>> greece is on is on the hook for 1.5 billion euros. will it make the payment? >> european leaders would not dare though his leaders -- a grexit could no longer be ruled out. >> chinese stocks. the biggest price swings in nearly 7.5 years after the country's central bank steps up monetary easing for the second time. >> prince executives -- violent

protests against the company. ♪ >> welcome to the pulse, live here in london, i am francine lacqua. manus: will be speaking to the u.s. chairman, action boehner. francine: the greece's bailout expires today. last night, some 12,000 demonstrators gathered in central athens, alexis tsipras went on tv to say european leaders would not throw his country out of the euro. manus: the government announced that certain branches will open tomorrow. they can withdraw up to 120

euros for this week. where live in the great capital as well as berlin frankfurt. let us go to elliott goggin. elliott: the banks are closed. the stock exceeds is closed. the the atms -- the atms are opened. as you mentioned, the governor announcing the bank branches will be opened on wednesday. they will allow pensioners to go inside the banks and route 120 euros of their pension, per week. the average monthly pension and greece is around 665 euros. if you multiply that 120 by

four, their monthly engine has been decreased by one third. that is going to hurt one pensioners -- that is going to hurt pensioners. an exhausted pensioner that has been queuing to gain access to some of that money underlining how some of the most vulnerable in greeks society is suffering. francine: alex tsipras -- the eurozone would not dare to kick us out of the euro. elliott: that is it. drawing the battling -- drawing the battle lines here it caring the message that he would impart to the people, especially greece's creditors. in his interview, a failure

would be even more painful for europe than greece. >> they will not take us out the eurozone. let me explain, because the cost is immense. the economic costs, the financial burden, if the europe zone is dismantled the cost of the country in default is immense. >> there was some 12,000 pro-government supporters at a rally in central athens last night, singing protest songs. having the same message that tsipras is campaigning for monday's referendum. they all want a no vote. today same time, same place, there will be another rally.

again, this time, it will be an antigovernment rally. people rallying for the yes vote. guy: -- manus: use of the work default, snow one seems to want to use it. will greece miss it echo what is next? elliott: it is unlikely that greece is going to make that payment under the current situation. given what is going on. given the financial squeeze that they are under. that $1.7 billion payment is due today. it will copycat matters if greece is in arrears. on top of that, the bailout program that greece is under that ends today. it is uncertain what is going to

happen when those capital controls will remain in place at least until sunday's referendum. other european leaders have been weighing in today. we asked the spanish prime minister he said if tsipras wins it shows that the -- the euro is reversible. it is interfering with the affairs of other countries. he says the whole planet was he a no vote as greece turning its back on europe. a lot of uncertainty as to where greece will go after today. will greece make the repayment to the imf today? back to you. francine: lettuce -- let us cross over to paul in frankfurt.

what do we know about the ela this week? paul: it does not necessarily have to make a decision on whether it is going to default or not. that can be made by others. should the government should be in default? the greek banks -- their assets -- the decision will be all -- will greek banks be solemn? under federal rule, they cannot continue to extend liquidity. should there be with john, the banks fall into an abyss. manus: with that comments from ecb board members. an exit from the eurozone can no

longer be excluded. if we take those comments where does that leave us? if there is no program, where do we go? paul: tsipras was saying greece will not be kicked out of the euro. it is not a case of taking anyone out. if you are country and you have no money, can you survive? do you have to leave and print your own money? those are very strong comments from a board member. he says he wants greece to remain. he said should the creditors be set to buy greeks in the referendum -- in other words, that does hint that the ecb will wait for the democratic process to go through. francine: paul, thanks so much.

let us get to our international correspondent, hans nichols. we have the ecb, let us go to berlin. if they default on the payment how is merkel going to react? hans called -- hans: taking sips his speech and -- -- taking tsipras's speech as proof positive that greece will default to the imf. what we have from the government is that he told our party makers that there will not be contagion. that argument seems to be have an effect on the euro. it seems to be true. it seems the firewalls are holding. at the same time from merkel, you have not very little as far

as influence as what is happening in greece. you have mr. rajoy he is making this case if you vote no you are voting to leave the euro. we had the chinese finance minister, saying a vote no be the vote for the drachma. for mr. shoretel a, we have -- mr. charla, we have this effort from -- effort to keep working with greece. he said the great government's behavior has been beyond belief. it will not be able to destroy europe. it is this idea that you can keep europe together, even if reese both snow on the referendum. one thing that is been talked about here in germany i suspect this will continue to grow, how much debt is on the books? what will germany oh if greece leaves the eurozone? to keep billion is one estimate. compare that to france.

i believe france's 42 billion. these states do have -- do not have an insignificant footprint. at the same time, a lot of this debt painting -- you would not have to write it off. francine, manus? francine: hans nichols in berlin. manus: that texas to our twitter desk that takes us to our twitter question. this was back to our point earlier, mariano rajoy talking about this situation. you and i looked at the statement this morning. he said these days you said they committed to any reversible -- committed to an irreversible --

francine: guy, thank you for joining us. you put in its sting no doubt saying we have days to save greece. i thought we was lost her. it is very difficult to lift them if we do not have some kind of new currency. it is a mess. guy: we could lift control unless there is a miracle -- the l.a. will be offended into the weekend. during the weekend, we will have these polls. it is interesting how the greek government is challenging solutions. trying to argue for a no vote, saying europe is against democracy. a yes vote could bring us back

to a negotiation. he could bring the eurogroup deal back to the table. a no vote brings us to uncharted territory with no solution until july 20 which is the ecb payment. that means banks without liquidity. it means an issue of iou. there is reversible to now, even though it is still not a given. it is still not our base case. the yes kate--the yes vote. manus: european leaders would not throw the country out of the eurozone. the cost would be enormous. is this man fighting game theory -- fighting game theory? >> that is his gamble.

the entire project is looking like it is going to fall apart. you look at the market reaction today, the spanish premium is higher. it is not even on a one-year high. this is a currency about to break up it is not reflected in the price. so far, the contagion is in very sharp. francine: your point is he gamble too much and lost it? he w bargaining. he said he cannot afford to lose it. looking at what is happening greece -- >> it looks like the oil region can afford to lose greece. if you're not a member of fight club you do not talk about fight club. today you got a prime minister and and ecb member talking about jackson -- talking about grexit.

manus: barto, the ecb meets tomorrow whether greek banks are solvent. everyday they drop in value. every day the economy worsens. this threatens the solvency of the banks. alberto: the solvency is deftly subjective. tomorrow, greece will be out of a program. the question is what should we do with the ela that is already there? that would mean: the trigger and pressing the self-destruct button. the ecb will not be the one to pull the trigger, because it is a political decision. but with a no vote, things become a lot harder. the ecb could increase

collateral on the ela. it will increase collateral if greece pleases the payment on the fourth of july. manus: the greek banks -- ecb. alberto: the collateral remaining is around 30. haircuts are raised. some banks may run out of collateral. i do not think they should pull the trigger before a referendum decision. francine: you see how many people want to withdraw. the problem is unless they increase it. if there is a yes vote. until? alberto: until greece is fine. even with capital controls, you have leakage. cyprus lost 10 billion deposits a year. you have some slowly gets.

the banks without a deal will run out of liquidity. he could be a few weeks, a month. there is leakage. francine: mark, d think regardless of the referendum are we going to have a new government in place? mark: we have not seen a pull yet. -- we have not seen a poll yet. it will be interesting to see how many turnout for the demonstration. we do not know at the moment what the greek view is. what is clear, these referendums should be the chance for them to say either yes we stand the euro and we will take the pain, or no . the referendum has to be a very clear choice for the greek people. that is democracy in action.

manus: mark, you're good to stay with us. thank you very much for those inputs. francine: here's a look at what is on our show. the pboc injected $5.6 billion into the banking system. it lowered the lending rates. that comes after a interest rate hike. chinese stocks that have -- shanghai composite index. manus: diplomats meeting saying -- missing a self-imposed deadline. european officials claim progress is being made. a path to a conference of agreement is to come within days. francine: uber managers are in custody in france after taxi drivers staged violent protest.

the companies general manager is being questioned by police. courts have consistently refused to block its business. the president says uber must be dismantled and declared illegal. manus: the stocks today offering after a three month free trial. nine dollars 99 a month -- $9.99 a month. the tech giant going head-to-head. francine: 10:00, we get the figures. we get those as they cross the terminal. we'll be talking to the u.s. chairman, axel weber. -- the ubs chairman, axel weber. manus: make sure you stay tuned

for all of that, right here on the pulse. ♪

♪ francine: welcome back on the pulse here it. manus: bloomberg view comments mark gilbert. mark, let me read to a slightly different angle.

the banks will open for pensioners. there is a humanitarian side to this. mark: 60 euros is not a lot of euros. there was supposed to be temporary measure. very hard to unwind. " it was more than 60 euros a day. it was 300 euros. mark: they are losing a third of their pensions a day. you if you -- if you have not money to spend, then the greek economy can only get worse. >> the summer months are crucial for tourists. some greek newspapers have said in 10 days supermarkets will run out of food. clearly, what tsipras has not told the population is that a no vote means pain, hunger, not being able to buy medicine and

the population will soon discover that. it is dignity but you cannot fight a war with an army with an empty stomach. francine: if it becomes armageddon, they're not go to keep him in power. alberto: with a no vote, tsipras could stay in power. the situation could become more difficult for the population. it is likely the government will fall in with a no vote. you may have a unity government which is the only way back to the table for negotiations. we may have something else and it may to be too late -- and it may be too late. manus: we talk about contagion. we have not seen a need for the european bank to act. are you surprised the euro has held up?

alberto: this week, the market was exciting the eye myth -- the imf with a high chance. i do not think the market is expecting a lehman event. we are in uncharted territory. if you get to a closer to a solvent situation, it is not a lehman event. there is very little direct exposure to greece. the cost of an exit is high. if there is a no vote, there will be more contagion. mark: it is the unknown unknowns that get you. it is the unknown unknowns every time. if you think about lehman, it was the surprise, the instant death of wholesale markets. francine: if everyone is saying we see a breakup of the eurozone, no one really believes

it. we do not know what happens if they leave your zone. mark: that is why this is a horrible situation. how do we get to a point where a member of the eurozone has not get this has not gotten any money left? they may not have any medicine. this is not what the creators -- manus: this was a containable crisis and they have left the dogs off the leash. mark: i do not think anyone comes out of this well. aside of -- aside from the ecb, i think everyone joins in the blame. albert two it is still desk a murder: it is still 60% in the polls. it will be disastrous for greece. there has been a lot of second chances. a lot of last-minute agreements. they will try it again this

week. this is a political situation. it is not the country it is the government. the government can change. francine: think you so much. and micro credit researcher from ubs. ♪ we will be back in a few minutes.

♪ francine: welcome back to the pulse. michael bloomberg manus: -- i am francine lacqua. manus:breaking news on the state of the u.k.. we seen a provision -- we have seen a revision. the original estimate for plus .3%. sterling up 6% in this quarter. we are seeing a strong reading here from u.k. gdp.

francine: let's have a look -- there you go. it goes higher. on our doorstep is the first country to leave the eurozone. they do not want to raise interest rates but they may have to do that. the pound going much higher if there is weakness in the eurozone. i'm glad i'm not a central banker. manus: that is all at play. francine: other top headlines, top diplomats meeting in vienna. u.s. and european officials claim progress is being made. they expect the path to an agreement to come within days. manus: china's central bank has taken further action -- the pboc has injected money into the

markets. they lowered the lending rates on funds. interest rates cut over the weekend. francine: the german finance minister says greece will miss today's payment to the imf. some 12,000 per government them as traders gather and central athens. alexis tsipras went on tv to say european leaders were not thorough his country out of the euro. the cost would be immense. they will allow pensioners with no cards to withdraw money from the banks. manus: france's prime minister said that if greece of votes against measures on sunday, it would have to leave the euro. he also blamed sippers for much of the countries that she also blamed sippers -- tsipras for

much of the country's problems. >> the spanish have been hawkish on greece, ever since -- rajoy was campaigning. he has been unusually forthright in showing his hand in showing where his allegiances lie in greece is the mystic politics. with the referendum coming up he has again been aggressive in his comments. today, he pointed out the uncertainty that sips his government has put greece in a recession.

francine: in terms of if we get a no vote, what does it mean for spanish politician chacko -- politicians? ben: the employee's eyes are fixed. it is in his electoral interests to see tsipras punished by markets, european establishment for challenging the austerity. roy bought into that -- rajoy bought into that. to the extent that tsipras can show there is an a turn it to -- there is an alternative, that is going to fuel they must.

manus: is there any sympathy when you talk to people that live in madrid what level of 70 is there for the greek situation? -- what level of sympathy is there for the greek situation. ben: people feel that your ordinary greek man or woman have very little responsibility. this is a crisis that is being managed by the greek elite. their interaction with the european elites. the greek pensioners who are being limited to want to 20 euros a week, they are desperate they've got very little responsibility for the situation that their country is in. the idea that solidarity should be divided along national lines is something to which spaniards

are questioning. francine: ben, thank you for the insight. let us get more on the greece situation. richard jeffrey, great to have you on the program. are you surprised that the market has remained calm? richard: i do not think it is the firewalls, i think it is the markets taking a sensible view. there is a lot of uncertainty. markets react to uncertainty. markets are trying to look deeply into this saying greece is a very small part of the eurozone. only about 2%. there are risks of contagion against the backdrop of the eurozone which is recovering. the risks of a contagion are

more limited. the bigger risk is of political contagion. that is not so obvious. the risk there is the commission gives an to greece and that prompts others to start others -- that pumps others to grab as well. manus: i saw note this morning calling the euro capricious in terms of holding up. we read so much. this currency -- richard: one of surprises is how the euro performed. i think there is a technical unwinding, which has led support to the euro. a lot of investors are saying this is an opportunity to invest

in mainstream eurozone. we want to raise our weightings toward an economy that is showing more signs of recovery. and the longer term, if you take the view that greece is going to leave the eurozone, there will be some disruption in the short-term, especially if the eurozone is stronger without greece. francine: do you think it will leave? i understand the rest of europe might be strong without greece. the foundation of the euro is that the euro is irreversible. it is now reversible. this means we have a whole new paradigm. richard: much everything is reversible. we have not found out how to reverse aging yet. you cannot make economic statements like that because circumstances change.

in different circumstances, everything is reversible. we do not know the in game yet. i always thought it was likely that greece would leave the euro or be forced out -- or would be forced out. there is no endgame in the star somewhere. the people in the commission do not know what the endgame is. what the eurozone was to say degrees is this is a vote on whether or not you stay in the euro. the greek leadership is trying to say to its people, this is a referendum on whether or not we accept austerity did they are two different things. that will be in the end what governs -- manus: this is not a lehman's moment, contained -- do you think this is a containable situation? richard: i think it is very

containable. in fact, i do not think they will be a big influence on what happens to the eurozone. the eurozone will probably grow faster this year. that is important. there is still some exposure to greek assets in the sector among investors. people will have written down their exposures. francine: thank you so much for your insights. manus: to senior uber managers are in custody in france after taxi drivers staged protests last week. the president said that uber must be dismantled and declared illegal, but the company says the courts have consistently refused to block them. we're joined by mark dean. are these routine

investigations. the custody holding of these two uber employees. what do we know? mark: i think it is important to say this is an investigation. the executives have not been arrested. they have been spoken to by the prosecutor. the press get it has explained that they are questioning desk this is the other important point, it relates to -- this is the other important point, it relates to uber being a chauffeur service. any private individual can become a mini cab on a saturday evening. that is the service that he declared illegal and dismantled. what prosecutors are doing is investigating whether or not

uber has broken the law. francine: were you surprised when you heard those two managers were in custody? were you surprised by the president calling uber illegal? mark: it does show how political the uber question is. with those violent protests in paris last week, it has drawn attention all over france. internationally as well. the government is taking an easy way out here, in focusing on uber pop now. it is legitimate. it is important not to confuse with uber itself, which is a service that is booming here in paris. manus: do you use uber?

do the people in our office use uber? to the people in paris want uber ? mark: i am a user uber and taxes as well. -- uber and taxis as well. taxi drivers have paid 200,000 euros for the licenses. their licenses are plummeting in value right now. and he taxi driver that is borrowed to buy that license is in deep financial difficulty. they are smart to defend the taxi driver but it is to explain the position. this is france. the government is not inclined to turn its back on that group of workers.

it is multiple things going on here. it will be instinct to see what happens with it. what the prosecutors can do for it. has uber done anything illegal? i cannot say. if you have the application there, is it uber's problem? i think those are separate questions. francine: mark, think you so much. coming up a sticking point, stalling talks over iran's nuclear deal. coming up next. ♪

manus: welcome back to the polls. live in london. francine: more the angle of merkel's next move on greece. let us go to berlin with a special opposition with hans nichols. he is standing by with to bloomberg news reporters that have covered this issue for years. hans: i'm joined by leading reporters. thank you for being here. you guys know so much about the crisis, pretty much more than anyone. there's a lot of talk about a split. was that true? will he continue to be true? >> i would not call it a split.

it is a different tone. it is stronger in the beginning of the crisis. what we have seen recently is merkel has drawn a line. she would accept a grexit if it comes. hans: if she was not at the point four months ago, you would say merkel has moved toward -- next it was the seventh -- >> it was the birthday party, and she said thank you. it was bigger. they are all in line with schauble.

hans: tony, you have lost a lot of sleep over this. how does what is happening now we're probably going to miss a payment tonight, how does it feel different? tony: it feels different in several ways. if you think back to the start of the debt crisis. there was a feeling of goodwill of genuine crisis the euro needs to be saved. now you have a very confrontational government that releases the view from the other capitals. in athens, you have bailout fatigue and the german parliament. these lawmakers have to support a deal with greece. after what is happened, the mood is a rock-bottom. hans: had they had a referendum

in march, could you have samples to? desk could you have established i -- could you have salvaged it? clinical you're in the situation where it seems very hard to get out of. hans: we talk a lot about grexit. who is the highest ranking german official who is calling it that? arne: and just come back from a meeting. he said for the second time today the greeks have to bear the consequences of their actions. ultimately that would be a grexit. he talks about it.

sickly, people are talking about it. posco it -- hans: is it a wish that greece would exit. arne: i think people who are close to the financial committee, they have calculated a grexit would be cheaper for germany, and better for the eurozone, then keeping this drama. hence: let's say there is a yes vote in greece -- hans: let's say there is a yes vote in greece. is there the political will for a new a package for greece? would things have to change? tony: let's put it this way, angela merkel who has defended

greece for five years would have a lobbying job to do to get that through. it comes up against the fact that the bundestag has to vote on this. yes, you can still see a deal being pulled out of a hat. for now, the german position is the ball is in greece's court. that limits your options. hans: what it cost merkel her chancellorship? arne: there would be the possibility. since she is a very careful politician, and since she does not want to risk her power, i do not think she would go down that road. hans: i thank you very much for your input. francine i'm going to hand it back to you. i think i heard from our

in-house guys no bailout package. it would be difficult for merkel to get that through. there is not a whole lot of goodwill toward the greeks right now. francine: hans, think you so much. , thank you so much. if anyone can figure out why -- will try to figure that one out for the next hour. manus: hans, think you very much. bmw are accelerating plans to develop a midsize sports car. the major components after a technical feasibility study. we have not been told when the reduction will start. francine: a music streaming service. going head-to-head with spotify

and pandora. the service will cost $9.99 per month for a single suspicion. -- for a single biscuit -- a single subscription. or $14.99 for a family subscription. -- and the launch of his white house campaign, the network says it will not air his miss usa and miss universe catch it, because of his views. miss universe is cloned by trump -- is co-owner by trump, they have threatened legal action. >> this is the end of their legacy. eight years even before that.

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different state-of-the-art components to it. it is built with titanium and carbon fibers. the bike itself has materials like no other. each bike starts at $350,000. francine: for those on bloomberg radio second hour of the pulses coming up. this is what we have for you. manus: eurozone unemployment. that is coming out. italy's cpi. francine: we're very excited to have ubs chairman. it will be very and sing to get his views on the german bund. manus: we have seen the u.k. has grown for the ninth straight quarter. sterling on this quarter is up almost at its best quarter.

francine: you can. twitter. -- you can follow us on twitter. we are back in two. ♪

francine: deadline day. greece is on the hook. manus: prime minister tsipras says european leaders would not dare throw his country out of the euro. the ecb says grexit can no longer be ruled out. francine: market movements. china's central-bank sets up monetary easing for the second time in four days. manus: uber arrests. french police take two

executives into custody after violent protests against the company. a very good morning to our viewers in europe. good evening to those in asia. welcome to those waking up in the united states. i'm manus cranny. francine: i'm francine lacqua. this is "the pulse." manus: coming up -- francine: first of all, we are getting breaking news in terms of eurozone figures. mark barton is standing by with the latest. mark: we have positive eurozone inflation for the second month. it is an increase of 0.2%. may's was 0.3%.

still way below the ecb target of 2%. unemployment remains at 11.1%. i have made a nice chart. the red line is consumer prices at zero. the green line is this cpi at 2%. the 0.2% figure is well below that level. look at unemployment in the eurozone. we have come down from a high at 12%. we are at the low for the last two or three years. it is still well above the level we saw in 2009-2010. nothing too exciting. everything in line with estimates. francine: it is deadline day for greece. the government is due to pay 1.2 billion euros to the imf. manus: the greek finance

minister says that country will not make the payment. prime minister alexis tsipras went on tv to say that european leaders would not throw his country out of the euro as the cost would be immense. francine: this morning, the greek government said that certain bank branches would open tomorrow so that pensioners could withdraw 120 euros. elliott you are in athens. what is the latest? elliott: in addition to all of the other things happening today, it is day two of capital controls. atms opened earlier than they did yesterday. people have been queuing up patiently to get out there 60 euro per day allotments. many pensioners do not have bank cards.

banks will open on wednesday to allow pensioners without bank cards to gain access to some of those funds. they will be limited to 120 euros per week. if you bring the 120 euros per week up to a monthly amount they are effectively getting about 70% of their monthly pension. a picture of an exhausted pensioner waiting to get access to funds in greece. manus: it is assumed that greece will miss the payment today. that is the broad-based assumption, isn't it? elliott: yes. it would be incredibly surprising if they made the payment. you probably expect them to try to miss it.

they have said that greece will miss the payment. they will formally exit the bailout program today with creditors. other finance ministers are weighing in today. the latest is the austrian finance minister. if there was a yes vote the agreement would have to be signed by the finance minister. somewhere there is a little bit of animosity -- let's call it frustration -- with the greek finance minister. we heard from the spanish finance minister talking about any no vote. they were saying that it would be better for the greek people if this side loses. manus, francine, back to you. francine: thank you for that.

manus: let's get to salzburg global seminar, which focuses on the changing face of banking and the trends that influence how banks do business. we are joined by the ubs chairman. great to have you with us. we will get to the big changes in banking and a moment. you have great expertise in this area. i want to get your sense about what alexis tsipras said to the world -- that european leaders would not throw his country out of the euro because the cost would be enormous. he really is raising the stakes in terms of challenging his european partners. >> good morning. a pleasure to be on the show. the real issue is next sunday. on sunday, the greek people will have to choose whether the greek people will stay in the euro and

adopt the program in front of them or choose otherwise. the rest of the week will be more of the same we have seen -- of what we have seen. nervous markets. we all have to look at sunday. that is the big decision day. i am confident that the greek people are convinced that their future in the euro is a better future. francine: how do you explain the strength of the euro? it is headed toward the biggest quarter in many years. we are talking about greece default thing and a 50/50 chance of greece exiting the eurozone. axel: look, the many investors in the market do not have big exposures left to greece. our exposure at ubs is negligible. the real issue is the interest rate pass that is ahead.

the ecb will continue to do ecb -- qe and the fed will raise interest rates later this year. greece has a lot of tail risk but it has been priced into the market for over half a year now. a couple of weeks ago i said that this would probably be the endgame -- that the greek government will be unable to do the deal because they cannot cross the line that they needed and the greek people will have to vote on this. i am pretty sure that they will take irrational vote, that they understand all the benefits the euro has brought to them and they will choose that future. i am convinced of that. manus: one of the biggest debates in the past 24 hours has been the relative calm in the bond markets relative to what we saw in years gone by. does that give you hope that

what has been implemented from the ecb is robust and that is why we are seeing the relative calm in the bond markets? axel: exactly what i always felt would happen is if this event comes up people understand that greece is 2% of the eurozone the europeans have been leaning over backwards to accommodate the needs of greece for financing -- this issue has been with us since may 2010. it has never gone away since. i think investors have gotten used to reading about greek news every day. it just does not excite investors the way it used to. i think investors are pretty calm around it. most holding bonds have been holding great hans in the hope for -- greek bonds in the hope

for a rescue program. you will continue to see operations of the troika in greece because on sunday, i think the troika program will continue. europe always goes through a lot of volatility to ultimately find a solution. i think this will clearly be a solution that will undermine the credibility of the current government -- in the sense that their negotiating strategy has come to an end. now it is a choice of in all route and i think the greek people will choose to stay in. francine: how quickly do you think that the banks can reopen and what kind of support can the ecb and will the ecb give the banks? axel: you know, i think it really depends what will continue to happen. if the greek government makes this a confidence vote for its own term in office it is more

likely that you will see the insulation of a more technocrat government, like we had in 2012-2013, that the terms of the conditions will drive economic policy in greece and you will have a government that implements these international demands and conditions rather than a greek political leadership making their own election platforms. eventually, such a technocrat government can secure the transition and i think it is very likely to go this way. we have seen that before and i think it will be a replay of what we have seen and that was quite a successful implementation of such programs. greece started to gain traction at that time and i think it is time to go back to that consolidation and reform. manus: what is your biggest concern? is it liquidity in the european banking system? is it liquidity and solvency of greek banks?

is that what we should be focused on as the biggest issue? axel: look, this is not the first time this happens. we had the cyprus crisis. banks had a liquidity issue. it remained for a long period of time. it can turn into a solvency issue. they used capital controls. they entered into a program. the turnaround was achieved. the banks were taken over. basically, we opened with a program for the country and the ecb was a part of that program, providing liquidity. solvency was an issue secured by the european government. i think this will play out pretty much the same. the banks will close for some time because they need to put the right set of provisions in place for capital controls. this cannot always happen very quickly. i think that the same will play

out in greece. i am confident that we will get to a rational solution that is tried and tested, that is the best for the markets. that is what many in the markets are pricing in. you have not seen adverse market reactions because of this. everyone has great confidence in the european institutions the ecb first and foremost, that they know what they are doing. i have no doubt that they will succeed in doing that. francine: you are also in salzburg to talk about the future face of banking in terms of the megatrends that you identified there. how does that compare with the concern about regulation for banks? axel: i would think that there are different opportunities and risks that banks now face. i have always viewed regulation and capital as an opportunity for the banks.

i think focusing on clients is the new normal. the quicker you get to the new normal, the quicker you get to higher capital ratios and you eliminate doubt. that is actually a positive. i don't view it as disruptive or negative. technology provides the same. it can be disruptive. cyber threat is an issue. but you can use technology as well to communicate with clients and do business. it is a much bigger opportunity then it is a threat at this time. banks need to open up. remember the music industry or the print industry or the newspaper industry or even the taxi industry. technology is transforming industries and it will transform banking and we need to adopt that. the banks have been somewhat slow. they were focused on themselves, henri regulation. now we really have to turn

around. we need to concentrate on the future. it is a great chance to exchange with thought leaders and leaders in the industry on where this is going. the megatrends are also aging the shift of economic gravity center to the east and to the south in the world the industrial world is less important for banking in the future than it was in the past. we need to adapt their business models and a regional outreach for that new reality. at ubs we are doing that and we are really focusing on the opportunities that the new world is offering. manus: you mentioned that business shifts east focus shifts east. china is hugely volatile at the moment but hugely influential. they have made their voice known through their actions from their central bank. how do we embrace the east?

how do we do better business with the east in banking? axel: manus, you have to remember we are talking about emerging markets. yes, they have emerged a lot already. china belongs to a more volatile asset class. we have seen movement and higher volatility in those markets for a long period of time. brazil and many of the other markets, turkey, mexico -- they have had a very good run. then there are setbacks. i always view the setbacks as a chance to basically reenter in the market, to use that market correction to improve your presence and then gain from the future dynamics. it is very, very clear from my perspective. the market share that these economies will have in the future is gigantic. what china was over the last

decade is asia now and will be africa in the next decade. plenty of opportunities out there. for us as banks, that is where we need to be. that is where our future clients will be. our current clients are in the established world and we continue to service them. our future clients will be in those regions and we have to be there to service them and be there banks. ubs is the number one world manager globally. we want to be where those clients are. they are the rich clients of the future because they engage in economic activity, they engage in production, their income in their economies grow fast. i think it is the right place for us to be. francine: thank you so much for joining us. come see us here in the studios in london. a bloomberg exclusive from salzburg in austria. manus: still to come on the program we set the mood on the

streets in athens. the capital controls are really beginning to bite down. the banks will reopen tomorrow for pensioners to withdraw 120 euros. francine: we have had this tweet -- we have had this breaking news on the bloomberg terminal from one of the most read papers in greece. greece is set to reconsider yesterday's officer from jean-claude juncker. does it mean that they will not go to a referendum? we will try to figure it out. ♪

francine: welcome back. we are just getting some breaking news out of greece. this is a newspaper saying that the tsipras government may be looking into the latest proposal from jean-claude juncker. we have had a bit of a spike on euro-dollar. i think we have seen a euro-dollar rising to around 1.1178. manus: it is a little bit of a take higher -- tick higher. is this alexis tsipras stepping back from the rhetoric he used last night that they would not dare throw us out of the euro?

is this trying to possibly step back and little bit from the brink? if it is, what is the deal that he is potentially going to refer back to? is it the one proposed back on friday night? francine: if this is true, it means we may be back to negotiating. as long as we are at the negotiating table, it means we may not see a greek exit. the we may see a default if they don't pay the loan back to the imf today. we have not heard anything positive coming out of greece in the last 72 hours. in the meantime, here is a look at what else is on a radar. manus: a deal restricting iran's nuclear activities will not be reached today. u.s. and european officials claim that progress is being made and they express a path -- expect a path to a comprehensive

agreement to come within days. francine: two uber officials are in jail in france. they are being questioned by police. uber denies it is acting illegally in france. the courts have consistently refused to block its business. president francois hollande has said that uber needs to be dismantled and considered illegal in france. manus: china lowered lending rates, which comes after an interest rate cut. it wipes more than 20% off the value of the shanghai index. that is in the middle of june. francine: we have that breaking news. how did the markets react? we saw a slight spike for euro-dollar. let's check in with mark.

mark: the news is that greece may be reconsidering its stance on negotiating with creditors. yes, we had a little movement up. we are down about 0.6% today. yesterday, we rose by 0.6%. throughout the day, investors seem to have this view that the crisis would not spread through the periphery. this is the euro stoxx 50. we had a spike during your interview. axel weber did stipulate that greece would be sensible, that greece would stay in the euro. i felt that moved the currency

to be fair. maybe it is that report. i am giving you two credit. let's look at the china stock market story. it has been an extraordinary 24 hours. yesterday, i told you how the point swing was the greatest -- get in here it is incredible -- yesterday the 422 point swing was the greatest since 1992. at the end of the day, they fell by 3.3%. today, we had a bigger point swing. at the end of the day, we rose by 5.5%. we rose 5.5%. today's 5.5% gain in china was the biggest gain since march 2009. the high for today was 5.6%.

the low for today was 5%. we have had this 10% swing all in one day. we had an industry group calling on investors and fund managers to take responsibility. speculation is growing that policymakers are preparing support measures. "the economic observer" reporting that the government is considering the reduction of the stamp tax, while the finance ministry it would allow the pension funds to invest in shares. these are extraordinary times for the chinese stock market. two days of intraday swings. what a couple of days. manus: mark, you are right. with that in mind, let's get back down to athens. this is going straight to our

man on the ground. elliott, you are down there. it could be that tsipras is considering the proposal offered by junker. the proposal is that the government has informed brussels that it is re-examining the proposal. that might include a reconsideration of debt in october and pensioners' social solidarity benefits. this could be quite significant if this takes shape. elliott: markets are certainly getting a little bit excited about this news. we have seen bond prices in countries like italy rising. we have seen the euro strengthening, as well. this is a last-minute proposal tabled by the jean-claude juncker.

the newspaper is now reporting that the tsipras government may be reconsidering it. that reconsideration would entail that they would accept the creditors' proposals, as you mentioned a couple of those, for example regarding pension reform . they would also resume talks to reach an accord. we know that it eight over until it's over -- ain't over until it's over. they have until tonight when greece formally leaves the bailout program. they have been negotiating for five months without much to show for it. in theory, you could get some release of funds in order to help greece repay the imf the $1.7 billion that it owes. this is really adding more speculation on top of

speculation. this is a report from the newspaper and we will await confirmation from the government. it would be something of a u-turn or somersault to use the translation of the word that the greeks use where tsipras having made that interview last night to turn around and say, let's vote yes instead. we are in uncharted waters. this is one of those things another twist that might come to fruition. for now, we await confirmation from the government. the markets are not waiting for confirmation. they are already pushing a bond prices and the euro. francine: i was going to ask you what the move was like. we have had one million proposals. it is unclear who is telling the truth. is he really reconsidering?

we had a day of minimal differences and then he called a referendum on friday night in the middle of the night. our people angry at tsipras -- are people angry at tsipras? what is the mood like? elliott: look i was down in that pro-tsipras rally last night and there is a lot of support for him. they feel like he is doing the one thing. one lady put it to me, it is better to be poor as long as it is our own poverty. many others are saying, look come a we can't go on that way. -- many others are saying look, we can't go on that way. there are all sorts of other problems affecting greece. in the rally last night, yes, it was pro-government. tonight, we have an antigovernment rally campaigning for a yes vote in sunday's

referendum. many people will tell you that they are very frustrated. the situation is just getting worse and worse. even some of those voting for tsipras will tell you that they did so sheepishly and they think he did not handle the negotiations well. there are many different opinions. they will argue with one another outside atm machines where they are queuing up. certainly, they all know that greece is in a very difficult situation. they hope it will resolve itself to the betterment of greeks. i guess there are disagreements on the best way to do that. francine: elliott, thank you. manus: let's check in with jonathan ferro at the touchscreen. some of the quarterly figures are astounding. jonathan: quite remarkable.

you see a turnaround on the periphery, as far as equities are concerned. positive territory in spain, positive territory in italy. for q2 it has not been about greece it has been about the bond markets. it has turned equities around and turn the euro around. equities in the euro -- the best first quarter since 2009. the best quarterly gain since 2009. in q2, it is the polar opposite -- the best quarterly gain for the euro against the dollar since 2011. we are down 0.6%. the story over the quarter has been euro strength. a lot of that has nothing to do with greece. it has come from the bond market . the euro was up 4% over the past four months. the difference in the spread

between the german-10 10-year. italy going to the market issuing debt this morning. the risk aversion we soccer a earlier this morning with the bond market has started to turn. german bond yields, yields are lower by about two basis points. sure, you have got to think about greece. it is that volatility that has really defined q2. what is q3 going to look like? q1 or q2? as a go to the equity markets forget about europe for a moment. huge swings in the shanghai market. it is an $8 trillion penny stock , according to my colleague. shanghai was down by 5% and

ended the day up by 5%. that is a monster. back to you. francine: thank you so much. jonathan ferro there with your asset check. manus: 45 minutes until "surveillance" takes over. -- 25 minutes until "surveillance" takes over. tom keene at the helm, as always. what is your agenda? is it greece? tom: of course it is greece. francince, the gentleman who came up with the phrase "grexit" will join us. he has steamed back to greece staying in the euro. you will see someone like mohamed el-erian respectfully disagreeing. daniel juergen will join us. i am fascinated about iran, the

oil. jonathan ferro mentioning that china is the other story. over here, puerto rico is a huge story. if greece did not exist trust me, that would be our top story. francine: you are absolutely right. on iran, you need to keep -- we need to keep a close eye on it. the inspectors are not allowed to look at the facilities. it is going to be a great show. tom keene and "surveillance" in 25 minutes. today's headline on iran. talks in vienna are set to continue after midnight. u.s. and european diplomats are confident a group can be -- an agreement can be reached in days. elliott: talks brinkmanship, and a dramatic venue. that sums up the negotiations on

an iran nuclear deal. as the deadline approaches, we may be in seeing the same. world powers say a deal can only happen once inspectors verify to ron -- tehran is keeping its word. they say that they will need wider and faster access to places of interest. some iranian leaders and politicians say military sites would be off-limits something world powers say would be a dealbreaker. the nuclear watchdog will be asked to assess the nuclear enrichment programs of the military. john kerry seemed to downplay that element. congress would have 30 days to

review a deal. that could be subject to delays. if midnight on june 30 comes and goes without a deal, don't despair. manus: so sanctions have denied iran billions of dollars in oil sales. they have been frozen out of the international financial system for the past three years. what would a deal mean for business opportunities? we are joined by frontier strategy groups head of research. thank you so much for coming in. we see lots of numbers bandied around. around $60 billion. jack lew said it could be half $1 trillion of infrastructure. what would it mean? >> from a business perspective, when we think about the companies it could mean a lot. iran is really seen as the

largest untapped emerging market. it has the second largest population. it has one of the three largest economies in the region, as well. given the demographics, future government spending potential it really is a game changer from a business perspective. francine: give us a sense -- do you think they will get the deal this week? one of the red lines are main sticking points is that iran wants sanctions lifted immediately. that means that the economic prospects for iran are very different than if you phase out the sanctions gradually. matthew: absolutely. these are the big questions and sticking points. the deadline is officially today, obviously. it seems to be more and more likely that they are not going to reach a deal. the key date we are watching his july 9.

that is the last day that the negotiating group has an opportunity to reach a deal with iran when the review from the u.s. congress will be 30 days. after that, it turns into 60 days. there is a lot of anxiety about that. as far as sanctions timelines, that is a big sticking point. when we speak with our clients about that, what they are focused on is the restrictions on international bank transfers, shipping. these are the areas they are looking to see lifted at the beginning. it is really going to depend on in the end, what is the timeline. the iranians want restrictions lifted as soon as possible. even if you have that fast-track , a lot of the companies we speak to don't expect that to happen until the end of the year. manus: if sanctions get lifted

everybody is optimistic, but the reality of going from optimism to business reality is about confidence. businesses are not afraid of iran. they are afraid of congress and treasury, which is obviously there risk. the sanctions that lifted, something changes, they have to pull out again. matthew: absolutely. we did a survey of our clients. we asked them about the top market risks in iran. pretty interestingly, there is a correlation between the companies who have the most asked periods -- experience with iran -- they are most worried about access to banking services. the return of thanks feeling much more confident that they can expand their business or enter into the market will be potentially lagging. we have seen that another sanctions climates. francine: are there countries or

industries that are more ready to go into iran? let's say the sanctions are lifted. let's leave the timelines. are there historic industries or countries that are ready to go into iran fast and get the most revenue? matthew: that is a big question right now. european companies definitely have a head start. german companies, in particular, they work through the german chamber of commerce and are well respected from a business perspective. you have the automakers that are already there. you have a lot of other movement that might take place. we want clients to watch emerging market competition. turkey, china india -- they

will look to expand and they will not be as hesitant as some of the western investors that are still going to be taking a measured approach as sanctions are lifted. manus: you have also looked at how people are going to make this expansion into iran. whether it is going alone or by partnership. matthew: there is definitely a strong focus -- there is a rule that you need to work through distributor or local agent, but we are definitely seeing the companies that are there are mostly already working through distributors vendors. a difference between the european companies that have a closer relationship and the u.s. companies trying to enter through regional partnerships and trying to get a leg up but not quite there yet. we are already seeing a lot of prioritization. 36% of the clients we asked about if iran is on the radar for investment and they said it

is. the number jumped up to 57% after a deal was reached. francine: thank you so much. coming up, apple is launching its new music streaming service. can they compete with those who have made it their core business ? we are live in new york next. ♪

francine: welcome back to "the

pulse." live from london. apple's music streaming service debuts today. offering users access to 30 million songs in going head-to-head with spotify and pandora. why has apple decided to get into the subscription streaming business now? >> for years, we saw apple rules the digital music business. a lot of people credit them with starting it with itunes. sales are dropping off. for the first time last year, we saw streaming revenues in eclipse download revenues. apple waited, established there was a market to get into, and now they have jumped. manus: how concerned really are spotify and pandora? they have really leapt ahead in this game. they own this marketplace. stephen: with apple, it is hard

to ever count them out. when this update launches later today -- it launches at 11:00 a.m. eastern time in the u.s. and the radio station will go live at 12:00 in the u.s. this could land on hundreds of millions of phones in hours and it will become the default music player on those phones. it is difficult to count them out when they have such wide distribution and they could become the de facto option. francine: what does it mean for competitors? give us a sense of -- in terms of human to ration, this is what apple -- curation this is what apple is touting. is the apple magic going to rub off on this? or will we always go for the cheaper or free option? stephen: i think what you touched on human curation is really important to apple. they want it to be a place you

come for the culture of music. you come because the editors at "rolling stone" have created a playlist or for l -- pharrell is sharing his new single with you early. it is not just about the streaming service or the on-demand play -- it is trying to be a music magazine at the same time. francine: stephen, thank you so much. stephen: thank you. manus: coming up, is a great deal on the cards? is it or isn't it? we are back in athens for what to watch as we have reports that prime minister tsipras well, is he reconsidering the proposals from junker> ? ♪

francine: welcome back to "the pulse." streaming on the ipad and bloomberg.com. manus: this is a heck of a b ike. it made its debut this weekend. we find out it is not the kind of motorbike you choose if you want to disappear into the background, is it? >> this is the legacy.

it has been under development for three years. we have made three concept motorcycles so far. we will be making 12 more and we are taking preorders now. the engine hangs directly from the center. if you can imagine a bow flexing, you have two independent strings and you have the steering separated from the suspension. this achieves a number of important goals, including reducing weight and allows us to keep things incredibly narrow and light. the engine is 1650 cc's. all of the motorcycles will be supercharged. the engine is 300 horsepower once supercharged. >> master craftsman jt nesbitt built the ultimate motorcycle. it is something he had in design for 10 years. it took them three years to

build three concept bikes. this motorcycle has many different state-of-the-art components to it. it is built with primary components of titanium and carbon fiber. the bike itself has built materials like no other. these bikes will start at $350,000. francine: nice bike. for look at what we are watching for the rest of the day, we are joined by elliott gotten in athens. we have a couple of headlines, but we don't understand whether they are really reconsidering negotiations. what are you hearing on the ground? elliott: we have yet to have this confirmed by the government. this is being reported by one of greece's most respected newspapers, talking about tsipras possibly excepting a deal from jean-claude juncker.

it is similar to one of those deals proposed by the eurogroup on monday. a reduced rate of 13% for hotels. it was originally supposed to go up, but that was a no-no for greeks given how important tourism is. also pension changes that would help greece spend less money on pensions. those are among the more important points of that deal. we are waiting for confirmation from the government. it would certainly represent a massive about turn on the part of prime minister alexis tsipras in the wake of that television interview last night, and rallying some 12 million supporters. one protester or demonstrator said to me we hope that this

government is different from the rest. in other words, that it keeps its word. if he goes for a yes vote and changes his mind, that will disappoint a large number of greeks, even if it will placate and please the creditors to greece. manus: elliott, let's cross over to mark. fran and i were looking at the euro-dollar earlier. what do you reckon? mark: i thought it was your interview with axel weber he said he is confident that greece will do the right thing and stay within the euro and the ecb will hold it all together. it was at that juncture that the euro and the euro stoxx 5-00 went higher. there is this newspaper article behind the scenes suggesting that tsipras could come back to

the negotiation table. throughout your interview all the way through and even afterward, the euro has been coming up off its lows. that is during your interview right there. that is when you were speaking. yes, it could be this other story saying tsipras is coming back to the table. sentiment in the market, for whatever reason, has changed in the last 15-20 minutes. it is going to happen, isn't it? we are in uncertain times. francine: thank you so much. we are lucky enough that one of our producers speaks a greek. from what we understand looking at the paper, this is a last-minute proposal that tsipras will be reconsidering. it is a last-minute proposal sent by jean-claude juncker that

no one has really heard about. that is it for "the pulse." give it right here on bloomberg tv. manus: we will be back tomorrow morning. let's see whether tsipras really is in new discussions. ♪

announcer: this is "bloomberg surveillance." tom: in athens it is over at midnight. greece will not pay the imf and must decide its future. default and deeper depression back in.

san juan, we have a problem. now s&p slash its credit rating. and apple spots a spotifying killer. from our world headquarters in new york, it is tuesday, june 30. i'm tom keene. joining me, vonnie quinn. joining us as well, the perfect time to have her on, particularly with latin america and puerto rico churning as well. we get to top headlines beginning with greece. vonnie: it is deadline day for greece. the current deadline deal expiring at midnight. greece will miss a 1.7 billion dollars payment to the imf at that point. cash is running out. the banks are still closed and the greek government sets new limits on pension payments. alexis