or if they do it through local banks, the bundesbank. >> hans, you bring up the bundesbank.t the germans. angela merkel is going to be here later on. she's talking about the german economy just before the press conference in frankfurt with mario draghi. axel weber, former boss of the bundesbank was here earlier. he was saying the germans are going to be one of the beneficiaries of all this. is merkel on board? how do the germans feel about this? >> the germans are opposed. their opposition is grounded in the view of inflation. that is that the deflation in europe has not been counted in for lower oil prices, which is going to stimulate the economy. give it another couple of months to see what the low price of oil does for the economy. it was a unique moment the other night when she had an audience with mr. draghi. draghi preview the plan for her. merkel has given tacit blessing. we will see what bundesbank president young's vitamin and others will do to signal if they are opposed to the size and the scope of asset purchases. how do they signal that? a simple dissent talk of

the most important one came from the bundesbank president. here is what he had to say in a public broadcast interview yesterday. "i hope the new government won't call into question what is expected and what has been achieved. i believe it is in the highest interest of the great government to do what is necessary to the tackle structural problems. he said they need long-term structural reforms. it is remarkable the president of the bundesbank is giving political advice to a new government that hasn't formed yet. there are discordant voices here in germany. the left party held a victory party. 68% of the german public are opposed to restructuring debt. that gives you a good idea of what is going to be driving mrs. merkel when they meet in brussels. >> give me some color on what they think about all this. i guess the bigger question would be is there any room for the ecb to act if the eu cannot find a political solution. has the ecb played there had already? >> she gave -- their hand already? >> she gave an interview and said while it could be t

that is what the ecb presented to the bundesbank according to "der spiegel." is that good news? >> it is good news in the sense that everyone is digesting the fact that the european union as we know it and the euro may be about to unravel. that means the world isn't falling apart. now in terms of germ knit 10-year bund which is below 10 basis points could go negative we have to watch on monday. greece, for example, their 10-year yield on their sovereign is nearing 10%. finally countries are starting to separate from each other and it is really all fine and working out and the price of oil stablized and other news, david, it was really important that jeffreys, the investment bank, came in and rescued fxcm, which was this foreign currency trading public company that found themselves on the wrong side of the swiss franc. >> we also should mention that with everything else that was breaking in this last hour, january options expiration. so that stirs the pot, not to mention all of the headlines that have been out there. let me get to pete lang. you don't care what the headline is. r

the story in germany has been the bundesbank stronger.yields from one year to five year in germany. the spillover has been pretty limited in spain, italy. yields are up a little bit today, but the contagion has not been there like it was before. the firewalls have been improved. how long can this go on for? the lack of contagion and spillover? investors are starting to get a little complacent about what greece may do. >> thank you so much. jonathan ferro with your asset check. tom keene joins us with a preview of "surveillance." happy new year. >> happy new year. i thought the jonathan ferro interview earlier this morning was absolutely must listen. we will talk about investing. kate moore is always of interest. we will be joined by ian bremmer of eurasia group and carl weinberg and we will focus on oil in europe. judd gregg will also join us. the republicans do better than good in the last election. >> thank you so much. >> now, it was a december to remember. joining us now is the coo of ryanair. is this the finessing of the ryanair mess

. >> does mario draghi have a lot of support there, especially from the bundesbank?nd howdy you think he reacted to angela merkel's acceptance of greece leading the euro? >> in terms of the ecb, i think we have seen a pragmatic approach from the bundesbank. it is not clear if the bundesbank will vote again to abstain or vote again in favor. i thought mario draghi was good last time around when he said we know you make difficult decisions not always by 100% majority. it is not just the european case where there can be disagreements on difficult questions. i think the board us with mario draghi. the overwhelming majority of the eurozone central bank, as anyone who looks at the window and quite honestly the data -- >> the shrinking heroes him. -- shrinking euro zone. >> exactly. separately we have more of the greek tragedy. i don't think that should have a big impact on the ecb. it should not have a big impact on european markets. if you just look at the behavior of spreads, it hasn't had a big impact. if the ecb comes out and has a credible qe program i think the marke

they don't want to hear it. >> how big of a revolution is this for the bundesbank?d war ii. with it is not, though, that's the thing. >> ok, why? correct it has all been a -- >> it has all been a fabrication pressed forward over the past couple of years. if you go back to the bundesbank, i wrote about this 20 years ago, they raise their inflation target in response to the first oil shock in the 1980's. they smooth things out. it's only since the euro came along and they were making sure the greeks don't rip them off that they started behaving this way. >> outside williams with bloomberg intelligence, thank you for going over earnings with us. -- allison williams with bloomberg intelligence, ♪ thank you for going over earnings with us. ♪ >> good morning, everyone. adam posen's president of the peterson institute. he has been most vocal on our misunderstanding the estranged linkages of our financial system, our central banks, and how they leak into the real economy. never more important than this morning with a massive flight to quality. the yen bidding a strong yen 2

the bundesbank president has clearly been against several of the decisions. if he loses germany, if the bundesbank turns against him his credibility is greatly limited in the future. it is not whatever it takes, but it is about what is the best he can get and that will create some in the market who will still say, we want some more. there were three rounds of quantitative easing by the fed. they started smaller and ended up with an unlimited package that they ended up shutting down now. they started their buying 2009-2010. >> this is what we know. they were presented with buying as much as 500 billion euros of assets. >> these were staff presentations to the governors, but the governors were asked not to give their opinions during the presentations. that tells you how political things are right now. one question out there is whether 500 billion is enough. the ecb wants to expand its balance sheet to more than 3 billion euros -- 3 trillion euros. you are going to get halfway there with this 500 billion euro package. on top of that, you have asset-backed securi

germany's bundesbank said the ecb exceeded its mandate, but a senior advisor to the eurozone's top courts it is legal. but it must operate under restrictions. the ecb must state its reasons for buying bonds the bank is not allowed to provide direct financial assistance, and they cannot interfere with financial assistance programs provided by the eu. the ecb welcomed the decision, but said that the legal battle is not over. >> this is an important milestone in the request which as you know will only be concluded with the ruling of the entire court. >> the political crisis in greece raised pressure on the ecb to act. if leftists win the elections later this month, some fear the country code leave the common currency. this would add to the woes of the eurozone which slid into deflation last month. >> after hitting five-week highs, a bit of a selloff of european shares on wednesday. this summary of the midweek session from the frankfurt stock exchange -- >> the ecb program will keep money cheap and easy. this is good news for financial markets. but this good news today was overshadowed by ne

it's going to be exciting. >> that is the bundesbank view. what about the ecb?b executive board member has weighed in. she says this is a political decision. there is nothing the ecb can do that needs to be done at the political level. it is certain we cannot agree to debt relief involving greek bonds held by the ecb. that is legally possible -- impossible. >> thank you very much. our international correspondent joining us from berlin. we have breaking news on the airline industry. aer lingus saying they are considering a revived -- revised offer from aig. we have not received information the board has approved the latest offer from --iag. we have had confirmation they have received it. it's a little more than perhaps suggested over the weekend. the offer is 2.55 a share. the board is considering the latest proposal. it does depend on the approval of the ryanair shareholder or the government shareholder. it is interesting to see that the government is seeking commitment from iag. the irish government is concerned not just about connectivity between dublin and th

the bundesbank claims will rise.he bundesbank's balance sheet will be more exposed to a greek exit because they will be giving money over. this is very interesting. politically, the backlash has been developing. there was a very good speech by ben friedman last year that germany has experienced periods of debt forgiveness, and that didn't go down well in certain quarters. but that is developing. you can see certain letters going into certain numbers. a well-known commentator in germany yesterday talking about them being a serial depor torre. you can see they are in a bit of a mix as well. other people are saying well, actually you have defaulted before, and we have forgiven your debts. so cut greece some slack. this is to me politically very interesting. >> greece could trade in one of our bloomberg columnists said yesterday, they could trade in their vote against russian sanctions for debt forgiveness. >> that is a threat. >> does that have credibility? >> it is a real threat. >> people have picked up on this, the f

there was an article in one of germany's magazines over the weekend saying actually the german bundesbankrman bonds. the italian bank will buy italian bonds. if the italian bank it's in trouble with its purchases the ecb will have to jump in any way. that is sort of a little crumb that is thrown in the direction of berlin to make it a little more palatable. >> the seahawks and the patriots. >> you had to bring that in. >> it is a glorious day for a seattle native. >> you hear that slumping on my desk. [laughter] >> if you can support the patriots, you will likely incur the wrath. thank you so much for joining us. >> still to come, the race for the 2022 winter roll up x. >> -- winter olympics. >> and the father of snowboarding. ♪ >> the 2022 winter olympics is down to just two bidders, beijing and the kazakh capital. >> many expecting beijing to prevail. >> the man known as the father of snowboarding says china is poised to become a winter sports powerhouse. >> they have world-class athletes already. guys are competing in the olympics. girls are making the finals. and there are already som

i don't think he ever will get the bundesbank fully on board.here are some brighter sparks in europe. retail sales in the last couple months have risen month on month. the currency clearly has a tail wind. it is not all despair. >> if i look at the date of this morning, french data, german data, that wasn't pretty. i look across the euro and i see it at 1.18. this lovely chart takes me back to the 1990's. we are heading back to the birth of the euro. talk to me about the lag effect here. we talked about qe, monetary policy, the ecb. we know it smashes the euro to pieces. when does that start to bear fruit? >> if you look at the history of the euro, it did start at 1.18. it was nearly 1.60 at the high. the impact of the currency on europe's trade has been pretty minimal. it has helped when it is very low, but it is a minor help. it is not that price-sensitive a region. >> is in a cheap way of buying inflation? >> there's no inflation anywhere in the world when the oil price has fallen to $50. that is why central banks are looking beyond that. tha

the former bundesbank boss making sure that everyone knows he is skeptical.e told bloomberg the priority is to fix the banks. >> europe is not in an existential crisis. it is in an identity crisis. some countries, like germany, want long-term reforms. >> he is not the

bank that he has persuaded the boom to spank that he is going to do quantitative easing -- the bundesbankt he is going to do quantitative easing. i do not think this will change that. there was a text message and they would rather surrender the currency policy than try to stop the swiss franc appreciating. it is a preemptive move and evidence that the ecb is going to do whatever you expect them to do on january 22. >> do you think there will be fallouts on the wrong side of this move? >> near term, but i expected to maintain in the currency markets. i do not think the amount is as large as we had it in 2011. that was much more of a shock. >>alessio thank you. mark, thank you very much. >> "market makers" will be back in a moment. stay with us. ♪ >> welcome back to "market makers." let's begin with movers. homebuilders on the move after a note from morgan stanley. it begins coverage of the sector with an overweight rating. linares the best -- kb home began with an under rate and pulte rate with an equal rate. growth will come at the expense of growth margin. let's move on to losers. best b

. >> that was axel weber, the former bundesbank president speaking exclusively to bloomberg. >> the staffe european central bank is pushing ahead with models, providing as much as 500 billion euros in investment grade assets. some members of the ecb executive committee are pushing back. let's go to hans nichols in berlin. what is new about this opposition articulated over the weekend? >> good morning, francine. this is the first anti-quantitative easing salvo we've had since those negative deflation numbers that we had last wednesday. you are starting to hear the german argument crystallizing. it is not necessarily new, just charter. the downward pressure on inflation is all energy cost-driven. here is what she told "der speigel." i do not see that consumers expect continuously falling prices. she went on to say, the benefits and risks of the program must be put in their proper proportions. joining her, jens weidmann, also pretty much opposed. you have the netherlands central banker. you have a stony up. later on today, we will hear from the austrian central banker as well. maybe we have

quantitative easing critic and german, have permanent votes, but this means that the president of the bundesbankbe a look to say no to any qe votes in may and then again in october of 2015. the lithuanian top banker will not have a say in march, april, and may. before any decisions this october, lithuania, which the economy has 2% of the economy of germany's, will have a vote, but germany will not. >> how lithuania is shaking up the ecb. >> let's stay with your but go to the u.k. with the british general election in may. cfo's of britain's biggest illnesses are worried. that is according to the latest survey of them by deloitte. a chief economist at dealing joins us. good to have you with us this morning. when i was reading through the report, i found it fascinating that obviously, the election risk has gone to the top, and they are much, much less worried about interest rates. >> europe comes in as a second reissue. >> we have in running the survey for eight years, and for the last eight years, it has always been the same thing, which is the economy and the financial system in the u.k. and all

. >> will it change the culture of the bundesbank? is it a game changer?t i don't think it is relevant. this was not about quantitative easing. it is unfair to say people should lose faith in the central bank. they did something that was really incredible. i think remarkable that they were able to hold it so long. and ultimately, they cried uncle. >> you are doing research about how interest rate have come down. here we are at negative interest rates. what does a negative interest rate actually mean for people who are putting cash and a mattress, goldin ewald? -- gold in ewald? -- a vault? >> the idea of this zero interest rate is to push money out. but as long as interest rates are at zero and bonds are at zero, people don't care. the central banks are printing money, but they really are just printing by. if the interest rates move more negative, then he would not sit there. -- it would not sit there. this is a rather esoteric topic, but they are constrained by paper money. that's the problem many to be tackled in the long run. >> everybody goes to cash,

is the economics of the bundesbank -- >> i think they and the ecb share a common goal.isagreement over means toward that end. tensely the effectiveness of qe. a big qe program probably will not do a lot to boost inflation this year, but it may prevent inflation and falling. it may anchor inflation expectations. >> aren't we just pushing on a string. looking adding negative 5-year note. what does it do for mario draghi? >> an excellent point. all the monetary policy can do and all that he can do is buy time. he has bought more time than many of us thought he could. europe challenges are not monetary. interest rates are low in europe . there challenges our productivity, competitiveness, and fiscal. he is buying time, masterfully. >> all we hear is the need for structural reform. have you seen anything in europe that looks or smells like structural reform? >> the spanish have done structural reform. structural reform in italy has been disappointing. nonexistent in france. the big countries, with the exception of spain, had not begun to go down this road. >> breaking news.

. >> the man who handed up -- headed up the bundesbank, he resigned because of the ecb going ahead andng a bond buying program from countries like reese. -- like greece. we will be hearing his views today. >> we will see if we get any insight into that fraction -- friction. the headline, we're expecting 1.1 trillion euros in monthly installments of 50 billion euros per month. that has vigorously been a prose -- been opposed by some. >> this share is very important, how much will national central banks take on to their own allen street? -- balance sheet? or how much will the eurozone as a whole share the balance of fear. who pays the bill? >> there are a lot of politicians weighing in on the subject, that it is not for the central bank to decide how much those risks are shared and others say something different. we will look to see whether they use those interest rates to incentivize banks to getting involved with quantitative easing. quincy will be on the ground in davos with guy a little bit later on this morning. it is 6:56 in london. see you on the other side. ♪ >> hello. welcome to