as one of the reasons why it matteo renzi came out on top. sh back and heart. >> he knows he will probably have to win some -- some support. fascinating for me is that renzi has decided to use as an example of where flexibility was granted and achieved is the german case. the germans are taking a hard line on austerity and then he pulls out a bag an example of when you are flexible on your own budget targets, look what you managed to achieve. >> the germans have always used example of as an what everyone else in europe should be doing. the key is that you see the economy start to settle down somewhat. you see the ecb start to do more. if you give these countries the flexibility that they desire, if any specifics come out, if they get the flexibility, they won't push forward on reforms. really, we're talking about france. interesting that an ecb board member is talking about patients being a virtue. in terms of giving the long term measures that the ecb has put in place time to work. and they're pushing back against any calls that we should see

that gives matteo renzi the ability to guide more towards fiscal flex ability.e are joined by marco elser. good morning. thank you for joining us. renzi's topthink priorities for reform are going to be here? >> i think his top priority is first going to explain the situation in italy. a lot people still do not understand that italy has tried with previous governments to do some reforms and they have not been able to do them. renzi is really intent on doing them. like you properly pointed out, development is top of the agenda. -- he does adea speech tomorrow, which will probably be the first written speech he has ever done because he normally speaks without a set of points. to try to get infrastructure development in italy and also in europe, which will hopefully stimulate the economy. because that is the underlying problem of italy, a very stagnant economy. the numbers came out yesterday, as you know. andre risking disinflation that would be extremely dangerous for the entire european economy. >> it is all very well to say that he wants to boost infrastructure,

then, he was a little bit provocative -- matteo renzi on the backhand. bang.e said him stay out of italian politics. no, no. >> the same thing to drive be. -- draghi. >> stay out of italian politics. a point for the ecb, the message, we will do enough andy you guys do a little more. it is incredibly sensitive. maybe the message back out is stay out of our business, you hit your mandate -- the 2% inflation target. he has seen what rizzi hasn't done. comeave to say, renzi has out on top. -- he has seen was a renzi has done. germans askede for more because they exceeded their debt. >> and it worked for them? >> clearly. >> feeling the heat. marks and spencer's ceo under fire. we'll talk about that. ♪ >> welcome to "the pulse." marketers spend -- marks & spencer's clothing sales have slid and said customers are getting used to the redesigned website. good morning. thank you for coming in. sales are down. the bad news for marco bolan because that has been his key area. he spent nearly $4 billion invested in this area, stores, the website and it does not like it is

which policies will prime minister matteo renzi are your ties in his six-month tenure?in his six-month tenure? he wants to model reforms on the italian economy on what germany did. you might have to ask for some leniency on some of the eu rules in exchange. >> the problem that italy is not germany. majorityt have the oeder hat in german parliament. he will push for more leeway in how we interpret the existing framework for fiscal governance of the european union. he is not pushing for a revision -- >> unsc change in the 3% deficit? is just potentially giving leeway to countries who are doing structural reforms in how muchrunning -- >> does that improve the growth prospects, that flexible interpretation yeah, does it improve the growth prospects for the likes of italy and france, for instance? >> nobody knows. if if you ask renzi at this point which kind of reforms would like to do, if he were given this leeway, there is no agenda. for time until september to write this up. country holding the rotating presidency to determine the policy agenda of the european union now i

. >> matteo renzi took on the eu presidency with a call to shift economic focus. the italian prime minister treated european parliamentarians to a sobering analysis of the current situation and said policies were now needed for growth rather than austerity. >> if europe was to take a selfie today, how would the picture looked? it would be a worrying image. because it would be a picture of stagnation. >> renzi talked every awakening the european spirit and putting people first. to do this, he suggested economic policy must be steered away from austerity. >> we have a stability and growth pact. we have achieved stability, but where is the growth? i demand that growth he comes a central element of european economic policy. this will not only help italy but all of europe. >> this has alarmed parliament's conservative wing. it fears growth policies could that in the newly one economic stability -- newly won economic stability. >> how can we tell portugal, greece, spain, and ireland they have done their homework, learned their lesson? >> even critical european parliamen

matteo renzi looking for of theal accord at 2 meeting. several companies definitely on our radar. caroline will show you through the numbers. 12 quarterly drops. air will be in focus. klm is a profit warning. depreciation. billion and they said they would earn $2.5 billion. they are facing competition. that is the critical issue from key players. have probablyhey have a settlement on the agenda. non-prosecution agreement for sanctions trading. it tells why useful half $1 billion. about $9 billion from a bnp. they are levied around the of eachf money sanction. that is the critical point. that is usually the difference between parabens and commerzbank . flat.ms of currency -- back to you. >> we will keep the equity markets. u.s. coming off a record highs. we have lucy mcdonald. are you comfortable with where we are? are we doing now? >> we recently have taken a bit of risk off the table. we have most of what we expect this year. what had this very good, strong move. the drivers are here. they are not going to be as strong in the future. earnings recovery. and also a revaluation. it

matteo renzi looking for budget cuts ability. he is also looking for structural reform. >> yes.hek structural reforms are not frontloaded and they get the flexibility first, they do not follow through. it is a big risk for the likes of france because they have been talking about her forms for five years. the only thing we see from the french recently is tax hikes. >> so we will get fresh data working its way into the european equities stage. we had a strong session in the u.s. overnight. fed minutes are 20 pages long and you can pick out what you want. but if you look at the certain damage elements that came out of the federal reserve last night is, yes, we are concerned about some of the risks, some of the froth. >> i like what i heard. they will look at macro potential weapons or tools rather than rate hikes. futures are fairly indifferent this morning. we have had the minutes. we've got the bank of england later on. and the china data which missed estimates. they talk about it all they want until it's ready to raise rates. connie turns on a dime. -- carney turns on a dime. >>