francine: china slowdown. markets review this live after a four-day shutdown. the world's second largest economy revises its growth downwards. add 6y prepares to billion euros to the federal budget to deal with the influx of refugees. david cameron will set up uk's plans later. glencore under pressure. the minor plans to sell assets and shares to cut back a $30 billion that are. what is next for the worst performing footsie stock? ♪ now welcome to the polls. life from bloomberg's european

headquarters. i am francine lacqua. chinese shares have slumped again. as the bureau downgraded its growth figures. let's go to down s let's go to hong kong. he is richard frost. what happened today? up --d: the market ended and it down pretty firmly, 2.5%. it started brightly, gaining 1.8%. what we saw toward the end of ,rade was the biggest companies china construction bank, plunging 10%. these companies have been the intervention.te some of them running up 18% in just a couple of days. the fact fairly clear

that those stocks were falling sharply meant that state intervention has taken a step back. they seem more comfortable allowing this marks to fall. francine: china told the other the turmoil is set aside. it does not look like it. richard: it doesn't appear as bad as the figures appear. virtually every stock falling heavily. with does god up to one shares up. it could be a sign that there may be some retail interest coming back into the market. some reassurance by what the central bank governor is saying, things aren't start -- things are going to start looking better.

no one really knows if it is state intervention. it wasn't quite as bad as it may have looked. francine: how much further can the market decline? richard: when we have been talking to some of the most accurate forecasters. one thing they point to is this is still a very expensive market. relative to other major markets. trading about 45 times reported earnings. in order to fall back to its long-term average, the shanghai composite would need to decline about 2.5 thousand. they say given how everything is slowing and deteriorating in china, the market does not deserve to still trade at such valuations. if the government does step back intervention, then we may see

that market fall back to those levels. richard, think you so much. that brings us to today's jenna question -- today's twitter question. is's ask our next guest, he ,ormer governor of argentina mario blejer. g-20 did not seem to buy what china was saying. we had a bubble, it burst. now it will be more stable. how much do you worry about china echo it is going to guess how much do you worry about china? mario: i think the situation right now is being felt all over in the emerging markets and developing markets. a large deceleration in the

economy will have an impact on the global economy. the equation is now subsiding or not, it is difficult to assess. china ismation from always [indiscernible] we always knew they were going to transition from an economy that was much more consumer friendly. do you think this is a part of the transition? doesn't underlie the fact that this transition is much harder than we were expecting? >> it was orchestrated by the government. keep controllt to even though the intervention is heavy in china. it is difficult to keep control over such a big economy. it is probably going farther

than what the government wanted. it is a part of a changing model of growth. is thistion is transition having an impact on the rest of the system? certainly today emerging markets are feeling the impact of china's acceleration. the markets in china are affecting many other markets. francine: how concerning is it for other emerging markets? you have china, the big question mark that surrounds it. you worryntinian, do that the turmoil is going to continue? mario: i think it will get worse before it will get better. --na is very influential in influential on emerging markets.

the deceleration in emerging affects-- this [indiscernible] china is important in the world trade. important in trade. recently withise the devaluation of the currency. no one was expected this. when markets have been taken by surprise, they react in an unpredictable manner. this is something that's advanced countries wanted china to be more -- they do not expect a devaluation. china did not expect the devaluation to have such a great impact.

the desk do you think we are in a currency war? mario: it depends on how you define it? we will get the qualification after this break. we will debate this and talk about argentina a little bit more. thanks for coming on. he stays with us and we'll talk about the fed as well. here is what else is on our radar. -- from hungry over the weekend. the prime minister of the check meetlic and austria will later to discuss the crisis. all of this comes ahead of wednesday when the commission -- migrants across europe. tesco has confirmed it is selling its south korean unit. 4.2 billiond at

pounds. the world's largest publicly traded commodity, glencore, is looking to get rid of its 33 billion dollars debt. decline in london trading last week. -- it tries to recover from an accounting scandal. the hundred $18 million through the end of march. that is compared to a year earlier. the former greek prime minister has told supporters that the upcoming election is a fight dark.n the of corruption and cronyism of previous administrations. its leader has told bloomberg that a threat of a grexit is

still very real. grexitink the danger of has not passed. if we end up with a government that will not bring about stability, these dangers will become more imminent. since we don't want to play games with greece, we want a .overnment led by new democracy doesn't mean we surrender completely. it means we go into negotiation's with strong arguments. francine: what can central banks take from this weekend's g-20 summit here it we take on that next. ♪

francine: welcome back to the polls. where live on bloomberg tv and radio. as oil prices continued their collapse, speculation that saudi arabia will drop its currency peg to a dollar. the biggest oil producer dismissed the call at last weekend's g-20 summit. he spoke to bloomberg's desk spoke to bloomberg and that exclusive interview. -- theexchange policy exchange rate of 3.75. it serves our economy well. it continues to serve our economy well. francine: the former bank of , mario blejerrnor

is still with us. join us is simon kennedy. mario, thank you for sticking around. before the break, you told me you think there may be some currency -- there may be a currency war. tendency is as a way to gain competitiveness. [indiscernible] in general, there is no immediate reaction. [indiscernible] we will repeat a situation that would be very difficult francine: to conduct policy. we talked about current -- francine: we talked about currency wars. it.now -- having to reverse

simon: central banks have raised rates only to bring it back down. the ability to get escape velocity's desk escape velocity is pretty hard. really raises rates only when you think you can follow through. that is the challenge. everyone thought september is on the cards. mario, you don't expect anything from the fed until next year. mario: no, i think you increase rates [indiscernible] francine: a lot of people are saying it is a very narrow window where they can act. if they don't act now, they don't have as many tools. the momentum may disappear. ; the economy is still --

probably be a good time to do it, i don't think the global consideration. francine: there is the bank of england. ; -- simon: i think the assumption of investors is that they will wait for the fed to go. some policymakers say they're not betrothed to the fed. he can go on their own account. mark carney plane down the effects of china. focusing on the data. both teams at the central bank focusing on the banks and their economy. francine: mario, what would you be looking at? do you have a higher pound? the oil prices -- mario: i don't think it's the right time.

the economy is still recovering. think [indiscernible] it is much more dangerous than a small increase in inflation. francine: simon, we talk about the facts that the markets have been dependent on this steady drift from central banks. we are not concerned they are going to be too dependent. at some point, they will have to raise rates. you don't know if the markets are ready or thinking about it. , less thanou look half was ready for a rate hike in september. the markets was the pricing in. there is a risk of their here it -- there is a risk there. policy was in the the exit policy was not thought

in advance. there is no clear exit policy. until we finish the excess, we don't really know how this is going to play out francine:. also an advisor to danielle seely. how difficult is going to be for the next administration to dismantle currency control? mario: i think is already difficult to dismantle control. it depends on how much argentina will be able to come back to the capital market. candidates of the are determined to integrate and get back to the capital markets. [indiscernible] francine: she is leading in the polls.

how to go do think it will be for him to win, because he is ?een as president fernandez's -- i believe that is what a majority of the people want. francine: thank you very much. austria is -- allowing 12,000 people into the country. the migration issue took center stage over the weekend as policymakers struggle to deal with the crisis. here is a taste of the discussion. >> time for blame games is over. it is time for making decisions. turning decisions into action and doing it united. cooks it makes no sense -- >>

and makes no sense to have a debate on who gets how many billions. solidarity.turb the the migrants and the understanding of the german people. >> we need to have a european response to this humanitarian crisis. nationalism and xenophobia are not the answer. closing borders is not the answer. >> we will continue with our approach and taking them from the refugee camps. this provides them with a more to theand save route united kingdom. rather than risking the hazardous journey. >> as far as the imf is concerned, we try to do what we can when we are asked. francine: in germany, merkel's governor dess merkel's government held an emergency meeting last night.

-- merkel's government held an emergency meeting last night. hans, what we know about the summit? fencing, there are two stories coming out of official germany. in some ways, the tension of the stores reflect the tension -- the mixture of chaos. behind me you can see hundreds of refugees lining up. a host of syrian activists upfront. this is where they initially have to log their registration. there is a separate line over there to get social help. that means money. there is a lot of that happening. the question is how is germany going to afford this? this morning, they have announced an additional 6 billion euros for 2016. we don't quite know how they are going to pay for the rest of

2015. what the numbers are going to be. merkel's government says it will do what is necessary. , the specialime, agreement between hungary, austria and germany, it will allow that bottleneck in germany to break open. these refugees to come to germany. 17,000 over the weekend. saturday, 10,000 is the estimate on sunday. for that to happen, they needed to bend those rules. the special agreement between those three countries appeared to be over. in some way, that is as important as what germany is doing, planning for the future. unless they have some sort of long-term process in place about what to do with refugees, all of the money in the world is not going to solve the process. have a seriess we of meetings taking place in

brussels. how we're going to resettle these refugees. a similar number in greece. these are all prospects. these are not firm numbers. these are proposals. a lot more work needs to be done. there needs to be much more political unity for these problems. francine? francine: talk to us about the camp at the bank. are they waiting for papers? are they house there temporarily? does it feel like chaos? hans: yeah. when you first arrive here, you get some sort of red piece of paper. that allows you to get a further judgment date on what your official status will be. this is your first ward of call here. there has been some frustration.

that gets to two sides of the story. you might see volunteers around handing out water, sandwiches. at the same time, we've heard from a couple of people talking about rudeness inside the building. -- you've got to ask yourself what are peoples expectations. they've had a very difficult journey here. they may not feel as welcome as byy official germany volunteer germany. the question is will there be matched on the official site. can merkel's government hold it together? she is in coalition with her sister party. they have been increasingly critical of the response and direction merkel is leading her country. francine? francine: hans nichols, in berlin. -- how the you kate will resettle thousands more -- how the u.k. will resettle thousands

more refugees. thousands more needed on a spending for the crisis. >> in the short-term, where good to take more refugees, but not in a way that encourages them to get into these ranges both. we need to about our age policy. we support reducing poverty's. -- the question in the spending review is not how our rate budget helps the rest of the world, but how it helps britain's national interest? cameron: we know david is addressing parliament this afternoon. what can we expect? plansis going to announce to allow refugees to come to britain. in terms of assessing out the long-term infrastructure, nobody really knows how to handle the

problem. is -- youwith britain just heard the chancellor speaking of redirecting aids funding to either the camps or those failed states. the problem that cameron faces is that there are already thousands of refugees in europe and how do we do with those? forcine: there are calls cameron to relax. how far can he go? >> he needs to leave people at home. horrifiedeveryone was by the picture of the child on the beach. does that extent to people being comfortable with intervention in syria? ?r take 10,000 more refugees

not necessarily. the other issue is he needs to make friends in europe. he is in the middle of very delicate negotiations. francine: thank you very much. we are back. ♪

francine: welcome back to "the pulse," live in london. i'm francine lacqua. china's foreign exchange reserves fell by a record amount as the central bank try to support the one. reservist rock to $93.9 billion. at the same time, the national the 2014wngraded economic growth figure to 7.3%, down from 7.4%. austria is to start closing its borders again, and it rolled

back measures allowing migrants to cross into the countryh. meanwhile, the prime minister's of the check public, slovakia, ahead of wednesday when the european commissioner will put forward a new proposal about the redistribution of migrants. will holdis hollande one of his twice a year conference is in the next hour. he is expected to face questions about the migrant crisis in the french economy. this comes as his approval rating stands at just 19%. let's get more on that story -- carol linktone and is in -- caroline connan is in paris. which is going to be the most difficult subject for him? caroline: it should be the migrant crisis in the situation in syria. syria will be the first question he will face, whether france will intervene in syria.

at the moment france has an operation against the islamic state in iraq, but nothing serious because france doesn't want to look like it is supporting bashar al-assad. question,be the first syrian refugees coming to france. he will face questions on the migrant crisis and how france will handle it. francois hollande just a few months ago in june was opposed to having a specific number of refugees coming to france. he may have to change his mind on the subject in light of what angela merkel is doing in germany. francine: caroline, i was looking at the approval rating yesterday -- it is incredible. 19% approval -- that is very low when you look at his main rivals in next year's presidential election. sarkozy has 25%.

how does francois hollande managed to get approval ratings that well? caroline: of course, six months ago, during his last press conference it was a very different number. it was just after the "charlie hebdo" attack. it was going up and now it is going down, 19%. no matter who he will be facing in 2017, according to this latest poll, he will not make it to the second round whether the candidate is of the right wing, sarkozy, or the left. he will have to answer questions today about the economy. to do in the 20 months before the next election -- he might announce a reform, but like any leader, he is seeing it as a touchy subject and where he needs to refocus on his way or appeal to the center. labor reform is very touchy in the far left.

finally, he says he will not seek reelection if he doesn't managed to reverse the curve of unemployment, in the jobless rate is still at record highs at 10.4%. he only has a few months left in order to reverse this unemployment curve if he wants to seek reelection in 2017. francine: thank you so much. the world's largest publicly glencore, iser, trading to to billion dollars worth of assets. let's get more of the details with bloomberg commodities reporter, jesse. you have been following this for a couple years now. dividends, but this was one of the main things i thought attracted shareholders. the share price is up 8% -- why the positive? jesse: very good question.

i think it is because for some time there has been serious question about glencore's balance sheet. $30 billion was clearly untenable in light of weaker commodity prices in dwindling demand for their biggest customer in china. significant, less than three weeks ago we spoke to the cfo, who said they can walk and chew go at the same time, protect the dividend in the credit rating, and we have been in 2.5 weeks and share prices collapsed. we hear today that the next meeting is what has driven this change of policy. francine: last time, you were talking about earnings. the rating is absolutely crucial. glencore lost more than half its value this year. i guess now it is redressing the balance sheet, and it has an impact on its credit rating. jesse: they are clear that they

believe the changes they are implementing that will protect that all-important credit rating. if they lose that credit rating it increases the cost of their training business significantly, so they will do everything they can to protect it. they are taking some extreme measures today, still ironing out the details with investors in the coming weeks. they haven't finalized the form of the sale but they expect to make a decision in the next quarter. francine: thank you so much. we are getting live pictures of angela merkel, commenting in berlin, introducing a new refugee package. hans nichols is live from one of the camps. angela merkel is saying that europe can only overcome the crisis together, also saying that the current rules are still valid through the bloc. she is talking about these

breathtaking events over the weekend in germany. earlier this morning, angela merkel and her coalition agreed to seek an extra 6 billion euros in spending to aid refugees into the country. that adds a next her 3 billion euros to the 2016 federal budget. of chaos andscenes we know the european commission is putting a proposal together for wednesday to tackle this crisis. they are trying to redistribute some of the refugees. and a report by the economic forum says that countries are seeing major opportunities to increase growth, so what can we do in such turbulent times? we are joined by the head of the center for the global agenda. richard, great to have you. i read the report -- the first of its kind you are putting out. see thisay out we refugee crisis that has seriously escalated over the last 45 weeks.

inequality can only be at chieved -- you put bullet points -- where do you put the refugee crisis in all of this? is this going to hinder the quest for more equality? richard: the current acute refugee crisis we are seeing in europe of course is felt mainly by a collapse and security. however there is a certain economic element to it. clearly in countries which are not providing good, widespread opportunity for their citizens to get ahead of the economy, corruption is rife, assets are controlled by too few, that feeds a desire for people to look elsewhere to live, to make their likelihood. there is some element there. but also on the other countries, it is clear that if societies are not producing abruptly rising living standards and good economic opportunity they will be less tolerant. francine: for the last two years

we keep hearing that the rich get richer and the poor get poorer. you addressed this by putting seven key areas -- which countries can do -- we just showed them on screen -- to make sure that the balancing act is a little more tilted toward equality -- what is your biggest concern? a lot of this seems pretty basic -- infrastructure, access to capital. richard: it is basic, and that is the whole point. this is how you build a broad foundation for growth. in the last some decades we have been particularly focused on a few elements that are particularly important for driving topline economic growth. but if you wanted balanced and sustainable, there is a much broader spectrum of structural policies, institutions and policy incentives. a lot of thembor, having to do with small business climate fronts, investment, basic infrastructure that links

people to jobs, social protection systems. what we are doing is providing a much rotter dashboard than the given that we need a wider view of how to drive inclusive growth. francine: are we getting worse at inequality in the last six to seven years, or do you think we have gotten worse and now there is more of a thought leadership? we have a lot of foreigns here with inclusive capitalism. ard: countries are still struggling with this, and it is not any particular level of income. rich countries, poor countries -- this is one of the top political issues. the world has a political consensus that we need a more inclusive growth model. and oneuggle, we find, of the central thrusts of this is, we have been looking too narrowly at the main drivers.

if your bottom line measure of success nationally is living standards, broad based living standards, we have 15 different areas that are really important to drive forward. interestingly, our findings is that there is no individual country above the median on all 15. every country has room for improvement. the problem has been a conceptualizatio of the growth modeln. we learned it after the last financial crisis. most western countries underwent several decades of labor securities market, small business financial systems, social protection laws, busting up trusts, improving competition. that is how you build a more inclusive and competitive economy. we need to relearn that lesson going forward. francine: are there one or two countries that disappointed you the most? richard: the interesting thing for us, we rolled the scores

up into one score per country and we had a nice little table. we think there is no single institutional makes of having growth with equity. you can combine different elements -- francine: but in your 10 best countries, you look at different metrics, the u.s. is nowhere to be seen. the u.s. is in the bottom third of performance for advanced countries. countries that are doing comparatively well, countries like the nordics, switzerland, australia, canada. there is a range of performance. francine: thank you so much for coming on. up next, the greek snap election is too close to call. leader speaksacy to us exclusively about his

ambitions, next. ♪

francine: welcome back to "the pulse," live from london. two weeks until greece a snap election -- the syriza party leads by an increasingly narrow margin. the leader of the new democracy party spoke exclusively to bloomberg. we want to be a government

with new democracy at its core and the european powers, too. that doesn't mean we surrender completely. it means we go to the negotiations with concrete arguments and an appetite for communication. whereas the negotiation team mr. tsipras sent went in without having done its homework, uninformed, without voters, hands in pockets. each review of the agreement, negotiations take place. right now we would make commitments with certain rules that are laws of the state. these will be respected. there are points which can be discussed. the agreement includes the targets of fiscal policy, the race to achieve these targets are met on a national policy. we are the ones who will decide how to achieve these targets. francine: we are joined live now in athens. this new democracy -- does it

have a chance of getting to power? niklos: the latest poll shows that this may be a nail biter, which is surprising given that up until a few weeks ago the prime minister was the undisputed leader in greek politics, with polls registering double-digit leads over main opposition. mr. cyprushen, signed a bailout agreement with creditors and it is clear he is paying the price for the broken promises to end austerity, and of course the fallout from capital controls, the bank holiday, the midsummer crisis which had such a huge effect on greece's budget. on the other hand, the conservative party started this campaign from another position, with the caretaker president who was supposed to monitor the transition to a new leadership. veteran of the party,

known for his informal style in strong language. judging from poor results so far, it seems that voters like his style. they see it as authentic and original. the latest surveys over the suppresseswed that lead is now very small within the margin of error. moreover, some polls even exist that say the new democracy has taken the lead. is key to this election voters who are still undecided. most of those supported tsipras in the last election. if they decide now to stay at tsipras forsh mr. his turbulent months in office, new democracy leader will be the prime minister to weeks from now. francine: thank you so much. nikos in athens.

toing up, china tries reassure the g-20 that its market volatilities will subside. we spent to the man who thinks the crunch has lost control. ♪

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

foreign exchange reserves fell by a record $93.9 billion last month. aginggures suggests that stepped off efforts to intervene in the currency markets to create stability. the countries markets reopened today to volatile trade after a four-day holiday. our next guest thinks that the china crunch has gone from controllable to uncontrollable. great to have you in the studio. you are a lot more pessimistic. the markets are seeing something in china, but you are putting your finger on -- it is going to be difficult for china, pboc, the government to keep a close eye on what's going on. >> the basis has always been that there are structural problems. we know there is a debt overhang, of the government is able to contain this and create a soft landing. in the meantime they had some sectors of the economy restructure. some parts of the industrial sector.

however, the overhangs are going still, and there is no policy actions that are aimed at containing that. the government has been implementing its two-pronged approach. the pboc lowers rates and on the other hand you should try to contain the local government debt, but these overhangs continue to grow because the policy easing has been stronger. we are worried that from a controlled thing it has become uncontrolled. francine: they can't do anything? the government isn't willing to take the steps that would be able to control it? alberto: there is a mix of issues. you have the fed at some point turning around -- francine: which possibly even trigger them to do it, right? alberto: right. and the economy is slowing down faster.

the other thing people underestimate is that even if the central government wanted to take over it is not easy. china has five levels of government and it is not one centralized country. it has a lot of disenfranchisement in the local government. the central government cannot much, andboat too if you look at the reforms that they had implemented, they have shadow banking, local government debt. it is too little, too late. we don't see anything to decisive. francine: officials were saying that the bubble has burst. that means that we look at more stability -- has the bubble really burst? they are saying that they have lost control. there may be more bubbles to burst and it can get very messy. alberto: if you think about the equity market that is probably true, but there are more issues -- private debt that has been

growing in the local government and corporates, in the household sector and in the shadow bank. the shadow bank is 60% of gdp, government debt is around 50%. all of these are developed market numbers, numbers close to a developed country. obviously the pboc can have reserves. they can use some government debt. but it shouldn't help enough to pay for all the losses. having confidence in the slowdown is key -- if you lose confidence, it becomes a self filling prophecy. it is a very fragile equilibrium. francine: this is a credit crunch -- are we looking at a credit crunch? alberto: there needs to be a credit crunch. francine: a controlled credit crunch -- if it is uncontrolled, we are looking at a world recession? alberto: on balance, i still think they can keep control.

the equity is one of the least easy things to control. it on the debt side, i think they still have control. it is very important that key reforms, the reforms to control the overhangs, need to be implemented very soon because otherwise if they continue to grow, china has doubled its debt in the last five years since the crisis, never had a credit crunch are deleveraging. this, ifon't stop rates remain, if the overhangs remain, we have a bigger systemic crisis next year. francine: what are the chances of a systemic crisis? 10%, 15%? alberto: still below. however, there are other emerging markets that could hit it china slows. francine: for those listening on bloomberg radio, the second hour has the positive planning app -- we will look at how much

china tried to sharpen. 8%, ofencore -- up losing value. ♪

francine: china's reserves slide. beijing's foreign exchange fell by a record. the central bank moves to shore up declines. the european migrant crisis -- germany prepares to add 6 billion euros to the federal budget. they will set out plans later. glencore's under pressure -- the plans to sell assets and shares to cut back of $40 billion debt burden. the worst-performing stock on the ftse this year.

good morning to our viewers in europe and africa, good evening to those in asia, and welcome to those waking up in the united states. this is "the pulse," live from london. china's foreign exchange reserves fell by a record last month and the central bank sold its dollars to shore of the you one, this comes -- the yuan. chinese market sell after a four-day closure. let's go live to our stocks editor, richard frost -- what happened today on the market? up looking ended pretty bad for the market. we started with the shanghai composite gaining as much as 1.8%, but by the end of the closing was down 2.5%. that was led by some of china's largest companies. bank,the most valuable and others falling more than a percent. -- more than 8%.

they were trying to shore up the market before that important military parade. people were wondering whether they would maintain that this week. so far, it seems like that is not happening. francine: china told the other g-20 nations that turmoil is said to subside. people don't really believe it because there is a little bit of worry that they have lost control. what did the g-20 say? there has definitely been a lot of cynicism. they don't think the g-20 tried to maintain a uniform stance, but what is clear is that the government has been heavily intervening to try and shore up its market and it has not been succeeding. if china stabilized its currency , we saw the amount of foreign

reserves fell. so when the government says that turmoil is going to end soon, it's not surprising that there is some element of cynicism when people approach that. today,in the markets there wasn't the sort of route we have seen in previous days. some elements of the market -- particularly smaller shares -- did gain. there may be investors in the mainland who did take comfort from those words from the pboc, governor, and others, that may be this turmoil will end soon, but i think that is a widespread view. francine: richard, how much further can the market decline? richard: well, when we have talked to some of the more accurate forecasters, the long experienced ones looking at this market, what they say is that even though the stock market has fallen about 40% from its peak,

valuations are still very high relative to the country's history and also the large markets. and given how bad the economy is looking, whether you were looking at industrial output or train, the market -- or trade, they see the shanghai composite falling to as low as 2500, which would be in line with its average but would be about an 18% decline. that would suggest that there is a lot still to come in terms of further decline. the question will be whether the government can stomach that and stay out of the market or whether he will try and intervene again. francine: richard, thank you. richard frost in hong kong. that brings us to today's trivia question -- today's twitter question. we are also getting pictures from francois hollande giving his annual news conference, one

of his twice a year press conferences or he is expected to face questions about the migrant crisis, the war in syria. i'm sure he will also be fielding questions not only on the french economy but on his view on china in the market turmoil. we have a former bank of england , great to have you on the program. china is the main worry, when you look at market turmoil. it is unclear to me how we read into this. is there a bubble that burst? are we going to look at more stable figures? in terms of the debt overhang, not just the markets and the g-20. chinese officials -- is it something much more sinister? ian: i think you have to keep it in context. that they, dramatic headlines thently in china has been

fall of the stock market in the equity market. other markets do move up fairly sharply, up and down and in both directions and as you know equities actually tell you what has just happened, so they are not great information. there is an adjustment in the chinese equity market. it is slowing down quite sharply but we knew that. the question is not so much whether the market adjustment matters -- that is always abrupt and rather violent -- but can it move rapidly in both directions, what is a telling us about the chinese economy? what we are seeing is a slowdown, but we knew that. that's not news. the chinese authorities have plenty of instruments available to try and moderate that decline. francine: you don't know? you're absolutely right -- a lot of the times there is market volatility, and sometimes -- but

it is clear that the response from the chinese officials is not really going according to plan. the transition from an economy that will be much more consumer focused may be messier than we thought. ian: in my experience it never goes according to plan. [laughter] ian: you have to work away at it and you get there over a pure bill of time. you have to look at the broader picture -- does the slowdown matter? look at the world picture. what we are beginning to see is a movement back to economies moving at different speeds in different areas of the world, the u.s. and the u.k. growing strongly, europe struggling, from the big change inertia we've had in the last five or six years, were all economies moving very slowly lockstep. now we are getting different movements in china as part of the picture. francine: so you are not worried about a credit crunch in china? at the moment, 10% and 15% probability. ian: i believe there are

adjustments going on but i don't think it will be something like that. francine: how worried about you armored -- how worried are you about emerging markets? ian: it depends on the state of the structural reforms in the strength of their constitutional systems, depending upon their budget in foreign exchange positions. some of them will come through reasonably well others will suffer. that is part of the picture you are seeing in the global economy. i am very interested in that which investsm, in macro trading strategies, has had few opportunities in the last few years because all economies have been the same. but with interest rates getting and different performance in different economies, we think we see much more fertile opportunity. i don't think that is bad for world growth, i just think it's a return to the pattern we normally see. said they willed

likely raise interest rate and that is being pushed back -- ian: i don't think anyone can second-guess when the fed will move. that is a position it will take -- it is clearly coming reasonably certain, possibly in september, if not later this year. it is a return to a pattern or interest rates in the stronger economies will rise gradually, and that is good news. it is normalizing monetary policy on the back of an economy strong enough to withstand. francine: thank you so much. he stays with us -- we will be talking more about this normalization of central banks next. here is a look at what else is on our radar. angela merkel has set out a funding package for refugees in germany. that came as austria rolled back measures that allowed migrants to cross into the country in the thousands from hungary. the prime ministers of the czech

republic, slovakia, and austria all meet later to discuss the crisis while francois hollande is saying france will take 24,000 refugees. is beingselling -- it bought by partners in a deal valued at 4.2 billion pounds. the world's largest publicly traded commodity supplier plans to have one third of its debt. it suspended dividends until further notice. at posted its biggest weekly decline in training last week. the former greek prime minister alexis tsipras has told supporters that the upcoming election is a fight between his honorable government and what he calls the den of corruption and cronyism. polls put him that can in that can -- have put in the neck with his opponent. i think the danger of

greg's it hasn't passed, if we these dangers will become more imminent and since we don't want to play games of greece, we want a government led by new democracy and the european powers. surrender mean we completely, it means we go into negotiations with strong argument. francine:, what can central banks take from this weekend's g-20 summit? we discussed that, next. ♪

francine: welcome to "the pulse," live from london. continue tos collapse, speculation that saudi arabia will drop its currency hike is on the rise, of the central bank governor of the world's biggest oil producer dismissed it at the g 20 summit, where he spoke to bloomberg in an exclusive interview. we are sticking to our exchange policy of the dollar, the rate over 30 years. it continues to serve our economy. francine: the finance ministers and central bankers from the g-20 nation pledged saturday to reframe from competitive devaluation, the first time the g-20 has used such language since 2013. we are joined by the former bhc

member, great to have you on the program. we are talking about normalization and you firmly believe that central banks need to get back to normal, because we have had five years of cheap money sloshing around, but 15 central banks have had to reverse raising interest rates since the end of the financial crisis. what makes you think we will normalize now? ian: i don't think it is the same for all central banks. ours is the stronger economy extending the recovery, the u.s. and the u.k. been the case for interest rates moving down, back to a more normal level, but stronger. that is perfectly normal monetary policy, raise rates and tighten as the economy recovers to keep it moving. i think we are at that point, approaching that point. but other countries, no -- there still weakness, and they still need to be holding ground or further easing.

francine: you were talking a little bit about the fed. you say it makes no difference if a hike in september, november, december. the general ideas that they will start hiking. where do you find the value in the? -- in that? it has been tough for companies to find value. well, it is not that hard to find value if you recognize that inflation is still extremely low, so rates are correspondingly low. i don't think it is critical as to which particular meeting the central bank moves rates. what is important in managing a business is trying to understand the direction of the trend. the trend is that u.s. rates will rise, and people will plan that. francine: and they will rise in the u.k. as well. ian: i believe so, in due course. francine: next year? ian: i simply can't second-guess the timing. i would urge anyone to try -- it

depends on the progress of the economy. things are looking pretty robust at the moment. i would expect it to be early next year, but that could change. francine: if you are a central bank, the sad or the u.k., is it important to get that first interest rate hike out of the way, the signal that we are normalizing? you have had a lot of central bank gratuity over the last five years -- even if you don't raise interest rates? ian: i don't think the timing of the first move, for the first move itself, is critical. what is important is to convey that rates will in due course go up. that message has been delivered. easing ore monetary other methods, but what you're talking about is not holding rates the raising rates. it is coming closer and that message has been passed. once the first move has come,

then we need to look to see when there might be further movement. it depends on the performance of the economy month by month and quarter by quarter. francine: do you worry about currency wars? that is a precursor to trade wars and that could get messy. ian: currency wars in the sense of competitive depreciation -- that worries me a great deal. that is something we have tried to manage ever since the second world war, to avoid, to ensure that monetary exchange rates take place with an international anght work -- international framework. i don't think we are at that point -- it doesn't mean that ies'currencies won't appreciate. francine: do you worry that central banks have taken on too much over the last five years, that they have been seeing too much -- have been saving too much? ian: in terms of monetary

easing? francine: we talk about markets, businesses being on life support, and they have had a pretty good ride so far. ian: no, i don't feel that at all. its nonessential that th extreme action is taken to offset the global economy. as for the economies, it is not in the drawing -- francine: it has been an ungrateful drop, because it seems that drug he can never get it right. ian: he will never get policy right at all. francine: is there a central bank that you think has done exceptionally good job? ian: i would want to give names but on the whole, the international community has responded pretty well to the extreme emergency. we have got things moving in the right direction then we have

stabilize the economy. there have been side effects for extreme monetary easing. we were bound to get bubbles. people have strange views about valuations. that is how markets work. what is important is that people recognize policy is beginning to move towards a tightening mode. that is quite right, and the precise timing is not critical. francine: thank you so much for joining us. let's talk about the european migrant crisis. angela merkel set out of funding package for refugees arriving in germany. in a speech within the last half-hour, she said the current crisis can only be overcome if europe works together. from thechols joins us main refugee processing center in berlin. hans, what has been announced? well, what happened is

they had to figure out a short-term, 2015 budget figure, because they have $5 billion left in the budget and they want to stay within the budget goals. what merkel announced his $6 billion for 2016 -- that still doesn't get you through 2015 and that still doesn't give you any sense of how you will make this chaotic system any more organized. we have been talking to a lot of refugees all morning. many of them were here before the day broke, and it has been exceedingly difficult to get this line processed, because you have so many applicants from different countries with different needs, whether it is their first time or whether it is to get a renewed housing voucher or some sort of certification that allows them to go to the jobs center. that gives you a sense, francine, of how overwhelmed they are. some been sleeping overnight. elsewhere, there is housing throughout berlin. it is a system that is under stress. you look at the numbers, they

are accelerating. 17,000 over the weekend, 7000 on saturday, 10,000 on sunday. that is an acceleration. the numbers today will be very interesting, because at that point, the news that merkel and her counterparts had a recent agreement to accept these refugees -- we will see how far that trickles down. the hungarians are saying they are closing their border. they will arrest anyone that tries to inter-. we have here are mixed messages. we have a clear sense that, at least from german authorities, they're are willing to take in as many as they can. the question is at what point is that become too much? 800,000 is the target -- that is what they are expecting. you already see some cracks in the coalition. the csu is being very critical of the weight merkel is handling this. right now she is keeping everyone together, but she is going to need support domestically and internationally as brussels figures out some

sort of distribution plan. francine: hans, thanks so much. the british prime minister will set out plans later today on how the u.k. will reschedule more syrian refugees. speaking to the bbc yesterday, a really sink was needed on a. -- on aide. >> britons will approach this with ahead as well as a heart. for the short term, we will take more refugees, but not in a way that encourages them onto dangerous boats. in the long term, we need a fundamental rethink on our aide policy. we support reducing poverty but we also redirect spending to failed states, to this refugee crisis, to the big threats facing britain, and to the question of spending reviews. how does it help britain's national interest? francine: let's bring in bloomberg's political correspondent. we know that david cameron is

addressing this today, immigration and the refugee crisis. are we expecting a helping hand from him? >> yes. he will specifically outlined how he will deal with the refugee crisis. we are expecting him to say that britain will allow at least 10,000 more syrians, or people qualified, for refugee status. of a potential financial plan and how to deal with the situation -- of course there remain many problems because this is a short-term fix for a long-term problem. he is looking more engaged at getting more refugees. francine: how far can you go? svenja: it is difficult because he was caught on the back foot. he was affected by those pictures, it forced him to show a humanitarian face of the crisis. the problem really is his relationship with europe. it's one thing to say you will

deal with a crisis in the country at originates from, but thousands have already reached europe. 10,000 is significantly less than germany. and he is in the middle of a delicate renegotiation, and he needs to make friends, not lose them. it's the relationship with germany come up with france, with italy -- with key allies that he needs to push of the reforms through. at the same time, he needs to please the crowd at home. there is a gut reaction of people saying -- yes, of course you want to do something to help. reality isterm, the that it has been a sensitive issue politically, and that may flare up again into something that david cameron is very aware of. francine: how much support does he have within the voting parties to relax policy? svenja: there have been growing calls within the tory party to

take more refugees, but he hadn't made that distinction between economic migrants and those experiencing political and humanitarian crises. heard calls within the tory party of a no-fly zone over syria. again, that is a much bigger issue that would probably not get wider popular support. so in terms of -- yes, the conservative party is calling for that, now we need to look at what that practically means, what the concrete numbers are, how much it will cost, how will play out. francine: thanks so much. , francois hollande in the hot seat. he has been talking about the migrant crisis in a news conference. we will have the details on . he has been talking about possible strikes in syria, and about the refugee crisis, saying

that france will take 24,000 refugees. we have hans nichols as the main refugee -- asked the main refugee center in berlin. we will talk about the situation, next. ♪

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francine: welcome back to "the pulse," live from london. here are the top headlines. china's foreign exchange reserves fell by a record month last month and the central bank tried to support the yuan. reserves dropped by $93.9 billion at the same time. the national bureau statistics downgraded its 2014 economic growth figure to 7.3%. earlier, within the last hour, angela merkel set out a funding

package for refugees arriving in germany. that came as austria rolled back the measures that allowed migrants to cross into the country in the thousands from hungary over the weekend. the prime minister of the czech republic, slovakia, will discuss the process. it has been on the agenda for francois hollande, currently holding one of his 20 year news conferences. becomes as his approval rating stands at just 19%, six points behind his rival nicolas a cozy. -- nicolas sarkozy. francois hollande has been talking quite a lot about refugees. he is taking a 24,000 refugees and is talking about possible strikes in syria. caroline: absolutely. these are the two top stories coming out of the first half hour of the press conference. first, france will welcome 24,000 migrants in the next two years. president hollande expects the

number to reach about 120,000 in the next two years. they will work on 24,000, so france's following the example of germany and what angela merkel is doing. president lond said that humanity is needed, and the migrant plan in france will be discussed in the parliament in the next few days. that was very expected -- that was the first question that president hollande faced during his press conference. planning to help with syria as soon as tomorrow. they say airstrikes are not planned yet but depending on the information, these do havessance flights some targeted airstrikes and they might happen in syria. is exactly what france's doing in iraq, but at the moment, the

president said that sending troops, french troops on the ground, is unrealistic, because france would be the only one doing so. francine: how is francois hollande, caroline, trying to shore up support ahead of the election? the paul yesterday -- 19% for him? caroline: yes. and on the migrant plan, he has to be very careful. there was another poll that came out this weekend saying that 55% of the french, a majority, is actually against welcoming more migrants. alsourse, these migrants have an impact on his popularity, and economic reform. president hollande will give more details in the second part of his press conference. that he isreminded planning a extra 2 billion euros of tax cuts for 2016.

that will impact 8 million families in france. we will hear more details in the second part of the presser. francine: thank you so much. caroline will be watching for any new headlines, and she will get back to that and bring us updates. largest publicly traded commodities supplier is trying to arrange as much as $2.5 billion and a share sale. it aims to cut $30 billion in net debt. let's get more with jessie wise borough. at there price was up open and it is now 50%. it seems that they had no choice but to address the balance sheet to please shareholders. jesse: that is very true. there have been question marks around it for some time, but of course that is largely to fund a commodity trading activity.

there have been question marks, but most interestingly, 2.5 weeks ago the cfo told me they can walk and chew gum at the same time. clearly in those last few weeks something has happened that has changed their mind. share prices tanked, outlook in china has weakened. we don't know what happened but we know this has been a significant change in position. francine: how surprised were you about the timing? the timing was unexpected, but you told me they had to do something about the credit rating, and the only way to do it was to make sure that the balance sheet is restructured. jesse: clearly, things may have been worse than we realized. they are selling assets, scratching the dividend for four years. there will not please investors but it may have already been priced into the market. they are reducing working capital, looking at things like precious metals, royalties,

selling stakes and agricultural assets, in the cfo said they would consider selling a minority stake in the entire agricultural business, which is a very attractive asset. it is the one realm of the commodities there that is still -- the commodities as fear that is still attractive. francine: they are up some 4.3%. this is the worst-performing on lost more than half its value. what is ivan glastonbury thinking right now? jesse: i put that to him this morning. he said he hadn't heard anything about pressure, and went so far to say as that the major investors fully support them and are behind the share sale. we still have absolute clarity in the form of the share sale. they are saying it is not a rights issue. they are battling the possibility that they could bring in a new minority investor -- it's not clear.

they have commuted that management will not be diluted, senior management will retain stakes. executives say they will have around 3%. that is a fairly strong signal of support. do they have access to ivan glastonbury ghana regular basis? did he sound confident about what was being done? minesad to close down two for a limited period. ande: he sounded confident so did the cfo, talking about bullet proofing the balance sheet. they think it will be enough to see them through. they stressed that the copper prices are much lower than they are today and it will be enough to see them through. but it is the most downbeat i have heard him recently, even on the subsequent analyst call.

the tone was definitely a bit more downbeat than usual, but i suppose that's to be expected. francine: thank you so much for your time. as more refugees arrive in germany, britain prepares plans on how to resettle thousands more. but how will this play into the debate? we discussed that next. ♪

francine: welcome back to "the

pulse," live from london. austria is revoking the emergency measures that allowed 12,000 people into the country. took centern issue stage over the weekend as policymakers struggle to deal with the crisis. here is a taste of what was said. >> the time for playing games is over. it is time for taking decisions, turning decisions and actions, doing it united, as europeans. >> that makes no sense to have a public debate about who gets how many billions for what because this will disturb the spontaneous solidarity with the migrants in the understanding by the german people. absolutely need to have a european response to this humanitarian crisis, which is absolutely not acceptable. it is not be answered -- xenophobia is not the answer

-- closing borders is not the answer. >> we will continue with our approach of taking them from the refugee camps. this provides them with a more direct and safe route to the united kingdom, rather than risking the hazardous journey which has cost so many their lives. >> as far as the imf is concerned, we try to do what we can when we are asked. francine: with david cameron due to set out plans to sell out there sins of refugees today, what impacts could the current crisis have on the eu referendum, and how should the government position itself ahead of the crisis? we are joined i the associate director of migration -- great to have you. this is the next as dental problem for david cameron and the conservative party, on how to deal with this and how they explain it to the public. >> i think they have come up with a smart strategy. to get the issue

of the refugee crisis as an international aid and humanitarian issue, then separated from the ongoing renegotiating strategy where freedom of movement sits at the thet of it -- you have chancellor coming out with the aid budget, stressing the fact that all the costs associated with the resettlement package won't be borne by local authorities and other domestic groups, but by the department for international development. you also have david cameron fact --laying up the this is something that britain will be leading on laterally. we will be resettling refugees directly from refugee camps. we won't be re-assessing refugees from europe. he is entitled to do that given that the u.k. is not part of it. i think they are coming up with a strategy.

that is probably the most sensible way of dealing with it. francine: the time seems to be turning in david cameron's favor. the humanitarian aide. a lot of people are supporting that right now. housing refugees under desperate situations. how much of that is true? how much will play out into the referendum? phoebe: there has been enough swell of public support of doing something, and at the same time, two weeks ago, as it was a resounding failure -- the british public is doing quite bipolar on this issue. on the oneparty, hand, there are stacke skepticsd he has to manage them. on the other hand, moderate conservatives align themselves with the church of england, important points within the british public, to force the government into action. the action is going to be played out, i think, and built up.

the u.k. has been one of the least generous in terms of resettlement offers. has been expanded to 50,000, compared to the german commitment, which is minimal -- but in terms of the domestic audience it will be played up for some significant humanitarian gestures. francine: you started by saying that they are making a very clear distinction between the economic migration and the refugee. in people's minds -- you said that they are bipolar -- do you lednk they will get medd when we start nearing the time of the referendum? phoebe: it will be interesting to know whether the government will decide to take, to resettle refugees, which is the proposal that is trying to become leader of the labour party. but yes, i think on freedom of

movement, that will be the focus of renegotiation strategies. interestingly, i think because the european countries, the european member states have been so tested, david cameron might find some more allies. people really do want to think about freedom of movement. is it sustainable? in the case of the u.k., is it due to economic migration? are they coming to the u.k. in search of jobs? --tern european countries flow ofdo with the refugees from southern europe. may slightly change the dynamics and for different reasons. francine: thank you so much for joining us. phoebe griffith. it is only two weeks until greases snap election. the cerezo party -- the

syriza party leads but by a narrow margin. the leader of the opposition spoke exclusively with bloomberg. >> we want to be a government with new democracy at its core and the european powers, too. that doesn't mean we surrender completely. means we go into negotiations with concrete arguments and an appetite for communication, whereas the negotiation team mr. tsipras sent went in without having done his homework, uninformed, without folders, with their hands in their pockets. in each are a few the agreement, negotiations take place. right now, we make commitments with walls of the state, and these will be respected. there are points which can be discussed. the agreement includes targets of fiscal policy, the race to achieve these targets are a matter of national policy. we are the ones who will decide how to achieve these targets.

byncine: we are joined alive nikos. does new democracy have a chance of getting into power? seem: it certainly does that new democracy has a comeback. just a few weeks ago, polls were showing that alexis tsipras, leader of syriza, was the undisputed favorite, and enjoying double-digit leads over main opposition parties. but it now seems that the greek borders are wanting to punish mr. tsipras for the broken promises, for keeping greece in the euro area. in the summer months during capital controls, banks and financial markets remain closed for weeks. and had a huge course on the economy.

on the other hand, new democracy, the main conservative oppositionacing more with the new leader, who was supposed to monitor transition to a new president. ofever, his informal style and often strong language in speaking seem appealing. the latest polls show that the two parties and i connect, and we -- our neck and neck. the pollsters are telling us electionkeys to the selecti are in the undecided voters. the question is what will they do now. if they decide to give him a second chance than mr. suppresses going to win. if a stay-at-home or decide to punish the former prime minister, then the new democracy party will be the prime minister. francine: what are the preferred outcomes from a european perspective?

it does seem that there is some tacit support from european government for mr. tsipras and his u-turn and the signing of the new bailout agreement. yesterday, hisw opposition protested the support that he sees mr. tsipras getting. he says that the european governments -- he is thinking that mr. tsipras would go moderate. that even if he wins willelection, tsipras still be facing internal dissent against the ballot measures from syriza party, and the led government will be unstable. only a conservative led coalition will make the bailout implement, and growth policies will be -- it remains to be seen

whether voters will also buy into this narrative. francine: answer me this -- you have given some of the answers -- but i was led to believe that alexis tsipras together with angela merkel were one of the most popular statesman of all time in europe. why is it going wrong for him? well, mr. tsipras was elected on the promise to and austerity in greece, and he said there would be no risk in the policy because of what was at stake for the euro area in case greece was kicked out. it seems that his tactics didn't really pay off. he was forced to sign an agreement, really harsh austerity measures. the conservative party is now running a campaign, on the

argument i told you so. his promises were unrealistic. new democracy, has a new leader who seems to be much more appealing. it seems to be up for grabs. francine: thank you so much. we are just getting some breaking news -- this is one of the two biannual press conferences by francois hollande, the french president. we are 15 minutes into the news conference, talking about the refugee crisis, 24,000 refugees -- he is also saying that he wants britain to remain in the european union, saying he is open to discussing eu improvements. what those improvements mean -- we are sure. -- aren't sure. but it is a welcoming sign for

david cameron, who has that important referendum coming up. up next, boris johnson attacks the heathrow airport expansion plans. find out what he had to say next. ♪

francine: welcome back to "the pulse," life on bloomberg tv. here are some more of bloomberg tops headlines. the mayor of london has attacked

plans to expand heathrow airport. in a 30 page letter, boris johnson says it would mean investing in decline, that heathrow would serve three few er cities than it does today. tomorrow, we get a preliminary reading of euro zone gdp as well as a final reading of growth in japan. wednesday, apple is holding an event in san francisco. one of the biggest companies is expected to unveil a new iphone and possibly a new version of the apple tv. we get a rate decision from the bank of england on thursday. we are also watching the news conference a francois hollande, giving one of his biannual addresses. he mentioned the refugee crisis and also wants some massive aide, as he called it, to keep syrians closer to home. he says there are 4 million want to, and if we avoid an exit as we have to

supply as much aid as possible. the news conference is ongoing and we will bring you any breaking news. he also says he wants the eu within -- the u.k. within the eu. keep it here on bloomberg tv -- coming up, we sit with the chairman. ♪

erik: bill gross is out to prove he's still got it, that he still has got the touch that made him one of the greatest investors of all time. in an exclusive interview, the one-time bond king tells me how he defines success, how he invests his own money, and how he is giving away his multimillion dollar fortune on this special edition of bloomberg's "encore." bill: i did not care for the aspersions that i somehow might have lost my touch. it is really hard to sink in as far as how much it is and what effect it could have. "would you like to manage a half $1 billion for me?" and i said, "yes, sir." erik: welcome to "encore." '