labor the ecb -- same favor. the ecb are in that position now. if they give into greece, they have spanish elections in may and the italians will say -- why are you looking out for that country? why are you looking out for that child? an impossible position. jonathan: we will talk more about the politics and what this means after the break. a quick check on the top stock stories. bt will finally by ee for 12.5 billion pounds. over in germany diamler beats estimates. that stock trading a little bit lower and bnp paribas france's largest bank reported a surge in fourth-quarter stock. we spoke with the company cfo. >> of course there is a major exception the fine paid to u.s. authorities but as you know the bank has taken remedial action and this is basically the top line. it has blown in all -- grown in all businesses. ♪ jonathan: welcome back, i am jonathan ferro live from the city of london. greece dominating the headlines. the ecb tightening the screws on greece was drifting after restricting access to funding. -- restricting access to funding.

i think the ecb is trying to focus minds. the problem is that is not the ecb's job. the ecb is there to keep the money flowing while politicians sort out the final the -- finer details of any renegotiation package. we have quite a few days left until this bailout package expires. it could have been handled a lot better. >> the markets don't like uncertainty. this is an uncertain time for greece. are we seeing any knock on effects? >> we are not. that is somewhat surprising. that is largely as a result that greece still has access to funding by the e.l.a., at higher rates, and i think that is why you are seeing the euro-dollar start to regain some of its footing. i think you are seeing a little bit of saber rattling by the ecb and the eu. you go into a negotiation in good faith. what you don't do is going to negotiations and, from the very start, put a gun on the table and say, let's talk about it, but just remember we got the ultimate sanction -- we've got the ultimate sanction here. >> let's take a look at some of the figures. the borrowing costs for greece, that ke

what is the ecb up to?> what we are seeing here is a reminder that these negotiations would never be easy. we start from a point where greece was quite farrow -- far away from the troika program. there was a lot of optimism that we had the finance minister come over from london and tell us they are no longer asking for a debt write-down. i think a lot of optimism was spared by that but that's still not bring the parties that much closer together entre the economics. and my reading of yesterday is clearly we're still far away from agreement on the economics. i think we have to remind ourselves that greek banks still have access to financing. what i am current -- concerned about is what this will do to confidence in greece and what could this put on the deposit outflow we are already seeing from greek banks. that is the immediate risk. the next risk is going into talks that will culminate on the 11th of february when leaders meet to discuss the plan. i think a "grexit" is a lose-lose situation but also not a

the ecb haven't even bought a bond yet.: again, as i said the off-balance-sheet commitments were so important because qe was not something which is in my opinion so important with the u.s. because there was no previous off-balance-sheet commitment in those economies and countries. that being said it is extremely important that for the euro area as a whole, we have an increase of inflation and that depends very much on the countries that have room for maneuvering that have a big surplus and a high level of competitiveness. that is the reason why i was mentioning the fact that the bull ins in the camp of the countries concerned. not only the executive branches but the social partners. jonathan: i want to wrap up talking about not just europe but the whole world and global economy. the federal reserve and the bank of england are possibly going to be hiking rates later this year. in your experience when you were worried about inflation being too high in your experience, was that a mistake given what you know now and be is there

qe is from the ecb. what we are talking now is what finance minister or politicians has to agree on. that's completely different animal i'd say. >> i take your point entirely. we're now, wilfred, in this political realm of negotiations over fiscal easing ultimately. the greeks have a program. they have been told to stick to the program that program has been harder to meet the terms of as the economy has been contracting and the debt burden is getting higher the current trajectory of dealing with that debt takes greece out a long way. we're still talking in excess of 100% through gdp. >> according to calculations by the ministry of finance it's 120% by 2022 if they stick to the program. >> that's an awful lot of growth that's only going to be there to service the debt obligations going forward. you can see how the greeks feel this is an impractical situation but is the rest of the euro zone willing at this point to take the pressure off when it comes to the reform agenda? that's where both the ecb and the

the ecb put it on the euro group and germany. >> and the ecb saying it's going to make access to capital more expensive by not accepting the collateral going forward. >> and the politicians on both sides. >> stick with us. we want to discuss more about greece and the fall out across europe. >> now markets in europe unsurprisingly low today weighed by issues in greece and an oil price pull back today. but we're not actually as weak as we were at the open about 17 minutes or so ago. we're down about .3% for the broader stock 600. let's have a look across and see where the weakness is spread out. you can see the ftse 100 is suffering because oil prices are weak today. late yesterday we raised most of the gains, all the gains we had this week. not all of the gains since the middle of january but significant pull back in oil yesterday. germany down a quarter of a percent and russia is down .4%. let's look at bond rates and see what we're looking at there because yesterday there was some descent data out of both the u.s. and europe. we had lots of services pmi out of europe. bond prices did se

the ecb puts grace on emergency funding. this as their attack is prepares for a showdown with his german counterpart. francine: bt goes mobile. the british carrier buys ee in a 12.5 billion pound deal. guy: and, a sales surge. daimler reports a profit increase as it races to overtake vw and bmw in the luxury sector. we are going to speak to daimler's ceo in just over an hour. good morning. welcome to "the pulse." we are live from bloomberg's european headquarters. francine: to our top story, the ecb turns the screws on greece. the european central bank announced that it will restrict loans to the nation. guy: that announcement came just hours after the greek finance minister met with the ecb president, mario draghi. varoufakis meets with wolfgang scheibe today. joining us now is hans nichols in berlin. this could be the meeting that everybody has been waiting to hear about. we thought draghi was going to be interesting. scheibe is going to be fascinating. hans: he is going into this meeting and they appear to have consensus

what is the ecb's position in all of this? >> a very tricky one for the ecb. the concern here is a does not want to appear to be political. the ecb is being cautious, sticking to the rules. when it raised the emergency liquidity funding just yesterday , 3.3 billion euros, there nowhere near enough. the idea was to keep banks moderately liquid without allowing them to bailout the government. the ecb looks like it will keep pressure on even further with the supervisory arm preparing to tell banks they should hold back. very tricky for the ecb. they are playing it very straight but they do hold quite a lot of sway over how this crisis develops. mark: there has not been much concern in global markets o far. how likely is it that could change? >> this is quite astonishing to some people. one analyst said there is complacency on the ground -- on a grand scale here we have seen the euro down only a little bit today. greek bonds rose today. european stocks extending seven-year highs. the markets are not too concerned. the other part of the equation here is quantitativ

they are citing people in ecb circles. there's going to be some interested parties to put the pressure on greece. beyond the banking sector, the agreement or the likelihood of extension for the loan, a lot of people want to write the headline, greece is blinking. that's not what is happening now, is it? guest: i feel there is a lot of posturing going on. i also believe that a deal is in the interest of both parties. i don't think any greek politician wants to be making a decision that greece goes out of the eurozone. greece goes out of the eurozone only because greeks want to go out of the eurozone. i don't think anyone is going to say they will go out of the eurozone. also remember that the things mr. tsipras wants to do, those are one of the recommendations that the troika is making. i believe there will be a deal. greece cannot get it easy. the ecb and germany are not backing down. jonathan: in terms of investments, you like a trade. what have you been doing in the background? guest: i'm not doing anything in greece. i

remember what happened in the ecb actually.o be nervous. >> a very quick question on argentina. we are seeing headlines about bribery involving the president, allegations of one of the main prosecutors finding his death by being killed. what does it mean for an investor? >> there has been increasing uncertainty. the situation you described -- [indiscernible] trying to call attention to the fact that there is a problem and the problem is for everybody. this uncertainty is creating a situation that is limiting the amount of investment even further. investment is a big problem and argentina. the big problem in argentina is the lack of investment it is not inflation or reserves. there is no investment domestic no investment public, no investment private, no foreign investment. this is not helping in that sense. i do think it will have a direct impact on the economy, but it is hindering the expectations. i hope that when the environment gets a little more clear that it will recover because a lot of projects and argentina are very pr

that of course is not in the interest of the ecb itself because the ecb just yesterday increased at least raised the caps for emergency liquidity assistance for greek banks to 68.3 billion wrur 68.3 billion euros. that was less than the bank of greece actually hoped for. that also tells us a story. greek banks are losing deposits by the minutes. and as high of the pace of them losing deposits the higher likelihood as well that they need more money from the ecb and the likelihood then is that the ecb at one point in time i say you don't have a liquidity problem, you have a solvency problem. back to you. >> thank you. julia what are you having if the ecb were discussing capital controls for greece it would highlight the ecb was very concerned about the unfolding situation. >> i think as far as greece is concerned i agree with annetta it's completely unacceptful but if it helps to focus minds about how important a deal is then we can say there's a use in that at least. from what i'm hearing from sources in athens a hot of progress has been made over the last 24 hours. the greek officials her

the ecb may actually by greek bonds. only have what the greeks call a bridge loan, a six-month extension, would the ecb seriously by greek debt? guest: i don't think so. i think this bridge loan is seen as a bridge loan or extension. i think the real deal is seen as a long-term one, the four-year deal that everyone is talking about. there would need to be an agreement there are more or less an agreement for the ecb to consider that. it could be back to square one within weeks of starting to buy greek government bonds. i don't think that would make sense. jonathan: as we approach this meeting, you will be sitting at your desk watching this news flow come in, what are you looking for from the other side, from germany? what are the concessions they've got to make? guest: i think a key thing is less austerity. a reduction of the primary surplus targets. there's a strange dynamic between the short term and the long term deal. really, you don't need that much for the short term deal, but greece probably needs to make some grea

i think the ecb will blink.hink the euro zone finance ministers will link and the candidate will be kicked down the road again. there has to be a structural convergence and there is no clear realistic prospect for that. >> what is the trigger point question mark >> the politics in this. on the economics, they should have gone in 2012. if you look at the lack of progress on structural reforms and labor costs in the position with the rear exchange rate they should have gone to that three years ago. the difficulty is the threat of makeup and the eurozone will be prepared to keep them in for in another year or two. the central case is in two or three years. it could stagger for a while. there is a disorderly exit earlier than that. the tail risk is it staying home and cleaning up the act. that seems the least likely of the three outcomes. >> let's talk about the most likely. you mentioned the event. where does the contagion come from? >> a bit of both. particularly through the banking sector. the banking sector and

as the euro area level and the ecb. the markets will be focused on that and there is obviously quite a bit of a defense. these things will obviously change. >> do you think they are thinking of debt neutralization? there is some sort of deal with greece to deal with countries like spain. >> that is a good point. the debate may come up again. the positions have not changed. the german position has always been that we can only agree if they have better common controls and the challenge is the treaty for the institutions. there is a big chance to move forward. >> the annual from frankfurt. >> a new round of funding could have the photo app -- in the world. a lot lot of money if the price is right. >> stay tuned. >> talking of luxury do not call it a suv. they are not calling it an suv. they're calling it an everywhere vehicle. what you call it? what do you think rolls-royce will call it? let us know. we're taking a break. >> welcome back. time for the bloomberg exclusive. the luxury goods company shot -- set down and asked

unclear if the ecb shares that view.interview and the german paper that talks about greece being an insolvent country and how the troika is a bunch of technocrats. that lack of respect is not going to go down well in berlin. he softened that a little bit saying, just because he doesn't think the troika is rational means he will not negotiate with it. . >> hans, thank you very much indeed. >> for more news and analysis, we go to our bloomberg business site. in copenhagen, it is a domino effect set off by the swiss central bank. the weakening euro has prompted speculation. >> let's go to copenhagen, where we are joined by our bloomberg news reporter. what are we expecting? how does this relationship work? >> for now, the intervention is up to the danish central-bank. if the danish krone is tied to the euro and they try to keep that plague inside his europe and 5% depreciation ban -- a 0 .5% depreciation band -- they have been intervening heavily in the last several weeks. >> peter, this is very similar to what we saw in sw

our normal payment to the ecb. why not have the two institutions find it amongst themselves a way of transferring these funding. >> investors are showing confidence in the new greek reform proposal. almost $800 million returned to greece bank accounts. in ukraine, the cease-fire may be taking hold. no attacks by pro-russian rebels overnight. the country has another problem. they are losing more than 50% against the u.s. dollar this year. the central bank imposed a ban on foreign currency but lifted it yesterday. >> two suspects were planning to go to syria and join a terror group. two of the men are from uzbekistan and the other is from posix stand. -- from posix tom -- khazikstan. >> instead of trying to hold hostage funding for the department of homeland security called the fund that. >> the homeland security department runs out of money this week. many say they will not vote for a new spending bill. turns out leaping too much can be dangerous for your health. that is excellent news for people on this desk. sleep

ecb.hy not simply have the distribution find it among themselves -- find it among themselves in a way of transferring the funds? >> that was yanis varoufakis talking about helping the country avoided default. as the bank deposits are starting to flow back. >> yesterday we had a deposit flight back 700 million to be precise. >> 700 million euros? >> came back on the news of the bridge and i have not checked the numbers. >> and you are still down by tens of billions. >> once you turn the tide, you hope. >> let's go to athens and talk to marcus. what is the takeaway that added another piece into this puzzle? >> of course, the news of deposits coming back in is certainly new and encouraging if confirmed in a will be a well before we get official confirmation. one of the big takeaways was that the solution to the funding of imf has to be repaid and solution has not been found yet. a second takeaway he is remarkably -- about this prospect and not too concerned as say why go through all of this r

and a lot of goodwill from the ecb to keep the banking system of float. the ecb is unlikely to come up with liquidity and a political education today should doing that because it is a drastic step. that brings us back to where we started. >> they need some allies. will they have an ally in germany? that will be a big question. the negotiations will be in germany. international correspondent hans nichols joins us from berlin. with the talk all day about the greek foreign minister. the big question we are touching upon is what the ecb won't take the -- will take the tap and turn it off? >> we got a little hint, the vice-chair said the greeks should expect and no surprises. let me read the quote and they will not give. he said there will be no surprises if we found out a country is below that of reading and no longer a program and disappears. john, right now greek is able to draw ecb liquidity because they have this waiver. if they exit from the eu bailout, they will no longer have that waiver and a clear indication from the ecb, absent an official waiver th

another great example is ecb.ians have been on their case to ease policy for a long time and there has been pushed back. the key point is marrying monetary policy on one side with fiscal policy. >> turkey a different story. we will get to e.m. currencies in the moment. let's talk about fundamentals -- inflation. inflation out of the united states at 1:30 uk time. will this be the trigger for the fed? >> this is a key thing to focus on particularly what janet yellen has told us in her testimony that inflation is key. what we looking for is a negative reading on a year on year basis in the headline inflation in print. this is largely oil driven. more informative is what is going on in coal. we think it will be stable. 1.6% year on year. >> something in it for both the dollar bulls and bears over the last two days, how much stronger can the dollar get? we assume terrific rally over the last 12 months. >> this is a good question. there are more dollar bears in the last 48 hours given that janet yellen has disappointed

what the ecb did today was they made it much harder for greek banks to get cash from the ecb. normally the ecb will only give cash to banks in countries that are investment grade rating. greece is not investment grade rating. it's junk rated, but greece had a special waiver from the european central bank because greece was in the bailout program. they were meeting with their partners, the imf et cetera. as long as they did that the ecb said, okay, we'll keep giving you this cash. they decided the new government doesn't want to stick with the program. the greek banks can get cash but they have to go to the national bank of greece that means all the risk stays within greece and it's more expensive for the greek banks to actually do that and get the cash. so there's going to be an impact on the greek banking system and this is the ecb putting pressure on the greek government to decide what they're going to do. if they're going to stick with the program or not. >> what doe your gut tell you, michelle? you've spent so much time covering the story from the very beginning. will this

he wants to keep the ability to draw funds from the ecb, at least from great banks, keep the ecb liquiditypen. he does want to give up the addiction to eu and imf funding. he wants a new deal in place by may for longer-term debt. he was very clear when he was in france this is going to be a difficult process. >> we have resembled drug addicts craving the next dose. do i believe greece should be taking another bunch of loans? no. it is not that we don't need the money. we are desperate because of certain commitments in my abilities we have. >> he did receive some support from the finance minister in france as well as from president barack obama who spoke later in the day. here is what they want to do. they want to keep their lines open to the ecb so they can pay short-term loans. the problem is if they exit the bailout program under the e.u. and that is february 28 the deadline. the ecb has been very clear they won't allow them to have emergency access to these open windows. the vice chairman of the ecb spoke over the weekend in cambridge. very strongly hinting unless greece is in the ecb i

can the ecb get guarantees from the european politicians that would make sure the ecb got made good?f they got those guarantees, maybe the ecb could say -- ultimately, it is a political decision. >> gabriel sterne, thank you so much. >> coming up, how youtube tries to steal the super bowl show from nbc. details on that story, up next. ♪ >> good morning. welcome back. you are watching "the pulse." we are on bloomberg tv and radio. >> telefonica is planning a share sales war between 4 billion euros and 5 billion euros. the spanish telecoms company is said to have hired jpmorgan to handle the sale. it would be used to pay for recent acquisitions in europe and bolster its balance sheet. shares were down this morning. >> the irish building materials company has agreed to buy businesses owned by lafarge. holcim and lafarge need to sell off assets in order to win the approval of regulators. >> youtube hosted its first super bowl halftime show. the show included a host of youtube stars doing a chemistry demonstration. it was not intended to compete with nbc, but to give teenagers something t

it started with the fed and is now the bank of japan and ecb.al banks are taking risk-free assets out of the marketplace by putting them on central bank balance sheet and is creating a supply and demand and balance for what investors need -- income. with the government bond yield so low now, investors all over the world are looking for something and are increasingly going into credit assets meaning investment grade corporate bonds and high-yield bank loans. investors can earn between 4% 6% on assets. it looks very attractive and that's why we think this will be the year of credit specifically u.s. credit. >> as far as investment strategy goes, he likes cyclicals and companies tied to the consumer. which sectors offer the most opportunity? >> the sectors that offer the most opportunity are tied to the consumer benefits from low interest rates and low energy costs. airlines would be at the top of our list because eve got industry consolidation, you've got your players raising prices. consumers are back in business travel is back so airlines have s

the larger issue is what they do if their banks are cut off from the ecb.here's going to be a meeting in frankfurt and they are going to be discussing whether to raise or potentially make it harder or easier for greece to access liquidity lines. two weeks ago, wednesday night we got that announcement that they would no longer be accepting greek debt as collateral. it was a way to force greece back to the negotiating table. we will see what we get tonight. frankfurt could have more news for us than brussels. jonathan: hans nichols, thank you very much. let's bring back james bevan. james the plan you just overheard that sounds like a can kicking. is that the most we can expect? guest: i think that we are seeing brinksmanship and we will have to muddle through. i think that we do see a six-month extension and that will become the basis for a behind closed doors conversation. the great prime minister really understands this. he is not a hothead. therefore, he's going to be taken extremely seriously. you have spain, portugal italy all in similar situations. but

yanis varoufakis arrives in frankfurt to meet the ecb president.t the central bank's blessing for his debt plan? >> slippery oil. the commodity falls after the biggest four-day rally in six years. >> and we are going to talk wages and inflation for the work and pensions. good morning. "the pulse welcome

there is an agreement with the ecb to tdo something.clear when the ecb has to step in. >> think back, start of the euro project there was a common agreement in exchange rate mechanism that everyone went to fight for everyone else. bank of england lost that game. even with the help of its mates in the exchange rate mechanism. again, the win marcus can take on central banks and win. this is not mean that the kroner peg has to go, but you have to have the stomach for the fight. it is a different world. if you look at those deeply negative bond yields, five years all across finland, germany, switzerland denmark, this is not a healthy environment. we are starting to see pension figures from some of the companies. they're soaring. it is mostly mathematical, but there is a lesson there. companies have to backfill. denmark defends its currency in some huge multinational corporation's pension deficit surges. there is a lot of moving parts in this. the bubble always comes back. >> i feel yield on the danish two year -6.5%. denmark, the central ba

if you look at the sector, can the ecb really do that? >> it is a good question and i do not focus on the legal dimensions of this. i leave this to the lawyers and i think the ecb is understandably concerned about collateral and cannot afford a new courageous program on quantitative easing to undermine the banks or facilitate a withdrawal of deposits that could undermine the greek economy and put the economy at risk. i think there will be a balanced approach that will enable it to support greece as the government seeks a for reform with creditors. >> you look at the greek banking system in 2012. are we underestimated -- underestimating the risk? is it small that it is insignificant to europe? >> there is a potential risk that this could contaminate the great contagion and i am amused by the small size of the economy and suggest that this has very little systemic risk. we learned that none of us can anticipate where the risk comes from. it is clear that the greek banking system is so vital to the economy and the economy is vital to the int

the ecb program may be in trouble before it begins.age of new supply from governors and a lack of sellers will create a scarcity and hinder the efforts to buy 19 months and the same proportion of the bonds as the federal reserve. >> fairfax holdings of agreement to buy britt four 8 billion and the insurer is looking to expand sales and coverage in the london market. >> a bit of restructuring. pandora beat profit estimates for the fourth quarter. the maker also said sales will rise to 40 billion products this year. the company's strategy is to introduce new charms more frequently. >> finance takes a step forward. investors are seeking higher returns wherever they can find it down. >> the first. 2. lender in the u.k. to offer a secure bond and that is interesting. the first perrer to peer lender. how hard was it to get approval? >> is the entire industry -- the entire industry has been interested. at through the investigations we discovered that by issuing a list of all bonds we complied with isa requirements and were able to be the firs

francine: what is the ecb's role?is considering doing is warning greek banks not to take too much or to reduce holdings of greek debt. that is a big challenge for the greek government and funding itself. next month they have a 4.4 billion dollar bond they are going to be rolling over. if they do not have their main buyer they could have a difficult time servicing their debt. they're going have to make hard decisions on what and where they are going to cut -- to pay. francine: hans nichols will be in brussels through the day. that is it for "the pulse." "surveillance" is next from new york with tom keene. follow us on twitter. i am @flacqua. guy johnson is @guyjohnsontv. have a great weekend, we will see you on monday. ♪ >> this is "bloomberg surveillance." >> the dance returns to brussels. artillery fire on.net -- on the netscape. -- on donetsk. this is "bloomberg surveillance " live from our world headquarters in new york. i am brendan greeley. tom keene is in washington. he has something to say to the president. oli

brendan: you are an ecb watcher. what i'm trying to figure out is the decision to no longer accept greek sovereign debt and part of their ongoing liquidity operations. it sounds like a dry thing to do, but it feels political. is that right? gilles: the ecb is doing what it always said it would do and the reason why greek bonds were accepted as collateral was that they were going to be in a program. the greek government has told ecb and everyone else in the world we do not want the program. it is the timing. brendan: yeah, they did not have to do it now. olivia: the point is they were operating under a waiver. it does not look like mario draghi is getting political, choosing to lift it now/ gilles: in the sense of what the ecb has been trying to do for years now, is not to be seen as the ultimate decider in europe. it is not their job. they are not an elected body. the message repeatedly from the ecb is do not count on us to make decisions. what they need from the government is a deal, once they have a deal, then ecb

and a means of dealing with the central-bank, the ecb.has been a part since 1944 and our relationship with the imf is undying and we want to continue. it is going to be continuing and actually proven. that is not the triga. the people in degrees nobody you do not know a you should know because you have not suffered it. what we refer to as the tryga is a team of technocrats the patched -- dispatched to come here and impose upon the government and people doesn't of lectionary in nature -- that was debt inflationary in nature that never targeted the real causes and made a bad thing worse. we should have a relationship by an institution and this is something not only we want to tolerate but seek. not because we want to repay the loans because we do not want to repay the conditionality's. [indiscernible] that is gone. the idea about the promise to negotiate has already been in the sense this year as we were saying, the prime minister's target has been waived. these are things that people on investors understand. you know the one thing they wan

the most immediate is payments back to the ecb and the imf.ce negotiating with their own people? shouldn't it be negotiating with european central banks and the international monetary fund? >> certainly, that's one of the takeaways of that graph. there are two key takeaways. the first is that actually this greece has to pay out a lot to the imf and ecb, over 15 billion euros. so 2015 really is a crunch year for greece in terms of funding terms. and secondly as you say, most of the payments in the short-term go to the ecb and the imf. this is crucial for a couple of reasons. if they negotiate the debt relief program with the eurozone, the eurozone can't really speak on behalf of the ecb and imf. and actually, throughout the crisis and throughout this negotiating period, both the ecb and imf have said we're not going to renegotiate our debt. and legally, they're in a very strong position. >> so, hang on. let me just get this straight. so if and it's a big if if greek does get a deal with the eurozone, could we possibly see the ecb and the imf a

>> in frankfurt, the ecb will have a meeting where they may discuss greece. the key question is will they keep the emergency liquidity lines, liquidity window open? two weeks ago, when talks were spiraling here they went ahead and cut off using the collateral. -- using greek collateral. the question is will they make it clear that if greece wants access to ecb funds they need to stay in the program, not the loan bailout or the credit facility? that will be a key distinction. the ecb could put more pressure on them tonight, especially as this proposal falls short of what many finance ministers were very clear of what they wanted, that greece stays in the program. >> loan versus bailout -- thank you. hans nichols joining us from brussels. >> that state a look at some other stories. the bank of japan has made a stimulus. they to stoke a recovery from recession. the central bank will boost an annual pay of ¥80 trillion, $670 billion. they say that exports and production have been the king. >> rebels and ukraine say they have taken over the strategic crossroads. f

we have another meeting next tuesday that we have the ecb review.there is a financing deal closed imagine what we have got for the rest of the year. it is in their interest to keep prodding out at the eu. the greeks have digested a record amount of austerity. we will want some relief from that. as we get to the end of the year we will have elections in spain and portugal. as an investor it is very easy to the get the bloomberg screens and get distracted by the dramatic headlines. if you look at the investment world, european earnings are picking up for the first time in four years. macro is beginning to pick up as well. look at french stocks. they are setting a blistering pace. >> sticking with the french theme, how much is the ecb dabbling in politics at the moment and how much cover do they have for the decisions they are going to be making. >> i think it is a good point. people think it is independent of a central bank. they think of a central bank attacked by politicians as they cut rates and not the other way around. the justice ruling did have

it is a requirement of the ecb. ecb made no observation on that. >> do you think the situation will get worse before it gets better? >> for this year, 2015, we anticipate a difficult macroeconomic situation in russia with the recession and with a higher inflation rate. globally speaking, we should expect an increase in our cost of risk. as i mentioned earlier this will be [indiscernible] >> could you exit russia or is this off the table? >> our vision is a long-term vision for russia. we are committed on the long term in russian economy. we come from that position. >> severin cabannes there speaking to bloomberg's caroline connan. >> in new york, the nasdaq closed near a 15-year high. billionaire investor carl icahn seems to be an apple fan. he raised his anticipated price for the shares. su keenan has the stock. >> up another 2% a day after. the company's market cap topped 7 billion for the first time in history. apple shareholder and activist investor carl icahn was cheering from the sidelines and put out a lot of

they want to take 1.9 billion from the ecb. they also want to loosen their labor market forms. -- reforms. if these are codified in the proposal that they submit today it is going to make it very difficult for the eu to approve them. then we have this common sentiment out of jack lew that could put pressure. >> hans, you just mentioned jack lew. in terms of this -- it is very interesting that we have had a focus in terms of what happens. the outcome of negotiations in the north of europe and greece. >> the u.s. has weighed in sporadically -- what we have on jack lew is a call and a readout of the call. it was pretty harsh, the readout -- in some ways what mr. lou was doing was the same thing mr. osborne did on close doors -- behind closed doors. eurozone officials are saying you haven't properly calculated what might happen if reese leaves. -- if greece leaves. mr. lew was talking tough. yesterday we were all expecting a proposal to be submitted to the eu. greece delayed and today they say they are on track but until we have th

in europe, the soap opera continues for the ecb. >> ecb has decided it too would like to communicate. us from london. you have the first ever minutes of an ecb meeting. is it a good read? >> i have in my hind -- hand -- they with the lid. this is the minutes of the meeting. the consensus on qe, pretty clear. they say it was the only option. fairly vague. we know there was a 50 billion euro bond buying plan every month on the table. they decided to raise that to 60. beyond that, the news is the discussion on buying corporate bonds. they fall short on the severn -- sovereign debt side of things maybe that is the trigger. they have also pointed out they will terminate this program when the inflation target is hit. that could be a wild. >> i look at these notes -- these are much more emotional and visible headlines. >> they are. there were concerns that releasing the minutes overtime would cause a nationalization of the ecb board. >> i have to give you that one. the fear that this would spread across europe and have some sign of real nationalization -- a lot of this is discussed publicly

the ecb $27 billion for the ecb. or greece does, shall we say. tomorrow he goes to frankfurt to meet where mario because he would also like mario droghi to accept the growth-linked bonds. that's going to be a little tougher, i think. >> you have met him. >> yeah. >> he looks a little like pit bull to me. casual. smiling. what's your read on it? >> i have -- >> where did he come from? >> i have interviewed so many finance ministers. he is like no other finance minister i have ever interviewed. you can see it in the way he dresses. never wears a tie. >> pit bull i'm telling you. >> you can see from this video from what i can tell he is almost always in a blue shirt, maybe black. for outer wear a leather jacket. he showed up to our interviews in ath oenz a motorcycle. he is a big-time blogger. has been for years. most recently he was a visiting professor at the university of texas in austin. he is also an economic consultant for a video game maker located in bellview washington. he calls himself a libertarian marxist. >> contributory, i think. he is

the ecb is saying that greek banks can no longer bring greek government bonds to the ecb for collateral is old-fashioned banking. this is how central banking works in all the world. banks in a certain country can bring collateral to the central bank and that's how they get funding. now the ecb is saying the greek banks can't do this anymore and the reason they're saying this is because greek government debt is not investment grade rated at this point. they had a special waiver because greece was in a program and they were doing reforms, et cetera. the new greek government says we don't want to do that program anymore. so the ecb says if you're not going to stick with the program, then we can't give you that waiver anymore. they've given greece a little bit of breathing room the greek banks can still go to the national bank of greece a division of the central bank of the european central bank but that's much more expensive for them to do. and so it's going to be more costly for the banks, and at any time the ecb can say you can't do that anymore either. once the banks can't fund themselv

varoufakis: they should pay this to the ecb. not have the two institutions find it amongst themselves a way of transferring this funding? betty: he says investors are showing confidence in the reform plan. $800 million has returned to greek bank accounts on tuesday. the ukraine government says the cease-fire may finally be taking hold. authorities say there were no overtax overnight by the pro-russian -- no attacks overnight by the pro-russian rebels. they violated the cease-fire repeatedly. ukraine's currency has fallen more than 50% against the dollar this year. the central bank banned foreign currency trading earlier this week but lifted it yesterday. knighted airlines sends stern warning to pilots -- united airlines sends a stern warning to pilots. they cited near misses. a jet ran low on fuel after deviating from its fight plan. those are the -- it's like plan. those are the top headlines -- its flight plan. those are the top headlines. abercrombie & fitch analyst downgrade. more on that as we look at pre-market movers. plu

secondly, the ecb, quantitative easing.n next month with german 10-year paper, that will decrease the german yield and the spread will widen. >> we know they are going to come in. they have already said the topline growth numbers is what they will do. it is set in stone. do you think that they will buy up to the maximum that they can of german bunds. for q.e. to work more substantially, you would presume they would go to the maximum of the periphery rather than bunds. >> a great. -- agree. the bundesbank would not want to take the negative yields on the short end of the curve. they could aggressively buy 10-year sector which is the risk. >> how can we hedge? >> for the retail guys at home, they can buy a core spread of the bunds. >> great to have you on. see you soon. >> you are looking at live pictures. it is friday, it is bright, the sun is rising across london. unfortunately, equity markets are not. equity markets are indicating lower. stay with us. we will talk about what will drive trade after the break. ♪ >> the scand

if the ecb decides to cut greece out, would that be an economic or political decision?> you can argue it both ways. if you look at the mechanisms of the agreement, it is a case of agreeing to fund banks which seem to be solvent. that could be a debating point. we've seen this massive capital slide. that really threatens the solvency of some of those banks and underlines the necessity to require external funding. on that technical point, it is more of an economic or nonpolitical decision. it will also be perceived as political at the same time. that's going to be the interesting -- >> the flip side of the trade is the dollar and friday's jobs report has brought forward expectations again of when the fed will raise rates. january 30 was the all-time high on a correlation weighted basis. we've had a bit of nervousness since then. are we back on with the dollar rally after those two weeks of nervousness? >> i think the way the market has been position, it has been long dollars and excessively long towards the end of last month, in the same way it has been getting short on e

they will need ecb approval for that. there is some indication that the ecb would allow those other credit facilities that were closed off. it seems to me the biggest and most immediate hurdles aren't necessarily political, but technical and financial. francine: thank you so much, hans nichols. for more on the crucial vote in the bundestag let's get an insider perspective. we are joined by michael fuchs. michael, thank you so much for joining us. great to have you on the program. you were there at the bundestag. what is the discussion focusing on? you've been fairly critical of this. does it mean you will vote no? >> no, i will vote yes. greece has fulfilled all of what we told them they have to do in order to get the bailout package. we are doing an extension of four months. we will of course supervise and control on a tough basis whether they fulfill what they have promised to do. that is one of the reasons i'm voting yes. i'm a little skeptical that they will do what they promised. as a matter of fact, they told us man

but according -- the ecb seems unlikely to grant them that.here is a cap of about 15 billion euros. they may want to go up to 25 billion. he clearly is playing for more time. >> we are going to be pitching our ideas to the group on how greece can begin it stability and begin deliberating with partners. by the beginning of the summer by the first of june, a firm new contract between the european union, the imf, and of course greece. so the so perpetuating crisis of the last five years could be put to an end. >> yesterday afternoon we reported that privately angela merkel is racing for a longer-term game. they want to see what happens when the financing rent out at the end of the month. they are bracing for hardball. publicly on july merkel spoke yesterday. she seems less than impressed. >> the greek government obviously still is working on its position. it is very understandable when you think about how few days this government has been office. we will wait for proposals and enter into talks with them. there will be sufficient opportunity. i do

>> first and foremost you have the ecb with an unlimited qe program. as much as it takes as long as it is needed. it could be extended. secondly, we are beginning to see the european economy shows signs of recovery. gdp data was very positive. what we have is a little momentum holding. what we have seen, when you are pushing an open door with stimulus, it's a good time to buy. when you look at when the old program was operated, when the ecb were in the market buying, we tend to see a positive reaction across risk asset classes. we may have been distracted. those who look at politics may have in distracted. if europe is genuinely turning a corner with the support of the ecb, there could be a lot more to play. our guitar trading that way. >> you are going to stay with us. ukraine, a delicate cease-fire tested as rebels and kiev point fingers at reports of fighting. 19 entities added to the eu sanctions list. we will tell you who is included in them when we return. ♪ >> welcome back. the delicate cease-fire. kiev has reported violations. the the e.u. adde

especially now we got the ecb announce announcement.estors will want to see a proof whether it is in fact helping the economy. let's switch over to oil. because friday we did see a big spike in crude prices. up by around 6%. some traders debating whether oil found a bottom. given the weak global data that u.s. gdp number on friday and today's china pmi. that suggesting weaker global demand for oil. we're looking at oil prices lower in today's session. wti crude trading at $47.47. brent crude holding on to the $52 level. >>> exxonmobil is set to report earnings before the bell. all eyes on the call tal spending plans. analysts expect revenue and earnings to come in lower than 2014 fourth quarter level. the shares are trading around 5% over the last 12 months. joining us now is ian reid. thank you very much for being with us. throughout the show we're talking about the russian effect. it's hitting luxury brands to automakers. we'll see that effect with exxonmobil through the business. how do you think it's going to play out in the earning

the ecb cut off a key source of funding last night.e have an offer to have a temporary bridge loan. the germans are saying not so fast. we liked the old agreement. we have more clarity. we>> how much longer is greece going to be able to access certain lines of credit from the ecb? >> last night, they swapped their collateral. they still have access to emergency liquidity assistance. that is reapproved on a two-week basis. there could be a 60 billion euro limit on that. right now, greece is at 56 billion. we have confirmed the broad outlines of it. even if they have access to funding, they don't have much headroom. if greece leaves their bailout program it expires at the end of february. there is not a whole lot to the ecb can do to open any financing window to them. they could be cut out. you have seen a number of basis points, up some 285 basis points on the day. >> since we are taking down the clock, any word on capital control? >> you clearly look inside of my notebook insult the question i was going to ask but did not get the oppor

>> the banks are the big problem go to the the banks ecb and want funding and the ecb says no, the banksould default. that is it. they must go to the old currency. and that is what happens. what did happen? unlikely. they have been talking about this for many years. we shall see. they want to protect the eurozone's system because of is hugeeaves -- it because spain, portugal, italy -- all those countries have debt concerns. they may leave the euro if the greek exit works. the concern is not not if they leave the euro. it must be financed. >> no economy can survive without cash. they are drawn their money. whether or not the question is of capital control would be put in place to prevent a deeper route. >> if the banks are talking to the ecb -- it is actually the people on the streets saying i want my money now. i will pull it out, put it in my house, under the bed appeared it is safer there than the bank. >> gold rising for a third day. thank you for that. you can get more on that and all the days of top stories at our new digital destination. we bring together the best of bloomberg news