headquarters. the sanctions haven't been lifted but the argument between iran and the world's biggest oil companies have begun. i guess the big question is when and where and how does it happen? like iran is definitely back on the agenda. how are they going to make it work? >> yeah, i mean they point this out. they don't want to run afoul over the sanctions regime. they need the sanctions to be removed. we need a deal for that. beyond that, they need a deal for the iranians that they can live with. talking about production sharing grems. that is when iran would effectively invite the oil companies in. they drill, that and they use the revenue to cover their costs and share their profit with the iranians. i talked to bob dudley. he said he wants b.p. to come back in. have a listen. >> i think it would be a big step to go back into iran.

it would give us the most certainty. ryan: the issue is p.s.a.'s are not always very popular with the government. tems themselves. i caught one the oil minister to have islamic republic who said no cigar on the idea of p.s.a. have an idea. >> not p.s.a. >> you think it is unfair? >> better situation, it makes a tough situation. long-term. ryan: now the alternative in the region in iraq for example are service contracts.

that's what the iraqi government hands out. they get a set number of dollars per barrel for the oil they effectively pump for the government of iraq. i guess the question you to ask yourself is to what extent are the iranians able to dictate the conditions by which the international oil companies come back to iran if they are able to come back to iran and i would have thought they would be able to do that but then -- the c.e.o. of lukoil a russian independent oil producer that has long been in iran, he told me, no it is not quite that way. have a listen. >> countrys with large oil and gas reservers are beginning to compete with each other. mexico is opening up and has potential. there are big shale opportunities in the u.s. iran needs to create terms that are attractive to investors.

it has to be something between a service contract and a p.s.a. ryan: we know all of the oil companies want to get into iran. when he came out of the meeting he said we like iran. we know shell is interested. b.p. is interested. we have the russians, the chinese, the americans as well. if the sanctions are lifted, that doesn't mean that it is an easy process. there is going to be a lengthy negotiation that begins after that. it is not entirely clear at the end of the day. the conditions that the companies get in on are going to be hugely favorable to the investors and shareholders in the oil companies. francine: at the same time iran's oil minister said there is serious oversupply oil market today. they obviously would love something, a price that is near 100. the saudis won't allow that. ryan: that's right. i was just talking to a friend

of mine. we were describing this as a gulf club. the opec cartel. what saudi arabia wants with the uaae. israeli, he doesn't have the influence to bring that about just yet. what the iranians are hoping for, if the sanctions are removed that the other opec countries are going to make -- they are going to lower their production to allow the iranians to have to ratchet up their production because the iranians used to produce a lot but because of the sanctions they have not been able to do that. they want the opec countries to ramp down their productions to make room for them. we might get more production out of the cartel which would mean a

lower oil price which is not something the iranians are particularly excited about. guy: thank you very much indeed. ryan chilcote in vienna. francine: the economic forum in south cafferca is taking place -- africa is taking place in cape town. >> without any further ado let me introduce our guest. no doubt you're very keen to the investment case for south africa at this event here in cape town. is it still as intact as it used to be? do investors need or want to go through south africa? >> you can also tell that by -- thanks for inviting me here. you can tell by the interest that has been chosen to -- south

africa. according toing the managing director this is the largest -- but judging also by the big events that are also taking place, it is clear that the appetite is actually growing for investment into africa and we have an opportunity to showcase south africa. we continue the hold and occupy that space. being the gate way but not only being the gate way into africa but also into -- and that investment. we are a destination to -- >> last time we spoke we talked about the impact an increase in interest rates by the fed might have on your country. you said you factored in an

increase. you have to plan around that. >> when you plan for sh it you are planning what you can do internally. all you do is create an environment that does not rely on the capital knows, differential between ourselves and the u.s. and the other developed economy. it is not a number. it is not the timing. it is knowing all the numbers and functions that there is a possibility of a movement in the capital. >> are you assuming a weaker rand then? >> indeed. but at the same time, what we do -- a weaker rand at the moment is good for our exports. but it also at the same time is not good for our imports in particular.

but at the moment, we still have the advantage of a -- the price of -- ill has come at a time when our -- -- it has come at a time when our -- >> they are working on what they call manipulation of the south african currency. are you shocked by what they are relating at the moment? >> we are quite concerned. we are hopeful they will be able to. we have a very strong system for our financial institution. we are hopeful we will arrive at the conclusion of an outcome that will -- we are working on -- as we continue to strengthen this. out of this will come new lessons also in strengthening. >> do you think this is a widespread thing that has been

happening to affect the currency? >> it is not easy to tell. >> talk about the excessive growth in this country. in particular the power markets and how energy is impacting growth. how much are you expecting the power sector of the reliable power sources to take away from growth for the rest of the year? >> i cannot put a number to it. as we said earlier, we are focused on 2% growth. because we have -- the energy challenge. we know that one of our -- unit six is coming on stream. we are likely to get -- then there is an opportunity where you have still the private

sector working with government. beginning to put in additional capacity to the tune of about 2,000 megawatts. the challenges where we are -- but once that is addressed, our manufacturing, which otherwise has been negatively impacted. >> are you going to soon release asset sales? >> yesterday we actually tabled our appropriation bill to make -- to facilitate the allocation of the tranches. >> can you give us any more timings? are you going to sell your stake in vodafone? >> at an opportune time.

we will do that before the enend of this month. >> at the end of this month we should get more details. ok. what can your government do about unemployment in this country? currently at an 11-year high. more than 20%. the world economic forum talking about sharing the benefits of growth more widely. how can the south african share those benefits? >> it is also -- as you always know a function of multiple opportunities and trying to get back into the -- but what we are doing is infrastructure -- for creating employment is -- for growing the economy, an attempt to create jobs. have the potential of creating those jobs. and are focusing of the sectors that are more labor intensive.

growing in areas like, you know sferses sector which have -- services sector which have not created the amount of -- >> finally, finance minister. can i ask you about the allegations surrounding fifa. the bribe to secure the games in 2010. is there going to be an investigation? >> look, once we have all the facts because we actually haven't -- from what we hear in the media. we haven't -- anything that comes to the country. we have a very rigorous budget. if there is anything -- that is brought to our authorities, our authority also do what is right. >> thank you very much for joining us. the finance minister of south

africa. joining us here in cape town. francine guy, back to you. francine: thank you so much. anna edwards there with south africa's finance minister at the world economic forum in cape town. guy: anthony johnson shares the optimism of alexis tsipras. let me take you back to the world economic forum in cape town. jenkins also talked there about the effects of slower global growth. >> if you look at global g.d.p. it is running between 2.5 and 3.5% depending on whose estimate you believe. that has some profound implications for individuals around the world. when you look at what is going on in the e.u. and greece situation, there is clearly a process of negotiation happening at the moment. i think past experience shows that there is generally a solution found albeit at the

11th hour. my money would be on that happening in this situation. >> do you in your position prepare a business like barclays for the possibility of a grexit leaving the euro? is that something you have to have conversations about? >> we have to think about every possible eventuality. we don't have very much business at all in greece. a direct grexit wouldn't affect us very much. some of the consequences we think about. that is just good business planning. that is our responsibility to our shareholders. >> do you think there is a need for interest rates in the united states to start rising? to get more like a normal interest rate environment, whatever that means these days? >> they are at abnormally low levels. when you're in a relatively low growth environment globally, policy makers have to be extremely careful about how quickly they raise interest

rates. i think you see that caution in the u.s. and in other parts of the world. there are expectations that are greatest when they start to rise they will raise very slowly. it will be a long time before we're back to the rate that we were historically used to. >> how is the business at barclays performing? how is investment banking doing? >> like all banks, we have had to adapt to this new environment. lower growth. more regulation and so on. barclays is on the good, clear plan to do that. we're making very good progress. we have a good, strong first quarter. we expect the rest of the year to be more of the same. >> investment banking. do you see any trimming that business further? or have we seen all of the trimming that we'll see in investment banking? >> we have laid out for the investment banks bank. we're making good progress. i would expect with all businesses over time you might do more of this and a little bit less of that.

that is the normal course of business. >> do we know about -- that is coming up at barclays? >> we have announced the head count reductions that are in the plan. we haven't announce anymore reductions. francine: now did you know that plastic can be good for the environment? well, steven thinks it is. he is one of the authors of one of the latest books and bloomberg went to talk to him about how to think like a freak. >> i'm one of the co-authors of the freakanomics book series. there are three ways you can learn to think like a freak. we want a better class of politician we need to think about the way we compensate them. pay them more. you can offer them more which works pretty well in other areas. i think politician incentives are not aligned with ours. they have short-term

self-interested incentive it is. we want them to work on long-term projects. i propose stock option where is politicians or appointed officials could if they work on a project that turns out to accomplish a lot 10 years from now, we write them a big check and make them like everybody else in the world who is rewarded if they do well and if they don't do so well, get rid of them. number two, get rid of the penny. in the states we make the penny at a cost of much more than one cent and then they quickly go out of circulation. because they are worth so little. the only reason that we keep making the penny, inertia, a little bit of history and feeling for abraham lincoln but primarily because it is made from zinc and the zinc lobby has done a good job convincing us we need to keep making it. those are pretty poor reasons. let's just get rid of the penny. number three, what do you think when i say the word plastic? depending on your environment a.m. views and maybe your able,

plastic is a bad thing. as it turns out, plastic can be pretty great even for the environment. if you're buying fruit and veg and you want to do your best for the environment you want to buy it wrapped in plastic. if it is wrapped in plastic it will keep longer and if it keeps longer you're more likely to use all of that fruit and veg. if it is not wrapped it will rot and you'll throw it in a landfill. those are some examples of what it meerns to think like a freak and i won't necessarily encourage you to do so because it can make you quite unpopular in certain circles but i would like to argue it can also help make the world margely better in some small and significant ways. guy: which brings us to our twitter question of the day. should politician bs paid more? let us know what you think. francine: yes.

at flacqua and guy johnson takeover. up next, for our viewers, the second hour of "the pulse." we have unemployment figures. it is our last day anchoring together. tweet us. please do. we're back in two. ♪

julie: do not worry. the greek prime minister tsipras is all smiles ahead of the imf payment deadlines. guy: the global bond rout continues the day after mario draghi warns of volatility to come. francine: top officials took backhander's promised two decades. guy: good morning to our viewers in europe, good evening those in asia and a very warm welcome to those

just waking up in the u.s. i am guy johnson. francine: i'm francine lacqua. this is "the pulse," live from london. guy: let's talk about how the markets are performing. a selloff in equities. let's show you how we are trading across the european indices. dax down cac down by nearly 2%. equities off the pace. bond market story continues to be one of a selloff. this is the bund, up again in terms of yields. we are backup. biltthe bond market selloff continues. francine: getting some breaking news from pierre moscovici. talking about greece.

he's saying it is essential the parts cooperate. saying this is crunch time. he says it is mutual to keep greece in the year oh and that leaving the eurozone would be a catastrophe for greece. guy: zero-dollar moving. we are seeing the selloff continued. it has moved into equities and it is continuing in the bond market. there is the possibility of a translation issue. what do you think it means? is it a misspelling of supportive or the french word? just to clarify, this is jean-claude juncker. francine: the commission president saying he only had three hours of sleep. i think it is the french word

meaning it was hard-working. there was a nice euro-dollar pop on the back of it. another round of talks have failed to resolve the standoff between greece and creditors after tsipras rejected it. guy: after a meeting with jean-claude juncker and mr. dijsselbloem tsipras reacted when he was asked about whether he would be able to make the payment due to the imf tomorrow. >> will you be able to make the next imf payment? mr. tsipras: don't worry about it. we've already seen 7.5 million. guy: i think he is channeling

"the sopranos." we're joined by hans nichols. and from brussels by ian. hans: it was a long conversation. mr. tsipras is talking about his proposal. the creditors are saying we made our offer of our proposal. i'm surprised the euro is moving so much on the comments from mr. juncker. moscovici said talks have been fruitful. catastrophic was the word. francine: this is something we've been trying to focus on the dow fell 200 points on the back of that. as a default euro supportive or euro negative?

we do not have the answer. let's get more on the talks with ian in brussels. what was the eu trying to achieve by inviting tsipras to brussels? ian: i think they wanted to let him see in black and white exactly what they expected of him. exactly what the creditors, the eu and imf for demanding. what there redlines might be. the european commission as portraying itself as a mediator between greece and hard-line countries like germany. they did not want to waste an opportunity to say time is of the essence. this is what we want you to do. guy: in terms of what happens next just walk us through. there's talk of a rerun on friday. give us a sense of the next set of meetings we are looking forward to. ian: the commission has distance

itself from the rerun of tsipras and juncker friday night. the real crunch time i be june 14. that might be the last possible day they could get a deal and get the deal through national parliaments before the bailout arrangement ends at the end of june. there's a finance ministers meeting june 18 and luxembourg. we are hearing that will probably be too late. there's a call tonight between finance officials and eurozone countries. time is running out. we are in two days rather than weeks. hans: what did you make of mr. moscovici's hours comment? meaning mr. tsipras has a challenge when he talks to his own party members? does not seem like that anything on the schedule.

ian: they are trying to put pressure on him. they are saying time is running out, we need you to agree. we want to put as much pressure as possible. it is not ours, it is days. coming through the crunch, you cannot miss around any longer. listening to what they were saying last night, the two sides are far apart. they need to get convergence very soon. francine: thank you so much. let's get more with europe economics director andrew. great to have you. are we going to get a deal by tomorrow? andrew: i think it is unlikely that there will be a deal by tomorrow. i don't think there appetite to have any deal at all. the current greek government, the only kind of deal it would want is one in which it sought

debt relief. it thinks it thinks agreeing to anymore austerity would be disastrous and would extend the disaster indefinitely. and the only way forward is debt relief, which clears off the investment climate so greece can have a chance to recover. guy: i read your note. the sense seems to be that the other is praying for the other want to make the move. greece wants to be kicked out the eurozone doesn't want to kick it out, they went into leaf. -- want them to leave. andrew: in previous times, under enough pressure, governments buckle. it happened in greece and italy. maybe under enough pressure this could be replaced by people who are more amenable. francine: how are we going to have pressure, we have qe? andrew: not in greece, we do not. francine: the pressure for

berlusconi was rising yields not only in his country but in the periphery. we do not have the alarm bells we had that led to putting down of leaders that were not talking to creditors. andrew: the pressure they hope to apply is political. it is still the case that the majority of greeks want to stay in the euro. they see it as the next essential matter. being part of europe as a opposed to the balkans. the greek population has regarded euro membership as a big x essential issue for which they are prepared to make sacrifices. they thought is if it is these characters creating the problem maybe they will go to a referendum and they would lose and be replaced by someone else. i don't think that is that

likely. the majority of syriza voters say they would prefer to leave the euro and have more austerity. they are setting things up so they can say they want to leave. i do not think that is certain. i do not think they are completely committed to the path. i think the logic of debt is so overwhelming that may be somebody in the end will see that as being necessary. even the issues on which they seem closely aligned hide some of the issues. while you are still looking at the 3.5% primary surplus 2018 and beyond, you are committing to the story that greece eventually repays debt. they want to accept that it is not going to happen. guy: hans? hans: do you want to see a referendum syriza or elections?

---syriza is not going to get the deal they want. andrew: the best result from the point of view of greece would be to stay in the euro. the best result from the point of view of the eurozone is for greece to go. what do i want to see? probably the thing i value the most is the eurozone's integrity. i would prefer greece to go. guy: if your goal is to keep greece in the euro, is it easier with snap elections or a referendum? andrew: i do not think snap elections are going to change anything. syriza guys will be even more strong if you have snap elections. francine: more with andrew after the break. guy: what else is on our radar? chinese stocks and the day up after falling 5.4 percent earlier. earlier in the day, shares were

down. european stocks are being knocked. francine: former aereofifa official admits he and other members took bribes and kickbacks for broadcasting rights and the selection of world cup venues. he made the confession in testimony to a judge in new york which has just been made public. guy: the ruble falls as the ukraine military attacks a town. the buildup comes ahead of an eu meeting later to review sanctions imposed on russia. francine: today's twitter question. we will hear from one of the "freakonomics" co-authors. should politicians be paid more? tweets us @guyjohnsontv and @flacqua. unemployment out of greece

25.6%. guy: and even more startling youth unemployment. that number highlight it. ♪

francine: welcome to "the pulse," live from bloomberg's european headquarters in london. we are back with andrew. talking about greece. you think we are not going to find an agreement. this will be rolled over. we will have a series of defaults. what does that mean for the markets? are they going to freak out? is there going to be a lehman brothers type moment? andrew: once you have a series of defaults and moved to a grexit the markets will not like that. there will be initial turbulence but i do not think it will spread wide. after an initial period they will get the idea that it was better. the medium-term, you come to a more decisive resolution to the eurozone question. you can move more towards the

franco-german proposals of establishing a euros in treasury and emergency fund. i think the eurozone will work better once the greeks are gone. guy: here's the problem. if the greek economy works after this, that is an issue. other politicians around europe saying that is not a good idea. andrew: if you were to have for example, the greek currency went down 50% and two years later they were growing 354% or 5% and unemployment was dropping, which i think is possible will the voting classes in other countries see the big loss of wealth and greece and say oh dear. we do not want to participate. will they see the turnaround in growth and say why are we continuing to bear --

guy: have you got kids that are 18 years old, in spain. or anywhere. they have no chance of getting a job. that is going to and cut your thinking. andrew: i don't think spanish are that much of an issue. the spanish regard eu and zero membership as the division between whether they were a developing economy to a poor part of the developed world. they don't want to risk moving away from that. francine: unless they have a blueprint. i was at the oecd yesterday and there was the finance minister of spain. people have always said the problem is greece defaults people's mines, why am i doing to reforms? andrew: i think that is more applicable to portugal. the spanish have lived for quite a long time on 20% unemployment.

you only have to go back 15 or 20 years. they do not think of that is the kind of disaster we would think of in the u.k.. i would say that the spanish and do not think they are the threat. the next weakest set of dominoes are portugal and cyprus. there was contagion from the greek default in 2012. in portugal it might be continuing contagion. in the case of italy, i might think they would see the level of loss of wealth. given the importance of wealth in italy, people depend on the wealth of parents to keep them going. the italians will be deterred. though i am optimistic about the scope for greece to do well i think the government is unlikely

to be adopting optimal policies by any means. the danger after them having some kind of protection and not embracing structural changes quite high. the initial turmoil will be high enough in greece that that would encourage the others. francine: we have to go. thank you so much. , more on the latest fifa scandal developments. a former official admitting they have been taking backhanders for years. back in two. ♪

guy: welcome back. you are watching "the pulse." let's talk about the scandal surrounding fifa. the newly unsealed court documents that shed light on bribery and money laundering allegations. what do we know about these documents? >> this is involving chuck blazer, a former official. he made a testimony back in 2013 in a sealed courtroom in new york. now the documents have made public. they show him admitting that he used his position for his own gain. arranging to accept bribes.

he also accepted bribes from a sports marketing firm and admitted in court he did not pay income taxes. in total, he pleaded guilty to 10 crimes at the hearing. that is what has been made public. he and his attorney have declined to comment. francine: what about big european football leagues? nejra: this is a report from deloitte. it shows that all five of the big european leaks reported record revenues for a third successive year. a lot of that was broadcast revenues. the english premier league revenues were almost twice that of the second, germany. a new age of profitability for some top clubs.

the premier league made its first profit since 1999. one bit that pay i found interesting was to do the average wage to revenue ratio. this fell to 59% across the big 5 the lowest since 2000. guess which actually had the lowest wage to revenue ratio? germany. guy: that is unsurprising. certainly not the u.k. premier league. francine: or the italians. thank you so much. great statistics. the latest on fifa. guy: let's talk about what we have got coming out. decision day for the bank of england. governor carney revamping the ble, from the structure to the meeting to the sport. not much is going to happen on rates. we will talk about that. a bit of market action. francine: a bit of pressure on european markets.

if we bring the board up, they are all under pressure. this is on the global bond market rout. guy: equities started to sell off yesterday. the gap lower first thing this morning. we have pops a little bit but we are close to lows. bonds are pretty interesting. francine: i have a great quote. the founder of an asset management firm. there is a quote, "sentiment wise community is very high." kind of sums it up. the markets are irritated. looking at greece looking at what the politicians are saying. not understanding every word they say and they are irritated according to this analyst. guy: irritation is the word of the day. alongside sportif. john paul younger used it earlier. as a result, some people may

have said that means supportive. fran thinks it is something else. francine: it is used when you are saying it did not go great but i will make everyone laugh by saying it was challenging. follow us on twitter. @guyjohnsontv and @flacqua. guy: i have a halo today. i am looking into the light. ♪

francine: welcome back to "the pulse." live from london. i am francine lacqua. guy: i am guy johnson. francine: the greek prime minister tsipras says his government was near to an agreement with creditors. he told reporters "don't worry." guy: alibaba picture group has joined chinese companies tapping

the market for cash. the unit plans to raise 1.6 billion by selling new shares. francine: former high-ranking fifa official chuck blazer admitted he used his position to enrich himself. he pleaded guilty to accepting bribes. admissions came from a 2013 u.s. hearing only made public yesterday. guy: to the markets, a busy morning. jonathan: another ugly session. ftse 100 down by 1%. dax off by 1.5%. the story is in the bond markets. the bond rout continues. the biggest two-day selloff for bunds since 1998. up by five basis points.

7 weeks ago we work within five basis points of 0% on a german 10 year. 90 basis points higher out of thin air. the bond market story feeding a stronger euro. euro-dollar 1.1344. up another .6% after the biggest two-day since 1990 nine. mario draghi says get ready for more volatility. get used to more volatility. how does he like what it means for the fx market. might tolerate a backup in yields. will they tolerate a stronger euro? euro-sterling, a seventh day of gains. head of the bank of england non-decision. rates remaining at a record low. what a difference 12 months have made.

where is the rate hike customer guy: francine: the bank of england is expected to leave interest rates on hold. u.k. inflation has turned negative. joining us is deutsche bank's chief u.k. economist george buckley. there are so many questions about the pace of austerity after the slight warning from the oecd. what worries you the most about the u.k. economy? george: productivity has not been strong for some time. i think that is a concern about what it means for the supply potential for the u.k. economy. the bank of england, it will be the middle of next year before they moved raise up -- rates up. it's mantra has been slow and lower than in the past. guy: are you thinking about

greece? george: it is one of the main concerns. it would have consequences for european economic growth because europe is a big trading partner. we send about 50% of our exports there. it would have consequences for the sterling, which you would expect. francine: you are expecting an interest rate rise. if greece stays within the eurozone and even further if greece comes out. george: the 20 16th view is predicated on note greek -- no greek exit. had a different political outcome been the case in the election, we could have seen the bank of england move differently. because the conservatives are

likely to continue to reduce the structural deficit at a similar pace to what we looking at right now, he bank of england has a bit more time and they do not need to move interest rate so quickly. guy: is the risk that it is later than may. if you are looking at the risks, what does the tail look like on that risk customer andrew: -- george: we have been wrong so many times. the further you push your review, the creator the chance you see a weakening in growth. and that they missed the opportunity or do not have the opportunity to raise rates. the longer you push it out, the greater the risk is. francine: give us a sense of when the markets start to -- i don't know if model is the right word or look at the referendum question. in terms of forecast for the u.k. economy growth, investment coming in how quickly do you

need a referendum? george: the quicker you have a referendum, the less likely those decisions to invest in the u.k. which might be delayed because of a referendum do not become decisions to invest in other countries. the longer that referendum is away, the more likely companies will decide to go elsewhere because they cannot wait. also you have the french and german elections in 2017. we have the presidency of the council and the second half of 2017. none of that looks like a good idea to hold a referendum during that period. i think it will be earlier than the end of 2017. i would not be surprised if it was towards the september-october time of 2016. a short period which means it is more difficult to get the renegotiations through that cameron would like to get through. guy: company is going to stand down at the end of june 2018. where do you think rates will be? george: good question.

i suspected they are going to be higher. how much higher -- guy: what kind of -- george: it depends what you mean by terminal rate. gdp is growing at a trend rate inflation at 2%. that could be a long way away. the greek would be somewhere in the region of 44.5%. francine: what is the one thing that actually makes -- in terms of long-term field -- is it a possible grexit? if the u.k. votes to? leave the eu, what does it mean for the interest rate george: i think you would get weaker investment. we are highly dependent on foreign direct investment. even in cash terms, we are only second to the u.s.. if that were to follow, you would see weaker economic

growth. the bank of england would not feel comfortable raising rates quickly. guy: in a world that nothing is going to happen with the bank of england, interesting. francine: thank you so much, george buckley from deutsche bank. guy: back to the opec meeting. we speak to oil ministers and plenty of ceos. stay tuned for that, coming up next on "the pulse." two ♪

guy: welcome back.

you are watching "the pulse." the sanctions have been lifted -- have not been lifted. the argument between iran and oil companies have begun. ryan chilcote is at the opec summit in vienna. let's talk about what it is going to take to get these two to tango -- the oil companies and iranians. ryan: if they have to get in if the sanctions are dropped, what is a deal they can live with? talk of production sharing agreement whereby the islamic republic would effectively award one of the international oil companies a deal where they could drill and use the revenue from that to cover their costs and they share the money with iran. i was asking bob dudley about what it would take to get him back. he said it would take a psa. mr. dudley: it would be a big

step to go back into iran in an uncertain environment. psa's would give us the most certainly. ryan: psa's are good insurance policies for drillers and oil companies but they are not always popular with the countries themselves. iran's oil minister said no cigar. mr. zanganeh: a contract not psa. >> you think it is unfair? mr. zanganeh: it makes for a tough situation. a more effective thing for them. it is not a psa. ryan: the alternative is a service contract where the country owns the oil, they own

the reserves and they pay the oil company a certain amount of money per barrel to get it out of the ground. that's what the iraqis do. international oil companies are not too happy about the situation in iraq. you've got ask yourself who has the upper hand? all the oil companies want to get into iran. does that mean iranians dictate the conditions? i caught up with the billionaire owner and a stakeholder in a company called lukoil. a longtime player in iran that had to leave with everybody else because of the sanctions. he said not so fast, i'll companies have a lot of leverage . mr. alekperov: countries with large oil and gas reserves are beginning to compete. mexico has potential.

there are shall opportunities in the -- shale opportunities in the u.s. there has to be something between a service contract and a psa. ryan: the total ceo coming out of his meeting with the iranian oil minister said we like iran. everybody wants to get in. it is going to be a fight after sanctions are removed as to who gets the upper hand of the deal. it is not a guarantee that just because you get into iran you're doing your shareholders a favor. francine: you were mentioning iran the oil minister was saying there is an oversupply in the market. can you put that into context? ryan: that is exactly the opposite of what you hear from the asaudi oil minister, the man

who is calling the shots in the cartel. he thinks the market is well-balanced. their strategy is to hold onto market share. what the iranians are really saying if the sanctions are removed, we are going to bring another billion barrels to market and you have got to make a room. we had sanctions and you up your production and pushed us out. we are coming back. raise the target or lower your production. i have not heard too many opec countries over the last couple days tell me they are prepared to make production caused by their own expense. back to you. guy: that you're ryan chilcote from the end. francine: barclays ceo anthony jenkins shares the optimism of the greek prime minister alexis tsipras that ideal will be reached, staring and exit -- sparing and exit.

he spoke about the effect of slower global growth. mr. jenkins: if you look at gdp, that has some profound indications for government businesses and individuals around the world. when you look at what is going on in the eu with greece there is a process of negotiation. past experience shows there's generally a solution found, albeit at the 11th hour. my money would be on that happening in this situation. >> your position would be to prepare a businesslike barclays for the possibility of a grexit, greece leaving the euro. mr. jenkins: we have to think about every eventuality. we do not have very much business in greece. a direct grexit would not affect us very much but second order

consequences we think about. that is our responsibility to our shareholders. >> you mentioned the low growth environment. do you think there's a need for interest rates in the u.s. to start rising. whatever that means these days. mr. jenkins: interest rates are at abnormally low levels. if you look back to a comment i made at the start, and a relatively low growth environment, policy makers have to be careful about how quickly they raise interest rates. you see that caution in the u.s. and other parts of the world. our expectations are rates will raise a very slowly and it will be a long time to get back to the interest rate levels we have been historically. >> how is investment banking doing. , it was quite different from the first quarter mr. jenkins: we've had to adopt to lower growth and more regulation.

barclays is making very good progress. we expect the rest of the year to be the same. >> investment banking, do you see a need for trimming that business or have we seen all the trimming we are going to see? mr. jenkins: we are running that business and making good progress. i expect of her time you will see more of this and less of that. we have been out reductions were part of our plan last year. we have not announced any more reductions. guy: injury jenkins in south africa. francine: dish network is in talks to work with t-mobile u.s.. the two sides in close agreement

about what the combined company would look like. dish's chief executive charlie ergen and t-mobile head john leg ere surfing as ceo -- serving as ceo. guy: nestle's maggi noodles banned in dehli after a test showed lead content above the limit. nestle has not received orders to remove the products off the market. francine: berilin bracing for an influx of football fans. the uefa cup expecting to put strain. guy: hans nichols on a plane back to berlin. up next why plastic is good for

the environment. that and more wisdom from "freakonomics" author. ♪

francine: welcome back to "the pulse." live on bloomberg tv and streaming on bloomberg.com. guy: plastic can be good for the environment.

bear with us. he's one of the authors of the latest "freakonomics" but. -- book. we went to learn to be a freak. stephen: i'm one of the authors of the "freakonomics" book series. think like a freak if we want a better class of politician, we have to think about the way we compensate politicians. higher salaries for politicians. which works well in other industries. politicians' incentives are not aligned with ours. they have short terms incentives. we want them to work on long-term. i proposed stock options where politicians or appointed officials, if they work on project that turns out to

accomplish a lot and if they do not do well -- we get rid of them. get rid of the penny. we make the penny at a cost of more than one cent. and then they go out of circulation. the only reason we keep making the penny is inertia and a little history. the penny is made from zinc. the zinc lobby has done a good job of convincing us that we need to keep making the penny. number three what do you think when i say the word plastic? depending on your environmental views, plastic is a bad thing. plastic can be great. if you are buying fruit and vegetables and you want to do your best for the environment, diet wrapped in plastic. --

buy it wrapped in plastic. if it is not, it will rot and you will throw it in a landfill. plastic turns out to be pretty great. those are examples of what it means to think like a freak. i will not encourage you to do so. it could make you unpopular. i would like to argue it can help make the world a marginally better in some small way. francine: think like a freight. -- like a freak. guy: we have got it nailed. francine: for a look at what we are watching -- guy: hans nichols is here. hans: this is where you have a sporty conversation. we will watch greece. how much euro-dollar are moving based on comments none of us understand. francine: that is the breaking

news. to your point, that is the problem with the markets overall. they latch on to things because there's a sense of maybe they are missing something. hans: traders in london, what percent would have french as their second language? guy: i think the percentage would be high. it is an international city. the chance of this being misrepresented or miscommunicated -- francine: jean-claude juncker saying he had a "sportivf" conversation with mr. tsipras. does that mean supportive or sporty? hans: it is not subject to interpretation, the jobless claims number coming out. we got two negative numbers. if you are worried about the pace of the american economy, this is something to watch. guy: that is it.

francine: for "the pulse." keep it here on bloomberg tv. it's our last show for now with guy johnson. guy: it's a divorce day. a trial separation. hans: always optimistic. francine: see you tomorrow. ♪

announcer: this is bloomberg "surveillance." tom: the bond route continues.

the german 10 year meals 1% -- and there's 1%. tomorrow is jobs day. will a constructive jobs report lead to further education? opec leaders meet in vienna. this is bloomberg "surveillance," we are live. june 4. we have a huge news flow. brendan: things are more happening. it is fun to get up at 3:00 in the morning when things are happening. tom: futures -13. can we have a fifa-free day. brendan: i was planning on it. there will be some trials and it will be fun. tom: we will try to get through a fifa-free day. vonnie: