. >> economy flat, eu economy flat, japan contracting. consumer sales flat. we're heading into a recession. >> no recession. >> is that a prediction? >> the bank will be reauthorized. >> chris christie republican nominee against clinton. >> we won't have a recession in the contraction of the economy but low growth for the next several years. >> north atlantic treaty organization meets in wales in september. i predict is agenda will be from the happens in the ukraine. nato will propose higher december fence spend. as the new threat posed by russia, and i think i speak for the numbers of the panel but even if i don't we wish you a nice labor day weekend with a minimum of labor. bye-bye. welcome to government contracting weekly, sponsored by aoc key solutions, inc. government contracting weekly is the only television program devoted exclusively to the competitive and dynamic world of government contracting, a world where coming in second place is not an option, but where principle-centered winning is the only approach. good morning, and welcome to government con

. >> economy flat, eu economy flat, japan is contracting, consumer sales flat. we are headed into a recession. >> no pat, no recession, forget that. >> is that a prediction? quickly. >> i had to disagree. the bank will be reorganized. >> excellent. >> chris christie republican nominee 2016 against clinton. >> really? >> we won't have a recession in the sense of the contraction of the economy but we'll have low growth for the next several years which is just as damaging. >> north atlantic treaty organization meets in wales in september. i predict the agenda will be domestic dated by events in ukraine. they have spiraled from political crisis and annexation of crimea to warfare. nato will propose higher defense spending and doctrines and training conquering what many perceive -- more time -- as a new threat posed by russia. i think i am speaking for the members of the panel but if i am not, we wish you a joyful labor day weekend with a minimum of labor. bye-bye. test. test.

we will be talking about russia and the risks to the eu economy. ♪ >> welcome back.xchange check. we have quick movement on the aussie dollar rates. a bit slow on the jobless numbers. much higher than the market had estimated. the aussie dollar dropped and it is the biggest rock that we have seen in almost a month. traders changing their view on the potential of a rate cut from the reserve bank of austria. yesterday it was 16%. the risk races to 36%. above the u.s. for the first time at 2007. dollarly in this aussie -dollar trade is still an opportunity for you to sell. if you ever see that level again. this is the best performing currency this year. let's look at emerging-market currencies. you have dollar rand falling. the pmi underperforming in south africa. us -- he said the tide is terming -- turning on emerging market currencies. also the ruble and the peso. this is a mini wobble potentially. the only thing that changes the difference between a decline to an exit this in currencies is volatility in that is rising. >> here are today's top headlines. russian fans

economy has seen no growth yet this year. some socialist politicians are blaming austerity measures demanded by the eu and championed by germany for making the situation worse. any economies argue france has dug itself into an economical. >> that is what economists say. we got this report from the frankfurt stock exchange. >> france is the most serious problem in the eurozone. that is the concern here. france has to become more competitive and productive and cut back the part the state lays in the nation's economy. whether a new government will be able to do that anytime soon while people are quite pessimistic on the frankfurt floor that that will happen. still, the share prices in frankfurt went up quite clearly. they hope the european central bank will act to prop up the european economy. remarks by mario draghi are being interpreted to that respect. >> in frankfurt, we can stay there for a closer look at the numbers. the dax finished the day up as did the euro stoxx, gaining more than 2%. in new york, traders are still on the floor, the dow jones is in positive territory and the euro is trading at $1.31. >> spain has the to

eu, that is a concern. boris, that about is a risk for the u.k. economyt needs to be about the whole of the british economy. reforms realistic? what timeline will we give the eu? how long will we wait. all of those are germane questions. does this feel like a negotiating tactic? is it about the negotiation or is this a real plan a and a real plan be? a lot of people in brussels will be working that out for themselves. >> what is the alternative for sterling question mark without a plan b, you cannot go into a referendum with any balance at all. eu,ould like to stay in the but we want a reformed eu. we will do this, this, and this. question,s an open whether or not he will look to take a seat at the general election. >> why do they want him back in parliament? it makes for a stronger conservative party. this is a man that since he was a teenager wanted to be the prime minister of this country. beforeameron got there him. does he still want to be the prime minister of this country? i imagine he probably does. does he do next year's general election? does he

eu to imposehe restrictions on russia. he says they should be aimed at weakening the russian economy and eroding support for vladimir putin at home. he told supporters eu leaders were ready to impose fresh sanctions. people in eastern ukraine have been cleaning up after the latest violence. during the night, the railway station and martin were bombarded in the separatist stronghold of donetsk. it is not known who was responsible. also unclear is how many russian soldiers are now fighting on the side of the rebels. russia continues to deny ever taking part in military action ukraine. of foreignthousands troops and hundreds of foreign tanks in his country. he warned that the conflict threatened to escalate into a war with russia. i think we are very close to the point of no return. the point of no return is full-scale war. happened in the territory controlled -- controlled by separatists. >> poroshenko said he hoped the talks on monday would lead to a cease-fire. max, there are surveillance photos that came out yesterday and have put sanctions back at the top of the agenda. what type support is therefore a third round of san

the russian economy is about 6% of the eu. e have a situation where the russian economy is now in recession and higher levels than the ukrainians. if russians really think the sanctions are cost less, i find that -- i don't understand that. it's quite expensive for russia. my sense was they were willing to incur the costs. but i would like to say what i think which is that russia is not a serious country. it has a conventional military about the size of germany's in poland's put together. this is a country that does not respect its agreements, so i think the view is you cannot deal wuth them. >> thank you very much. let's go to keith darden next. >> keith darden, american university. what do you see as the future of the insurgency? five years down the road, what kind of ukraine do we have and how would that compare -- it seems that russia's involvement has not been producing a less nato aligned ukraine, and that the country has so many pathologies on its own that in action might be the best way to achieve a desirable result. >>

announced last week to [indiscernible] the import ban is impacting the economies of lithuania and poland. dairy, and fish products. the eu says it will continue to market -- monitor market development. >> their hopes of a export led recovery. exports fell half of 1% and turkey.ell 8% in and 14% in russia which has its own economic crisis and that figure in russia could be worse as this data was collected before moscow imposed that food ban. russia has said there is no harbor u.s.-made in reaching a cease-fire in ukraine but tension over and eight convoy at sent to the country has been resolved. the move seems to have called jitters on wall street. u.s. stocks drop just jumped and the nasdaq hit a 13 year high and the dow jones wind-up 150 points. we see the s&p 500 also doing trading over .75 of 1%. taking a look at some company news. in china regulators are continuing to put pressure on foreign carmakers in the world's largest auto market. mercedes-benz is been found guilty of price-fixing. no penalty has been announced but last week local media reported that audi could be fined about $40 million for similar issue. chin

when you look at manufacturing, clearly germany is the strongest manufacturing economy in the eu. francis about 10%. is about manufacturing 15%. germany is close to 22%. you take all of that and overlay what is happening in the global economy, the potential slowdown in china, sanctions and russia, just focus on sanctions and russia. look at the effect between january and may of this year. german exports to russia down 15%. 20-year, 20 five year decline could mean the gdp declines a quarter of a percent in germany. estimates all of european trade with russia if it continues to slow, .3% shaved off gdp. it is not all negative news. there could be a positive story. they will start shipping fully w's toed audis and vo china. manus, i think you are more of a volvo man, guys? >> hans, thanks for that. towe are live in moscow discuss what could happen if russia is hit by further sanctions. ♪ >> first. bloomberg. >> welcome back. i'm mark barton. our next guest says the current round of sanctions and russia have been priced into this year. now the concern is what happens next. joining us n

you would think would be the economy. no, eu foreign ministers truly urgency meetings in brussels address iraq, in particular, ukraine. ukraine with the challenges between russia and nato and europe. the convoy of russian humanitarian aid is the most visible. love this as the day simply get -- all of this as the day simply gets shorter and have the coldest winter coming. hans nichols joins us. as you visit brussels, what is different about brussels this time versus a week or month or year ago? >> what is different about this meeting, it is entirely emergency meeting. it is a snap ending. all of the foreign ministers are coming here. there's a crisis mentality. more so on iraq and i say ukraine. on ukraine, they simply want to find out -- they just started meeting. they want essentially find out what is going on. no one really has a great sense of what is happening in these rebel territories. before any decisions are made, they will have to hoover up some intelligence. >> these meetings start with knowing how they want them to en

last four days, the united kingdom has created more net new jobs than the rest of the eu put together. this economy is starting to move if we take think those long-term decisions and really switch our economy looking at the fast growth of focusing on or near neighborhood, i think we could be a great success story. takeke said, it will pro-business, pro-enterprise policies. the only thing i disagree with mike about his of course i want to end uncertainty whether over the future of the united kingdom or the future of the united kingdom and the european union. in modern politics, you want to trust people and take them with you. you cannot maintain these relationships without public support. i have a strategy when it comes to europe getting the changes that we need and holding a referendum in which i believe written should stay and a reformed european union. i think that's the right answer. where i would disagree is i don't think this strategy is disadvantaging in terms of investment. i see no evidence for that. hondanissan, toyota, moving massively into our car industry. i see chinese businesses inves

the russian economy is about 6% of the eu. e have a situation where the russian economy is now in thansion and higher levels the ukrainians. if russians really think the , i finds are cost less that -- i don't understand that. it's quite expensive for russia. my sense was they were willing to incur the costs. to say what ike think which is that russia is not a serious country. it has a conventional military about the size of germany's in poland's put together. this is a country that does not respect its agreements, so i think the view is you cannot view it. >> thank you very much. let's go to keith darden next. >> keith darden, american university. see as the do you future of the insurgency? road, whatdown the kind of ukraine do we have and how would that compare -- it seems that russia's involvement has not been producing a less and thatned ukraine, the country has so many pathologies on its own that in action might be the best way to achieve a desirable result. >> we had one gentleman at the end very briefly, and then we .ill

russia, ukraine, eu, negative impact on the european economy.ned, but you don't want to panic. >> and if you've been looking at a stock, is now a good time to buy because the price is down? >> we put all -- especially new client coming in, look, these kind of events can be either a crisis or they could be an opportunity. so you need to look at your portfolio and go, maybe this is a good time to make some changes. people -- we see a lot of people that have been way overweighted bonds. well, bonds have had a terrific year. maybe it's time take some of that money off the table. high, sell high, here's a concept. sell high, put some of that money to the side. and when stocks go through the correction mode, go in and buy stocks at a cheaper price. look at these as opportunities to rebalance your portfolio. no panic. >> great advice. dominic, thank you. >> appreciate it. >> you can forget about the kids, it's your turn to go to summer camp. you know, adult summer camps hang around the campfire, go swimming. give all of us a chance to bring out our inn

our aim is to ensure the continued financing of the economy. >> the european commission has given its approval to the bailout, saying it is in line with eu competition rules and would help reestablish confidence in the portuguese financial system. >> to recap our top story -- israel has resumed airstrikes in gaza. >> at all for "the journal." thank you for watching. [ mid-tempo music plays ] steves: riding this gondola, you soar, landing in the sleepy, unpromoted village of gimmelwald. in 30 years of researching guidebooks, i've found hidden gems like this in every country. gimmelwald would have been developed to the hilt, like neighboring towns, but the village had its real estate declared an avalanche zone, so no one could get new building permits. the result? a real mountain community -- families, farms, and traditional ways. choosing places like gimmelwald and then meeting the people, you become part of the party rather than just part of the economy. this is a realistic goal for any good traveler. eins, zwei, drei. man: [ chuckles ] steves: take a moment to appreciate the alpine cheese. so, older is better? man: oh, yes. -woman: i do

eu. so anything installed in europe gets built by americans. the british economy is growing faster than it's neighbors, and until now, never been the continent's undisputed engine of growth. and now they wonder if the uk will overshadow it. >> it has gone from lager to leader. the uk's economy is growing as the european neighbors have stalled. it's good. dp is higher than a year ago. and that was the best performance in six years, and it's unemployment has dropped from a high of 6.8%, but the uk's recovery has been slower than germany and france. it shrank by 8%. >> the uk has been glowing very rapidly, but it's behind germany in terms of growth since the stock crisis. >> reporter: among the factors credited for fueling growth in the uk are cheap money, and a weakened housing market and exports that help it stay competitive. any slowdown in europe also poses a threat to the uk since it exports goods to the euro zone, and still, growth is expected to continue. >> i think that the uk can do very well over the next few years, but germany is still a lot bigger in term

. >> reporter: back in july, eu leaders imposed sanctions on sectors of the russian economy. the russians responded by banning agricultural imports. they would do more if the situation on the ground escalated and this week it certainly did that. the momentum towards tougher sanction he seems i irresistibl. some eu states with deep trades with russia and ones heavily reliant on russian gas. sy plosimon mcgregor wood. >>> that's why we need to work within the european union as well. the continued targeted air strikes against the fighters in iraq. the united kingdom raised its terror threat yesterday. we'll be learning more on the eu response in the coming hours. saudi arabia is warning their countries could be next if more is not done to stop the threat of the islamic state group. >> translator: if no action is taken against i.s. for sure in a month they will reach europe and in another month they will reach u.s. i am telling you now and you have to keep this in mind. ircall upon you leaders to take this warning seriously. >> roz jordan is following this story, roz, the u.k. ha

economy minister. the minister has questioned whether eu's pause for austerity. france is effectively no economic growth, zero, no growth. the approval ratings, needless to say, they have nose dived. meanwhile, brussels is piling on pressure for france to get the act in order, finances in order. big day for france tomorrow. we'll be all across that one. france and the euro zone high on the agenda at the annual summit of the world central holders in wyoming. the gathering ended with mixed signals act the strength of the americans and global economy. the he had of the u.s. federal reserve there, janet yellen, the picture at the -- the economic picture she says is hazy -- that's the word she used -- talking there to the european central bank boss mario. he says they're prepared to do more to boost the shaky recovery. the governments must do more to tackle their own high unemployment. i wonder the if he was talking about france. okay. want to come to the movies with me? got popcorn? are we ready? what are we going to see? this summer has been a lacquer. no huge $400

economy. we've had the latest inflation figures for 18 countries with eu currency.s rose just 3% that month, smallest increase since october 2009. what does it mean? inflation has been locked in what the president called a danger zone of below 1% since october last year. let's take a look at numbers now. the european central bank's target for healthy inflation is 2% a year. anything below 1% is danger zone. in july, it dropped to 0.4%. figures for august show 0.3%. this is going to put pressure on the ebc to stimulate the economy when it meets next week. that's the round up of our business. tim, back to you. >> thank you very much indeed. >>> here in britain, police are searching for a 5-year-old boy with a brain tumor has been take an way from the hospital by his parents without the doctor's consent. there's concerns about this boy who needs constant care. he was taken from southern england on thursday. police think he's been take ton france and have launched a major investigation to find him. jane francis kelly has this. >> reporter: police say they are seriously

eu. the move meant to counter western sanctions that have been hitting russia's economy. rding to reuters, officials in moscow are considering a ban on transit flights to the eu and u.s. that air space over russia is key. we'll see if that happens. meantime, closing arguments are under way in the oscar pistorius trial. the prosecution is making their case first. there is no jury, so it is up to the judge to decide his fate. the blade runner claims he killed her by accident. the trial began a long time ago, back in march, but it's been delayed several times. >>> verdict in the shooting trial could be today. theodore waiver is accused of killing a 19-year-old who knocked on his door during an early morning in november after her car crashed. if convicted, he could be sentenced to life in prison. >>> 40 illinois state troopers called in to join police in chicago for patrols in four neighborhoods in that city. this order announced by pat quinn on wednesday will focus on catching wanted fugitives with known violent criminal backgrounds. the troopers are set to remain in chicago

a standoff between russia and the eu is leading to a disruption of trade. italy's economy back into economyn, and germany's likely contracted for the first time since 2012 in the second quarter. barney's has agreed to pay to racial profiling allegations. in addition to the fine, hire an will also anti-profiling consultant and bring that person on board. it is 26 minutes past the hour. bloomberg tv is on the markets. we are about one hour away from the opening bell on this tuesday morning. equity futures are rebounding. there were actually in decline a little bit earlier this morning, so they are reversing this two-day rally we have seen in markets. we are obviously looking at various factors -- factors today including earnings and the tail end of second quarter results. we are on the markets again in 30 minutes. deathblow -- the death toll above 1000, the world health organization says it is ethical for untested drugs to be used to treat patients infected in this largest ever outbreak of the virus. bloomberg's yang yang joins us from washington with more. these drugs have

eu and in response to u.s. sanctions. how vulnerable is the russian economy? can it survive?e are joined by a man who predicted the crisis in 1998, john paul smith. they keep. theare structural bear on russian economy. you tould it take for change that? view on's a structural russia. it has been negative on the russian equity market. the reason for that is primarily governance driven. the expansion of state power among which has had advance -- negative consequences. viewsare more technical which looks closely at the level of valuations positioned in the less bearish on russia than i have been for quite a long time. it has nothing to do with the series of vents in the ukraine. the market has been sold off to a level where you have a dividend yield on markets approaching 5%, which is similar. foreign investors have been driven out of the market. >> where are those opportunities? the you look at not so much food, but the closing down of financial activists, where do you see value with that on the landscape? >> it is over the short-term and the medium-term, the russian economy an

exports, of course you now have to look at each individual sanction of the eu and the russians and what effect they can have on the economy a need for the ecb to respond to it. the russian counter sanctions, it is all about food. that could have some import and european exports. -- impact on european exports. the real factor is and remains confidence. we are seeing a serious impact on confidence in germany. germany is the one country where you could think they could cope with it. the weak ones like spain, portugal, italy -- there are signs that even italy is affected by this already. russia will say that it has also to of impact. down the road, would you be raising your hand today to say this time for a rate hike? >> not today. the same risk to the ecb applies to the u.k. russia affects europe. that is the downside to the u.k. economy as well. you have the independence referendum. you would not want to be prematurely raising rates at this stage. should receive fairly quickly. we have a big boom in the housing market. >> i thought macro prudential was meant to do with that? >> it was. we have the mortgage market review. i

eu regulations. we'll keep on that throughout the rest of the day. japan's economybig backward step, biggest contraction since 2011 when it was devastated by that earthquake and tsunami. the shock of a new sales tax that took effect on the first of april meant the japanese economy this rank in the last three months by 1.7% when compared to the previous quarter. the congress thinks the impact of the sales tax will fade, but i have to say this, the sales tax in japan is going up again to 10% in 2015. >>> twitter, yes, the little bluebirdy has announced it is set offing a new video advertising feature. twitter is trying to show it reached even as the growth in its user figures slows down, but it is not the only website trying to tap into the lucrative video advertising. worldwide was worth an estimated $17 billion last year. this year, it is expected to reach $32 billion. follow me on twit, tweet me @bbcaaron. all the news coming up on "gmt." and now i will move in while you're away. protect it. don't you worry. i will protect the house. party time at geeta's! >> we're

has the most sophisticating be economy on the planet, but creating jobs through trait and investment is a priority at this summit. so far the u.s. trails far behind the eu and china, so political and business leaders will be pressuring president obama to extend things like agoa, the african growth and opportunities act, which offers preferential access to the u.s. market, upon which tens of thousands of jobs depend. >> and more remains from malaysia airlines flight 17 are on their way back to the netherlands. flight 17 was shot down over ukraine back on july 17th reportedly by pro-russian separatists, most of the 298 people on board were from the netherlands. closing in on pro-russian rebels, captured the town of yazanuzia near donetske. separatists holding that town since may. five of its soldiers were killed in that operation. >>> coming up on al jazeera america, massive evacuation before a catastrophic flood. >> a british ship has carried more than 100 people away from the violence in libya. they transferred to the hms enterprise in malta. most of the people on board were british nationals. a recent surge in violence in libya leaving 200 people dead.

operator in the world with a big operation in the united states and the eu and china, by virtue of its own importance in the world economyts importance in the southeast region of the world, we thought it was a good next step. >> can you break down where you are flying or where your customers are these days outside the u.s.? 170 countries. there are few places we will not fly. about the only place we will not go where the government is identified as a no go zone or look at them and are less safe than we would like. >> have you changed flight paths over ukraine? >> we have followed the faa restrictions. we paid close attention to what is happening in ukraine and what is happening in iraq, etc. other than that, we fly everywhere. the united states is been doing relatively well. brazil has been fairly good for us. europe is starting to show some signs of life although it's always fits and starts. >> absolutely, it depends on how the economy is going. we were just talking about muscle cars and the latest advancements in that category. those are sexy things on wheels but what about sexy things that fly? what is the latest in a

economy is on decline. this going into ukraine will bring more costs and consequences for russia. >> eu leaders meeting this weekend landfall lowill look at sanctions following this turn in the crisis. this satellite image shows russian combat forces in and around eastern ukraine. moscow still denies such involvement. indeed in his latest remarks, the russian leader is on the defensive accusing kiev of an assault in eastern ukraine remaneembeanence ent to world w. this outside the military base in russia of relatives of servicemen saying they're in ukraine and demanding answers about their whereabouts. the wreckage and costs of this conflict are plain to see. a way out seems as elusive as ever. >> there's a lot move on this story in the last couple of hours. nato ambassadors have been meeting in brussels in the last a 15 minutes. the secretary general held a press conference there. this is what he had to say about the crisis in ukraine. >> russian forces are engaged in direct military operations inside ukraine. russia continues to spupply the accept ra tests with ta-- the s with tanks, armored rockets. it h

eu. >> that is the key conclusion. the status quo is not an option. if things stay the same, it is not good for the u.k. economy.f the reform does not happen, we should not be scared of the threat of leaving. >> the economic advisor to borst johnson saidris leaving on good terms does provide a very strong outcome. how can we leave on good terms? >> one way of doing that is making a genuine effort to reform the club. what we have to do is set up a reform agenda that other people can buy into. if that doesn't work out, we can look at other options. one of the things that came from that, it is key what other member states would agree to on a brexit scenario. the european parliament would have to approve any deals in the u.k. >> what about the new president? if seymour against the idea -- is he more against the idea of giving britain concessions? positive that he might be open to the idea of performing? >> it is too early to say. it could go either way. the key will be the national governments. angela merkel has expressed enthusiasm for reforming the eu. there are other countries that really want to see a more slim

imported $385 billion in goods and services from the eu so any escalation of the crisis in ukraine has the potential to be felt by the world. europe's economies were already starting to slow down when geopolitics in ukraine started throwing them for a loop so it wouldn't take much for them to fall into recession. so says sarah johnson. she's a senior research director at ih economics, a firm that counts thousands of european firms as clients. from lexington, massachusetts. make clear for us who don't follow global economics as much as you do, how much was this already in play this weakening of europe's economy and how much this has to do with what's going on between russian and europe? >> frankly very little has to do with russia at this point. not to say, results could not be far worse with the cutoff of energy supplies. i looked back a year ago and we were projecting europe's growth to be 0.7% for the full year, it could be a little better but the euro zone is clearly struggling for a number of reasons, on the consumer front, high unemployment, weak wage gains, high debt levels, business investment is also sluggish, given excess capacity, t

economy? tim bitsberger, i want you to weigh in here. first answer -- no, any firm will suffer when one of its biggest customers is in trouble. is such aa, the eu largeste trading partner. the eu's gdp is comparable to that of the u.s. u.s. growth has been solid. things are moving forward, but certainly the data in the eu has been disappointing, and i cannot b be beneficial to the u.s. >> the best way is to update and -- the best with the u.s. can protect itself is a stopping and versions by updating its tax code. >> would it be so easy. should be able to protect itself, shunted it? rhetorical question. >> in order to continue this growth, we need our partners around the world to also grow. yeah. >> we are waiting to see what mario draghi actually does when it comes to that stimulus. tried before.n timothy bitsberger, thank you so much for joining us. tim bitsberger of bnp paribas. "bloomberg surveillance" on radio continues. "in the loop" is next on bloomberg television with matt miller this morning. have a great rest of the day. ♪ >> good morning. it is tuesday, august 6. we are alive and bloomberg headquarters here in downtown that -- downto

economies. if they impose sanctions. russia is the european union's number three trading partner and one of its biggest oil and gas suppliers. but russia also has a lot to lose. the eu are a russia's -- is russia's biggest commercial partner. >>> cal trans is moving along with the earthquake retrofit on northbound 280. the demolition work is done. now crews are pouring to concrete. the -- the concrete. they're replacing two hinges on the freeway that will allow the span to move a little bit give it flexibility during the earthquake. the northbound direction is shut down from the 101 interchange to king street. >> you know we're always hopeful that we'll -- finish early but with two locations to work on, we're really focusing on finishing by 5:00 a.m. tuesday morning. >> well let's hope so. it's the last by the way of three planned closures for 280. >>> it appears someone may be viciously tacking this south bay store. what police are doing before vandals hit it again. >> we'll hit 90s tomorrow. a bit of a warming trend on the way. forecast coming up as we look live at san jose. after a break. ,,,,,,,,,, ...we need to break up. is it the biting? cuz i can stop? no! i

economies of scale to be competitive on the international market. so, mexico went looking for markets and the first went to the common market to the eu and they were toldy the president that if the western europeans were going to make trade concessions to anyone at that point in the late '80s, the concessions would be made to the new nations of eastern europe and to russia which is what happened and they had other fish to fry and were not going to be worried very much about latin america. so, he was an economist whose cabinet contained probably more american trained a comments they and any cabinet in the history of the world including any american cabinet. then approached the united states and negroponte supported the idea of the north american free trade agreement an and supported them at a time when the u.s. trade representative's office was opposed to it. the trade representative's office was opposed to it because it was trying to promote another set of multilateral agreements like the kennedy round and the dove hawk round and so forth. these agreements hadn't come about largely because of the resistance of agricultural countries to them. he promote

economies of scale necessary to be competitive on an international market. so, mexico went looking for markets, some it first went to the common market to the eu, and salinas was told by the president that if the western europeans were going to make trade concessions to anyone at that point in the late 80s, those concessions would be made to the new nations of eastern europe and to russia, which is what happened. and that the europeans had other fish to fry and were not going worry much about latin america so salinas, who was an economist and whose cabinet cop taped probably -- contained probably more american trained economist than any cabinet in the history of the world, including any american cabinet, then went -- then approached the united states and approached negroponte, and negroponte supported the idea of a north american free trade agreement, supported it at a time when the u.s. trade representative's office was opposed to it. the u.s. trade representatives office was opposed because it was trying to promote another set of multilateral agreements like the kennedy and -- these agreements had not come about largely because of resistance of agricultural

economy overall. so with these retaliatory actions, in terms of the imports coming from the eu, the u.s., australia, you name it, prices are going to go up. it is going to hurt the russian consumer, isn't it? >> that may well be the case, but i think it's probably been well thought through on the russian side in terms of who may be impacted and i think they would have carefully calculated how wide an impact these sanctions would have in terms of russian consumers. it's also important to note that from the u.s. and the eu side, when they introduced sanction measures, there probably is not an intent to really hurt individual consumers. i think the intent is really to go after certain officials and certain specific businesses with whom the eu and the u.s. have concerns. >> is it possible to say just how long these sanctions will stay in place for? >> so, what is really unique about the russia sanctions, especially if you compare it against other measures like iran or syria or north korea, i think first off, it's how fast-moving they are. where we are today is very different from where we thought we'd be tw

have imposed counter sanctions within the eu, it has affected the berry market, fish, fruit, wheat and vegetables that are clearly having an effect on our economies. it needs about 157 billion euros in the next year to continue to work. so, of course, if these were somehow blocked then, of course, this would create a larger problem for russia. so these could be some sanctions as well as countersanctions that then could come, of course, to us once again on aerospace, auto and naval industry. so it's a concern of what could happen in terms of stepping up these sanctions. we may know more tomorrow. obama will be in a nato meeting next week, so certainly the ukraine situation will stay top of the agenda. >> certainly. thank you so much for that, claudia. we're now joined by andrew, director of the center at the henry jackson society. andrew, what exactly do you expect from that meeting or do you have higher hopes from the nato meeting? >> first of all, after today's meeting, i would expect an expansion and a tougher sanctioning of the sanctions. the sanctions are limited in scope. particularly with regards to the russian financial system in the weste

economy minister right? austerity is not the answer? they face high unemployment and a sluggish manufacturing sector. should they be going into more debt and violating those euromises on the fiscal deficits? >> that is a very good question. the euroe big reasons is in this mess is austerity. early in the recovery, they were getsting -- budget deficits big and recessions. we had a doozy of a recession in the financial crisis. that is not the time to tighten fiscal policy. you get into a negative feedback loop by cutting spending and tax receipts go down and the economy goes down. the time to do that is when things are expanding. that is when you that the deficit. the short answer is yes. austerity is not the thing. mario draghi called for stimulation policies. >> either way, he is very happy to be back. larry kantor, thank you so much for joining us from our clays. >> another look at the s&p 500 hitting a big round number. we will return in a moment. ♪ >> welcome back. we are approaching 26 past the hour, it is time to go on the markets. the market took five years to get from 1000 to 2000, where we had earlier this morning. consumer discretionary and health c

eu andctions that the the u.s. put into place do not touch any of that. they were very well orchestrated and constructed not to touch the real economy in a very significant hit on the financial sector in russia was structured in a way that left huge loopholes for the russian sanction banks to operate within. on a very practical basis i would not be worried in the immediate or midterm future of these companies to invest in russia. from a practical standpoint, the risk aversion would dominate. we are already seeing unintended consequences coming into force. >> for a political point of view, how do we assess the risk here? risks.s running some big you look at the fact that food price inflation is already a story in russia, inflation is a story. he has high approval ratings come if he starts taking away peoples food, they start thinking differently. >> especially gourmet food. thef you look at the risks politicians are running and transact them into your thinking on where sanctions go next, where does the balance line? it looks asymmetrical. angela merkel is running risks, she has just been reelected and is unlikely to face a near-term problem. putin does no

eu stance on russia. they don't want to publicly call out european leadership. there are so many european projects that we could be working on to strengthen our economy and to offsetrade that we need to offset russian trade. we need to be looking more to the united states and european allies. i think a lot of what is being -- itsed right now is needs to be fast tracked. we need to complete the single market in the eu. that needs to be fast tracked. the general attitude among businesses is we have alternatives and things we can do. there are other customers. let's get doing it. it's try to get this done. >> the sanctions are increasing pressure on legislatures to encourage transatlantic trade. thank you very much for joining us today. up next, cashing in on classic cars. stay with "the pulse." ♪ >> welcome back. not justclassic car is a purchase, it is an obsession. the amount of time and money the goes into restoring and maintaining these cultures can make an art collector blush. we talked to the aficionado at monterey our week in california. this is the most important week of the year for us. >> there are billions of dollars of collector cars here. thousands of c

looking at one of the most modern european economies, that puts e-governance and e-forms to shame, flat tax dynamic. it is a commitment to du and the nato, the eund an outstanding example. if you are on the trip, you will enjoy tallinn very much. let me briefly segue to the present's -- presidents next stop, cardiff and wales. the main theme will be nato's unified message these are the russia and ukraine -- vis-a-vis russia and ukraine. at the nato summit in chicago in 2012, that summit was overshadowed by the euro crisis, and this summit is, in fact, quite overshadowed not only by ukraine, but obviously, events unfolding in iraq, syria, and libya. this is the secretary-general mussen's last summit as the secretary-general, and nato will be welcoming the former norwegian prime minister as the new secretary general. in some ways, this summit represents the last summit on afghanistan, a subject matter that there is great uncertainty about footprint resolute support, and that weighs very markily on the question over the there will be bilateral support agreement between the united states and afghanistan, and what nato's assurances will be in the in

economy either. norway -- we were talking about this -- it is hurting the seven producers there, but it is overall not a good deal for the european union. heard about finland and poland calling for euion because they can no longer sell goods to russia. i wonder if you have heard anything on those lines? >> you have not heard that indiana state. it is more of a tradition for european governments to support agricultural producers. cases like this. >> because subsidies exist here, just as they do their. >> the real impact will be on the russian consumer. it will raise prices because of shortages. inflation rate right now is 7.5%. sayysts we have spoken to it could raise it by one or two percentage points, so you're looking at almost 10% inflation for russian consumers at a time when the economy is really slowing down. >> they could hardly afford it. >> and the flipside, exports from russia, in the short term commerce bank saying that could stay negative because they need to keep the grains in house, and there are less on the market, which raises prices for everyone. >> it does, but the feeling is we will not see such a big price rise that will be noticeable as we are down the food cha

eu and its member states ,ontinue to call for investment with emphasis placed on a reliable [indiscernible] that will complement the efforts and bring countries transformational change in their economiesration efforts, especially on critical infrastructure will enable the speed of integration on the continent. plus the value of additional african exports, and provide adherence to the jointly agreed actions. the global trading system is undergoing significant change. the advent of trade agreements within the context of an onyx -- agendain development will affect the ability to enhance its share of global trade. it is therefore within the context of our partnership good to find ways to exchange notes on these important issues. in conclusion, the litmus test of the partnership would be in its ability to improve quality of life, including the safety and security of the people of the united states, africa, and the rest of the world. external risks and shocks we face, such as climate change, conflict, and other conditions, can be better managed through a dynamic partnership of equals bills on a common heritage, values, and aspirations. finally, let me quote an african proverb that says, "if