necessary to go on financing greece. reforms will have to be introduced. greece must be put in a position to be more competitive and it must be allowed to grow again. without growth, the debt -- manus: that was mr. hollande saying he is used to staying up all night to get deals done, talking about a temporary greek exit. let's turn our attention now to nejra cehic standing by with the estonian prime minister. take it away. nejra: thank you, manus. i am joined by the estonian prime minister, fresh out of the eu leaders meeting, to talk about this deal. prime minister, please just outlined for me, what happens now? >> what we agreed on -- put it

this way. it is all about implementation. we expect greece to deliver results in the next coming days. this will mean legislation passed in the greek parliament to show that the will to the reform is really there. and of course there are a lot of discussions needed in the parliaments of many member states, including estonia. if greece shows good will, i believe this is doable. nejra: one of the big issues through the discussions was trust. do you trust greeks to implement what they say they will? >> it is clear that trust has been lost and i can also put it this way, we can slowly rebuild

it. it doesn't grow very fast. today was a step in the right direction. nejra: i understand that this fund has been set up and part of it will go toward recapitalizing greek banks. talk to me about what else, if anything, is going to be done in the coming days and weeks. >> i think the liquidity issues are up to ecb to explain. this is not something i can comment. in terms of recapitalization, we see the banks being privatized. this will give not only money to cut the debt but possibilities for economy to grow. many countries have done it, not

only because of the money but they have done it so that private owners take better care of the properties. nejra: talking about the ecb, how much impact is this having on emergency liquidity assistance today? >> mario draghi was with us every hour every second. nejra: anything about what he said? >> i can't comment. nejra: are you satisfied with the deal that has been reached? >> it was a difficult decision and in many countries, people are saying, why are we doing that? do we still need to continue with that? keeping greece in is the best solution for everybody. not only greece, who has very bad consequences if they went

outside the eurozone, but also other european countries. it is important to have the eurozone as a whole. it takes a lot of effort to make it happen. the next steps will be there as well. now, it is really up to greek parliament to decide whether they want to go forward with reforms. nejra: could the next step potentially be a grexit? in the documents from the eurozone finance ministers, there was a timeout clause. can you tell me how that came about and if there is potential for a grexit? >> today, we agreed on the plan that leads to greece being inside the eurozone, getting financial support and reforming the country, and hopefully having economic growth in the coming years. it is of course very fragile.

every part of the deal has to be implemented. otherwise, there can be very severe consequences. this can happen any day. if there is a real desire to do that, what has been agreed, then i believe that we can see a positive. nejra: you are not ruling out a grexit? >> we are working on keeping greece in. if there were serious obstacles for example greece parliament deciding against this, then we would be in a difficult position. nejra: thank you. i will throw it back to you, manus. manus: thank you very much. the estonian prime minister talking about the desire to keep greece in. the deal was done in the last half hour. the german chancellor herself has said that we now don't need

a plan b. chancellor merkel: we have paved the way for this by unanimous decision by the eurozone members. we have created the conditions for being able to recommend to the german bundestag to pass a vote to resume negotiations for a concrete program for greece. >> hello, bloomberg tv. good morning. it has been a glorious night. i think it is a good step to rebuild confidence, and there will be many more steps that will be demonstrated by the implementation of what has been agreed now. manus: madame lagarde there, the head of the imf. joining me now is ryan chilcote in athens. our headline at bloomberg is tsipras capitulates to the creditors' demands. that is what he has to sell in parliament. he has accepted perhaps worse

terms than the ones he walked away from. ryan: it is interesting. it is hard not to see this as unmitigated capitulation, but that is not the way the greek prime minister is characterizing it. he does have to sell this deal to the greek parliament by wednesday if he wants to get the aid. he's already making it clear that he sees two wins in this for greece. the first being the trust fund, the privatization fund that targets 50 billion euros effectively collateral that would be used if greece doesn't pay its debt. it can be also used to recapitalize the banks. that was the obstacle to a deal. the idea was that this fund would be anchored outside of greece. that was a nonstarter. many people saw that as any rozier an of this country's

sovereignty. that is no longer the case, he says. we were talking about this about a week ago. nonetheless, the greek prime minister pointing to that as a win as he goes to the next phase, selling this to parliament. the second point is, the greek prime minister saying this will help this country's banks. now there is the prospect for further assistance. as you know, the banks are closed. manus: the ecb will be convening this afternoon. the question is what they will do with liquidity. ryan: i think that's it. we heard that there might be bridge financing. we know that draghi was in on the meetings. we can only expect that the ecb is going to be kind when it considers ela funding.

there is still a question of how long it would take them to actually open how many of them can open. i think it is interesting that just with that referendum the greek people were saying no to austerity but they also got the banks closing. i was outside of a cash machine standing with a line of people waiting to get their money yesterday. they don't like austerity, but they also don't like the fact that all the banks are closed. if he can get the banks open maybe that is the next measure of success. he needs to point to that in the coming future. the greek people have been paralyzed by this standing in line, waiting to get just 60 euros, in some cases just 50 euros because the banks don't have any small notes anymore. that is something that he has to deliver to the greek people if he wants any kind of long-term

political survival. the short-term focus is on wednesday, and getting this through parliament. everybody we have spoken to this morning say they think it is likely that he can push this austerity program that is being demanded by the creditors through parliament by wednesday. they say that referendum gave him the support of the people to do it. if you think there's going to be another huge hiccup here, i guess we should say, never say never. but so far, things are looking good. there's a recognition that this program has to happen. this country needs financial assistance. parliament got together over the weekend. 251 of 300 parliamentarians in theory gave their support. it looks like tsipras has got the support. manus. manus: ok, ryan.

the next 72 hours are going to be critical. how are the markets reacting? we saw the euro spike initially. it has since dissipated a little bit. when merkel started speaking. mark: the deal on stock rally. it was at 7:56 london time that it flashed across the bloomberg terminal. eurozone summit has reached an agreement. eurozone stock market opened the session at 8:00 a.m. have a look at the stoxx 600, the primary european benchmark. intraday, already up by 1.5%. we are on the back of three days of gains on the stoxx 600. the biggest two-day rise through friday since -- this index rose by 4.3% on those days. the index added 410 billion

euros. quite astonishing when you consider last tuesday. the index closed almost 10% below its record high. now it is just 5% below that high. that is the stoxx 600. this is the euro stoxx 50 the benchmark index of euro area companies. already up 1.7%. thursday and friday, we had the biggest two-they increase since july 2012. that was an increase of 6%. this is the italian 10-year intraday price. the yield. you can see the yield down to 2.1%. we are down about two basis points. little movement in the bond market. italian bonds did rise on anticipation of a deal.

what an interesting morning it has been for euro-dollar. overnight, the euro opened lower by about 0.6%. we spiked when the announcement came through. now, we are at the lows of the day, down by 0.7%. the euro has fallen when we've had good news and risen when we've had bad news. manus: ok, mark. thanks for putting that in context. we are going to turn our attention to jon ferro in athens with reaction to the greek situation. roberto gallo standing by with me. thank you very much for joining us. jon let's go straight to you. there is debt relief on the table. there's an extension, but there's no debt relief. >> i think alexis tsipras, when he came out of the meeting, was trying to spin what is known as

an extremely difficult deal for him. he claims that there is that restructuring as part of the agreement. it sort of depends on how you interpret it. merkel did concede the fact that the eu can look at that. once the greek deal has been completed. in a lot of ways that is a reiteration of what has been on the table since about 12. that has been around for quite a while now. tsipras might claim that he has won a victory on that front, but if you look at the full context, it is not perhaps as much of a win as he would likely try to present to the greek parliament. manus: tsipras is going to have to reach across the aisle to get this group is own parliament. his own party is now riven with

splits. how do we look at the political landscape for tsipras? john: there doesn't seem to be any huge doubt that he will manage to get this through the greek parliament on wednesday night. but of course, we all know why he was elected. it will be difficult for him to preside over the legislation that has passed. anything beyond that is pure speculation. there was talk that he might be tempted to form a technocratic government. perhaps we could see elections this year. right now, i think the mood in athens is one of certainly fury. a lot of people didn't expect the germans to come down on them over the weekend with the talk of a temporary grexit.

if you talk to people here there is a sense of resignation. either accept this deal or leave the euro. there is no appetite to leave the euro. ultimately, tsipras has to push this through. manus: john, thank you for giving us an update. let's turn our patient now to alberto gallo. good morning. what do you make of the deal so far? >> it is a good result. we have always been pro greece in europe and against a grexit. all that we saw yesterday was harsh on greece for three reasons. it constrained future decisions. on the fiscal side, it required approval before any big law was going to be passed in the greek parliament. then it also moved 50 billion of valuable assets into a

luxembourg-based institution. today, we learned this institution will be based in greece. we still don't have the rest of the deal. it is relatively harsh on greece as president juncker said. things have gotten worse after the no referendum. my impression is that greece has been used as a pawn to show the rules of the european union to other countries. it has been the instrument to decide the future rules of the european game between germany finland, and other northern countries. manus: the politics of europe, i think that is a big conversation in itself. the banks, the european central bank will convene today. what do you expect? we are hearing words like bridge finance, a whole variety of terms and 25 billion euros.

merkel said 25 billion euros for recapitalization. alberto: the banks are going to get 25 billion from the esm. they will be recapitalized partly with the 50 billion fund of assets that will be privatized overtime. the greeks have bad loan ratios. one third of their loans is unprofitable or needs to be restructured. they need more capital. we still estimate that bondholders and have to take a loss to help banks with 25,000,000,008. another concern is to consolidate them to smaller numbers. there is a potential loss. is the deal sustainable long-term for greece? manus: as you say, the longevity

of this deal, that comes down probably to how much the debt is extended and the level of austerity. the biggest risk in the next 72 hours, what is the biggest risk? alberto: the execution, the approval of the deal. the greek parliament has to approve these measures. they have until wednesday to approve the reforms. we know that the proposal from greece that was presented before the weekend was approved with a majority. now, the left wing of syriza may fall further. some allies may require more concessions. all this points to potentially new elections in greece. manus: stay with me one second. we are going to switch out to my colleague, hans nichols, in brussels. we heard the estonian prime minister speaking a little earlier.

give us a flavor of the main figureheads and the political reaction there. hans: we are getting a sense of just how close they were to an exit. this is from matteo renzi. right now, we have clarity in brussels. i suspect that we followed may be by chaos in athens. you look at the terms of this deal and they are pretty harsh. about the only thing mr. tsipras was able to claim victory on was this 50 billion privatization vehicle will be housed in athens. he also claimed that he got debt relief. whether that means a restructuring are re-profiling i suspect we will have a debate on that. on four of these proposals, they need to be voted on by thursday. the other two proposals, july 22. we have a clear timeline.

we are still looking for what happens with short-term financing. that is separate and distinct from what the ecb does with ela. there are a couple pots of money sloshing around in brussels. the s&p for one. this goes back to the old june deal. we do have progress in athens. you could see the esm and other eurogroup leaders figuring out how to release short-term financing before that july 20 payment to the ecb. that is one area we don't quite have clarity on. otherwise, we have a deal. it is going to be difficult. it is going to be need to be followed step-by-step in athens. manus: thank you very much for that. let's get a voice from someone who has an inside track as one of the finance ministers at the negotiations. he joins us now via phone.

thank you very much for joining us this morning. >> good morning. manus: the discussion so far that has been that bridging finance will be needed for these. do we have an estimate of how much that will be, and where those bridge finances will come from? >> i would not like to elaborate on precise figures. this is one of the puzzles that we should solve. but this is all so very important to note that the risk of not having that bridge financing lies with the greek government. the precondition for any discussion of bridge financing which i think will start already

today, is the processes that will be on the greek side. manus: the ecb needs to be paying 3.5 billion euros by the 20th of july. this is a country in crisis. there must be some parameters. is it 5 billion, 10 billion? >> let me put it -- there is a one digit amount of billion of euros. let's keep in mind that in order to restart the imf participation in the process, greece should clear the international monetary fund, which also waits for the next payment very soon. i think one of the things that will be discussed now quite closely could be how greeks

would manage to collect, to better collect taxes, and try to normalize the situation with treasury income. we don't suppose to get all the money from outside and now to fill all the holes that have appeared in the greek economy. greek finances should be alive and should be improved. manus: that -- [indiscernible] involved in this process. obviously time is limited for us. let's get to the kernel of the matter. meta-merkel has said that a nominal reduction in debt for greece is not on the agenda. she did suggest that there may

well be extensions in time duration. how long might those extensions be? could it be up to 20 years, as suggested by the imf? if you can give us some estimate , that would help us understand this deal a little more fully. >> this is one of the aspects that was discussed. i think all around the table should agree that this is not the most urgent matter. when we talk about the limits perhaps -- manus: forgive me for interrupting you. debt relief. every single guest i've had through here at bloomberg television has said that the amount of debt greece has leaves them in an untenable position. debt relief must surely be an integral part of making a robust and long-term deal.

>> you should also take into account that this debt is quite specific. most of that debt comes from public investors or public creditors. this is a bit different. meta-merkel is absolutely right. you can't make debt relief in nominal terms. this is forbidden by the treaties. we must find some way to work around -- manus: what it be 20 years, 30 years? >> the term of 30 years was announced by the imf. i wouldn't think this is going to happen. i think we will talk about shorter periods of time and shorter grace periods for the interest. this will be the discussion. manus: thank you very much for

giving us a framework to work with. rimantazs sadzius. stay with us. we have the cypriot finance minister after the break. ♪

manus: welcome back to "the pulse." i'm manus cranny. we have alberto gallo joining me. we just spoke to the lithuanian finance minister. capital controls and liquidity for the banks is probably the biggest area of focus in the near term. alberto:. yes. we have the ecb extending credit to greek banks or maybe increasing it. capital is missing.

banks have a very high ratio of bad loans. they need to be restructured. the esm is putting 35 billion into it. there could be a consolidation of greek banks. or if the number has to remain the same, there could be losses for bondholders. it is good news that the esm is putting some capital into this. manus: ok, alberto. we will continue breaking the headlines here. thank you very much for joining us. let's turn our attention now to the finance minister of cyprus. thank you very much for joining us here on bloomberg this morning. the deal has been done. the details are yet to follow. the biggest question on everybody's mind is, the banks.

and the european central bank and their ability to extend liquidity to the greek banking situation. do you think this deal will allow the ecb to do that? >> yes. it is in the banking sector that we should expect to see the first positive impact of this agreement the importance of which i cannot underestimate. cyprus went through a series of crises two or three years ago, focused primarily on banks. the crucial ingredient is confidence and stability. that's what the greek banking sector needs now, a sense of restoration of confidence and stability and i do expect that these will be significantly improved gradually through the

agreement. and obviously, even though i cannot comment on ecb decisions, that is something that we can also expect soon. net -- manus: they are convening today. capital controls are probably top of the agenda. do you think that capital controls should remain in place in the near term, and if so, for how long? >> that is directly related to the issue which i have raised. the confidence of the depositors to the stability of the financial sector it is very important once this agreement has now been reached, for it to be confirmed, and for it to be

implemented. the implementation of the program will proceed. confidence will be reestablished, hopefully. that will allow for the gradual relaxation. no economy can function under such strict restrictions. there is a framework through the implementation of the program through the implementation of structural reforms, to establish confidence. and in this way, to gradually relax these restrictions. manus: the restructuring of the banks is something which madame merkel has referred to in her news conference. she used the figure 25 billion. is that a figure you would agree with? can we expect depositors to be

confident in the recapitalization? >> i cannot offer a clear answer regarding your second weston. there is no such issue, no such prospect that could have been at risk had there not been an agreement, but since we do have an agreement bank deposits will be safe. it is through the esm that the capital requirements will be provided. the number, 25 billion it is an indication. it is high enough to send that positive signal to the markets.

that there is a more than added it -- more than adequate backstop to cover the greek banks. and in this way to send a positive signal to the depositors. manus: it is interesting, now that we have a deal and there's a level of congratulation, which is a normal process in europe, and a great deal of relief for the greek people, but how much division was there in these negotiations? we had headlines at bloomberg that it was fractured and at times almost an air of violence between the ministers. give me a sense of how fraud these discussions were. these discussions have not been easy, have they? >> i would share the sense of relief coming out of this

agreement, and the good prospects for greece to essentially establish the foundations for the economic model. there are also lessons regarding governments at the national and collective level. i have not seen in the last month's the best regarding our economic governance. i have said that the last six months was time wasted, and this has added to the difficulties and the burdens for greece and the greek people. so once the dust settles, and once we are down to the difficult but necessary job on

the ground of implementing reform and restoring confidence, we should re-examine how we take decisions, how we steer our common currency area through difficulties without adding additional and unnecessary instability. manus: thank you very much for joining. the cypriot finance minister joining us on bloomberg. ryan chilcote standing by in athens. you've got a guest. ryan: i'm joined by constantine the president of the athens chamber of commerce and industry. thank you very much for joining us. i guess, in the final analysis,

this is the deal that you had to have. >> we said we needed a deal. the other option would have been catastrophic. greece can't stand on its own two feet. this is not a production-based economy. we need to be attached to the currency. as members of the eurozone, we wish to remain within the eurozone. ryan: alexis tsipras faced his entire political career on fighting austerity. now, he's done a deal that ensures that austerity will be the main deal in athens and greece going forward. how does he come back and justify what he's done. >> it was authorized by 251 members of element, in order to negotiate the best possible deal. it may be and will be quite hard

to actually sell it to all the political parties, including his own. i would imagine his own party are the ones that are going to resist this deal far more than other political parties. because it contains deep austerity measures and the private sector of this country has taken the full brunt of the austerity that has been implemented, we have to slowly start building a relationship with the european partners and lenders so when the credibility gap that exists today is slowly emerging once again we need to change economic policy and enhance growth. ryan: you reckon he will be able to sell it on wednesday? >> we hope so. otherwise, we will be back to square one. we don't have the luxury of another early election. we paid the full price. had we not had an early election back in january, the bill would

have been approximately 1.5 billion. it went up to 8 billion. we rejected that as a government. the result now is that we are paying double the price of what was being offered. ryan: all those conversations about a grexit, about the return of the drachma, can we say those are now over? >> we hope they are over. we can't change the mixture of economic policy that is going to be applied over the next six months. if the government is not able to implement basic structural reforms, such as opening up markets, privatization is a major issue, what we need is to be able to allocate public property to the private sector at the correct price. if we are not able to implement

all these policies in the right way, anything is possible. ryan: the greek economy has contracted by 25%. where are we going to be in five years? >> it is difficult to calculate. if we see the death of the austerity measures i would imagine that if we don't change this policy, we are looking at another 10%. ryan: what does today's deal mean for the banks? they are still closed. >> we hope that they will be authorizing the ela without the collateral restrictions that we saw last week to continue the financing of the banks. ryan: we just heard from the cypriot finance minister. they had capital controls in place. how long do you think they are going to be around in greece?

>> capital controls are here to stay for a long time, maybe a year, year and a half. perhaps with an extended amount to be withdrawn. currently 60 euros a day. this may gradually go up. capital controls in an economy that faces tax evasion to the level we are facing is probably positive. however, we need to guarantee the banking business and the financing of greek sme's. ryan: alexis tsipras is prime minister of this country for how much longer? >> we need a steady government. it depends how this discussion goes. we want a steady government. it doesn't matter who is in power has long as they are doing the right job. ryan: thank you.

we just heard from the president of the athens chamber of commerce. this country cannot put to the side the conversation about a return of the drachma and grexit is still up for grabs in greece. back to you. manus: thank you very much for that. let's bring you some of the breaking headlines from the eu. greece needs 7 billion euros by july 20. they also owe the ecb some 3.5 billion euros by that date. greece, still at risk if it fails to complete its negotiations with the eu. these comments coming now. greece needs swift progress to meet urgent needs. those are some of the breaking headlines at this time. some of the other top headlines this morning, chinese exports of

the first time in four months. overseas shipments rose from a year earlier. the data is fresh evidence that the world second largest economy is stabilizing. china will release gdp data on wednesday. iran could be close to reaching a nuclear deal. one of the biggest divisions among negotiations was resolved on sunday. a senior diplomat says a political agreement was reached to lift the united nations arms embargo. greece has reached an agreement with its creditors over reforms needed to start talks for a third bailout in five years and remain in the euro. greek prime minister alexis tsipras yielded to austerity demands at a euro area summit in brussels. angela merkel says no plan b is now needed following the agreement.

what does this mean for european assets? here is the bart chart with mark barton. mark: it is like dusting down an old friend. the bart chart is back for a special treat. what i'm looking at, the title is european assets. how have europe's main assets fared since that greek election on january 25? this is the euro against the dollar. the euro has slipped by 1.1%. it started at 1.12. it rose as high as 1.1481. that is the yellow circle. it fell to 1.0496. by the way, today, we are at 1.10. just slightly below the starting point. the call today is for euros-dollar at 1.175.

let's look at the bond market. was there contagion? this is the spanish 10-year yield. it started the period at 1.38%. it fell as low as 1.4%. it rose as high as 2.41% on june 15 as we approachedd that deal. we moved from 1.38 to 2.16. there has been an increase in yields, partly because of the improving eurozone economy. initially, we saw the decline in yields because of quantitative easing. i want to look at the stock market as well. how have stocks fared? this is the stoxx 600. the period started at 3382. it raises as high as 38 28. it fell as low as 3294. that is a 3% decline from the

beginning. right now, from the period when tsipras and syriza won the election on january 25, the stoxx 50 is up 6%. this is the most incredible period right here. the last four days. the euro stoxx 50 is up by 9%. that is the equivalent of 225 million euros. just to wrap it up, the bart chart is back. european assets. the best asset to be in from january 25, when tsipras came to power was the euro stoxx 50 which is up 6% from the beginning of that period. i will be back tomorrow. manus: there you go. up next, he is sitting in the wings. i don't know whether he's written his morning piece. it is mark gilbert.

stay with us. we are going to talk greece. ♪

manus: welcome back to "the pulse." 17 hours of talks in brussels and an agreement was reached this morning on aid for greece. let's bring in our bloomberg view columnist, mark gilbert.

thanks for coming upstairs. what did you make of it? we are seeing lots of variations on a team. merkel looked exhausted at the end of it. we are hailing this as getting one across the line. is it? mark: it shows that there is really only one voice in europe and it is germany. everyone was excited about france intervening, france taking charge. it has only been angela merkel making things happen. what is clear is that this talk about maybe five years out of the euro once you have the chance of are saying we might see greece out of the euro, you see tsipras realizing he really is in the departing lounge and he doesn't want to be on the plane leaving the euro. manus: here's a fellow that went to the country in january, was elected on a vote for no more austerity. to walk out of negotiations and

not accept the austerity levels, and here we are. has he completely capitulated for the sake of his country? should they have stayed or gone? >>mark: it looks like capitulation. if you were a greek, you might wonder what was going on given that the deal looks more harsh than what greece might have got act in january or any time this year. i think it is kind of cruel. imagine you turn to your local tennis club and there's roger federer across the net. and every time you turn, there's roger federer. the greek economy is too week for greece to be in the euro. i think that may have always been true. it is certainly true now. there is almost a vindictiveness to keeping them in. i think they would be better off

regaining some independence stopping having to qualify to be in the currency. manus: this comes down to the greater political scenario in europe. i'm looking up slow back. there was a wonderful -- show no mercy. this is the slovakian. this was the psychology in that negotiation. show no mercy to greece. greece has gone through one of the biggest austerity programs in europe. it has implemented a huge amount of austerity. when she you -- when you see the slovakian's saying, show no mercy, do you want to be part of the club? mark: if you are going to play brinksmanship and you lose, you don't have a say as to what happens next. countries get the governments they deserve. this capitulation, i don't see

how you sell it at home. manus: he had a vote, 251 out of 300 supporting. now there's this privatization fund. mark: 50 billion euros. manus: originally, it was to be domiciled in luxembourg. the italians stepped in and said no. correct me if i'm wrong. they haven't managed to privatize a huge amount in the last five years. mark: this is part of -- humiliation is almost too strong a word -- if you look at merkel face when she was going into negotiations before the talks even started, she's angry. she's really angry. tsipras has threatened the entire project. she is seriously displeased that she has had to be in brussels

talking about the future of the euro, having to threaten kicking a member out to get that member back in line. that is not somewhere angela merkel wants to be. manus: that is not how the germans want to be seen. my perception is, this is not a harmonious europe. mark: no one comes out of this well. if the creditors had been more relaxed last year, you might not have had the election results you got. but if the greeks had negotiated in good faith, and every ry indication is that they didn't, trust has dissipated. whether that can be rebuilt or not, you better hope that the greek parliament doesn't start talking about a coup.

manus: ok, mark. we are going to take a quick break. we will come back. join us on "the pulse." ♪

manus: the euro summit unanimously reaches agreement with greece. it merkel says we don't need a plan b. we will have all the latest on this developing story. chinese markets rise again. 400 companies resume trading. exports rise for the first time in four months. at the 16 days of talks in vienna, a nuclear agreement could be announced early today.

good morning to our viewers in europe. a warm welcome if you are just waking up and bring your coffee in united states. this is "the pulse." we're live from london. we will be speaking to the standard and poor's. we start the day and the pulse of a raking news. alexis tsipras has surrendered to european demands to qualify for a 6 billion euros in aid. he needs to keep his country and a single current -- currency. this is what leaders were saying. >> we had one objective, to reach an agreement. after 17 hours of negotiations we have reached it. >> we have found an agreement. it was laborious.

it targets time. it has been concluded. >> it has been a laborious night. it's a good step to rebuild confidence. there will be many more steps. >> we worked very hard on a lot of issues. financing needs etc., we were able to agree on a lot of these issues. >> after 15 hours of discussions, an agreement was reached. it was wanted by france and we do have this agreement. >> there is a unanimous decision by the 19 euro members. we can recommend to the germans to pass a vote to resume negotiations for a concrete

program for greece. manus: for more, let's bring in hans nichols. hans, let's turn to you first. in terms of the politics merkel, she touched on a couple of different issues. they talked about the need for trust. hans: i daresay there was trust at the end of the meeting. this is an agreement choked with conditionality. what the greeks need to do before we get to the next steps. on wednesday, they will need to pass for measures. when madame lagarde spoke to bloomberg television in the we early hours of the morning, she said this was a step-by-step process. >> good morning.

it's been a laborious night. i think it's a good step to rebuild. there are steps of will be illustrated by the implementation of what we do now. hans: the pressure point in these negotiations are a telegraph of where the problems will be in the parliament in athens. you saw mr. tsipras dig in his heels. on this 50 billion privatization vehicle, it will not be houston luxembourg. it will be established in greece and run out of greece. it will be administered by greek officials and supervised by eu officials. he did not keep the imf out. they will have a continued presence in athens.

that could be a problem for mr. tsipras. he has debt relief. that is not a debt restructure. that is not a right down. we have very little clarity on what that actually means. now we have a series of steps and we get into the serious negotiations about what this year some package will look like. there is short-term financing how you are going to restart the great thanks and make sure these payments coming do actually get made. manus: let's switch our attention to ryan. the deal is done. the deal will get ratified in the parliament behind you. ryan: a lot of people are going to see this as complete capitulation by the greek prime minister. that's not how he can characterize it, he has 72 hours

to push these measures through the parliament. two of the things that he will count as wins as he goes into the parliament what is he avoided a grexit. they also made it very clear over the past couple of weeks that they want to stay in the european union and the eurozone. he has already said this, this should bring it banking stability. that is key. while the great people said in that referendum that they don't want any more austerity this would appear to be exactly what he is agreeing to, they don't like standing outside the bank. we are now in week three of capital control. the banks are still closed. if tsipras wants to sell this to the greek people in the longer term, than those banks have to open.

now the attention goes to mario draghi and ecb and what happens with the funding. i can't impress on you enough. greek without its banks is not greece. people want access to their cash. it's just not enough money. people are concerned that even with this deal, what we saw in cyprus in 2013, it's not something they can forget about. they want their money and they want to hold on to it themselves. manus: thank you very much. we are joined now by standards and pores. it's great have you act with us. we started this conversation seven days ago. we were talking about grexit and now a deal is on the table. from what you know so far, what do you make of it? >> this is not a deal in the

sense that this is a program. it's a framework agreement that will allow the parties to negotiate a program. in order to reach that point, greece had to commit to unfinished business from the second program. that has to happen by wednesday. in principle we see right now are the contours, but not an actual deal. negotiations will drag on. you can't just flesh that out in a long night over the weekend. we have at least some time that might allow if it goes through parliament on wednesday to find some funding that would allow of an avoidance to default. manus: bridge financing is the term that merkel used.

they've got to pay the imf. they've got to pay the ecb. what is a fair assessment of bridge financing and how it could be delivered? where would it be delivered from? moritz: my understanding is there will be 7 billion on monday. that is the day when 3.5 billion bonds come due to the ecb. there is the backlog on the imf. there is a commercial debt and interest payment later next week. there are a lot of general payments. but i expect is given the question of trust that you mentioned, this will be very much in steps rather than a grand disbursement the beginning. after see what happens on wednesday in athens. it's hard to stomach for some

parliamentarians of the coalition. i would expect they've been negotiating for, what they ask the population to endorse is not being fulfilled. the referendum has lost the greek element of time. the economy and the financial system has deteriorated quite significantly and a recession is all but a certainty. manus: getting the banks open and getting access to funds in getting the economy back on its feet in terms of the ability to continue to deal, the politics has to play out first. there is a process. where does that leave capital controls? manus: the capital controls and

withdrawal limits on atms, if they were lifted the greeks would try to empty as much as possible from their accounts. once bitten, twice shy. this would require in increase in ela. that is quite unpalatable to the ecb right now. this will continue a little bit longer. it's a big problem. much more than the u.k. or germany or france greece is much more cash-based. any transactions including wage payments are done in cash. if cash is in short supply economic activity will decline. this is the real challenge, how can the banks open without being drained immediately of their deposits? manus: we've had some details so far on this 50 billion euro fund

that will be managed for privatization with --. it will be used to recapitalize banks. i want your take on this urbanization fund. they have not had much success in privatizing greek access this far. is this a realistic goal? moritz: you are right. the trike -- track record has been poor. that's been one of the problems of the funding balance of the greek government. the question is what changes. who are the buyers that would snatch up 50 billion of greek assets? what's unclear to me is what would happen if those 50 billion are not forthcoming? if it doesn't happen, how would

the funding happen for the bank recapitalization and the debt reduction? that is being fed those privatization receipts. there are many question marks on that one. one has to be cautious regarding assets whether through an agency or directly. the foot dragging of the greek government in selling assets that may be mitigated. 50 billion is a big number. i'm not clear who would be the buyers. the gdp of greece's round -- greece is around 180 billion. manus: skeptical? is that a fair representation on your take? moritz: i think one needs to because us on that one. what's a negotiations for the

program get underway, there will be discussion on what's going to happen if this fall short. you can build a robust program with those 50 billion when it so uncertain what will be coming. you need to see the list of the actual assets. it just sounds like a rabbit out of a hat to me. i don't think a clear project or properties for companies that underlie this number with solid valuation. skeptical sums it up. manus: we are running against the clock. that relief is something mr. tsipras refers to. there will be an extension. where are we on this? what makes that sustainability to have standard & poor's ratings? he is talking about that relief. what do we see in terms of sustainability? moritz: the most important thing

is always a growing economy. that's what greece has been lacking. it's been lacking because they're been so little progress on the reforms. they have been successful on the austerity. they need to rebalance and have more structural reform that allows the economy to grow further and faster than in the past. if that happens, you can re-profile and generate a profile that might square the circle and get sustainability while the creditors say we haven't given anything. the actual value of the debt would have been reduced. my understanding is not going to be frontloaded. this will only happen after a first review of the new program which has yet to be dispersed. it's not emmett. manus: thank you so much for giving us your time this morning. markets initially had a little bit of a flurry. we have some context.

what is your take? mark: at the beginning of today's session, we replicated the behavior of the euro against the dollar in the previous two weeks. the euro immediately fell by 6/10 of 1%. take a look at this chart. this is the euro dollar day chert. the euro crept along until the big news came out. the euro summit has unanimously reached agreement on it greece. the euro started to rise against the dollar. that was just before 8:00 london time. the euro has come back. now we are about a quarter of 1% lower against the dollar. this comes after a 1.1% rise on friday against the dollar. hedge funds and other large speculators are virtually

unchanged for a second week. what's interesting is the euro has gained almost 5% in the last three months. that's the best performer tracked by bloomberg's correlation indices. that's the euro against the dollar. we had highs once the news of the deal broke, but it's been creeping low. the euro has risen in recent weeks on it good news. we are at 11070 five. let's look at the stock market reaction. it's phenomenal how these equity bosses have their last three days. the euro stocks have risen by 8%. that's the biggest three-day since 2012. ligety advance today. euro stock is up 2%.

stocks seem to be the beneficiary of this news in a deal that has been struck with greece up by 2% for euro stock. take a look at the bond market as well, italian bonds rose last week and yields declined. there is little change for the italian 10 year intraday. italian bonds rose last week. spanish bonds rose last week. the movement is seen in the stock market, not the bond market. the euro is falling against the dollar. manus: the old days are some of the best days. mark barton, thank you very much. chinese exports are up for the first time in four months. overseas shipments rose.

this is frist evidence that the chinese economy is stabilizing. they will release gdp growth data on wednesday. there is they are -- they are close to a nuclear deal. there have been 16 straight days of talks in vienna. an agreement has been reached and a key issue. mexico's most the tortoise drug lord has escaped from jail for a second time. officials say he disappeared from a maximum security prison near mexico city through a mile-long tunnel. he spent 13 years after a prison break involved a laundry cart. cards are being questioned over his escape.

protests have reached heathrow. the court says it's working closely with police to deal with the incident. there could be some delays and cancellations. ok. we've heard from s&p. this is about trust and keeping greece and the parliament a green over the next 72 hours. how will tsipras manus the deal? we will discuss that on "the pulse." stay with us. ♪

manus: you are very welcome back to "the pulse." ryan: i am joined by the market commission. they give for joining me. i guess the news out of brussels is good news. you've got to like that. >> there has been an agreement it has been a long night and difficult. the negotiations had gone sour at a certain point. ryan: will the greek prime minister get agreement here with

his own parliament? >> the sequence of events is we need to pass most of the new provisions in our parliament on wednesday as soon as wednesday the day after tomorrow after many difficult measures. it will pass in front of the other national parliament six countries need to pass from their parliament. ryan: then what happens? when will you be back business? >> it depends mostly on the liquidity. that's another story. that depends on what the european central bank will say today. we hope after the agreement and

based on that, they will start functioning. ryan: everybody likes to look to the ecb. >> they will start functioning again under some restrictions. ryan: your market opens when? this week? >> at depends on what we do today. we will talk to the systemic stability board. we will discuss the strategy moving forward. ryan: we are hearing from the finance minister, when cyprus went through this, they had to keep them in place for long time. >> in cyprus it was two years.

normally for up -- and amount of time of some months it depends on how the banks react. ryan: we heard from the head of s&p ratings. he was skeptical about the appetite for great assets. do you expect people to come into the market start buying great securities? >> i think it's a huge challenge but it's possible if things go well on the political front. ryan: thank you very much. and all depends on the ecb and what happens with the ela. he is hopeful they will be able to open this week. back to. manus: that is probably the biggest question on everyone's mind, when will the greek banks reopened? the ecb is convening today. greece is brain drain it, we

will take a look at how they are losing some of its talent. ♪

manus: welcome back to "the pulse." live from bloomberg headquarters in london, i'm manus cranny. chinese exports are up for the first time in four months. the data is fresh evidence that the second-largest economy is stabilizing. china will release gdp growth on wednesday. iran may be close to a nuclear deal that could be announced today. one of the biggest problems was

resolved on sunday. the political agreement was reached to lift arms embargoes. the top story for the past hours, greece's reach an agreement with its creditors over reforms needed to's dart talks for remaining in the euro. alexis tsipras yielded to austerity demands after 17 hours of talks. >> today we had one objective to reach an agreement. after 17 hours of negotiations we have finally reached it. >> the agreement was laborious. it gets time. it has been included. -- concluded. >> it has been a laborious night, that's a good step in rebuilding confidence and there

will be many more steps demonstrated by the implementation of what has been agreed to. >> we worked on a lot of issues regarding reforms and debts and financing needs. we were able to agree on a lot of these issues. >> after 15 hours of discussions and debates, an agreement was reached. it was wanted by france and we do have this agreement. >> it has been laborious. manus: has impacted the markets? jonathan: at least we have an agreement. equity markets are in agreement. here is the rally on europe. up almost 2% in spain. right here on the dax 1.3% for a fourth straight day of gains. we are up by 7% in just four days in your meat.

laborious was the buzzword coming out of the conference. implementation is going to be the buzzword in the weeks to come. can greece get this through parliament without picking up their government? that is the challenge going forward. then you have the respective parliaments of the governments that need to vote on a rubberstamp on a deal. that is the challenge ahead. that implementation the reason that bond markets are not getting excited. they are just about making it a fifth with yields marginally lower. spanish yields on the day are higher. they are higher by about one basis point. yes you have an agreement, the big challenges implementation. when you look at the fx market the euro is weaker.

it is down by 8/10 of 1%. that enthusiasm is rolling over to session lows right now. what a week we've got set up. we have testimony on wednesday. mario draghi is on thursday. it's a busy week ahead outside of greece. another day, another sign of stabilization in china. this is what happens when the market is shut. it's a big week for shanghai. exports are up for the first time in four months. gdp figures are released on wednesday. this week is a busy one. not many people think we're going to hear the end of greece just yet. manus: there is a huge amount of political risk. joining us is -- thank you so much for coming in.

there is an immediate pop on the upside. there was an immediate rally. there is still a lot to be done on the finance minister over the next 72 hours. >> it's a long torturous road. this is significantly worse than what they said no to just a few weeks ago. i think the situation is worse. the package put in front of the parliament is going to be significantly worse than what was there a few weeks ago. there is going to be great uncertainty. manus: if he manages to get it through, this is a complete capitulation for more austerity then it would have been there in the first place. he has capitulated.

can he call elections to renew his mandate to implement it? ashok: it's inevitable. there is going to be a lot of repercussions within his own party. some of the allies supporting him may decide not to. an important point is the 50 billion euro fund. it's difficult to see how that is going to be satisfied of short-term. in terms of which assets. manus: that's one of these trumped up formulas for a drugged up solution because they couldn't come up with the proper solution. ashok: if you look at the reality, the numbers are not feasible. you've got a hurdle that has been put in front of the greek people that is unlikely to be met for a while.

this will hypothetically be height -- privatized and moved into the fund. this going be problematic because the recession is worsening and the banking system will be recapitalized. this privatized assets will be worse than they would be. manus: recapitalizing the banks 25 billion euros. one of finance ministers said there will be no bail in. i need to be clear on that. take all of this for me. we are in correction territory in a lot of these markets. with you by european equities if this deal goes through? ashok: i think it's getting to a

stage where one gets excited and you may need to wait on the -- until the middle of the week to see if more uncertainties are taken off the table. the new mortgage rates are coming down. the economy growth rate is more sustainable. manus: they downgraded america and china but they keep european growth rates. 1.7%. ashok: the short-term rate will probably be around 2% before it comes down. if the cost of capital stays down, you have stabilize the housing market and the banking sector. you make it so that the loans go down faster. the cycle is pushed further out into the future. the consumer spending is already rising.

you get exports that have done reasonably well. i think there are cyclical things now. there are structural changes that give you more comfort qe is starting to have its affect. you're not going to get inflation for quite a while, maybe early 2017. we are gaining a situation where liquidity keeps coming in. i think the corporate earnings cycle could be a lot that are -- better. there is a huge rally in the first quarter. a lot of it was preempting all of the corporate earnings over the next two years. now we have had a lot of correction because short-term money has come out. i think it's time to do the due diligence and add to one's portfolio. manus: what would that be? if everything lines up?

moritz: i'm convinced that the large cap to mastic players will continue to capitalize. manus: thank you very much for coming in on a busy morning. a deal may have been done. with youth unemployment at 50% young educated greeks are leaving country. we spoke to students about the brain drain. >> a great number of people young people are going abroad at the moment. there is no future here in greece.

>> the unemployment and the percentage of unemployment is growing every day. we are anxious and stressed about will come after finishing. i will try to do my best so i have a better chance to find a better job. you have to live. you may have to go abroad. that means all the good brains of greece are going abroad. the problem is for them it's good. they are going to take the best minds and adjust employment. they are going to use them. they will make a bigger amount of money. for us in greece, who is going to stay?

it's going to be the idiots. it's a pity. the brains are leaving. i don't know who's going to stay here in greece. i hope that in the next years people will come back and help the country. i don't know. we will see. it's disappointing. we will figure it out. manus: the reality of austerity on the young students of greece. coming up on "the pulse." iran and world powers are on the cusp of a nuclear deal. we have the full story on what it means coming up next. ♪

manus: welcome back to "the pulse." we're live from bloomberg television studios in london. we are down to the wire on this nuclear deal between iran and world powers. there could be deal as early as today. elliott, all of the voices in the past 24 hours are urging us toward getting this deal done. is it for real? elliott: it's hard to tell right now. if you've asked me that a couple

of hours ago, i would've said it certainly seems so. the text of a deal is now 98% complete. and we heard from the top iranian negotiator. he said talks have reached a final moment, that he can't promise that issues will be resolved by tonight or tomorrow night. these last two issues that seem to be preventing the deal there was some part of the deal that the europeans and chinese and russians were happy with but the u.s. and the iranians what the wording changed. there are people around this negotiating table and it will come down to the u.s. and iran. we are very close to a deal. manus: even if this deal is reached in the end, it still needs approval in washington and

the voices coming from washington are not accommodating toward this. some of them, i should say. elliott: they are in day 17 because they have extended so long. congress will have 60 days to review any deal. some of the words from the speaker john boehner talking about the text of the deal looks as though the u.s. has act away from some of what was agreed to in the framework back in april. mitch mcconnell talks about a very hard sell needed to get this through congress. there is no doubt that israel will be speaking with its allies. we have heard from the defense minister this morning talking about israel preparing to defend itself. netanyahu will be using all of his influence in congress to stop any deal when we get one. manus: everybody refers to iran

and their oil capacity. that will come back onto the market in addition to the oil production in the united states. do we have any sort of research or views on the impact of the oil price? elliott: we know that there are a lot of companies queuing up to get with iran. bank of america says it's going to take six to 12 months for them to get the investment and revive some of these wells to get production ramping back up again. it's not going to happen immediately after a deal is done. congress may try to kill the deal once it gets a chance to review it. there will be a separate timeframe. all of the sanctions will be lifted as well. make no mistake, iran is the

fourth largest holder of oil and there are hopes that a deal would be done in vienna. oil prices are down by 2%. there was optimism because if greece -- things became uncertain about whether we would get a deal in vienna. world oil prices reacted to that. there has been reaction. most analysts expect the real impact on oil prices to happen 12 months further down the line. manus: stay focused their on the potential for a deal between iran and the rest of the world. these are some top headlines. the nintendo president has died of cancer. he led the company back to prominence in the early 2000's with wii games. he was the first president

outside the family that founded the company. there was a major security breach as protesters penetrated london's heathrow airports perimeter. they kept their way through the wire to stage a demonstration on the northern one way. -- runway. this after announcing he will resign. he has been at the center of a corruption scandal since june denies it. coming up, what will await the greek prime minister when he arrives back in athens? we will have the latest on the ground with ryan. has he got clinical support in

this critical 72 hours for the future of greece? ♪

manus: this is "the pulse." we are streaming on your ipad here it this is what we are going to be watching for the rest of the day. ryan, tsipras has to return back

to greece and convince the parliament that this is a deal that is worth signing. there was a line. he said he doesn't have the mandate to hand over half of greece to a privatization fund it, but he didn't. he has. ryan: it's interesting. he appears to have gone from predator to pray. how does he reinvent himself? how does he sell what has transpired is a good thing? the bets are he will be able to do it. there will be a lot of twists and turns. expect them to point to that ravages asian fund and how it's going to be housed not in luxembourg as was being discussed arian it will be in greece and that was important. this is going to save the banks. it's going to prevent a grexit.

we need to look at what the ecb does. is he going to increase the cap? the banks are still closed. obviously, the ela is absolutely essential. it's not clear when that could happen. manus: i know some of the voices you have spoken to this morning and guests i have had here they can't see the capital controls being lifted anytime soon. that's the other issue. whether they can or what they will do in terms of liquidity. ryan: i think that's a good point. there is a difference between the banks reopening and it capital controls going away.

you were talking about the finance minister, it took two years in cyprus for that to happen. one guest said it could be two years for that to happen in this country. maybe you see that migrate north. maybe people can withdraw 200 euros a day that is in very much. that's where the rubber meets the road to the greek prime minister. if he wants to maintain the support of the people, he's got to reopen the banks. they want to and austerity but with the banks closed for two weeks, they want an end to that as well. manus: ryan, thank you very much. a job well done there. that's it for "the pulse." keep right here on bloomberg television.

greece is paying the price for having a populist government. what will the ecb do? you will get it here first here on bloomberg.

announcer: this is "bloomberg surveillance." tom: tsipras capitulates. merkel demands step-by-step inch by inch action. tsipras must face parliament in athens. it is the new american banking

on. jpmorgan reports tomorrow. we consider the future of wall street. and slovakia is not greece. sir howard davies, the former prime minister of belgium and hosni nichols from brussels. olivia sterns and david gora in athens as well. this is "bloomberg surveillance ," live from our world headquarters in new york. vonnie quinn is with us with the news. first, brendan greeley, what is your headline of the two hour cacophony? brendan: this is not a bailout. it is the discussion of the possibility of a bailout. tom: that is the theme for this hour. not a lot of answers right now, but a lot of questions. sir howard davies will join us in the next hour.