francine: deal deadlock. greece is given onto wednesday to satisfy creditors and end an impasse. chinese manufacturing data beat estimates of but indicates contraction. british businesses say they will back cameron's bid to stay in the you the only if he backs of five key reforms. we will talk to the british chamber of commerce director later in the show. welcome to "the pulse." i am francine lacqua.

we are getting some breaking news. pmi numbers pretty much as expected in terms of what we are getting may factory pmi rising to 50.9, a touch better than expected. -- 52.5. a little bit of a hiccup over the last couple of months. you can see the pmi overall for the euro area for the month of june better than it active. european leaders have given greece until wednesday evening to make the final push an end a five-month standoff. for more on all of this, straight over to guy johnson in athens and hans nichols is an brussels. what needs to happen in the remaining time? guy: a lot of details. an interesting 48 hours to put it mildly. there's optimism.

we have not been this far forward in quite some time. we are close to a deal, that seems to be the sense area that is what alexis tsipras said. alexis tsipras: our proposal has been accepted as the basis of negotiation by the institutions but the negotiations must go for some hours for 2 days. we do not want a fragmentary and time-limited agreement. we want the comprehensive and viable solution that is accompanied by a strong growth package that will make the greek economy viable so the country can stand on his feet again. guy: he was a dell by the end of the week. he said there's been a significant step forward. -- he wants a deal by the end of the wii. the greek proposals are heavy on raising taxes and not on cutting size of government.

-- he wants a deal by the end of the week. we need to keep the creditors happy in terms of reducing the size of government and finding a way force i read the and the party that a let -- four syriza and the party that elected see purse. -- elected steeper. -- that elected tsipras. francine: they're still sticking points? guy: there are still sticking point. issues exactly what the vat raises a will look like. key areas we need to see some progress being made. the broad a story is progress has been made and weapon basis for a plan will can work on. the question is will creditors be happy with a deal by the greeks at the moment and can see per -- you can tsipras get his

party to vote it through? he has to do with both sides. 48 hours is about the details and how much or do we raise do we have a primary surplus in the next few years? 1% or 2% or higher? those are the things we're trying to figure out. francine: guy, great job. let's bring in hans nichols. another increase in the ela. hans bank the ecb -- hans: the ecb is giving us some breathing space. we do not know how much of that ela is going up, it was in a conference call. we know it is the fourth increase in over a week's time or under as i should say. yesterday was 1.9 billion euros. now, what everyone is saying even those and that was last night and late last night, those traditionally opposed or

skeptical of the process for a great deal, there seems to be a recognition that greece has made a direction. as guy was saying, a serious proposal. that's not to say it is a done deal. many details need to be worked out and many numbers that need to add up. listen to what christine lagarde said about the urgency of the matter. christine lagarde: work on the basis of new proposals. more to do and includes a more detail than what we have been. it is still short of everything should be expected. there is room for negotiations and work. we will be constructed in a short amount of time. hans: as the positive momentum was building yesterday, the german finance minister put out a statement saying they would

not release funds on tilde was a vote in athens and the parliament. -- release funds until there was a vote in athens in parliament. not just being endorsed by brussels but accepted by the tsipras government in the tsipras led parliament. it just turned in berlin-adsense story although technical stories continue. -- berlin-athens story although technical stories continue. francine: look at the holdup, whether they get the stamp of approval from germany and from tsipras' party are they the most ferocious in terms of having to convince it is really credible and they need -- they mean business? hans: we could be surprised by the finnish parliament or dutch parliament and the danish parliament is forming a new. there could be some surprises.

it since i most pretension on what the germans do and what happens in athens. one final note is there could be a credible proposal, everybody has to a grill the numbers and a great deal of goodwill. the numbers are all on the same page. there's been nothing but ill will and mistrust and burned and hurt feelings. yes, something changed last night. it is unclear if last night's change is enough to paper over a lot of the differences festering for 4 months. francine: thank you. hans nichols. for more on degrees and the european -- greece and the european pmi figures, david powell and our guests. thank you for being with us. philip, let me kick off with you. in terms of greece, a bit of a sigh of relief. when you look at the situation,

have to talk about debt restructuring and what comes the next just 2 sides that have come together but not a real place? philip: they are closer to coming together. the feeling seems to be they are close to an agreement and details to settle but the faces of an agreement is actually there. that is good news. some of the debt restructuring, some ways off of restructuring and may be some debt relief lengthening maturities and reducing the interest rates on the loans. long term with a lower rate of savings to the greek government it would not actually be much more than they were hoping. francine: david? the markets seem to be firing on

all cylinders. how likely is it the greek issue comes back in three or four months? we had a bloomberg survey that said 24% of respondents think the euro bloc will not be up to stay together in the next couple of years. david powell: even if they come to an agreement over the second bail out package, it would bring financing throughout 2015. we have crunched the numbers what they would need for a third bailout, the financing needs for 2016-2018 probably another 20 billion euros to tide them over. francine: how confident are you that in the government, the greek government is in a place of conciliatory stuff? just because they did not have a choice or further negotiations will be easier to get through? philip shaw:'s that have a

choice but the other choice is unpalatable. the better of two options and the government might accepted. this has to go through the greek parliament. and alexis tsipras faces the prospect of rebellion. if he cannot convince his party, it is absolutely essential for greece to stay within the euro no surefire bet it will happen. you do have a degree of problems from the greek side. francine: what did you make of the pmi numbers today? david powell: good if you look at quarterly. it points to growth in the second quarter being at least as strong in the first quarter 0.4%. this little boost with scene is

due to the fact that the oil prices are no longer rising. in the month of june, they slept and economy responded well. first the bank surprise on the upside -- francine: surprise of the upside? philip shaw: slightly but it does not change that the economy is gradually going. it is helping the 12% depreciation in the euro since last year. and credit flows are gaining momentum helping the private sector. our baseline case is more of the same through the remainder of the year unless of course something goes badly wrong such as the greek situation begins to fall apart again. absolutely, modest growth. francine: how surprised were you about the french figures? french output rising to the highest in almost four years, i still thought actually

structural reforms needed to be done amongst the kind of desperate cases in europe. this points to pretty strong or stronger than we thought the french economy? philip shaw: the french pmi numbers seem to be more volatile than the large economy numbers within the zone is one point. francine: why? philip shaw: i am not sure but it may have to do with variability. all manufacturing sectors helped by the weaker euro. quite notable if you look at the first quarter gdp numbers, and performing were france and italy as well. and what did they have done in terms of structural reforms, they are getting a boost from the weakness of the currency. francine: thank you. philip shaw and david powell stays with us. the latest snapshot the manufacturing in china beating expectations. the hsbc pmi was 49.6 up from

49.2 and 0.2% of the median estimate. numbers below 50 signal contraction. it could reduce pressure -- it could reduce pressure on policy makers on easing. shares of ladbrokes have soared that gala coral would emerge. the chief executive, three months ago, said it could great the business to generate value for both company shareholders. u.k. presses will back promise to david cameron's bid to keep the u.k. in the eu if he helps the economy. the british chamber commerce have signal five key reforms they want to see and what it calls a clear and balanced approach to immigration. we will be discussing that with the director general at 10 past

10:00. what else is coming up this morning. at 9:30 a.m., the editor of a newspaper and is take. at 9:40 a.m., the cofounder of strike. it processes twitter and pinterest and others. it brings us to the twitter question -- will we still be using cash 10 yearsa from now? ♪

francine: welcome back to "the pulse." chinese stocks today and last week, the shanghai composite index over 2% after down in early trade. let's bring in richard. what was behind the dramatic rebound? richard: it is important to remember is a public holiday. the first time the chinese markets to react after the heavy selling the biggest weekly loss in 70 years. we saw initially that the market headed downward.

before rallying sharply. it was over seven percentage points which is massive. analysts and investors cannot point to any immediate trigger for the gains as they struggle to pinpoint why it had such losses recently. no doubt volatility is climbing dramatically in this market. in fact, the volatility is the highest in six years. that makes it much more difficult for investors to gauge where it is going. francine: we do not know if the rebound is sustainable or can we take a longer view because of the market is so small compared to the amount of money people are making over long-term it can only go up? richard frost: yeah increasingly this market gets more volatile. opinions but more -- become more divided.

we have had particularly foreign investors and analysts more bearish calling it a bubble. one thing the government is keen to limit the margin debt that searched and help create the rally we have seen. what will be interesting is how the government manages in the amount that is driving this market without spurring some the big selloffs. overall investors are optimistic that the market internet is highs for the day. they are concerned about where the index may be heading will remain. francine: richard frost in hong kong. the focus on china. we are back with philip shaw and david powell. china, we talk about the chinese stocks and people say actually a lot of wealth is created and a lot of the papal have cleaned up well in the chinese stock market.

are you concerned we are looking at a bubble that will burst or do you think it can be sustainable as long as volatility keeps in check because so much wealth is created? philip shaw: certainly if you look at the metrics on equities they have added value. volatility in that sense is not a bad thing. if you get a down day, it can ward off excessive optimism about where the index is going. a lot of stuff going on in china . you have the slow down in hopes of the authorities will keep pumping in liquidity. also not only domestic investors getting more in soft ball hopefully msci will include china. that would widen the chinese a shares to a national audience. pushing and pulling factors at the same time.

the other factors, if you good 7% growth, your phenomenal gdp rising. -- you have nominal gdp rise. there is a lot going on at the moment. absolutely the chinese market is volatile. francine: david, how much worry from central bank's around the world what is happening in china? what did they are doing in the margin, the government has a good handle or a risk of something hurting growth? david powell: certainly a major focus. mario draghi warned are pointed out a loss of momentum and euro area and contributed that to slackening in external demand especially from in emerging markets. the eurozone if hoping that china will rebound to help it along and the world is looking. first the bank thank you for joining us. philip shaw and david powell.

-- francine: thank you for joining us. the five reforms that british businesses are demanding that david cameron secure. ♪

francine: welcome back to "the pulse." u.k. businesses will back prime minister david cameron in his bid to keep you cap -- the u.k.

in the eu if he backs businesses. they have highlighted five key reforms. svenja o'donnell is here with the details. how important is the backing? svenja o'donnell: very important for the businesses to speak out. so that the picture is made clear that businesses want the u.k. to stay and the best picture for the economy. cameron is counting on that message to be hammered out. francine: what are the five points that they hammered out and how easy are they going to be to achieve? svenja o'donnell: three of the five are pretty easy like securing a better common market common market services industries, and trying to curb the burdens of regulation. everybody pretty much agrees on this. it has broad-based agreement all across the eu. the two are the principal of

ever closer union. we have heard from germany that it may be possible to put an addendum, a technical note, like a p.s. to the treaty to say it is fine which were not require change. the sticking point is immigration. the bcc vaguely say we need to handle immigration. cameron is trying to curb benefits for migrants, germany, poland, and other countries said it. francine: what phase of negotiations are we? svenja o'donnell: what cameron has done is gone european capitals and spoken to other eu leaders and figured out what other points he can achieve reform on. we are moving into the

bureaucrats take over and the accident comes actually are hammered out. francine: great to have you. svenja o'donnell. we will be joined by the bcc director general at 10 past 10:00. we are "the pulse." ♪

francine: welcome back to "the pulse." i am francine lacqua. here are bloomberg's top headlines. an index of manufacturing and services has risen. growth gains momentum in germany and france. market economics composite index is 54.1 from 53.6 above the 50 mark and that means expansion. the latest snapshot of manufacturing in china has beat expectations.

the hsbc market pmi was 49.6 up from 49.2. the u.k. government has 600 million pounds shares of the banking group. it is down from 24.9% last december. sales of lloyds shares have netted a total of 11.5 billion pounds so far. european leaders have given greece until wednesday evening to make the final push to satisfy creditors and end the standoff over aid. leaders agreed prime minister tsipras' government was getting serious after giving a fresh set of reform measures. back to guy johnson in athens. guy: thank you. let's talk about domestic takes. that will be more of an issue. alexis tsipras -- the chief

editor nice to see you alexis. what will happen in parliament over the next few days. one we think a vote would happen. how do think it would go? alexis: stick around. not a very predictable. you will not to get aboard. i think there will be a vote in parliament if every ring goes well. even sunday night or monday night. it is a very tight schedule. guy: how do you think it will go?syriza, will he get behind mr. tsipras? alexis papachelas: this will depend on the dynamics. there are colorful, unpredictable personalities. one is a person in the parliament with strong views. i am not sure they will support this in parliament. we will see how some.

the other is mr. varoufakis. he has been against every part of the agreement if you look at statements. he has not said a word since yesterday. he wanted a eurogroup a i am not sure he is supportive. -- he went to the eurogroup but i am not sure his supportive. it is really too early to say. guy: if he gets it through, what does it look like in terms of making payments? do you think we will make the imf payment? alexis papachelas: the schedule is very, very tight. let's assume everything goes smoothly, get a statement on the debt because of that is important and then the european leaders decide on thursday that the deal is done the eurogroup will decide the next day they will let the ecb issue through the greek banks.

he will use that to pay the imf. all of the has to be done by monday. the eurogroup and everything else otherwise miss the payment on tuesday. it looks really, really tight. let's say they decide they do not want it and then a few days the whole timeline is gone and will have to find another solution. guy: let's look at the wider dynamic politically. we have heard from the spokesman from the government they want to make sure it is the coalition that evokes for it and not of the other pro-democracy, etc. will he have to allow on the other parties to get it through and what are the implications? alexis papachelas: i am pretty sure that they are going to vote for the agreement the way it looks right now. it will be political posturing for the prime minister because he does not want to be associated with people who

supported the previous program. if he loses, that means he loses his own party and most likely scenario is even if it goes through, he will have to go through an election for his own mandate? guy: we could have a referendum in the middle of summer. alexis papachelas: it has never happened before but it is colorful. once he has committed himself to the agreement, it is not going to be a bank run or anything else. they will make sure that money to pay mentions. -- pensions. guy: do you expect cash flows to reverse? alexis papachelas: yes, we hear some of the orders placed in the last couple of days for sending money abroad. the markets and the average person on the street want an agreement. the prime minister will listen to them more than his party. guy: do you get a thought that

tsipras will move center? looking long-term. that company now needs a blue spree at you get down and you need an economy that starts to function. -- the company now needs a boost. -- you get an economy that needs to start functioning. alexis papachelas: that is a million-dollar question. two ways to go. one was to become postmodern and the markets against merkel and the others. or do what the lula way covenants is party to be more pro-reformist and pro-business and so forth in turn things around. i am not sure if you capable of doing that. the next few weeks we'll see if it's possible. my fear is yes to the agreement and then not really implement

and go through another few months of this kind of misery which is not going to get us anywhere. guy: thank you. alexis papachelas editor-in-chief at the newspaper. fran, it will get interesting over the next few days. next week could even be more exciting. an awful lot of politics to deal with in athens. francine: great stuff from guy johnson on the ground. thank you. as millions of greeks wonder how they will be affected by any deal to satisfy the country's creditors, others are partying as usual. unscathed from the economic crisis and we paid a visit. ♪

reporter: we are in mykonos. >> it is not greek. ♪ >> [indiscernible] no crisis. [laughter] it is a heaven. ♪ >> the year mykonos gets better for sure. it is at the top. it has everything. the party is beginning at 5:00 and finishes at 10:00 and 11:00.

>> what is happening in the euro might affect us but of fencing does the least and the last from all of debt but affecting us the least and last of all from the rest -- but affecting us of the lease and last of all from greece. francine: we speak to the cofounder of strike that processes payments. ♪

francine: welcome back to "the pulse.” let's talk tech. start up stripe was lunch three years ago bore price -- launched three years ago that processes billions of payments for companies like apple and twitter. your been looking at them and it is huge. you have one of the cofounders. tell us what they do. caroline: it is hard to ignore in terms of what it does build all with apple pay and ali pay and investors. it is a who's who. the likes of previous experts also sequoia, one of the biggest

investment group. the scale is pertinent in europe. john, cofounder and president of stripe. give us a sense. you are in europe, and i wish boy at heart -- and i wish boy at heart a long with your brother. you are already in 18 countries. -- an irish boy at heart along with your brother. guest: we were in different countries last week getting started. the nordic markets but also european market is exciting because of the wave of technology. in sweden spot of five and him of these companies and here and the u k, some really exciting things where you have deliveroute and local tech companies. francine: john, how do side which countries -- how do you

decide which countries and regions come next? is it government or private companies? is it a gut feeling, something is happening in their region? or is it spreadsheets and numbers? john collison: our focus is internet businesses. a software platform. so we are always looking for where we think the big successful business will be coming from. beyond canada, the u.k. was our first international markets. it has grown quickly for us and now more parts of europe and south east asia and latin america and places like this. where we think it will be large and successful. caroline: give us a since of scale. we said you are processing billions of dollars. how much? how much by the end of the year? john collison: it is across the

number of merchants is growing fairly quickly in the tens of thousands of merchants. one thing that's exciting as how much of the barriers have come down for starting a business. a stripe account is as easy as setting up e-mail. in contrast to a difficult it was previously to set up a merchant account which was your only real option. just the scale in terms of a number of businesses we can support and thanks to the internet to get people up and running. caroline: you look at apple -- francine: you look at apple and your business and industry the effectiveness and how fast it is transformed is incredible. give us a sense of how will apple pay is doing pretty you are at the forefront. john collison: mobile commerce today voices -- forces five years ago is completely different. we think twitter 15 will be when apple pay goes mainstream. apple pay announce they are

seeing two times the convergent rate. that would think to thousand 15 -- we think 2015 is when apple pay goes mainstream. at first, it was so clunky. with apple pay, press a sensor and you are done. we are working with google on android pay and all these problems starting to get solved wearable for mobile commerce was cumbersome. now, it is easy. francine: we new york, and we are exciting and told our toward question -- we knew you were coming and we were excited and we built our toward question of around you. our question is do you think that we will be using cash in a five years? you can tweet me at @flacqua. caroline: tell me what banks

think. how keen are they on the disruption you are doing? john collison: at one level stripe is not totally new departure. stripe accepts credit cards and payments and at some level we are working within the banking system. but on the other hand, there is disruption going gone where i experienced this before and working with a merchant bank provider to run my business online it was the most painful inc.. really, i think before stripe the banks had failed customers in terms of giving them a service to easily run a business online. we are seeing this and other areas the fact you can deliver financial services over the internet. it is taking for exchange and

making that much lower cost. startups doing consumer lending and in the u.s., a lending cloud which is peer-to-peer lending. it is interesting to see if you take the internet everybody has a mobile phone in their pocket am financial services are more cheaply, it is being provided by startups and none by large banks. that is interesting. francine: do you want to branch out? why not go into financing? john collison: maybe someday we branch out. we have a lot to do on payments. we see this as the last large size problem on the internet. we have this communication that makes it easy to send to any culture. when it comes to moving money, and is like you can only send an e-mail within the u.k. within the borders and boundaries.

we are trying to make a perfectly seamless. with think payments is a really big problem. 2% of global consumer spending happens online today. the rest is off-line. i think we will get to their starting from a low baseline. 2015 is the year mobile commerce hits. it is just messing around phase and finally getting into it. caroline: what percentage do you see by the end of 2015? john collison: by the end of this year, i do not know if webb made it that much progress -- if we have made that much progress. you can argue whether it is 10 years or 15 years. francine: when you say you may look at branching out what a lot to do here, are you thinking about m&a or organic? john collison: we are focused solely on payments.

one of the exciting things about the internet is you can operate the services more efficiently or you do not need sco's seems in every team. you can make the service free available for anybody to sign up and that is much more efficient way of doing that. caroline: what about in terms of silicon valley, your irish, you your brother have decided the valley is where you wanted to grow your business would you make the same decisions today? is it to support the tech talent? john collison: with stripe the reason we decide to move out to really was stripe was providing a service to tech companies so it was useful to be near our customers. the same critical mass of tech companies in silicon valley. where people start companies is dependent on who your target customer is free if you are starting and a european

consumers, it makes sense to star in london. if you are make a service and that target tech companies, maybe you want to be in silicon valley. it depends on what kind of industry. francine: how much you think your company is worth? we are hearing big figures. john collison: silicon valley and the media got caught up in evaluations. it is unfortunate. it is the call the capitol at the end of the day. internally, we try to be focused on the internal matches. -- it is capital controls at the end of the day and how happy the customers are. we have the managers and can keep it ourselves. the scorecard among companies. francine: that's a smart answer. our twitter question of the day. cash or no cash in 10 years? john collison: cash and not

going away in tenney -- in 10 year's time. francine: thank you. john collison. the twitter question -- you can tweet to me at @flacqua. 2015 a record year for global m&a. some of the biggest a deal so far. ♪

francine: welcome back to "the pulse." shaping up to be a record year for global m&a. the total value is on track to surpass $3 trillion for the first time since 2007. with more is manuel baigorri. what are some of the biggest deals? manuel baigorri: a tremendous year for m&a. every sector, every geography. some of the biggest deals you were mentioning energy. we saw the biggest so far with shell bg. very hectic charter. will seem time warner cable in the -- we have seen time warner cable in the u.s. and an offer made yesterday by bouygues telecom. just a nonstop. francine: what is behind in this? manuel baigorri: a few drivers.

in europe, the economic recovery as ceo's far more confident that the economic recovery is underway so they feel those deals they had in mind and had thought about in the past they feel quite sure that it was positive. they want to tap into it. on the other hand, we see the rallying equities driving m&a. they are helping companies acquire cash and stock. we are seeing more transactions using these mix of cash and equity. at the same time nice when you announce a purchase a you see your shares go up. in the past, it used to be the other way around. francine: what kind of deals are we expecting? hold that thought. we will get back to you.

manuel baigorri thank you for now. on radio, first up. for viewers, "the pulse" we will be talking m&a with manuel baigorri. ♪

francine: deal deadline. greece is given until wednesday to satisfy debtors. mixed picture. services and manufacturing data hit a four year i but chinese numbers contract. -- four years but chinese numbers contract. we will be speaking to the british chamber of commerce's director later in the show. good morning to our viewers in europe and good evening to those

in asia and those waking up in the united states. i am francine lacqua. this is "the pulse." will be joined by blackstone group director and talking about what could be a record year for m&a a europe and the greek crisis and the refugee crisis. european leaders have given greece until wednesday evening to make the final push to satisfy creditors and end a five-month state of of aid at risk of putting the euro in trouble. we have guy johnson and hans nichols. what needs to happen and the time we have left? guy: we needed to thrash out the details that could ultimately be done between greece and its creditors. the second is mr. tsipras would need to add domestic policies and it is looking like here in the greek capital that it is going to be the last, more

tricky. it is not going down that well. and we do not know whether votes would be scheduled but it could be sunday night or monday morning. by no means convincing that mr. tsipras could win with the backing of his own government. domestic politics are coming to the forefront over the next few days. yes, was a good a deal done in brussels and yes, a lot of details to be panned out but that is moot if the greek parliament was a package. we could end up with all kinds of scenarios playing doubt. the timeline is incredibly tight. fran? francine: guy, where are the sticking points? guy: and to the moment when it comes to a deal, things like vat on electricity and processed foods and what exactly we are want to see in term of of budget

surplus. we think it will be 1%, 3% over the next four years. if it will be more balanced structure between tax rises and cuts in government expenditures. they need to be thrashed out. all of that again, the point about domestic politics we need to get all of that done and then a vote in athens. an awfully long oil to go. this deal will not be done by the end of the week. we'll be running this story into next week. a critical eye on the payments as well. francine: guy, thank you. we will get back to guy johnson. let's bring in hans nichols. another increase in ela. hans: the central bank is going to give greece breathing space to have an agreement even though the timing is incredibly tight. we do not know how long or how much of the increase is.

yesterday, 1.9 billion euros up to 80 billion euros. the fourth increase in six days. to touch of the point guy was making, the corollary is what happens. it is very clear that the germans, especially the finance minister and public want to see the greece parliament taken affirmative vote and actually vote the measures in. here's how angela merkel put it when she was speaking about the need to thrash out some of the details. angela merkel: all participants of the discussion, including myself said we would like greece tuesday the eurozone. what agrees put forward is certainly progress but within a discretion, we notice there's a lot of work that needs to be done and we are running out of time. therefore, was to concentrate on this work. -- we have to concentrate on this work.

hans: along with lagarde, merkel was putting on the brak that we are stream rolling toward the deal. es we had a prime minister say that unless it is passed by the greek, austria would not support a new disbursement. everybody wants to see a good faith effort, more than good faith from greece and want to see parliamentary action. francine: that is what angela merkel was talking about, she wants to see more. and mr. tsipras has convinced his own people, his party that this is the right proposal. hans: yeah. this -- as there are a lot of ways this deal campaign now. maybe step back and look at how it can go forward and mr. tsipras signs a majority of its prominent does not have to be a majority of syriza. and angela merkel brings her

caucus along and her party alone. it does seem that something fundamentally has changed in the past 24 hours. it was this time yesterday that finance ministers were pretty negative. pretty harsh a was of a doubt the greeks had proposed. that actually read the proposal and it turned around. we are heading into that. -- pretty harsh and there was a lot of doubt of what the greeks had proposed. it is heading in the right direction with heavy domestic consideration in place. francine? francine: hans nichols in guy just. to talk about the latest in with a deal will be reached in the next 48 hours, we are joined by a citigroup manager. thank you for coming in. the markets are your foray. the best with had in months. it could -- and the two sides

are split in acrimony. what is not done? guest: it is political agreements between greece and the euro area as long as action is taken is the way euro works. it is conditional. the most important thing. francine: talk me through this, are you confident that mr. sievers goes back and puts the government in a position, how confident are you tomorrow night we'll have something in place debt restructuring? guillaume menuet: is pretty clear that the eurogroup will sign a deal with greece with a comfortable amount of compromise to put something before parliament. whether they agree program excepts depends on what is put before it. i'm sure quite a few of the left

wing of the fire is a party will reject it. tsipras' job is to find centrist. i think the greek government [indiscernible] a deal will include significant promise of debt profile and. francine: when we talk about that profiling, will it take weeks or months? it has been ignored so for -- so far. guillaume menuet: greece will get a six-month extension, the minimum account you need -- amount of time you need for the debt amount have to be dealt with. it looks as if the eurogroup could consider six months to the end of the year. not enough money and the 7.2 billion charge the eu would like to disperse. they would need more money.

i think to get the deal done, you need to think about 2015. debt restructuring requires surplus pretty if greece can show a primary surplus by the end of the year, i think it could. francine: how much damage have we seen to the eurozone and to the concept of untouchable euro? are we going to see more cases like greece down the line? guillaume menuet: i think it's unlikely many countries will be in greece's position. francine: a very fair comment. guillaume menuet: you will have many countries they will say debt has a deal on debt restructuring, why don't we. i did -- i am not sure this is the way. it is, greece sustainable. [indiscernible]

i think we have to take a constructive view on the whole thing. the recovery is here and will stay and the euro will stay. i think we have a pretty good 12 months ahead. francine: are you an easy about the market movement? it seems like the markets rallied yesterday. is it only qe been priced in an market is not seeing the real problem? guillaume menuet: no, i think markets corrected too much. we are seeing a relief rally. we are seeing easing of conditions for the past 12 months. a structural recovery but the cyclical recovery is here to stay in because we have large gaps and accommodation of fiscal easing coming through. it is not all about qe. the fact banks are there to make money. when it is really cheap they

can spoil the recovery. francine: thank you for joining us. guillaume menuet director of european equities at citigroup will stay with us. what else is on our radar this tuesday morning. a radar has unexpected risen to the highest and more than four years as growth gained momentum in germany and france. it increased to 54.1 from 53.6 of buffer the 50 mark that device expansion from contraction. meanwhile, the latest snapshot of manufactured in china beat expectations but indicate a fourth month of contraction. the markets pmi for june was 49.6 up from 49.2 in may. shares in the bridge for its maker ladbrokes has soared after confirmed it will have a possible merger with gala coral.

they could create value for both company shareholders. u.k. businesses will back prime minister david cameron in his bi d to keep britain in the european union if you secures a deal that helps the economy, according to the british chamber of commerce which is identified five key performance it wants to see including what it calls a clear and valid approach to immigration. we will be discussing that more after the break when we're joined by the director general. stay with us. ♪

francine: welcome to "the pulse." u.k. businesses will back prime minister david cameron in his bid to keep britain in the european union if you secures a deal that helps the economy according to the british chamber of commerce which has identified five key reforms they want to see. there director general john longworth joins us. and guillaume menuet is still here. in terms of the reforms, some of them look straightforward. others a little bit more tricky. i have two in mind. the doubt.

-- the opt out. john longworth: all of the reforms are massively important if britain is to perform well in global economy. it is important to all countries if we get a more active in economy in the eu. in principle, they should not be that difficult. if there is no wilderness, we might as well know now. any negotiation will not result in the matter. it is important that the prime minister goes in at the beginning with a wide brief of all the reforms we want. he said he will not be a to as for numerous later. francine: we have the five key reforms you put together a it is central for david cameron to have the backing of businesses and that are to the conversation now rather than six months down the line. the first two one seemed to be the most difficult.

the dow and the immigration. why have your members asked for this? how concerned they want to retain key talent? john longworth: it is very clear on the first one is the ever closer union. members of our network, business members do not want further immigrant -- integration of but that want safeguards about decision-making and the european union if the u.k. is not a member of the eurozone and quite clear in the u.k. will never be a member of the eurozone. what happens to decision-making in the european union if the eurozone formed the caucus? like the ecb and they make decisions on behalf of the eurozone that affect the u.k. and the u.k. could be damaged, marginalized, and become like norway but in the eu with all parts of the you which will be a bad place to be.

we need to be clear how it will function in decision-making if the eurozone is driving the agenda. francine: how important is it to make sure the referendum isn't put together too late because that is uncertainty for your members and businesses and give david cameron another room to negotiate? john longworth: we set we shut the referendum as soon as possible. as soon as it is possible to hold it, we should do so to reduce the level of uncertainty for the shortest period. my personal view is the referendum will take place in the autumn of 2016 but it could be longer. francine: what is your take on all of this? businesses are really the backbone of this economy and make sure london and the u.k. is still open a part of it. do you worry about the referendum? guillaume menuet: i do not

particularly because i think it's a clear choice that u.k. will stay in the eu. i think there is a redline. and that is the view that germany would push through and very strongly. as long as you can have agreement that all of these proposals can be made on a consultation basis and not davos and referendums, germany and france will be up for it. especially to go down the road closer and certain matters not to deepen. francine: and the treaty change what were talking about. the ever closer union, do you think we can add an addendum to the treaty so we do not have to go through the change? john longworth: the question is for the politicians and anything is possible. we have short treaty changes carve out that was made for

denmark which were promises of a future treaty change, for example. the treaty will have to be changed at some point. and also the possibility a protocol for some people say protocols are changes in their own rights. there are mechanisms for dealing with this which may satisfy the u.k. the u.k. this community will want to know some of these matters are cast-iron guarantees. francine: you think they will get these on the five terms? it seems angela merkel does not want her legacy to be the chancellor to see greece leave the eurozone and not the chancellor where we see the u.k. leave the eu? guillaume menuet: she clearly wants to keep it at bigger countries to drive the progress. she has made speeches in the

past. the biggest problem in germany and france is 2017 because when massive elections. john's suggestion of autumn 2016 works perfectly. the french election around september 2016. francine: the fact that it looks i was a deal with greece, does it help the conversation with david cameron and counterparts? not too bad, at least the eurozone is staying together? john longworth: the greek situation helps of the clearest way. the negotiations between greece and the eurozone is as symmetrical yet degrees needed the eurozone less than the greece needed the eurozone. even a small country like a greece can get leverage. if you're very large country and very important to the european union such as the u.k., that should do the prime minister even more impetus to question

the things he believes the u.k. needs. actually what the u.k. means. the whole of europe needs to be a successful economy. francine: went to the markets start looking at the referendum like scotland, three weeks before? john longworth: probably earlier than that. maybe six months of the deal will we started to have a greater number of meetings and negotiations and the positioning to set out. i think the polls will be in favor of staying and the u.k. will try to push for reform and eastern europe and the nordic will be there. and the eu [indiscernible] francine: the polls, do we leave it on the referendum? a whole other conversation. we have to bring you and. thank you for joining us. john longworth and guillaume

menuet. up next, now the time to start buying the german dax. we investigate after the break. ♪

francine: welcome back. time to head over to the markets and gas -- at the markets desk. looking at the dax. nejra: we know the dax rallied

at the beginning of the year. april, it hit the p. it fell as much as 11% because of a troubled direct part of euro strength and a selloff in bonds and troubles in greece. some said it would fall below 10,000. jpmorgan said we will see it rally. now is the time to buy the dax again. it rally through the end of the year. passive 13,000 what take it too is highest point ever as set a new record. what is more interesting if you look at the relationship between the dax a euro they move in opposite direction. back to you. francine: nejra cehic. 2015 is set to be a record year for global m&a. we will look at the biggest deals. we speak to john of blackstone

and his thoughts on unemployment and political risk in europe. we will be talking greece and france. that is coming up. ♪

francine: welcome back to "the polls." these are bloomberg's top headlines that it did the u.k. government has sold about 639 million pounds of shares in lloyds banking group bringing the treasury holding below 17%, down from .4 .9%. sales of shares have noted a total of 11 million pounds so far. martha stewart living has agreed to sell itself, but the price has left shareholders disappointed.

the company founded by martha stewart is being bought by sequential brands for about $300 million. a fraction of its peak market value more than a decade ago. european leaders have given greece until wednesday to give the final push the standoff over a good it is believed that t sipras is finally serious about striking a deal after a series of reform measures. mark: now that tsipras is serious about a deal, the european markets are seeing the biggest today game for this market. the dax index in germany for over three years in july 2012. millions of euros have been added to the dax in the last

hours or so. j.p. morgan chase says it is time to stop buying german stocks once again, predicting a 13% jump. what a couple days it's been. 12% gain in the last couple days. great banks happen measured by the athens index and they have soared in the last two days, up by 28%. there is just one of them. for bank is just one of them. rising the most since february. what a day it was yesterday for the greek bond market. greek bonds continuing the upward climb today. i thought we would look at the two-year part of the curve. yesterday, the greek two-year fell by 500 basis points. there is today's 200 basis point move, that is 88% move.

money continuing to move into peripheral yields as well. i will show you the tenure part of the bond curve in europe. that is the greek 10 year continuing to fall today, down to 10.59 percent. the part of the bond market i want to focus on today is the spanish bond market because yesterday spanish securities have the best day in a year. the spread between the spanish 10 year the german tenure has narrowed to the least in a month on optimism that a deal will be reached between greece and its creditors. the spread between spanish tenure and german tenure has come down to 113 basis points today. the euro though is declining for a third consecutive day.

it is down by 9/10 of 1% today to 11248. the feeling is that investors are now focusing on the monetary policy divergence between the ecb and the federal reserve. goldman sachs says the ecb's qe program will set the currency towards parity with the dollar. parity is still a long way today to go from today's level. the forecast of analysts that we have surveyed is one of five at the end of the year. the analyst community does not think we will reach parity by the end of the year. goldman sachs does. one of other day we are having across the european asset space. francine: thank you very much, mark art. it could be a record year for m&a. the total value of deals is on track to surpass $3 trillion for the first time since 2007.

here with more is made well. >> good morning. this has been one of the busiest years for m&a. we have seen the shares of bg, the sale of charter and time warner cable. one of the busiest is not the busiest year since 2007. francine: what is behind the record? manuel: a bunch of reasons. there is more confidence by ceo's and the economic recovery. there's also the rally in equities, which is helping finance some of the concessions by cash. also, the fact that some of the companies are seeing their shares go up after an announcement. francine: thank you so much. we are joined by john suzuki.

we will be keeping him for half an hour. we'll be talking about m&a, europe, and the greek political crisis. give us a sense of this m&a deal. you speak to some investors and some analyst of the years and they say that you have to make sure that these deals are done for the right reasons. you think that now it is for the right reason that they are structured and lean enough to make m&a work? john: it is interesting. since 2008, we had a bit of a love oratory in the boardroom. -- laboratory in the boardroom. for the first time since 2008 board and management teams arts for nearly confident. they're confident because they watch themselves have flat topline growth in 2008. they watch them manage their core structure, reduce headcount in some cases by as much as 30% and at the same time, get the same degree of profit and

productivity. they watch their businesses restructured. this is across all stacks there's -- sectors. you see this in the united states and in europe, but less though in asia. you have boards that has seen restructuring, but they now know they have to find organic growth. it's a cases if they cannot find organic growth, boards and management teams are very comfortable with m&a. it is a bit like the darwinian principle because the down stages like telecom, the m&a is the survival of the fittest. the large successful companies are going to continue to gallup and swallow the weaker players. you also have extraordinary amount of cash on balance sheets. for the first time, you have confidence you've got cash, you got conviction among shareholders. shareholders, as you recall, if we're having this conversation two or three years ago, everyone wanted their cash back. no shareholder today wants cash.

the actually want to see real organic growth. they want to see growth in earnings. they want to see growth in dividends. why? because they basically seem to have been taught by the activist community. the bill ackmans, the elliotts the beautiful thing that has happened with the analysts is that they have not paid attention to the hedge funds and activists. they have learned that many of these businesses have had to be restructured. you have shareholders who for the first time see the merit of m&a. remember -- activist only support m&a that is focused on the rigorous discipline strategy. basically the core strategy and not diversification. francine: how concerned are you that there's too much money sloshing around? the fed is about to pull back a bit. you believe that a lot of consolidation was necessary and

it is well-funded and has come together for the right reasons. is it not tricky when things are actually cheap to get credit available, and at the same time valuations could be pretty punchy? john: it is very interesting situation. in boards around the world, people are scratching their heads saying that they do not see a material slowdown. maybe a short-term market correction. why would you continue the investment? invest in cycles and expansions are normally seven or eight years. potentially we are now looking at an expansion that could be as long as nine years. i actually think you're going to see a record amount of m&a activity beyond 2007 and this year and potentially the year after. francine: what industries? he said telecom will continue to consolidate. you also said health care. john: telecom is one that has gone through a hole restructuring. some of that is migration

toward the mobile systems and the convergence of technology and mobile telephony. that is going to continue to happen. health care -- different. it is one that was driven by obamacare and at another level by health care management models and the pharmaceutical industry and health care industry are all consolidating at different levels. that is the strategic logical consolidation. that is so strong players are exhorting weaker flavors. -- players. you will see a lot of activity in energy space. you have not seen enough because prices are low. right now, we are seeing a lot of businesses potentially the available for sale because people are looking at their portfolios and saying, i can afford to invest in a and b, but

c, d, and he are going to have to go would be restructured or partnered with a third party. you're going to see a lot more moving pieces in the energy space. francine: very interesting. john, thank you so much. he stays with us. the senior director of blackstone managing group. we'll talk about the greek situation and political risk. p ditty is arrested with assault with a deadly 11. we'll get into the details next. ♪

francine: welcome back to "the pulse. " john is still with me. they do so much for sticking around. we were talking a little bit about emanate in industries that you saw right for more consolidation. we talked a little bit about shareholder activism. you think we do not have enough shareholder activism in europe? you're talking about the fact that a lot of companies are learning that shareholders and i doesn't -- activism are not all about giving back cash to shareholders. john: all the smart names of activists and hedge fund activist that you know of in london and new york also look for opportunities to invest in europe. the issue is the strategies are different. there are two or three examples in london and germany and elsewhere on the continent.

what an activist does is that they construct an investment the system and say that the share prices in x would be 40% higher if you did the following three things, whether it is changing the management, core structure use of capital, investment allocation, whatever. in europe, the strategies are often -- because it is a stakeholder environment more than a shareholder environment the smartest activist start often by having more discreet conversations with the chair the board. it is what i call more backdoor activism. it exists. it is very successful in some cases. it is done in a much more measured basis. francine: i also want to get your thoughts on greece. we are looking towards a deal. we are seeing that creditors -- i'm not sure. i hope i'm sure. investors are sure. are you not sure? do you think it may be more compensated than we think? it seems that tsipras does not

have a choice but to give it a little bit. john: it is interesting. for a long time , this has been bailout kabuki. two people staring at each other thinking the other won't blink. the germans have been very straightforward. i think christine lagarde comments finally have to get some more details. they talk about taxes and increasing taxes. they have ignored pension reform. clearly europe felt a bit like the fool negotiating against itself rather unsuccessfully over the last several weeks. i think this is a time where they have both done a lot more homework and probably the first time they have a much more granular understanding. i think this is probably the last -- we're probably in the eighth inning and we will know whether there is going to be an

exit and a default or whether it is going to be a new solution. i think it does not solve the longer-term problem. if you look at the cash flows of the country, greece still as the economy needs a new model for creating gdp. it does not have a model that is sustainable. for all the numbers that i have seen, you have 20, 25, 30 years where the availability -- ability of greece is going to be unable to pay down material amounts of debt. whether they are postponing or effectively waiting for godot there will never be a solution. francine: i look at the markets. i'm often very surprised at how constant they are in the rallies that we have seen. i know we had a correction because this could possibly be a breakup of the eurozone. it could be the refugee crisis that puts too much pressure on

infrastructure. it could be the rising of extreme political parties in europe. what worries you the most? john: this greek problem -- this whole greek big lots needs to get resolved. it has been unhelpful distraction about the real problems in europe. the real problems in europe have become much more apparent on the whole subject of immigration. immigration in the last three weeks has gotten more attention than it has in the last three years. it really has. your string is -- you are seeing a strong polarization between the right and the left in european you have germany france, and u.k. -- they see a sense of responsibility. they realized that part of your -- they understand immigration. these are economies that have been built through immigration and they know what this entails. then you see a lot of the marginal the members of the european community -- eastern europe, particularly, being very concerned about immigration.

then you have northern europe scandinavia, where some fairly conservative economies are run on fixed budgets that may or may not be able to afford or have a proper model for funding material amount of immigration. so immigration is the first issue. youth unemployment in countries like spain, italy, greece -- 50% of youth under the age of 25 unemployed. there has been no solutions table on that since 2008 that are credible. whereas you look at germany denmark, holland, and northern europe austria, switzerland, there are good suitors which involved the national service and the army and structural forms in countries. europe is going to take that more seriously as well. all this implies the polarization of the right and the left and europe breaking farther apart.

greece has been a terrible distraction. there is going to be a breakup of europe. there is going to be a redefinition of what it means to be a member of the european union. you have seen this with the danish selection. david cameron is going to take a lot of attention to the day -- danish model as he thinks through how he renegotiations this. -- renegotiate swiss. francine: given all this and the classic economic models, it is difficult to price these things in. will you be short or long on europe five or 10 years down? can we get over these problems? do we have the right politicians in place to deal with this or are we going to have a surprise in the next five years? john: i think all the surprised that you are going to have is not going to be economic. they're going to be geopolitical. there's no question that i think you're going to have a lot or people leading government in

europe, whether it is lepens. sitting here at years ago, no one would have anticipated this. to many people in and outside of france, the arguments that she makes are very sound given everything that has transpired. francine: you think as a chance of being president of france? john: i think she does. i know a lot of people will rolled her eyes. but there are a lot of things that have transpired over the past five years on the outlier that have transpired as well. i think she does. remember -- people are looking for leadership. right now, i have to go to my favorite fan of hope. where you find leadership in the world? you have the vatican. i think people are migrating . she is strong on a lot of things. you don't agree with her on over half are things, but she is prepared to lead and be very clear in her communication.

the people are more industry -- interested in leadership that operating governments. francine: i think you're right. the markets will have a tendency not to model in political risk. we'll talk about that more. john stays with us. here in the meantime are more of bloomberg's top headlines. the governor of south carolina has called for the confederate flag flying for the statehouse to be removed. it comes after pictures emerged of the white gunman who killed nine people in a black trust the church last week with a confederate flag. , walmart is removing from it stores all items depicting the southern bowel five. a heat wave has killed more than 200 people in three days with temperatures soaring above 45 degrees celsius. many of the deaths have been reported in the southern port city. these extreme temperatures have coincide with ramadan when most muslims do not eat or drink in the daylight hours. and rapper sean peter becomes

has been arrested for assault with a deadly weapon at the college where his son plays football. he was arrested at the university of california los angeles in an incident involving a kennel bell. he is reported to have attacked a sports coach which with this. we will be back in a couple of minutes. ♪

francine: welcome back to "the

pulse." for final thoughts, we are joined by john studzinki. we are talked about greece and political crisis in europe. what piece of advice would you give european officials right now? john: if you look at greece as a case study, the whole greek situation is an example of a lack of good communication and management expectations among greek constituents and the broader european union. for example, if you look at the greek community there are those who want to remain a part of the european union and will do anything for that. there is another such that -- subset whose management expectations have not been met. communication and management expectations is very important. with that message, leadership in

europe country by country now is one to spend a lot more time listening, communicating, and managing expectations. this wonderful word empathy has to be reintroduced into the context of leadership. francine: john, thank you so much. "surveillance" is up next life from new york. ♪

>> this is "surveillance." tom: greece and e.u. leaders agree on -- disagree on when and where to be.

marcus like what they hear this morning. is janet yellen not focusing on the nitty-gritty of banking? taylor swift is fearless. she takes on a life. goliath blinks. good morning, everyone. this is bloomberg bloomberg "surveillance"." it is tuesday, june 2013 we can talk about taylor swift all show. brendan: did you say "neetay greetay." tom: i think it is from the steve miller band. brendan: we will prove the theory that it is impossible to talk about streaming services without a photo of taylor swift. tom: greece. brendan: what we thought we knew on sunday night, turns out to be true. there is the deal. there may be a real debt restructuring. tom: bill ro