Being estimates on quarterly sales. We will have an exclusive interview with the companys chief executive. Welcome to countdown. I am mark barton. And im anna edwards. I am anna edwards. The governor of swedens Central Bank Says he is ready to expand his Bond Purchase Program and will not rule out intervention on his countrys currency. You never know. We are in a very uncertain world. That would not be our first choice, but never say never. It has been a tumultuous week for europe on two fronts. Gridlock talks over the future of greeces a program. Bailout talks have resumed in hopes of a new contract. And a ceasefire in Eastern Ukraine was the result of over 18 hours of negotiations in minsk. The collapse of previous provinces has left the eu skeptical to leaders threatened russia with fresh sanctions should the ceasefire collapsed. Lets get to hans nichols who is following this story on both fronts. What is the latest from the leaders in brussels . Grexit good morning. It is cautious optimism on both stories, the ceasefire in ukraine and also a resumption at least on the technical level of talks with greece on how they are going to stay in the program. Angela merkel and Francois Hollande arrived yesterday and briefed their counterparts on the negotiations that took part in minsk. As Angela Merkel said, more difficult work needs to be done. We have to try to take this Peace Process further. Ukraines president made clear that this is an important thing for his country. We are aware it will take a lot of effort. Therefore, we are open to all possible reactions. If it goes well, we will happily go forward with this process. If there are difficulties, we are not ruling out additional sanctions. Angela merkel was perhaps more optimistic after her first meeting with the greek Prime Minister peter she said coming out of that meeting that she wants to see what they can offer. She also wants to make sure the rules were followed and everyone stay within their commitments. At the same time, there is some give in both the greeks and the germans. From the german side, they are willing to accept that not all elements of the current Bailout Program, the one that ends at the end of this month, will need to be implemented. And the greeks acknowledge that they still need to run a surplus in terms of percentage of gdp. Maybe not as high as 4. 5 , but above 0 . There is still a great deal of concern. Jeanclaude juncker said he remains concerned. Prime minister David Cameron spoke for many when he talked about the Overall Economic consequences that have prolonged that a prolonged negotiation could have. What is required between greece and the eurozone is not a standoff, but a solution. The british economy is growing and succeeding but we are affected by the situation on the european continent. The longer this standoff goes on, the worst that could be for britain and that underlies the importance of sticking to our own economic plan. There are going to be technical discussions, meetings between officials from what we used to call the troika, which may be a little politically inexpedient in greece now. They need to agree to a common set of numbers and get the data before the resumption of talks on monday between finance ministers from the eurozone. A selfimposed deadline to keep greece inside of this Bailout Program. It ends at the end of the month it after that, they are at the mercy of the markets. It looks like the European Central bank will be increasing the amount of emergency liquidity assistance to 65 billion euros. Previously, it was 60 billion euros. Another 5 billion euros of breathing space. It will be fascinating to see how much of it is about real change in terms of how much is a change of language. You can follow that story at bloomberg. Com. A bloomberg exclusive with a man who has done many successful deals but is best known for one that lost money. He is the founder of terra firma and grabbed headlines when his investment in the iconic Music Company emi went wrong, wiping out much of his personal wealth. He has been telling guy johnson that he is looking for fresh deals with one billion euros to invest. We have one billion euros to commit to deals. A large percentage of that will be my money and my firm terra firma. Can you give us a break down . Not exactly. The majority will be coming from you and your partners. Correct. That money is not hindered on further exits. Hinged on further exits. It is there now. Yes. One of the things that people missed about terra firma our portfolio looked sick after the emi trial. Since then, we have had 6. 5 billion in exits and made 4. 5 billion in profits. It has been a wonderful feeling quite a spectacular performance. Additionally, a lot of people came in in 2011 and bought our funds in the secondary market. Some of those have made three, five times their money. If i was being cynical, i would say, guy hands is stretching this as an admission that he is struggling to raise my. Raise money. Would i be being overly cynical . It is an interesting thing. We have our own money invested and fees have always been used to hire people. So it does not actually, from an economic point of view what is important is, what other returns on the money we invest . It is nice to get fees but if you have more money to invest you have more pressure to invest it. You probably end up averaging down your returns. Why not do one or two deals a year that you feel really excited about . Guy hands speaking to guy johnson. You will see more of that exclusive interview through the day youre on bloomberg with a 30minute special program at the end of the week. Interesting commentary coming from greece. Lets talk about what is happening in the steel sector. tis in group has fisa group thyssenkrupp, germanys largest steel maker, has been cutting costs. Net income has come in at 50 Million Euros for the three months ending december 31. That is compared to a net 65 Million Euros a year earlier. In terms of the analysts estimate, adjusted earnings rose 21 , just short of the average of 10 analysts. Slightly short, but some improving trends. They have been expanded their industrial component units because of weak steel prices. It is much more of a diversified industrial business than a steel business. The worlds biggest cosmetics maker is getting a boost. Loreal reported fourthquarter earnings that Beat Estimates which helped on the rebound of its consumerproducts business. Caroline is live at loreal headquarters in paris, where she will speak exclusively to the chief executive later this morning. What is behind the beat . Loreal benefited from a strong dollar. They do have half of their revenues in north america. They also benefited from the buyback of their nestle shares. They got a 2 billion capital gain from that buyback. The main reason is the rebound in the Fourth Quarter of the Consumer Products division. That division is affected by economic uncertainties in emerging markets, western europe, and north america. That division, which includes loreal paris, maybelline, garnier, had 3 like for like sales growth in the Fourth Quarter. That is better than expected. The Luxury Division was the star performer. That includes brands such as lancome and george your money giogio giorgio armani,. Many uncertainties remain on the economic front. Sluggish growth, slowing demand in china. These are all questions i will be asking. The ceo of loreal coming up in the next hour here at loreal headquarters in paris. In a Statement Last night, he said that the economic environment remains challenging but 2015 should be a better year on the monetary front. Caroline, it is not just about cosmetics today. France unveiled gdp data in 20 minutes. What can we expect . It will be a very important number. Of course for president Francois Hollandes popularity. The estimates we have is. 1 for the Fourth Quarter. 2 on a year on year basis. Of course it will play a lot on the popularity of president hollandee. President hollande. According to the latest poll, his popularity dropped another eight points to 30 . You have some economic lows, the economy minister debated in parliament that could also play in the balance. We will have to see if these small changes are enough to really revive the French Economy. Thank you. Be sure to stay tuned to bloomberg throughout the debuted she will bring us an exclusive interview with the chief executive of loreal in just over an hour. Stay tuned for that. The top stories on bloomberg this hour. In south Africas Parliament the Opposition Party staged an unprecedented protest and walked out during jacob zumas state of the nation address. Police were called to remove members of the Economic Freedom fighters party after they repeatedly interrupted his speech. Numbers of the main Opposition Party then walked out in protest. The members had been protecting against his protesting against his use of state funds to upgrade his private home. Valiant pharmaceutical has arranged for a possible takeover of the gastrointestinal drugmaker. Valeant is likely to make an offer of more than 150 per share. English football giants Manchester United looked to be heading for their first ever annual lost since its ipo in 2012. The loss is expected to be around 11 Million Pounds after the team failed to qualify for the uefa champions league. No comment. Join the conversation on twitter. Let us know what you think of the day of the show today. Among the trending stories Steve Strange sadly dying from a heart attack in his 50s. Sad day if you are a fan of the 1980s. That is a sad story. Lets talk about what has been happening in ukraine. A source of many developments all this week at a ceasefire was the result of over 18 hours of negotiations in minsk. Previous collapses have yet have left leaders skeptical. Leaders have threatened further sanctions against russia should the ceasefire collapsed. Lets bring in a senior russian analyst. Thank you for joining us. What do you make of the deal from 24 hours on . Not much. From the very beginning, the actual outlines of this deal, there was very little different from the original ceasefire accords that were signed at last the temper. Aside from the fact that it did appear to give the rebels a little bit more territory as well as the fact that this ceasefire is not due to kick in until midnight on saturday. That gives the russian proxy forces and local militias plenty of time to expand the territory they have already taken. Uptodate neither the russians nor the leaders of the peoples republics have negotiated in good faith. I do not believe that there is any reason to suspect that they are suddenly doing so now especially when they have the advantage on the ground in military terms. Is it a win for putin . Or is it a cynical, delaying tactic . I do not think it is either of those things. There was a summit that the germans spoke of as the last chance before sanctions. It certainly gives russia a certain amount of time under which the you can the ukraine is confused, they do make a good effort, start withdrawing artillery which the rebel forces on the ground might take advantage of. There is also all sorts of this and pieces in the accordance itself. Theyve are to withdraw all foreign fighters and mercenaries on the ground. Russia has maintained from the beginning that its troops are not in ukraine despite the voluble evidence to the contrary. At the same time, there are foreign fighters in some of the ukrainian volunteer battalions from all over europe. That could be used as a pretext to restart fighting. There is not really a lot in these accords that gives one hope that this is going to be a durable ceasefire. Are there things in it that will be difficult for ukraine to sell back in kiev and for putin to sell in moscow . Certainly not for putin because he is not beholden to the same Political Forces that poroshenko is beholden to. He is also not making the decisions in public. To involve Russian Military forces has been decided behind closed doors. Poroshenko has a tougher job. Reintroducing autonomy for these regions, the introduction of a demilitarized zone. Talk of Ukrainian Forces taking over the international border. Why would the rebels allow that . That is their supply line. That is where they are getting all their ammunition and equipment. There are so many elements that looked impossible to actually implement. Even if poroshenko does have to sell it, i do not know whether it will be a viable argument. Further sanctions are being prepared. What is going to trigger these sanctions . Is that unanimity behind them . You need these nations. Correct. The nations will put forward new sanctions read a lot of the sanctions already in place have to be renewed in july. The ones that are really hurting russia that is a big part of why you are hearing germany talk about it is the last chance. It was worth giving this a try so that the more hawkish members of the eu can say, look we gave this our best shot. We have given diplomacy every possible chance during this crisis. And it has not worked. The problem again is whether greek or the other members of the eu that are more sanctionsskeptic will go along with that. Thank you so much. You are watching countdown. We are back with darrell to discuss russia. Where does this leave ukraine when it comes to its economy this 40 billion imf loan announced yesterday . Does this put a fall under the economic collapse . We saw the collapse of the ruble in december. The ukrainian central bank, last week, said that they could no longer keep doing currency intervention. Ukraine has massive problems. Not only does it have this war prior to that, its economy was largely unreformed. They are not terribly competitive. And it has a huge corruption problem as well. While this is a welcome sign for kiev, this injection of a and cash, the threat that the country is going to default the loan could be swallowed up by corruption. That is a real possibility. We saw that in russia in the 1990s. There is tremendous pressure within ukraine to tackle corruption that we are seeing from the streets, but not as much from the poroshenko administration. That is something that is going to be one of those points that will be watched going forward. On a positive note, i read an interesting piece that suggested that the terms were just tough enough and the size of the deal was just small enough that it might encourage reform activity on the ground in ukraine. That is absolutely the hope. The problem with this is that the ukrainian state, the actual bureaucracy not just the politicians, that is a real source of corruption as well. It is the within the state, deep within the lymph nodes of the state if you want to think of corruption as a cancer. The people who engage in corruption are the same people who know how to do the technical aspects, drawing down an imf loan facility, interacting with international banks. There have been a lot of great pieces on the Health Care Sector in ukraine and how corrupt procurement of medicines and this sort of thing is you cannot just fire these people overnight. Even if they may be corrupt, skimming something off the side. It is a real question as to how rigorous the state is going to be able to be in policing itself and getting rid of people who might have Technical Skills that are in short supply. What is the endgame here . Putin remains in place, this continues. I find it difficult to see any and game endgame for the ukraine crisis and i believe it has become something more along the line of it is a crisis that is growing with increasing incompatibility between putins russia and europe. He has invested a lot of personal credibility in this ukrainian venture. Any backing down on his part any compromise, is potentially politically threatening. Existentially politically threatening at home. How long is he in power for . At the moment, he is in power indefinitely or may as well be. He does not have to face reelection until 2018. At the same time, the russian state has shown absolutely no bombs about bringing these elections in the past. The state has strengthened its control over the media and the internet sphere all the information that is going to the people. And the regime itself has become much less it has become autocratic. There is a reliant on security services. It is hard to see where there is an endpoint for putin. It is hard to see where there is an endpoint for this crisis even if there is ukrainian capitulation. What happens next . We have seen figures like the former nato secretarygeneral saying ukraine today is essentially the baltics tomorrow. There is a very real possibility that, before he leaves office depending on the outcome of this crisis putin could provoke a crisis with nato to test the political and military coherence of that bloc. Thank you for joining us today. We will take a break. Coming up on the program, more with terra firmas guy hands. Fascinating comments on greece from him this week. We will be back with more of that interview. Time for a look at the Foreign Exchange market. The euro on track for the third weekly gain against the dollar. We have the ceasefire agreement in ukraine. That is easing geopolitical concerns. Falling retail sales dimming the outlook for growth in the u. S. The currency rose to a oneweek high after rush and Ukraine Russia and ukraine agree to the ceasefire. That is eurodollar your to date. Year to date. As low as one twelve. It has rebounded to 1. 14. Hope of a deal with greece, the euro is reacting to news about greece. There you go. The euro euro to date lower but on track for the third weekly gain against the dollar, the best stretch since march, 2014. Breaking news about the French Economy. Matching estimates is the headline to read the economy expanded by 0. 1 . Matching estimates, can the weaker euro and Cheaper Oil Prices helped pull the economy out of three years of stagnation . That was one of the key questions. Can the neighbors in spain or germany help pull the economy out of stand asian stagnation . We heard from the ecb they were increasing their forecast for this year. They expect the economy will grow by 1 incident 0. 7 . We had it will about 100 dollars this time last year. The euro 16 higher than now. These are considered to be positive factors that could help to boost the French Economy. If you look at numbers for business sentiment, a banker friend survey showed sentiment was a 10 month high. That is a reason to be cheerful. Numbers from germany on the gdp front, 27 minutes from now. We will get the complete numbers for the eurozone. Plenty more to come as we go through the morning. If you are interested in the French Economy specifically, we will be talking to one big company a little later. The ceo of loreal. He will be speaking to us exclusively here at bloomberg. The top stories, Angela Merkel says russia will face further sanctions they do not lament the piece deal she helped broker do not implement the peace deal she helped broker yesterday. The ceasefire arrangement is due to begin on sunday. Greek Prime Minister elect says his nation is seeking a new contract with the euro area on how to continue the bailout. This came after he met with eu leaders. He said their goal is an agreement that would lead to new deals with authorities. After announcing 10 million kroner of bonds, swedens governors said they are prepared for more qe if necessary and they cannot afford to rule out interventions. You never know. You are in an uncertain world. We knew that would not be our first choice. But never say never. Through the morning, we are bringing you an exclusive interview with the founder of terra firma. He has done many successful deals. He is best known for one there is a group that says it happened to everybody. The only difference is you have had huge amounts of us about it. Everybody else rolled over and got on with the next thing. You spent time trying to make them a success. In the end, did was enforced against you. You clearly have a legal battle. We accept that. And then you have people who feel pretty hurt. I understand that. Luckily for us that is a reasonably small percentage. Is there an argument to be made you are in the penalty box . I dont think so. There is a huge split. Over 200 investors. Undoubtedly, of the 200, there are some who have been with us from the beginning and felt that emi is horrible. A lot of people have increased their exposure to us over the time. We have done well with the funds and investments they have made. Some have said, to be honest every major firm did some deal back in 2007. None of us actually expected the crash that occurred. From our point of view, the difference between you and them is emi was very public. Clearly you have gone on to try to get your money back with regards to something you feel is the right thing to do. Not stopping people signing off with you. Maybe it is the high profile nature. The high profile problem is not something that is currently manifesting itself when you try to talk to people who are going to be investing. They are much bigger issues. I dont think we are any different than that. That was guy hands. You can see more from the interview at bloomberg. There will be a 30 minute special program this weekend. 2014 was a tough year for rollsroyce. 2015 does not look to get any easier. Herewith a look ahead to explain, Caroline Hyde. What prompted the difficulty. A lot of difficulties. A myriad of issues. If you listen to the chief executive the entire world was turning more difficult in terms of economic situations. Defense spending. Rollsroyce is not the luxury carmaker, the engine maker for airplanes. For military purposes. Also, skin in the game when it comes to ships. Nuclear reactors that go in submarines. That area was rained back in particular. The impact of sanctions from russia. About 1 of revenue is from russia. The block on Diesel Engine experts in particular hit numbers. They had not one but two profit warnings. That drove shares down by a third overall. We are respecting the first drop in sales for a decade at a decade at rollsroyce. Expecting profit to drop. The targets do not look pretty. After perhaps these two dire profit warnings, we are not expecting things to look much prettier next year. The new cfo breathing new life into the company. Job cuts. We cannot control the external environment. We can control costs. They are going to try to cut down costs. An economy going down particularly in china and asia. Little bit problematic because of the oil industry. Capital expenditure being cut. Also, sale of assets to siemens. The aircraft is not being made anymore. A lot of numbers focus. Whether the company is going to guide lower in terms of market expectations. Broadly, structurally, calls for the company to have a dramatic change of focus. Toward the end of last year, you saw the imminent calls coming from investors. They were saying, split the company apart. It does not work as a multiindustry company. It used to be an airplane engine company. Then they went into marines and nuclear. They want the nonaerospace unit sold off entirely. You might get about 6 billion pounds for that. Or break the company and two and have two listings. They say that could drive the value up 20 . They want the overall helm to look at the company. They you very much. We will bring you those numbers. They are due out at the top of the hour from rollsroyce. Tell us what you think of the show. 641 in london. 6 41 in london. This is what is trending. I will pay what is trending. Anna will tie you what it is. It must be something to do with the film 50 shades of grey. The fourth trending subject. I will not say those words. Manchester united struggling to win on the field. Looking to head for the first a difficult story for mark. I dont have to read it. Welcome back. Chaotic scenes in south Africa Parliament as the staged the staged a walkout. Armed police were called to help. Members of the Opposition Party walked out in protest. Members had been protesting against zumas use of state funds to upgrade his private home. Lets talk about football. Manchester united looks to be heading for their third annual loss since the year their american ipo. It came after they failed to qualify for the champions league. They are likely to make an offer of more than 150 per share. Shares jumped 4 on the news. The next guest says growth has not been as fastpaced as hoped. Lets bring in frederick newman. The head of the asian economic research. The correct pronunciation of your name. We often see you in hong kong. It is hard to look at asia whether to look at it in absolute or relative terms. Relative, lowest growth since the 2000s. What are the challenges we still have growth and it is the envy of the world. But growth has slowed. If you think about commodities selling off, it is because it has slowed. Deflationary pressures and places like korea and southeast asia. Even india seeing a decline. It is a lack of growth. We are still growing, but at half the pace we used to. How you rate the chinese governments attempts to reorient their economy . They have gone away from exports. The problem is that they are to investment focused. Not enough consumption focus. Here the efforts are not a bearing fruit. Still growing faster than the economy. But not enough to pull china out. Investment is such a big part of the economy. How could they encourage the consumer to spend more . They are doing things like free health care. Really what they need is higher wages. Wage growth needs to accelerate. That is that for corporate profits and stability. You can only go on gingerly. How is the low oil price playing out . We know retail sales it is not consumers that react, it is investment. Investment has a longer leg. The oil price has not lifted growth at all. It will take another two or three quarters before investment comes back to read one of the reasons is government have removed subsidies for gasoline. Hence consumers are not seeing as much relief at the pump. Governments are going to invest in infrastructure but that is going to take time. Where theare the positives going to come . Indonesia, india. Taking money and putting it into infrastructure. Those are the big stories in terms of lower oil boosting investment. In china, mixed signals. They are trying to rein in investment. They already have so much overcapacity. In hong kong, Lower Oil Prices are not necessarily going to boost investment that much. There was a story that the boj is said to view monetary easing as counterproductive. Is that it . Qed over in japan . Qe over in japan . I wouldnt go that far. But once you see inflation turned negative, for a bank that said they are going to do everything to eliminate inflation, that will be the key to do more. There is a Nuclear Option that has been coming into play in the last few weeks. Negative Interest Rate. Following denmark, sweden, switzerland. That will be a game changer. If you look for an smb type surprise event, it is the bank of japan saying we are going to do negative Interest Rate. That would lead to money pouring out of japan and push up the end. Thank you very much for joining us. Fred. Coming up, valentines day tomorrow. So they tell me. Dating 41 . Our favorite story from bloomberg. Digital output. He was many a girls dream valentine. Now he is facing bankruptcy. It is valentines day tomorrow. Dating is take business, reportedly worth more than 2 billion annually. Company cupids are looking to cash in on those with only hearts. Lonely hearts. We went to meet some of those companies. A lot of these people are similar. Just because i do not have a lot of time it makes it very easy for me to arrange to meet people. The inner circle is a invitation only website for professionals. The website is by invitation only, so you have to be invited by a friend. We screen every profile to retain the right quality standards. London only. Starting at 10,000 sterling. Anything up to 50,000 u. S. Dollars. This is for the 1 . This is for the cash rich, time for clients that need to be he a top class person and have their best interest at heart. Capote people would have to be stellar. I would want to date a nobel prize are for that money. Expensive money. Are you an aspiring, attractive professional . Whatever happened to just meeting in a pub . Lets have a look at the pictures for the digital output. Writing about the ukraine bailout. Giving his thoughts on it. It is small enough to work. The first day of the rest of their life. 40 billion, roundabouts. That is what the imf described the deal as. Actually the smallest might be an advantage because it might encourage real reform on the ground. Talking about valentines day. David cassidy who broke many hearts when he was a star in the 1970s sitcom the partridge company. He is bankrupt. Millions of screaming girls that was the rage in the 1970s. He was the heartthrob of his day. He has filed for bankruptcy. He said, i am going through bankruptcy proceedings. I wanted to let you know personally. It is necessary for practical reasons. He was the big deal in the 70s. A big impact on mark clearly. We continue me coming up. Breaking greeces gridlock. Behindthescenes negotiations continue in brussels. New sanctions as europes leaders work on tougher sanctions. Terror firm terra firma guy talks to us. Why should the greeks be given a pass when the irish and spanish has worked just as hard . Loreal looks to the rest of the year with confidence. An exclusive interview with the chief executive. Welcome to countdown, i am mark barton. I am anna edwards. The governor of swedens central bank tells us he is ready to expand the bond buying program. You never know, given that you are in in in certain world. We have said many times that would not be the first choice. But never say never. Breaking news from germany. Gdp in the Fourth Quarter rose by. 7 . Analysts estimating a number of. 3 . Way above estimates. That as the economy grew by. 1 in the third quarter. Just breaking it down, fourthquarter growth impulse from domestic demand. Private consumption rose from the third quarter. Investment part of the economy has developed positively as well. Construction rises significantly from the third quarter. Exports up strongly as well. Imports rising at a similar pace. After the french coming group in line economy grew in line with estimates, we did have a warning that the economy has overcome the week phase it hit earlier. With consumers benefiting from Falling Oil Prices and salaries. Real waysges rose more than thatey had since 2008. That has been confirmed from data collected. Export up stronger domestic demand strong korean. 7 . A blockbuster gdp number from germany. Something to make Angela Merkel smile. Earnings per share, 173. That is 1. 73. This is the london listed producer of metals, minerals from africa to brazil. To get through the statement, the committee saying despite the headlines of Economic Uncertainty the underlying fundamentals of our business remain attractive over the long term. The company saying they expect tough conditions to prevail during 2015. They will continue to build on their significant operational improvement. We will keep an eye on the details. A strong statement from the ceo of that business. Bloomberg speaking to the ceo. In just under an hours time. Breaking news from rollsroyce. Caroline hyde is here to talk us through those numbers. A mixed picture. Sales profit in line with forecasts. Profitability down 8 . What is noticeable is the cash flow situation. Cash flow has fallen by two thirds. To 254 Million Pounds. They are saying they have a record backlog in terms of orders. 2014 was a mixed year. But the fundamentals of the business are solid. We have complex Power Systems for air, land, and see. This is a company focused on aircraft engines for commercial and military. The military side has hurt. Macro Economic Uncertainty. That is why we are seeing sales down for the third time in a decade. But they are trying to say look, it remains rational for us to be in these areas. To remain on land and in c. Sea. But many are saying it might be better if they split it into bank. Into two. In terms of these numbers, they are trying to remain up the. They are saying we are the only engine maker for the airbus aircraft. The more fuelefficient engines that have been selling like hotcakes. They are the exclusive provider for that. But we are seeing the likes of airbus not making as many as they used to. About nine and year instead of 10. That is something out of rollsroyces control. In russia, where they have exposure they say the sanctions have hurt them. They have eight german unit that sold Diesel Engines to russia and that has hurt. The ceo did sound very gloomy, saying there was no area of growth around the world. But now is a bit more upbeat. In he calls for the company to dramatically change course . This is what they are trying to fight off in the statement. Saying it remains important that we address the future. Interestingly, neck in november back in november, they were sacking 2600 people. They are trying to breathe new energy into the management to you have the likes of a quick update on anglo american. Commodity price driven environment, 3. 9 billion. It includes rio, the project in brazil we were referencing earlier. They started shipping iron or ahead of schedule. As a result of the steep decline in prices, they have had to take this right down. Iron ore slumping 50 . Behind the scenes bailout talks have resumexd in the hope of a new contract. And negotiations in minsk area but the collapse of previous promises has left the eu skeptical. They have threatened them with fresh sanctions. Hans nichols is following the story. Good morning. What is the latest from leaders . The latest is qualified cautious optimism on both the ukrainian story. Maybe more optimism on greece. But first, ukraine. Allnight marathon session in minsk where they did broker the ceasefire. Angela merkel seemed to suggest more difficult work had to be done. We have to try to take this Peace Process. The cranium president made it clear this is the most important thing for his country. We are very aware it will take a lot of effort. We are open to all possible reactions. If it goes well, we will go forward with this process. If there are difficulties, we are not ruling out additional sanctions. Two important developments on the story last night. One, the idea that there are technical conversations taking place. Advisors from the European Union and imf. Leaders and administrators of the Bailout Program talking to their greek counterparts on a longerterm deal. A common set of numbers. The second issue is both the germans and the greeks seems to have come down from their negotiating positions. That is not to say everything is in the clear. David cameron talked about the danger for other economies. What is required between greece and the eurozone is not a standoff but a solution. We are affected by the situation on the european continent. The longer the standoff goes on, the worse century it could be for britain. That it could be for britain. Last night was the first time they had their meeting. Merkel said she was pleased. They were both positive coming out of it. There is also a meeting with the euro finance head. They continue conversations and appear to be laying a groundwork for some sort of cover my eyes. I suspect we are going to have another marathon session on monday. Look forward to it. Hans nichols in brussels. Guy hands on greece. An exclusive interview of the founder of terra firma. He says greece should exit the euro and they should not offer it a free pass. You have the green party greek Prime Minister saying, i dont necessarily think this is what we should do, but i have no choice because it is democracy and i was voted into do it. It is a very clever way of arguing 3d can blame it on democracy. Arguing because you can blame it on democracy. How unreasonable do you think he will get . More and more by the day. You think it is not going to be a problem . I think there will could be a greek exit. You mean reasonable or rational . I dont think he wants an exit. The vast majority of greeks are happier with europe. Brits see it as a good thing. They want to effectively have their cake and eat it. The protection and support of europe. The germans have reached a point where they need to draw a line in the sand. Northern europeans generally feel that way. For the future of europe and the good of europe, there probably is a need to put a line in the sand. Otherwise, there is a risk that if the greeks can get away with it, so can we. If you look at the pain the irish and spanish have taken, and what it has meant to growth rates, they deserve rewards. Why should they be given a free pass when the irish and spanish have worked just as hard and taken as much pain . Do you worry we could not understand how the impact will be manifested . Does it have a potential for a lehman moment . The big risk of unintended consequences is if people given to greece and give them a free pass, the antieuropean parties across europe will really sees that. There will be a huge swing. Saying, we are waiting why do we continue to do it . You will get it in the u. K. It is an incredible boost. If they do not get bailed out i dont think it is a boost at all. It goes the other way. People saying, there is discipline in europe. Brussels isnt just giving money away to their best friends. There is a focus on discipline and having action. I think the real unintended consequence is a moral dilemma of giving in. That was guy hands begin to guy johnson. Can see more of the interview here on bloomberg. A special program coming up. These are the top stories this hour. Chaotic scenes in south Africas Parliament as opposition parties staged a protest during jacob zumas stated the nation and dress. Armed police were called to remove members of the party after the interrupted. Members of the main Opposition Party walked out in protest. The eff members had been protesting the use of zumas zumas use of state funds to upgrade his private home. They have according to people familiar with the matter. Likely to make an offer of more than 150 a share. English football giant Manchester United looks to be heading for its first loss since its american ipo in 2012. The losses expects to be around 11 Million Pounds and comes after failing to qualify for the you couldve the lucrative championship. You can join the conversation on twitter. Have we mentioned that mark is a Manchester United fan . I feel the need for full disclosure every time we bring up manchester. We are on twitter. 16 minutes past seven. Coming up, the greek Prime Minister looking for a new contract with the eurozone. How is the uncertainty likely to play out . He joins us next with his insights. This is countdown. Big day for european economies. Gridlock for greece is in the mix. Lets bring our guest. A senior strategist and economist. The latest is greece is seeking a a new contract to get out of its bailout. Might we have a deal by monday when the finance ministers meet or not . I think it is unlikely. There are continuing to be constant discussions between the two groups. That is positive in a way. At least it is not gridlock and nothing is happening. X when is a new deal an extension of an existing deal . We can get caught in the mcquistan of it. In the linguistics of it. Whatever deals end up being done, you could possibly talk about it in different language in different parts of europe. A lot of it is semantic. In terms of summary from the meeting on wednesday the greeks dont want to talk about an extension of the Current Program, they want to talk about it about a new program. Europe is clear it is an extension of what was agreed years ago. That is where the clash is. It seems like it is, how can you sell the deal . Sounds easy to fix. Chaining the title is easier than the fundamentals. Greece has said they will go along with two thirds of what is in the agreement. An extension of the Current Program would probably need to be voted by the parliament. Some of the most radical faction of the coalition might he reluctant to be voting for extension given may have been voting not to extend it previously. What does the euro tell us . What a torrid time it has had. Is that a dollar weakness thing or a we are feeling better about greece thing . There is the dollar weakness, we have seen it depreciating against other currencies. For investors, we are starting to be used to greece. We know exposure is lower than it was in 2012. Governor cartyney said for most banks, the exposure is small. One we hear governments like the u. K. Government putting in place contingency plans, they will not go into details. The details of contingency plans. They need to be behind the scenes. What kinds of things might european governments be doing . We have not seen much contagion as of yet. Given the probability of the neck said an exit, i am sure every government is looking for how it could happen. What is my exposure to greece the arch they are doing that kind of work and wondering, how can i help my own economy. It is risk management. On the subject of helping economies, the German Economy grew. 7 three does that give them leverage . It probably does. It shows, if you follow our lead, this is the kind of economy you can follow. Also, the spanish experience. Spain did reform and look where reform is. Gives more weight to the argum ent. Domestic demand has been growing faster than expected. That is what the eurozone needs. Domestic demand. What is the french story for you . The ecb actually increased its forecast recently for french gdp. Things look fairly stagnant dont they . France is a troubled economy at this point. One of the economies where there has not been much structural reform. Not much of a drive internally to push for those kind of reforms. It is a bit of a conundrum. Can they do better despite themselves . Looks the risks are more on the downside considering nothing has been done. It is harder for them to grow at the same rhythm as germany. I wanted to get a question in on the bank. That took many by surprise. More likely to be up then down. They could cut rates if necessary. Are we pushing forward for when we think the next hike is going to be or not . Our views are the rate hike will be 2016. We are away from a need for rake hte hikes. Much can happen. The negative shock if greece entered the eurozone. We dont know how it would play. It would make sense for Governor Carney to say, there is a risk. And unreliable boyfriend. The possibility of negative rates in japan, is that something he japanese Financial Community is considering . The bank of japan has been very much into the game of expending what they are rather than negative rates. The most likely path would be quantitive easing. If, for their down the road, if we need to do more in terms of going negative thank you for joining us. Charles, the senior economist and strategist. More from our exclusive interview with terra firmas founder. He has been talking about the u. K. Party and how they could improve their relationship with business in the selection. In this election. Stay with us. Time for a look at the Foreign Exchange markets. For the third gain against the dollar. It is a big deal. The euro has not risen for almost a year. A torrid time in the last 12 months against the dollar. Ukraine and russia agreeing on a truce. The euro is down by 5 year to date. It has risen from the 12 year low last month 1. 12 against the dollar. A gauge is set forth a weekly decline. U. S. Retail sales fell more than expected. That is causing some to question the projection for Interest Rate projections increases. We have had french gdp data which rose by. 1 . German data rose by 0. 7 . On track for the third weekly gain against the dollar. These are the top stories in bloomberg. Angela merkel has warned russia it will face sanctions if it does not implement the peace deal she helped implement. She called it a glimmer of hope. But it does risk crumbling like the previous truce between ukraine and prorussia ruffles rebels. The arrangement is set to begin sunday. The greek Prime Minister says his nation is seeking a new contract with the euro area. His comments came after he met with eu peers for the first time at a summit in brussels. The goal is a sixmonth ridge agreement to lead to a new deal with euro area authorities. After announcing it would by 10 billion krone versus of government bonds, sweden said they are prepared for more quantitative easing and they cannot rule out direct intervention to weaken the krone. We have said many times that would not be our first choice. But one should never say never. You can find more indepth coverage at bloomberg. Com. We are bringing you this exclusive interview with the founder of terra firma, guy hands. Speaking to guy johnson about some of the big topics including the u. K. Election in may. He says the Opposition Party does not understand how the city has changed since 2007. Anybody looking at it needs to look at it a little more like emerging markets. The number one risk consideration was politics. With the government could do in terms of changing strategy. When you look at any western country today, you probably should start there as well. The u. K. Election is incredibly important in terms of making decisions about the sort of business to purchase. And what to do. The problem is politicians tend to increase rhetoric towards elections and then they tend to backpedal postelection. How nervous should those in the square mile around me be about an antifinance line from the upper estoril ons of the labour party . Pretty nervous. I dont think one can blame the labour party for this. I dont there is a good understanding of how much the city has reformed and changed since 2007. The labour party feels very frankly bitter and hurt. They made a huge effort pre2007 to get close to the city. They made a lot of laws, a lot of the stowing of awards on people in the city. It and then it went horribly wrong. They feel they were frankly conned and they feel upset about it. It is difficult to blame them. What the city has to do is find a way to engage with labor. I hope labor will find a way to listen to the city. Realize they have done some extreme reforms. For the ordinary person, when they see the salaries are still in the millions the fact that they were in the tens of millions is not any real comfort. At the top level come the city is paying less well then industry does not come across. They still feel they are a bunch of fat cats playing monopoly which it is really not. That is a difficult argument to get across. I hope labor is willing to engage in that. Before making bold decisions which will harm the u. K. Economy. I personally think they well, but you never know until the fat lady sings. Guy hands speaking to guy johnson. You can see more the interview here on bloomberg. A 30 minute special program at the weekend. You can join the conversation on twitter. Have a look at what we have been tweeting out. I just tweeted out another line. Greece could exit the euro. Barts charts time. Is cheap oil causing a burger bubble . We have been speaking to loreal. The french cosmetics company, the worlds biggest. We have had an interview with the chief executive. Lets hear what she had to say. We had a first half of 2014. It was due to the markets. Markets globally were weaker than the year before. Especially in the u. S. The u. S. Has seen was pretty exceptional. The end of the year was better. The market rebounded. We were able to grow our market share better. In western europe and in many parts of the world. Absolutely. That is what we want to achieve this year and the year after. As we have been able to achieve for many years. The global Cosmetics Market was one of the weakest in many years. With 3. 5 grow percent growth. What do you expect for 2014 . Will that be better and how is loreal going to perform . Ask good question. Good question. Market in 2014 was a bit weaker. We have to be careful about the words. It was 3. 5 compared to 3. 8 . We are talking about a very little slow down. I think 2015 should be more of the same. Maybe a bit better. There are positive elements like the strong decrease of the oil price which probably will translate into gas prices. More money in the pockets of consumers. We know this helps the consumption of our products. This could be positive for the u. S. , western europe. I am pretty optimistic. Loreals chief executive speaking exclusively to carolyn conan. Lets turn to another french company. They reported fullyear earnings. We have also had a french ddp numbers. Joining us from paris is the ceo. Thank you for being with us. Talk about the macro environment in europe. We have had sluggish with figures from france today. Better numbers out of germany and elsewhere. What is your assessment of the strength of the eurozone economy or the weakness . It is true it has been a very flat year for us. And for the retailers we deal with. Especially when it comes to france the rest of europe has been more dynamic. We have had a growth in many other areas. Recovery. Good figures. Going forward, i think we still have the same environment. Not great. No expectations for pickups in retail in europe . Falling oil prices or qe . Will that help your business . It should. It puts more money into the economy. It is a good way to improve optimism in the economy. And among consumers. What can be done on a structural level in terms of how much the consumer plays a part in the eurozone recovery . Does policy need to change to enable consumers to step up and spend more . I think it is up to us, the players of the economy, to get the rules where they are. We have addressed the most growing cities in europe. We have refocused our portfolio into the large asset. If you do that and also concentrate and focus your business with the most dynamic retailers, you get growth. That is what we have achieved so far and will continue to do so. Hell what are you to the parts of the business you are concerned with . You have operations in greece, i understand. Turkey as well. To worry about geopolitical concerns or whether greece is going to state in the eurozone . How do these concerns play into your strategy which mark when it comes when it comes to your strategy . When it comes to greece, it is marginal. We have a new exposure to turkey. We still think there are good fundamentals in the turkish economy with highly dense population, growing. The economy is growing too. Longterm, we believe there is potential there. When you look at the Retail Sector across europe, how is it changing . How are you having to update what you are offering . We spoke to management and they told us, wifi has to be standard for all stoppers shoppers. How are these demands changing . The retail environment is changing faster than ever. We have to play this change. We have to renew as many concepts as possible. Determine which retailers are changing faster. Raise the partnership with those people. The name of the game is to partner with the best retailers. There are some who are really running the change. Some are performing better than others. We have to play with them. Thank you for joining us. Great to get your take. The ceo. Time for todays barts charts. Is cheap oil causing a burger bubble . Where our u. S. Consumers spending the money they have been saving . This is the composite restaurants index. You might be familiar with one or two. We are talking mcdonalds, kfc starbucks. This is essentially the home of burgers, wings pizza. And frappuccinos. Right now, it is trading at an alltime high. Going back to january, 1995. By 4 from the low in october. It has jumped 17 . The best performing were wendys, up 23 . Sonic, up 17 . From 1985, the left of your screen, it has risen eight times the initial value. The s p has risen on mere 4. 5 times. A good question to ask is this. How cheap are the stocks . The index is trading 25. 6 times reported earnings. The stocks not looking cheap. The index is trading at 23. 6 times what analyst predict the committees will earn. That is an alltime high. More than a quarter above the decade average. If you needed more evidence of the appetite for these types of companies, burgers look no further than shake shack. They sold shares for the first time in january. Shares more than doubled on the first date of shading. 40. Berger, anyone . Burger, anyone . 7 48. Protests in south africa as members of parliament walked out. They repeatedly interrupted zumas speech. Members of the Opposition Party walked out. They had been protesting against a zoom up a use of state funds to upgrade his private home. Manchester united heading for an annual loss. It is expected to be around 11 Million Pounds and comes after the team failed to qualify for the champions league. Million pharmaceuticals has arranged a Pharmaceuticals Company has arranged for they are likely to make an offer of 150 per share. A live shot of the city of london. Futures pointing to a gain of a third of 1 . The nasdaq rose to the lowest level in 15 years. Remember 2000 . I was sitting not in this spot. Not far away. That too far away. Amazing moves on the u. S. Market. This is how europe looks, futures pointing higher. Act in a couple of minutes back in a couple of minutes. It has been a tough year for rollsroyce. The first decline in a decade. Caroline hyde is here. What prompted the troubles . Governments are not spending on defense. This is a government desk uppity that makes engines. This is a company that makes engines. Governments are not spending so much because of Economic Uncertainty and austerity. They seem to be facing headwinds. Oil and gas falling in terms of prices. Capital expenditure is falling. Russia sanctions, they say we have Diesel Engine exports. That got blocked. A lot of headwinds. So many they had profit warnings. They made huge restructuring choices. A new financial director. What is worrying about the numbers and why we are likely to see them fall 1 2 is because the market has deteriorated further since their last announcement in november. They are saying it has gotten worse. The cash flow position says it all. It has dropped by two thirds. We are seeing analysts calling for more changes. Iron ore. Down by a half last year. Not only do they sell steel, they also sell iron ore they get to make these deal. It is that mining exposure. 2013 is not looking pretty. Demand is picking up. But that is not enough to offset the huge slump in prices of iron ore. That is likely to hit the share price. Thank you very much. See later. On the move is next. Watch out for anglo american. They wrote down their assets by 3. 9 billion after Commodity Prices fell, leaking into what caroline was saying. Focusing on their brazilian business. The ceo will be joining the on the move team. Have a good weekend. We will see you on monday. Happy friday, and welcome. Moments away from the start of european trading. Lets get straight to your morning brief. Economic growth crushes estimates. Dd become in more than gdp comes in more than double the estimate. Ending greases gridlock, germany is said to offer concessions on the rescue term as long as the program is prolonged. Chancellor Angela Merkel urges nations to act quickly. The minor announced 3. 9 billion of writedowns as Commodity Prices plunge. We will talk to the ceo and just a couple minutes. We will bring you an exclusive interview with the man on top of the biggest cosmetics company. We hear from the loreal ceo a little bit later. I am looking at futures markets a little bit higher. Dax futures up by 50 points. We could be ending the week on a high. Lets check with Caroline Hyde for the open. Just 20 seconds into market trade. Its green across the board. Ftse 100 similarly trading up 4 10 of a percent. Yesterday it was all about the relief of the ceasefire. Hope there could be meeting moves made driving equities