francine: the ball is in your court. mario draghi said greece must take the necessary steps. the european court of justice ruled the ecb's scheme is legal. kuroda's you turn said he was not trying to influence the yen when his remarks sent the currency climbing. francine: welcome to "the pulse ." i am francine lacqua. also coming up we will be

hearing from some the biggest names in aviation. the ceo's of airbus and airasia will be on "the pulse" this morning. greece's finance said creditors must take his country's proposal seriously if they want to break the deadlock. after the european central bank president mario groggy said greece needed to take the necessary steps and the ball was squarely in the greek government. to get more we are joined by hans nichols in berlin. what are the creditors' plans and greece's plans and how far apart? hans: they seem far apart. we see a lot of reports at least one important report talking about plan b if there's going to be an exit and capital controls on greece. and the greek plans and according to mr. varoufakis

editor interview is we will not be coming to the table with a new plans. more work needs to be done and they need to take our initial proposal seriously. it does not like greece will show up with a new planet which everyone is expecting them to do and amending them to do -- a new plan which everyone is expecting them to do and demanding them to do. mario draghi said the ball is in their court. mario draghi: a credible plan is needed for greece and the euro area as a whole. all actors will need to go the extra mile, the ball is in the camp of the greek government to take the necessary steps. hans: creditors planning for capital controls, there are 2 parts. one is an ultimatum. eu leaders have agreed they have agreed they will come up

with an ultimatum to present to the greeks. if it is rebuffed they will urge them to impose capital controls. after that point, it may happen by themselves. technically, the greek government need to implement them. you can see capital flight is not an agreement as we get closer to the important data lines. all across europe most of the conversations have shifted toward plan b. what to do you do the day after if you do not have an agreement? the latest polling out other greece. the question was -- colbert's responsibility for the prolonged negotiations? 56% said the creditors and 37% said the greek government. there are other aspects. that gives you a sense within greece and the whole population and not just a result, a strong animosity toward creditors and support left for the attack is

the cerebral government. -- syriza government. caroline: vw may have an impact. hans: this is weighing could clearly on what we saw. the numbers are disappointed. we have had a remarkable string of increases month on month. a little bit down. there could be quirks. down 647% and volkswagen is down. it could be affecting and there are still strong sales. cheaper credit, it is a warning sign, this number. if gay second bad a month, the uncertainty of greece to consumer spending and not just business investment. caroline: thank you. within the last half hour, the central bank said

[indiscernible] -- the decision by the european court of justice is binding a cannot to be appealed. straight to our ecb editor. paul gordon, they have a mandate. paul gordon: yes, a mandate for omt that has never been used as separate to qe but has implications. an endorsement for the plan. the european court of justice noting 4 key points. it is single. another is it is aimed at achieving the ecb's primary objective of stability and cannot to be confused foreign economic policy and is a monetary policy tool and doesn't infringe. it does not a manifest beyond what is needed to achieve the price stability objective.

if it should be needing a you can imagine perhaps it may be in for a country like greece, it is there to be used. caroline: what are the odds it will tighten greece? paul gordon: hmm. we are getting closer to the point where maybe the ecb has to do or say something about this. there are policymakers who would like to the collateral standards tightened, accessing ela a you could justify the conditions especially as greece is indicating no new proposal before going to the eurogroup. the ecb has been concerned about being the front runner and the one that takes decisions. mario draghi made it yesterday. no doubt it is the eurogroup that has to make the decision. there comes a time when the ecb

may have to issue wording that says to sort it out or we may have to change our terms. caroline: paul gordon in frankfurt. the second day of the paris air show in paris. guy johnson is there with a guest for the very latest. guy? guy: thank you. the big debate at the paris air show is are lower fuel prices starting to hit to demand? let's touch a man who may know it. good morning. -- let us talk to a man who may know about it. you have the e1 which is the current generation engine fuel etc. and a new aircraft which is the e2 which is more fuel-efficient and going to save the airline a bit of money. fuel prices are down. guest: we have pause.

we are waiting to see where this thing will go. i do not believe in the long-term there will be change and the trends we order the new airplanes. guy: would you have expected to be selling more e2's? frederico curado: we are very satisfied with our results. we announce another 25 aircraft. it is good. two or three years away from certification. guy: it is that airlines you really want to see, isn't it? frederico curado: both are important. so, i will say they are both important. guy: u.s. airlines are making a lot of money. frederico curado: they are. strong consolidation in the u.s. the demand is much more

integrated than it was 10 years ago. so, yeah, it translates into profits. guy: i was talking to a russian company about the volatility he has seen with his currency. you've seen a lot with your currency. how hard is it to manage the business in this environment? frederico curado: your balance sheet goes up and down. for us, a stronger dollar is a tailwind. we have 25% of our cash flow in rei's, everything else is dollars. we have a bit of a tailwind. guy: you have got pretty good visibility. what does it look like? everybody thinks it looks tough. frederico curado: it is certain we are going through an adjustment that is nasa's ares. -- that is necessary.

this year is a test year. high inflation a negative growth. that is not where you want to be. the way we're going right now -- turning that situation into something hopefully that will be a little better. guy: i am not sure you will be able to provide an answer. you are being investigated under the spca for corruption at the moment. can you give us an update of what we will see visibility on the case that surrounds that or any of the cases to go any further? frederico curado: i cannot make any comment on that. it has been for years now. fully supporting the authorities in every way we can. i cannot go any further. guy: ok. fair enough. i'm sure the lawyers have advised you on that one. your relationship with the brazilian government.

a program you are fairly deep in with the brazilian government. they owe you a bunch of money. when that money will be coming back? frederico curado: part of that is just what i mentioned. the government to budget and the defense programs. they are in the process of establishing which program in which way. we have heard the declarations from authorities. the main one we are in charge of is the cargo aircraft. that is our main concern. we expect in the next two weeks to know. overall, we think we will probably go a little bit of adjustment and that english channel -- in the english channel. guy: any idea of the magnitude of the adjustment? frederico curado: let's put it

in this way, we are not changing our guidance for this year. we are comfortable. even if we have a reduction in defense, we have other companies sustaining our guidance. guy: what is that story for defense around the world? companies with wide basis, exposed all around the world significantly better than most. how do you position your defense business? frederico curado: our major customer is the brazilian air force but also exports. a strong demand for exports for lighter aircraft. of course, the stability around the world. there is a growing demand. also, anti-insurgency aircraft. exports tend to compensate the

difficulty at the moment in the defense area. guy: good to see you. ceo of embraer. plenty more from the paris air show. the ceo of airbus will come up later, tony fernandez as well. and tim clark. his view on spats between the gulf carriers and the u.s. carriers. the view later on. if you want to check on what is going on here, go to the website, bloomberg.com. there's a special page. francine: a great website. i keep an i on you. you have all of the breaking news. a look of what else is on the radar. the bank of japan's governor said he was not trying to influence the exchange rate and the remarks that sent the currency of this of the dollar. after mr. kuroda told a hearing

that the yen was unlikely to weaken further. that was seen by some for lessening monetary policy easing. shares and the australian giant iag surged of the most in three years after securing a $382 million investment from warren buffett's company. the chief executive told bloomberg it is a win-win situation. >> we see the advantages for us and our customers really leveraging the, mystery skills that iag and berkshire have. it also reduces some of the volatility in apple results and providing us with greater capital diversity and flexibility. we see it is a win-win situation given it is berkshire access to the proven activities of iag is

involved in. it also means we are seeing a significant endorsement of strategy we are following across of the asia-pacific region a recognition of the strong franchises. francine: 10 people have been arrested after police in hong kong discovery materials for making explosives. officers also seized air missiles and a 3-d printer. the arrests with tensions high over a planned vote on a china backed plan for elections and the financial hub. the former florida governor jeb bush has launched his presidential campaign. he seeks to follow his brother father to the white house. the 62-year-old has promised to deliver 19 million new jobs. he faces a struggle to submit himself as a front-runner in a crowded republican field. jeb bush: campaigns are not easy

as they are not supposed to be. is there are a lot of good people running for president, quite a few. not a one of us deserve the job by right of passage -- right of resume. it is no one turn. it is everybody's test and wide open. as the contest for president should be. [applause] francine: that brings us to the 20 question -- when you look at the success of the kennedys and clintons, is the america to assist with dynasties? as a 9:30 a.m., u.k. inflation data. we will bring you the numbers as soon as they break. we will go to the paris air show with an interview of the airbus ceo, tom enders.

and a look at how computer technology and chickens help bring the dragons to life in "game of thrones." stay with us for all of that. ♪

francine: welcome back to "the pulse." back to our top story, the greek

deadlock. we are joined by chief european economist. great having the program. i spoke to you a you are confident greece would stay in the eurozone. still? guest: things are choppy. choppy or is and i would have expected. very far to achieve that. i can only stick to simplistic views which is a, every poll in greece that everybody wants to stay. campaigned on staying in the eurozone. on the european side, even if frustration is melting, it makes more sense to keep greece in then to allow a situation it would be out. to paraphrase, angela merkel when there is a will, there is a way.

francine: are you confident that the main players, the people negotiating, the government wants to greek -- greece in the eurozone? that is what the people want. you look at some of the chief negotiators that it is a realization they may actually not feel so bad about leaving the eurozone. gilles moec: there seems to be a faction in syriza which is contemplating leaving. there was always a faction that kept quiet so far. i guess what matters at this stage is what the key players on the political side in greece continue to see. wristers tsipras and mr. tsipras -- mr. tsipras and mr. varoufakis. that would be a good reason to be worried. and the stage of debate, you

cannot really call it a negotiation. the debate where annie weapons can be -- any weapons can be used and fear and even the scenarios put forward in hope it will actually unlock in the next few weeks. so far, no one at the top end has talked publicly in favor of exiting. francine: the spanish 10 year is above 2% for a long time. do you expect the ecb to step of qe? gilles moec: they will have to. what i wrote is the finger is on the trigger. not just what is happening in greece but this is taking place against the background of the selloff. and now we added to this

contagion from greece. and you have to be very basic on this. the very purpose of qe's to make sure the central-bank could control real interest rates. even once the policy rate hits a zero. if you look at the real interest rate it is higher now than they were. you have to admit that. as it is today. there is one snag which is some of the selloff was probably driven by technical factors. in may, quite a bit of paper coming in on the market. it is changing now and will change further in july. they want to make sure that things are fundamental and not technical. to me, july is going to be a natural experiment. if we see it is deeply negative

issuance at the market itself with that yes, the market will have to step up. probably initially rhetorically. and technically with actual decisions. the markets were misread what mario draghi said and the ecb is collectively more concerned. they sounded very flippant. i think they are really concerned. they came out saying if there was a tightening in military conditions, it would basically jeopardized and they would ask mario draghi and using different words. it needs to be provided. francine: we had a new euro president possibly. there seems to be a clear snub. is that fair?

is he being snubbed because he is spanish? gilles moec: i do not know about that. the issue for spain is not only the representatives after the ecb board, the diplomatic defeat a few years ago. if they cannot get to the eurogroup, it would be an issue for spain in general. i don't know if it is because he is spanish or other problems within the eurozone. it might also be the case that do so blue -- dusselbloem is a socialist. and it is in his favor. the problem for spain is a they have lost some diplomatic clout which is probably at odds.

in a way -- first the bank they are the poster child and the -- francine: they are the poster child and the ones at risk if something happens with greece. gilles moec: we have contagion and it is happening fairly late. i would say related to where we were two or three years ago, the market view of spain has completely changed. it was very hard to argue that spain was a good business and they would deliver on the private sector. now the issue for spain is if we have the second half of the year which remains choppy with whatever contingent we got from greece and the prospect of elections. if you look at the elections, the risk it would play a major role at the end of the year.

probably much more containable. francine: thank you. gilles moec. coming up -- u.k. inflation data and take you behind the scenes at the fashion show at burberry. ♪

francine: welcome back to "the pulse." we are getting inflation figures. prices rising 0.1%, in line with what economists were expecting. matching median estimates. at 0.1% higher. the pound fell a bit. it is back on the rise.

here are bloomberg's other headlines. llamas varoufakis says creditors must take his proposals seriously if they want to break the deadlock over bailout funds. mario draghi said greece needed to take steps and the ball was in the cab of the greek government. the bond buying program is valid. the scheme does not exceed the powers of the ecb. the ruling is a victory for ecb president as he put -- as he continues the program. 10 people arrested after police in hong kong discovered materials for making explosives. officers seized air rifles and maps of several central neighborhoods. the arrest come with tensions high over a vote this week on a china-backed plan for elections.

men's fashion week in london is becoming a bigger event. yesterday, burberry showed off its latest designs. i caught up with the ceo backstage. >> we want to have a combination of traditional pieces. we have sartorial tailoring and the iconic trenchcoat we make here. as well as the iconic burberry scarves that we weave in scotland. england is well-known for --

making, historically. i like the play on different traditions. you have hugely talented roads. real incredible musicians and a singer-songwriter, and he played with this. francine: what do men want when they dress? >> to feel confident and feel good in their close, to make sure that there close -- that their clothing fits them. i think how far along those lines those guys go depend on what your life is like. in the showroom, you will find

classic shirts to go with this tailoring. francine: what does it mean to be a british designer for menswear? >> we have a history of menswear in this country. it is so embedded into burberry. it is a natural extension of everything we do. the trenchcoat, we say it is for men and women of different ages and lifestyles, but menswear is something at home here when we show in london. francine: it is almost as important as the catwalk, live streaming? >> yes. we live stream on the catwalk and on the periscope. it is important these shows become something for the live audience and that it is just part of the audience. we have people all over the

world engaging in this. some people come because they love the music and they come to hear that. others because they love fashion and the idea of shows. others because they are looking to shop. you get so many different types of people. francine: tie or no tie? >> it depends on where you are who you are with, what you are doing. i like ties very much. the majority of the time i do not wear ties. normally, someone i work with, he is always in a tide. ties or no ties, depends on what you do and where you're going. francine: we are getting breaking news. we had breaking news in terms of cpi inflation data.

now, we have aninformation on mortgage lending. a lot of market jitters in the housing market. people holding off. we had the u.k. election to choose the next prime minister. a lot of people were holding off less mortgages were granted. we understand that as part of the reason this mortgage lending fell 10% in april. a huge figure. put into context of the elections here in the u.k.. keep it here. we are on "the pulse." ♪

francine: welcome back to "the pulse." let's get more from the paris air show. let's head to guy johnson. guy: thank you, indeed. one of our biggest yes -- our biggest guests joins us now. he is the ceo of airbus. this is your home first. -- your home turf.

you are not getting the 350 orders some people expected you to deliver here. what is going on? >> we have 1046 orders yesterday. that is a novelty. secondly, we have important orders yesterday. the regional from saudi. overall, i think we will have a good week. we do not feel like this is a contest where we would --. >> you are happy with the way the 350 is performing in terms of the orders you see coming in. >> what is important now is that

we meet the majority targets that we are ramping up the production. that is going really well. we are happy about the 350 program. guy: the 380 program. are you happy with it? >> our customers have a mature aircraft now. the acceptance by passengers is superb. we would like to sell more of the three 80's. that is true. -- the 300 80's. -- 380's. guy: you have open spots in 2018. how much pressure is there from investors to have a look at the program? is there a question?

>> it is not a discussion we are having. we have some good ideas. guy: can you be more specific? >> we have ideas how we can more efficiently use the cabin. there are ideas about a new engine, what performance should have. we have an orderly discussion inside the company and we will come to a decision and announce them if they are there. guy: when might we see these announcements? the year end? >> i would not make any predictions. we review the products performance, the possibilities to enhance the product throughout the year and we will see where we get. guy: they are all still on the table?

>> different advantages that we can get at the same time, we are in talks with potential new customers. we will review the situation throughout the year and see where we get to. no panic. orderly process. guy: what would keep tim clark happy at emirates? >> why don't you ask him? he is very happy about the three haiti -- the 380. he built a program largely around the 380. it is a money making machine for him. guy: when he favor the neo? >> talk to him yourself. he has been public about favoring product enhancement, engine enhancement, etc..

the product has a great future. guy: let's talk about the a 400. we are sad about the crash that happened on the aircraft. when will you be able get production back in the air again? >> i hope it is not a question of weeks, more of days. we fly every day. the british air force has never stopped flying it. they are resuming flight today. we are gearing up to deliver the program and to deliver the aircraft that we have committed to delivering to our customers minus one.

guy: you know where the problem lies? >> absolutely. we understand the problem. we have launched a wide investigation into the process and quality. the usual stuff you do in a situation. we know we can fly this aircraft safely. on that basis, we hope to resume production. guy: let's talk about your defense business. when do we start seeing assets on the block? when do we start hearing news about that? >> the next couple of months. these things need preparation. we are not interested in

detecting -- in damaging the defense business. these are serious decisions that take a while. guy: do you think you will have to be more aggressive with the business? five years down the road, bigger changes coming? >> what is driving us, we want to be in leading market positions. we are leading players in helicopters, space, launchers, satellites. in some areas, we were number 25 perhaps. we said we are not the right guys, we have business and we want to divest that part of business. the company will remain a strong defense layer.

today, with the assets we own we are the largest defense company in europe. guy: you are big in helicopters. sikorsky is on the block. when airbus be interested in that asset? >> we are interested in following the discussion. whatever decision they finally take, we will influence one way or the other. that is the only statement i want to make at this point. guy: thank you. always a pleasure. tom enders, the ceo of airbus. francine: thank you. guy johnson bringing us the interview from the paris air show. up next, designing a dragon. the technology behind the

special effects in "game of thrones." ♪

francine: welcome back to "the pulse." with airlines racing to increase fuel efficiency, 3-d printing helps cut costs and decreasing weight. bloomberg spoke to a company at

a paris it -- at the paris air show. >> manufacturers are able to produce a part they would not have been able to produce with traditional means. they can build a part from nothing. you can build complex geometries, hollow geometries. i am the manager of aerospace and defense strategies. from two years ago to today, there is 3-d printed parts that are more prevalent. they are flying and a lot more interested. 3-d printing is say -- is a technology uniquely suited to the volumes we see within aerospace. it pushes the envelope to

increase the performance of a vehicle. airbus has selected our technology to have a flexible way to produce parts for their aircraft. there are a number of opportunities, prayer merrily -- primarily in interior components. our various electrical covers, routing pieces, any classic element throughout the cabin of an aircraft can be customized and tailored to lighter weight geometries and unique geometries. more customers understand it is a manufacturing technology. there is more to do. there is more advancement within the processing for it to become widespread. francine: the season five finale

of "game of thrones" has left fans with unanswered questions. just how does the show create such realistic looking dragons? high power computers and chickens. >> "game of thrones" is five seasons deep. the real star of the show does not speak a single line. the three dragons are brought to life by an oscar-winning team. 30 people spend up to four months a year living and breathing the designs of dany's dragons. they model the structure of pigeons and chickens to scale the creatures from this to this.

>> it is like raising babies. the character changes we had to build in more facial performances the last season. they grow. the detail becomes more complex. >> 10 times more complex. the layers of texture increased from 70 to 700. >> we had to model each scale individually. this is what makes the machine slower and therefore we had to increase the complexity. >> dell provides the workstation that powers these edits. >> it takes a lot of horse

power. our precision workstation offers power. >> enough power to create a 1000 frame shot that took two months to build. the dragons are still growing meaning more complex animations and a need for more computing power. francine: that is amazing stuff. the u.k. communication watchdog has launched a fundamental review of the regulation of mail. the review will ensure regulation remains appropriate and sufficient. european car sales rose to the

slowest pace. they held that demand. registrations increased. that is according to the european automobile manufacturers association. china minted one million new millionaires. that is according to a study by the boston consulting group. asia-pacific is expected to have private financial wealth in 2016 surpassing north america's 56 trillion. the first word is up next. a second hour of the pulse is coming up. we will go live to guy johnson. it will be talking to the co of airasia. this is about finding raw

materials. legos are more and more popular. they want to be more sustainable. we will ask about the materials they have used in the past, if they will be recyclable. we are back in two. ♪

francine: mario draghi says greece must take the necessary steps to reach a bailout deal. the european court of justice roles the ecb buying scheme is legal. the japanese central bank governor says he was not trying to influence the yen. good morning to our viewers in europe.

welcome to those just waking up in the united states. this is the pulse. we are getting breaking news out of germany. this is for future expectations. investor expectations are below what we were expecting. 31.5. the median estimate was 31 point -- 38.3. a significantly below estimates. this has to do with the greek crisis and the fact we do not have an agreement yet. let's look at whether this has had an impact on the euro-dollar. disappointing use in terms of future forecast. this adds another straw to the

ones that say that we are not doing as well as we think because the euro has come under a lot of pressure. it has given a listft. euro-dollar at 1.1255. let's get to paris, where guy johnson is at the air show. guy: the company makes fighter jets. they are at the business end of the civil market. let's talk to his boss, the ceo. very nice to see you. tom was sitting in the chair you were sitting in minutes ago.

he decided to offload shares in your business. you are more in the limelight when it comes to the corporate business. >> we are happy to be in the military side. we are happy to be in the civilian side. they decided to choose the falcons. guy: have they noticed a different -- since the free flow? >> we have to go explain to them who are we. they are more than happy.

next year will be 100 years. they have seen how much we can survive. this is not bad for them. >> that is in addition to. guy: let's talk about the military side of the business. you had good momentum recently. orders coming through from qatar. hadeed keep the momentum going? >> after so many years, we are expecting to have this. it is a good time to show the capabilities and i think it has been seen because of our own armored forces.

now that customers come to us they are also former customers. it is more wide and more capable. guy: what is happening with the uae? what is going on there? >> they were the first customer and then they upgraded and bought new. it was the best for the customer. we are discussing the future.

we are confident. we are talking to all of our customers. this is easier now that the first contract was signed. guy: european consolidation is never far away. there is pressure for budget to increase pressure. the opportunity was there. using the opportunity will come in the future when we make a shift from manned aircraft? >> the government is part of it. it was difficult to convince the government.

i think now it is over and we have organized companies in europe. it is enough. we are happy with that activity. we are in the fighter business. we always -- with our partners. it is a consolidation. it is a big company and defense. it is also to show we are interesting to invest in defense. we are ready to

. guy: we see the civil and commercial side of a market. >> coming back, we had 90 orders. this is the first time after so many years. the commercial and business, business jets are bought by companies. this is part of the investment. when the economy goes well, this is the case now. in the u.s., we are back to a good level of orders. china, still flat. we expect orders to be back at the right level in the coming

years. we still invest in china. europe is going well in the north. africa is going back. you follow the economy. guy: plenty more. mr. clark will be joining us. great guests still to come. we have a special page for the paris air show. francine: i have been checking out the website. you can see the -- great greece

finance ministers must take proposals seriously. it comes after the bank president said greece needed to take steps and that the bar was in the cap of the greek government. hans we had the figure showing growing investor pessimism. what kind of impact does it have on the thinking of how you deal with greece? hans : they could stand a greek exit if you keep the roles clear and you strengthen the european union. it is not that they are down. it is the level to which they are down. we came into the 30.15 range.

it is a precipitous decline. it gives you the sense that the economy might not be as strong as any policymakers want it to be. we have heard from several key lawmakers. they are having a conference on the other side of town. it gets to the core of how germany is moving towards the next step and planning. the permanent position of denial as for me and many others difficult to understand. there is almost confusion about what the position is. what the strategy is. you heard varoufakis saying there is not going to bring a

new proposal for the thursday meeting. the question is, what are we going to do in luxembourg. if you do not have an agreement there is talk of an emergency meeting over the weekend sometime. at what point do you go to plan b? you have this idea of plan b. you have to start talking about capital controls. france has uncertainty about greece having an impact on car sales. hans: things are slowing down especially in germany. i do not want to read too much into the sales figures. the increase to delta is slower. these are pan-european numbers. germany is down 6.7%. it could be consumer sentiment.

they sometimes get an investor, or it could be a long holiday weekend. that could explain the fluctuation. it does seem consumer sentiment and confidence here has waned in the last couple of months. i suspect this is due to greece. francine: thank you. here's a look at what else is on our radar. the japan governor was not trying to influence the exchange rate, the statement comes after he told the parliamentary hearing that it was unlikely to weaken further. 10 people have been arrested after police discovered materials for making explosives at a disused television station.

the arrests come as tensions are high over a planned vote this week. the former florida governor, jeb bush, has launched his campaign as he seeks to follow his brother and father into the white house. he promised to deliver economic growth and new jobs. he faces a struggle to cement himself as a front runner. >> campaigns are not easy and they are not supposed to be. there are good people running for president. not one of us deserves the job by right of resume, family, or family narratives. it is everybody's test. it is wide open.

francine: that brings us to the twitter question. when you look at the success of the kennedys, bushes and clintons, is america to obsess with political dynasties? ♪

francine: welcome to "the pulse."

let's get to guy johnson. he is at the paris air show. guy: a great guest. tony fernandes. lovely to see you. the first place i have to start is with the share price. it has fallen over the past few days. tony: a report was put out and that has created some mass hysteria. we do what we do. everything that has been brought up in the report has been highlighted why me for the last few orders. thailand is doing well. we have plenty of cash. we are going to have a record year this year. we own a lot of assets.

if we need to raise a lot of cash, we have investments in expedia and others. once the hysteria comes down, i think share price will recover. the reports try to focus on the transparency of our accounts, which we have been as transparent as we can be. the fact that we were so transparent allowed them to write such a report. we cannot consolidate because of the aviation regulation. we committed that we would do a pro forma consolidation.

the need for more capital, we announced local shareholders are putting in capital themselves. we will do some convertibles. they highlighted -- they thought our leasing income was fictitious. 60% of the income comes from thailand of which is very current. again yields have gone up. indonesia was doing great. we stopped advertising for a couple of months. maccallum calm had here. share prices overreact.

a fundamental of the company is strong. proof is in the pudding. we will put the results out. we are sure people will see the value. guy: you have had a tough year, but you think it will be a good year. >> profits were up in the first quarter, despite no advertising. the bookings are very good. india has been a big surprise. we are on the way to break even. guy: the germanwings crash has raised a lot of people's awareness of what happens. it was a big subject. what is your view?

>> we are a big family. we are socially aware. we are all on facebook, google plus. people not feeling great, we won't know weekly. -- we will know quickly. we always have two people in the cockpit. you can profile all you want, but it has to be a continuous process. i may come in positive but something terrible happens inand things can change. knowing your staff is something we have been good at. it is the best way of knowing what is going on. the reality is aviation is

one of the safest modes of transport. because it is safe, when things happen, it is huge news. i have been advocating --. you have one set of regulations and it is easier. the regulations are different. i speak safety, the easier it is to understand, the less bureaucracy. i have been pushing and encouraging one aviation authority. you have one set of standards. guy: would you be interested in converting some of your orders

into three 30's -- into a 300 30's -- 330s? >> in many ways, we are a founder of that aircraft. more likely than not, we would move the 350's into 330's. when we did the 350, there was no 330. our plans for europe have changed slightly. going to europe takes an extra hour. we are looking at that route. guy: great to see you.

back to you. francine: the paris air show, now, spain 10 year bond-year-old has risen for the first time since august. kris will not make further concessions to unlock bailout funds. we are joined by philippe. thank you for being on the program. give me a sense of how concerned you are. is there a chance that greece leaves the eurozone? we cannot even call them negotiations anymore. >> an agreement before the end of the month is unlikely. it means the program will expire at the end of the month without relief of the remaining funds.

greece will be in arrears. i am not sure we can talk about the default as such. a default would take some time to materialize. it will make the job of the ecb more complicated. it will also increase the risk of a greece exit. so far, the situation is very confusing and them not sure i can give probability about the greek exit. francine: do you think when it comes to the ela, the support their giving, they will have to make a decision to make that smaller or will they wait? essentially, it is a political decision. >> it is a political decision

but there are rules to comply with. i do not think they will change the rules this week. the chances are low for an agreement. the ecb will continue to provide liquidity. mario draghi said they will provide liquidity. they do not have any reason to change their view. they will have to review the position at the end of the month. they just acknowledged imf loans have not been repaid. it will be really difficult. francine: are you concerned yields of periphery countries will go higher? >> i am not surprised.

we have qe of course. if one country is about to leave, it is a question of whether or not your area will continue as such or not. suppose greece leaves, there will be a need to speed up -- of countries. it is not something easy. there are different views. francine: it looks like it is going to be mayhem. you do not want to give a percentage. what kind of advice would you give to an investor now? >> to monitor the situation

closely. investors probably riskwait until the situation comes down before moving back. the probability of a greek exit as high. i'm not sure this is something many countries would like to see. i was in germany last week. i could see this fear that a greek exit would have bad consequences for the future of europe. there are some geopolitical risks which could emerge. it has been everybody's minds. everybody would like to avoid the greek exit. it is a game of chicken. everybody wants to save face. of coarse, they can try to find

last-minute deal. with maybe some tricks to avoid the default. it is becoming more and more difficult. francine: an accident would mean what? >> an accident means that the banking sector in greece will collapse without the support of the ecb. the ecb will have to change the role of the ela. which would mean the banking sector will have no financing. of course, capital controls. in the end, if the banking sector and greece collapses, they will be no other option other than new currency to support the economy. otherwise the economy will contract dramatically. the risk that eventually there's a lack of financing and the

greek government has to do something immediately. talks are stalling and that -- every week which is undermining confidence in europe. we had a recovery which is still very vulnerable. francine: we saw it in the zew figure, much worse than expected because of the greek situation. chief european economist at barclays. other top headlines. greece's finance minister yanis varoufakis says creditors must take his proposal seriously. after the european central bank president mario draghi said greece needed to take steps and that the ball was in the camp of the greek government. the european court of justice ruled the ecb's 2012 bond buying program is valid.

the court charged the program does not exceed the powers of the ecb. the ruling is a victory for mario draghi as he continues the bank's program of quantitative easing aimed at stimulating the eurozone. 10 people have been arrested in hong kong after police discovered materials for making explosives. there were also rifles and maps of neighborhoods. the arrest comes with tensions high over plans to vote this week over a china backed plan for elections. let's check on the markets. jonathan ferro has the latest. pretty heavy movement on bond yield. jonathan: i will get to the bond market in a moment. the selloff inequities continues. down over 1% on spain. in germany on the dax, down by

a full percentage point. the ftse 100 selling off by .5%. the greek situation as injecting uncertainty into the equity markets. volatility in the bond markets is feeding as well. put those together and that is reflected in the zew number, the index investor confidence in germany. that was significant drop-off as far as german investor confidence is concerned. in bond markets, spanish, italian bonds falling. money going into bunds. we have a turnaround cummerbund yields -- we have a turnaround, bund yields were still high. italian yields move 4 aces points lower. a divergence between what is happening in spain and italy. when we talk about spreads, we talk about headline spreads. the spread between spain and

italy is something to watch. italian yield of 2.32% spanish yield of 2.42 percent. the spread as 10 basis points. not big, but significant. over the last 12 months, italian yields have traded above spanish yields. we've now got a negative spread, spanish yields trading above italian yields. maybe the political risk as the months progressed when we get the spanish election, maybe that is what we are starting to price in. albertao gallo of rbs telling me that. in the fx markets, the euro buying me 1.1258. discussion about the euro side. tomorrow's a federal reserve decision and news conference a summary of economic projections and the little dots we obsess over. a busy 24 hours.

francine: anything the fed does has an impact on the emerging markets. saudi arabia opened itself to foreign investment yesterday. for more, let's go to dubai. mark barton is standing by with an economist. mark: i am. good day. i am joined by a man who often comes to london. i thought it was decent to visit him in dubai. chief economist at standard charter. great to see you in dubai. we're here for the saudi opening. you are less bullish on the saudi arabian economy than the consensus. why? >> where below consensus in terms of growth. the drop in oil prices is being absorbed by two main parts of the economy. the first is the budget.

saudi is not afraid to run a budget deficit. some shock is being absorbed by the budget. not all the shock. some will have to be absorbed by the real economy. projects are still taking place. they're being prioritized. they're not spending on projects as they used to in the past. inevitably, i think this will lead to some deceleration in economic activity. mark: there's a view that the drawdown and the currency reserves for the central bank is being used to fund the deficit. it's wrong,. you say. marios: it is wrong. a poor comment that many people make, all over the world, that saudi arabia is running down its reserves to pay for its budget. it makes no sense. why would saudi arabia spend its u.s. dollar reserves to generate

saudi currency when it holds currency and deposits? we can see how saudi arabia has been funding its budget. it has been drawing down in r iyal deposits in saudi arabia. the fx reserves are declining because saudi arabia is running a current account deficit. there has been some capital outflow from saudi arabia to a broad. this is why reserves are dropping. mark: give us an idea about how the rest of the middle east is coping with declining oil prices right now. marios: there's a combination of factors. what is positive this time around what is different, and a lot of middle eastern countries are not afraid to have a budget deficit. in the past when oil prices

collapsed, spending in investment would collapse as well. i think that is the wrong thing to do. when oil prices drop and inevitably it leads to slowdown in economic activity. if you also cut dramatically you are spending, you can come up with a recession -- it is not desirable. i think middle eastern economies should be spending less when oil prices are booming and spending more when oil prices fall. there are some signs they are doing that now. they have reduced spending but not by as much as they would have done 10 or 15 years back. many people are criticizing that. i disagree. they are doing the right thing, picking up some slack in the economy by maintaining the key investment and key projects. mark: i vowed when i came to dubai saturday morning that i would not mention the g word. the greece word. yesterday was pure saudi arabia

and gcc nations. in a former life you advised the cyber central bank. just for you, i will break my vow. they know about capital controls. do you think greek capital controls are going to be and lamented? -- be implemented? what lessons can greece learn from cyprus? marios: greece implemented controls very quickly -- cyprus implement of capital controls quickly and managed to get rid of the controls soon. greece is beyond the stage of cyprus at this point. it is interesting that they have not introduced capital controls already. by not introducing capital controls, greece has increased the cost of a default to the european central bank. it is in a strange way putting greece and a stronger position

without capital controls than with. mark: how much do people in the middle east, in the gcc care about greece? marios: not as much as i would like, as a greek economist. it does come up in conversation. it is a global risk but not the main point of tension -- there are local and regional factors that are more important. mark: is greece going to stay in the eurozone? marios: everything is possible including greece exiting, greece staying, and greece defaulting on debt and managing to stay in the eurozone. we will know in the next couple weeks. mark: great to see you in dubai. back to you in london. francine: a lot of the gulf countries are confident they are immune to greece. if it doesn't leave the

eurozone, we do not know where that money is coming from or going. it may have more of a regional impact than people think. next lego's sustainability push. the toy company's ceo on their pledge to move the way from oil-based plastics. ♪

francine: welcome back to "the pulse," live from london.

let's talk toys. lego plans to invest 150 million dollars to develop more sustainable materials for their famous blocks. we are joined by the legacy you joergen vig knudstorp -- by the lego ceo joergen vig knudstorp. lego has seen a huge success. the amount of raw materials you use is so much bigger. your raw material consumption is more than 77 thousand tons in 2014. how much raw materials do you plan to use this year? joergen: i can't say. we are optimistic that we are continuing to grow the business this year. we do produce and a lot of lego bricks all the time and will continue to do so in the future. francine: what is the deadline to find a better material?

jorgen: by 2030 we want to be based on sustainable materials. material that is from a source that is less fuel emitting. a material that has an optimal chemical composition where we can understand how to manage it through its lifecycle. at the end how it should be recycled if it is not kept for future generations. to cover that across a range of generations is something we want to achieve by 2030. we realize to get there by 2030 we need to step up the effort and employed more than 100 experts in the field and invest as you mentioned more than 150 million u.s. dollars right now. francine: to what extent can you use all of bricks-- old bricks to create new ones?

this is what you initiated last year. jorgen: you can use old bricks. for us to make pristine original lego bricks, we need to make sure that the old bricks that are turned into new bricks are clean. that presents a problem. we grind left over from our manufacturing process. there we can make sure the material is in pristine condition. francine: i have to say your reach for sustainable materials can only be applauded. we're in a year where we are expecting a breakthrough in paris. do you think a lot of this has to come from companies? private and public companies spearhead the movement. so far, and a lot of governments have failed. jorgen: i think certainly our

view is that companies need to take a big responsibility and have to do so in partnership with other companies, with research institutions. we want our research center to be open source. we invite nongovernment organizations, research institutes, and other companies to participate in research to solve a tremendous challenge. we are well known plastic manufacture. we are a small part of the world's total volume. we hope other companies will join us in this important effort. francine: give me a sense of how serious you are taking -- you are trying to merge the bricks with digital games. how much revenue will you have from digital games in the future? jorgen: for me, it starts and ends with the physical brick. this is where we make revenues. i look to digital and adjacent

activity as a way of engaging with children and parents and lego fans all over the world. whether the revenue comes from the digital experience which is an opportunity to engage and have a dialogue, is less important. i will give you a great example that it is not always digital -- the lego club. we have millions of members. it is a satisfactory experience for children and their parents. we ask whether they would recommend the club, they highly recommend it. we do not charge a fee. of course, it is something that is valuable and important to us to have a lego club and lego magazine reaching millions of children all over the world. francine: what is the next bestseller? last time we spoke we were discussing that lego has managed to capture an audience for little girls. what's the next big thing? jorgen: this year, we have some

major launches. particularly for girls, a super exciting fantasy theme. still reaching into a fantasy world. it has come off to a fantastic start. for boys, lego minecraft is doing very well. francine: thank you for joining us. jorgen vig knudstorp there, the ceo of lego. i spend a lot of time building lego castles. the season five finale of "game of thrones" has left fans with unanswered questions. how does the show create such realistic looking dragons? the answer, with the help of high-powered computers. also chickens. emily chang takes a look. emily: hbo's "game of thrones" his five seasons deep.

the real stars do not speak a line. the dragons are brought to life by the oscar-winning team at the international visual effects team behind "the hunger games" and "spider man." 30 people live and breathe the designs of the dragons. they model the skeletal structures of pigeons and chickens to scale the creatures from this to this. >> it is a little like raising babies. the character changes. we had to build in more facial performances the last season. of course, they grow. emily: 10 times more complex. the layers of texture that went

into each dragon this season increased from 70 to 700. sven: we had to model each scale individually. so the scales are moving. this makes the machine slower. we had to increase the complexity of the rigs. emily: dell powers the edits. >> rendering takes a lot of horsepower. think of a mcdonald's milkshake you want a fat straw. our workstations offer immense power. emily: enough power to create a 1000 frame shot that took two months to build. the dragons are still growing. more complex animations and a need for more computing power. we will have to wait for season six to see it.

emily chang, bloomberg, san francisco. francine: pretty amazing stuff. here on bloomberg, top headlines. the u.k. communications watchdog has launched a fundamental review of the regulation of royal mail. it comes after the collapse of a rival service and left no competitor in the market. the watchdog says -- european car sales rose at the slowest pace in may after concerns about unemployment and the greek crisis held back demand at volkswagen. registration increased to 1.5 million vehicles. private financial wealth in the a's are-pacific region excluding japan overtook europe last year. china minted one million new

millionaires. according to a study by the boston consulting group. asia-pacific is redacted to have $57 trillion in financial wealth in 2016, surpassing north america's $56 trillion. what we are watching for the rest of the day, stay with us, we are on "the pulse." ♪

francine: welcome back to "the pulse," live on bloomberg tv and

streaming on bloomberg.com. looking at a lot of things. we are joined by hans nichols. fomc's are starting today. we find out about interest rates tomorrow's. hans: no one expects given the soft economic data, that this meaning they are going to decide on an interest rate hike. most people are looking towards september, december or 2016. it is nice to parse the language when we get a little bit more tomorrow. francine: what happens on greece ? the eurogroup meets thursday and friday. hans: on wednesday we will have emergency liquidity assistance decided by the ecb. we have a eurogroup finance ministers meeting in luxembourg thursday and friday. the greeks have been clear they are not going to give a new proposal. francine: thank you so much.

this was the main thing we have been watching today. a lot of volatility not only on currencies but on bond yields. "surveillance" is next, live from new york. see you tomorrow, everyone. ♪

announcer: this is "bloomberg surveillance." tom: greece is at a turning point.

after the collapse, oil find stability. what is next for american oil? and they cannot help themselves. once again, the airlines -- surprise -- they add capacity. good morning, everyone. this is "bloomberg surveillance ." we have breaking news right now. moments ago across the terminal this from "the financial times." "eurozone officials consider emergency resummit by sunday." brendan: when discussions broke down sunday, greece said they were not people in the room empowered to make decisions. tom: we have a lot on this. hans nichols and john farrell will join us. right now, we need a complete update on our top headlines. here's vonnie quinn. vonnie: an old creditor eurasia group -- the meeting might happen again sunday.