Revolution. The ceo of a Company Teaching the world to code. And we are live in ukraines capital to see why voting next week and could be a dangerous endeavor. Lets start with the recovery in europe. Standard poors raising spains Credit Rating. Fitch also boosting greeces rating. David tweed joins us with more. What is the update behind the numbers . I want to start with greece. I am going to read a couple of lines from the fitch upgrade. They are still below investment grade, but moving in the right direction. Remarkable progress on the fiscal front. The most challenging adjustment for greece is behind it, says fitch. There are problems still, but they have managed to have a primary surplus and start Interest Payments in 2013. There is a funding shortfall also say theyy will fill the gap. Just hold that thought. Spain, standard poors, i will read you something from the upgrade. It is because of the improving Economic Growth and competitiveness as a result of spains structural Reform Efforts in 2010, including the 2000 well they were market reforms 2012 labor market reforms. I want to put that in context and asked what would have happened to these countries if they had gone out of the euro and currencies had to have dropped, as many people prescribed. They would have seen an increase in exports, but would they have done the Structural Reforms that they needed to do to make their economies competitive . I think them being within the euro, the euro itself has acted like a crucible that has made it essential for companies to take really tough decisions and put these reforms through. I think that is what we are seeing now. It truly is a sign of progress. Rating level. A b four years ago, i was with Francine Lacqua for the first overnight meeting where they bailed out greece for the first time. A lot of progress there, which you have covered every twist and turn. German Business Confidence numbers, ifo coming out. We were expecting confidence to decline, but we are a little bit shy of forecasts. What do you make of the numbers . A little bit shy of forecast. The interesting thing is to look behind the reasons for that. What i want to know is what german businesses there are 7000 businesses which are surveyed here. What they are doing in reaction to what is going on in the ukraine and russia. Are they delaying investment . Are they delaying plans for employment . We are going to speak to the president of ifo later in the program and these are the sorts of questions i want to hear the answers from him about. The other thing that has been going on in the German Economy, that i think is quite interesting, it looks like we are seeing the first signs of a rebalancing going on. We got the pmi yesterday. Still above 50, but the interesting thing was going on with the services. They were really very strong. Is that a rebalancing of the German Economy, something that mf, the unitedi states has been asking for . It will take longer before we find out the answer to that, what we could be witnessing the beginning of a trend. David tweed, our european editor for us, in berlin. The National Economic forum in st. Petersburg, president putin will address Business Leaders later today. Ryan chilcote is there as well. To those what did those who have shown up look to hear from the president later . I think they want to hear that this that business is going to be good in russia. I think they realize that the easy way to do that right now is to hear conciliatory comments from the russian president about ukraine. We have ukrainian elections coming up on sunday. The u. S. , germany, and the European Union have threatened sanctions if they feel that russia has interfered with that election. They are going to be listening for conciliatory language. Will they recognize the election . Just his tone, in general, on the ukrainian authorities. The last thing that anybody here wants is more sanctions. The address from putin, what else is on todays agenda . We are trying to look at russian business from a couple of angles here. We are going to talk to the deputy finance minister here in russia. They have just come out of talks with visa and mastercard. Russia and visa and mastercard have been in a conflict now for a couple of months, ever since they declined to service the credit cards of some of their clients in the country on the back of u. S. Sanctions. There was a short suspension. It was long enough to rile the russians. Rules,plemented some new including visa and mastercard having to pony up collateral to the russian government to prevent them from doing Something Like that again. The visa ceo said the amount of collateral was too high and it ran into the hundreds of millions. As far as he was concerned, on those conditions, it did not make sense to continue to do business in russia. Those conversations have continued. Another round of them just ended here at the forum. We will talk to him about that. We will also talk to the ceo of megaphone. Inobile provider here russia. How is he navigating this crisis . We heard a lot of ceos talk about how borrowing costs have gone up on the back of the crisis. Rin will join us later in the day. Resident couldnt will sit down president putin will sit down to dinner with some investors. It will be a busy day at the economic forum. You have been speaking to people on and off air ahead of the ukrainian elections on sunday. What is the best hope among attendees at the st. Petersburg interNational Economic forum for a resolution in the wake of this weekends elections . Hope ofnk the best people here is that the in the first round, because there could be a second round, a president that the russians feel that they can deal with more than the current leadership, which russia has been very clear, is not a legitimate power because they came into office through parliamentary approval, effectively on the back of a revolution. There could be some kind of negotiation between the russians and the ukrainians themselves. There has been very little of that. This is a question i put to the russian Prime Minister when i spoke with him exclusively earlier this week. A fronte identified runner in those elections, the man that is most likely to be ukraines next president , as someone they could do business with. That is what everyone is hoping for. Maybe there can be negotiation through that leadership in ukraine. Thanks a lot. Ryan will join us again shortly with the Russian Deputy finance minister, something to look forward to. Lets get to another one of our top stories. German Business Confidence data came out a few minutes ago. German Business Confidence fell in may by slightly more than economists had forecast. We are joined by the president of the ifo interview for his first televised interview of the day. Thank you for speaking with us. His numbers a little bit worse than economists are looking for. What is your outlook for the Second Quarter . Well, it is unclear, but the indicator went down everywhere, in retailing, wholesaling, construction, and the german industry, manufacturing. Is primarily the expectations and we think it is because of the crimean crisis. And that leads me to my next question read with question. With the elections taking place on sunday, is there a risk that a crisis within ukraine could continue to dent sentiment among german businesses . Yes, of course. Even though the direct exports to russia are not so important, the general climate could be affected negatively. But my feeling is that the worst of the crisis is over. Genevahave some talks in. The feeling is now it has calmed down. When we asked the firms a couple of weeks ago, at that time, there was a peak of nervousness. This is shown in the data. I would say the economy makes a little pause at the moment. It is not a turnaround. Before we speak of a turnaround, we want to see three months in a row and we do not have that yet. So i would not be overly pessimistic. For so long, the story in the european recovery has been a divergence between the core and the periphery. The numbers showing up lately show a divergence even within the core. For example, yesterday, we saw a slowdown in french services. The German Economy appears to be maintaining its momentum. At what point will a slowdown in neighboring countries touch as france start to weigh on the German Economy . France is germanys biggest trading partner. France does have enormous problems with its industry. It has lost its competitiveness in the euro. Germany has become more competitive. France is very dependent on Southern Europe. Where it is sending its products to be to. And the banks providing credit to the Southern European economy. France is in a situation that affects germany too. On the other hand, the german exports are more going to the rest of the world. Germany is very diversified. So the influence is limited. We have hot water and cold water. The hot water is in germany. The cold water is in Southern Europe and france. To speak about an average is very difficult. To talk about your exports to the rest of the world, they are influenced and affected by the strengthening euro, which, to be fair, has come down from its highs of a few weeks ago. Would you say now and is there a sense among the Business Community that we have seen the highs for the euro . That the action that the ecb is expected to take next month will push the euro further lower . We will see. ,hen quantitative easing comes that, in itself, means that the euro will decline. Investors,t foreign they will bring the euro to the Exchange Market and the euro value will decline if that is done. That indeed could happen. And it would strengthen the european economy. Thus far, we have seen the opposite. The euro has gained strength 2012, when the rescue operations were announced, because the Collateral Damage of these risky operations is that not only do investors from inside europe, from Northern Europe, come to Southern Europe, but from all sides, they come to your to europe and wanted by uye currency in want to b the currency in order to invest in government bonds and what have you. It is difficult to find the right mix in europe. Thank you so much for your time. An interesting interview. We always talk about the core and the periphery. I never thought we would talk about europe in terms of hot and cold. There is no lukewarm. North netherlands, of course. Colleaguesof our printed a terrific story yesterday called the ikea of Northern Europe economics creek saying that the leaders, mario draghi, in particular, are adopting a scandinavian model for these rates. Deflation,oes have of course. Coming up, russias recovery. We will head back to st. Petersburg and speak with the Russian Deputy finance minister. That is right after the break. Stay with us. It is day 2 of the st. Petersburg interNational Economic forum and one key topic on top of the agenda is russias stalling economy. Lets get back out to ryan chilcote, standing by for a first on bloomberg interview with the Russian Deputy finance minister. Take it away, ryan. He has just come back with a mastercardh visa and executives. Russia has been locked in a serious dispute with visa and mastercard ever since those companies introduced or declined to service some of their credit cards in a very brief suspension that turned heads in russia and riled russian politicians. Thank you very much for joining us. The visa ceo said that the conditions that russia is talking about introducing, there is already a law, in order for and to stay, are too dear if russia is going to stick to its guns on the amount of collateral the russian government wants and moving the operations onshore, then it is better for visa to exit. Coming out of this meeting, do you get the sense that these and mastercard are going to leave russia . We are absolutely continued to continue to work with visa and mastercard. They have over 200 million cards issued in russia. A lot of people use their products so we want to continue to work with them. The transactions which happen reasons which are beyond related to the card rules. Sure to ensure weervices domestically have to be certain that people can continue to use those cards in russia. Making transactions on russian soil. This is essential. It is done in a number of countries. You mentioned france and turkey would be two of those places. Resume only resume only presumably any interest of their Financial System as well. You asked for 100 million of capital. Ideais an unprecedented that you could use to punish them as if they stop servicing credit cards because of sanctions. That is what the law says. Whatever interest it is from visa, it is about 250 million and whatever it is from mastercard. Are you going to come down on your collateral . That is about right. Let me give an example. High fines for jobbing your chewing gum on the pavement. Gumor dropping your chewing on the pavement. Same here. This find is not here it is tore to motivate Companies Move their russian settlements in russia. Tricky one. They thought they were just following sanctions. You would be punishing them for complying with u. S. Law. We are not punishing them. We just want a structure that is more proper. That is the only way for us. Sure that those statements continue to happen. How bad would it be for russia if visa and mastercard left or stop servicing russian credit cards . My understanding is it is not just the 200 million credit , not just that, but interbanking transactions, an atm card from one russian that moneyther, almost always goes through the United States, through visa and mastercard. How bad would it be if they would pull out . How many credit cards do you have . I have about five or six. Questionback to your we look at very strategic plans. People using their cards in atm something,hat is those transactions have not been stopped because those transactions are being conducted thank you very much. Unfortunately, we have to leave it there. Fresh out of the meeting with visa and mastercard. Thank you so much. We will have more from the st. Petersburg interNational Economic forum coming up later on the pulse. We will also bring you an exclusive interview with the ceo of megafon. Stay with the pulse. We will be back in two. Lets see what is happening on the markets. Jonathan ferro has your asset check. You, be quite honest with across the continent, it is a little bit boring. We are higher. They are green, but it is very marginal. Can we get the six weeks of gains . It looks like we might, but only just. In london, down. 2 . The big ipo today is saga. Morning, thes price range, the bottom of the pence per i at 185 share. Elsewhere, lets check out the euro dollar. Yesterdayh pmi data showing contraction across many of those regions. Ifo, todays german Business Confidence shows that german Business Confidence was in a delicate situation as well. You can see the dollar falling rising, rather, and the euro falling. 10 days until the big one, june 5. Executiveup, chief officer of russias secondlargest wireless officer, megafon, talks about the sanctions on russian businesses and the economy. You can follow me on twitter and join in on the conversation on the pulse. Megafon ivan tavr welcome back to the pulse. Live from bloombergs European Headquarters in london. Im mark art and. To european economies have been upgraded. Two european economies have been upgraded, greece and spain. Index hasn stock pared its losses losses. Has leftce in ukraine 16 ukrainian soldiers dead. The government in kiev accuses russia of trying to destabilize the nation before sundays ballot. Will the election harold a fresh start . Phone live by the kia. Ev. The latest information i have today, of the five District Election Commission offices, these are the offices that run the voting, one of them is still operational. The heads of two of them have been kidnapped and released. The other two have been sealed. Ballots have been taken by armed separatists. About 90 of the would be holding stations around the city are now not open and not likely to be opened by the time the election starts on sunday. Sorry, continue. There atgood situation all. The intimidation of these election workers is going to be a major barrier to having a sustainable vote that is recognized by the outside world. Concerns, how credible those elections can be. Ive been speaking to the osce which is the International Observation mission. They did not have an active role. They are there just to monitor and observe. It is very clear that if the if the voting doesnt take place in large numbers, it will be easy for people such as the russian government to say the people in that region to not care about being part of ukraine. Longterm, that will be damaging to the credibility of any new president of ukraine. Their willarks there in tf. Kiev. Cracks it is a threeweek extension. It was requested by the french state. They want to get a better deal siemens moreive time to come up with a rival bid. Approved. Informally have endorsed but not formally approved. Siemens is considering whether or not theyre going to make a formal bid. They get more time to look at tom to see whats they might bid for. The french government clearly prefers the siemens bid. Their new rules in france, the has new decrees to block some of these proposed takeovers. At the same time, everything appears to be going against ge. The ceos said you have to trust us a little bit to know what were doing. They are not going to give up one of their core businesses which is locomotive manufacturing. The french government may want alstom to want. That is that. We will know in three weeks. Could they have done anything to make this process a bit smoother in their interests . They may have wanted to hire a lobbyist in paris sooner to massage and talk to the french government the whole way through. The challenge with that is that you lose the element of surprise. The french government could have signaled its opulent its opposition a lot easier. Om and the ceo. St that has aggravated french authorities. Lets head back to st. Petersburg for another bloomberg exclusive as the west threatens tougher sanctions on russia. Companies are bracing for the fallout. The ceo of russias second largest mobile operator, first when it comes to data, i want to talk about trouble in the russian cell phone market. One of your competitors reported terms the sales for the First Quarter were down six percent. Is this a trend across the mobile market . Or is it something Company Specific that you you recognize . Withok, i should not agree you by saying there is trouble in the russian cell phone market. There is a lot of room to grow. , we haveabout megafon thedisclosed yet firstquarter numbers of 2014. Look at our 2013. We have almost 10 growth. Our russian accounting, which we disclosed last week, we have nine percent growth. We are not showing a decline, for sure. We are very bullish. I guess the concern is, particularly when it comes to data, which is a big moneymaker, as the economy stagnates, which , people cut back on how much data theyre willing to do with megafon. There will i dont know how you can say there will be less data consumed because of the economy. Megafon uses a lot to promote there is a lot of room for people to catch up with data. Yeah, maybe they will use a bit less, but the quantity of people who use is much higher. So saying that we dont see any nation in data you sat down with me two months ago and discussed sanctions. A lot of ceos are telling us that theyre finding it more expensive to borrow. Are you trying to prove the point that that is not the case or test the waters . What is going on . It really depends on the company. Issued russian. Onds last week we dont need the dollars in terms of borrowing. We are absolutely fine with rubles, because almost 100 of nominated ins ruble terms. We are very thankful for the confidence of our investors in us. Talk to me about crimea. As far as russia is concerned, crimea is part of russia. I was just in crimea and i noticed that the mobile coverage. Here was very poor what are your plans for the region . Are you going to be investing their . Have you sent the engineers down . What is going on . It does not depend on engineers. The first point is economics. If you compare the russian out is ato the crimean, it more than one dollar. That means to send engineers there, too brought the network, we have to have an investor. Sure that this is a good Investment Case at this moment. We have not done a lot of work it very it secondly, secondly we need to look at frequencies. We have not been offered anything yet. When you look at disputed territory where russia has a presence, the banks are not really working in crimea yet. Be you who were afraid he might upset the west and bankers might take it out on you. To be honest, we have done zero homework on that. Again, we havent done any preparatory it is too early to talk about it. Shares in the forany, which is operating a long time. Relativee a young guy to the other ceos i have spoken to here. The do think about crackdown that we have seen, increasing control on use of the internet . If you are a blogger you can be like other media organizations. We have heard some russian officials talk about how twitter should be shut down and facebook should be shut down. Youre not a soviet guy, what do think about all this . Speaking about the shutdowns, on the one hand of course it is not the best way to shut down any social network. On the other hand, it is extremely important to comply with the law of the country we are operating in. U. S. , the media laws and telecom laws are much more strict than in russia. Look at television. My background is not telecom but television. Is much of operation harder than here. Everybody needs to obey the law of the company they are operating in. Two and facebook will understand that and comply with it. The ceo of megafon, the second largest mobile operator in russia talking about a pretty wide range of issues. Is interesting to hear that he thinks the fcc is tougher than the regulators of russian media. There from theew st. Petersburg international forum. We will also be speaking to the media. Ctc we will be putting to her the very same questions. Back with more. There is a revolution coming to schools across the u. K. Beginning this fall, Computer Programming will be a mandatory part of the curriculum in british primary and secondary school. We are joined by zach sims. Hes a founder of the new yorkbased free online coding. Ducation platform code academy important think it is that the children of today learn ode . It has become so essential to basically anything we are doing today, whether it is industry shifting online or a problemsolving paradigm for people to use to enhance her Critical Thinking skills. What are you doing to promote this learning . Decademy ined co new york. We try to make it super easy, engaging, exciting, and really to teach people the most fundamental skill of the 21st century in the easiest and most simple way possible. It looks like youve had some incredible success already. 24 million users and 190 countries. You have some norming names backing you in the Venture Capital community including richard branson. What is your Business Model . Right now we are focused on building a product. We think that groups of tens of millions of people across the world knowing the most important skill is eminently monetize book. For us the focus is on building an educational product that beingpeople from zero to employable. Cademy. Gged onto code acad im a little bit of progress. I only made it through the html section i did not get through the csx section. That is me coding your webpage. Guess what it involves . Clubs. Eventball mark, you can learn how to. Mputer code very jack, you doing some amazing things. Us about your idea box project. It is a very worthwhile project and involves refugee camps disaster zones. What are you doing . A we are working with nonprofit in paris here where i am now calling libraries without orders. Put together a box to send to refugee camps that includes tablets computers, literature. Were hoping to provide access to anyone in the world, regardless of where they are and give them access to what we think is the most powerful education they can have in the 21st century. Are you seeing people really being able to get coding jobs a sunny education youre giving them on the website . Definitely. People get jobs. Weve also seen people create jobs. We are seeing tens of thousands of businesses created all around the world by people that are learning these skills on y. I think people are getting jobs and they are also creating their own jobs. Startedked, if i learning coated today, and im really dedicated, how long before them up to your sort of level . Months is a couple of what you need to get to build your own company. Took me 90 minutes to make that for a basic html. Agreek all of years would that the first up is to get you on twitter. Getmarkontwitter. Are thanks to zach sims. We will be back in two minutes with more on the pulse. In todays new energy, branching into biomass, as trading with russia becomes increasingly expensive. Ukraine looks to renewable sectors for energy alternatives. Ceo,e joined now by the richard spinks. Just start by explaining what aag does. We operate inl, the biomass industry which is carried out by traders. We are not a traitor. We focus on the raw material. Ukraine, we had significant for history assets. , port facilities, tsutomu assayed out of the country so you can move an asset out of the country. You need to be able to turn this asset into a commercial proposition. We started in ukraine. We dont operate in ukraine. Exportsignificant in from spain in terms of biomass. We started with chips and wood chip, which is pretty much a baselevel product. These are new trees you chopped down . Take all the pieces of a tree that cant be used in a sawmill. What is normally left as residue, we will take away, but we do it in a very large way. 500here we will be over million tons. Half a million tons. There is a lot of water and moisture in biomass. Without expending hardly any we can drive down that material, reduce it to ,ellet projects or granules which burns far more efficiently, giving off far more ton. Y per you can effectively turn what is waste material into a very high value fuel, far more efficiently, far more cheaply, toh hardly any compared traditional systems. Much has the ukraine crisis disrupted your business . Not at all. We dont off rate we dont operate in regions where there is disruption. Can you go back there . I cant go back there. Ive been warned against that for now. Does it make you think twice about your operations in ukraine . No. It is probably the single best operation right now in europe. Having the best. It is ever had and possibly will ever have in europe right now. We will have to have you back perhaps after the president ial election. 9 56 for those of you listing on bloomberg radio. You, the second hour of the pulse is coming up. We have the ctc media ceo coming up, do not miss that interview. Ryan is there. He spoke to the economy minister yesterday. We heard from russias secondbiggest telecom ceo. He thinks the fcc in the u. S. Has tougher rules for the media russia the bahan russia. Hard to believe. Wo. Ill be back in t russias president gets set to speak in saint petersburg. We are live at the chief chiefive deficit executive officer. Ge looks to extend its bid for alstom. Hello, good morning to our viewers in europe. Good evening to those in asia and welcome to those just waking up in the United States. Lets get right back out to st. Petersburg. It is day two of interNational Economic forum there. President putin will be addressing Business Leaders later today. But get back to our Foreign Correspondent ryan chilcote. Take it away. We are joined by the ceo of the Worlds Largest aluminum producer terry at thank you for joining us. We have to talk about sanctions, briefly. One of the things that the u. S. Has threatened is to have focused sanctions against russias metal producers. How likely do think it is that your company could be affected by sanctions from the u. S. , directly . Zero. Just in general, in my view it driving the nickel prices in over 40 this year. If the same happen in our copper or aluminum, it would be a disaster. You do not think the u. S. Would do it . A sense of what the sanctions threaten . How is that affecting your business . We are well structured. In , development of russian based projects in development of the industry would be lowered. Russia is in economic stagnation. What does that mean for you as an aluminum producer . Much, because we have been quite healthy. Yes, we have slowing infrastructure, we have a quite good Housing Market in russia. The transportation sector is up a little bit, but still very strong. Bad. Not ruble to dollar changes sorry, i did ginger up. The cost structure would be tremendously improved. In general, we all believe it is just temporary. The steel market has seen better days. How does the aluminum market compare a steal . Steel . A hiddenina had subsidy because they dont have environmental costs. That is why they built so many smelters. They have not very efficient which directs them towards aluminum. There are people who are not thinking very much about cost of capital. Consumption levels for the last four years that are lucrative. Very low prices and very attractive materials for our customer. We are a multiproduct company. Most of them focus on Something Like iron ore. They could write off billions of dollars. It is a time when investors realize theres no need to have this conglomerate. Think this will create tremendous opportunity and balance the market. Yes, theres a good growth in demand, but we need to have very rational output planning. We have 30 more seconds. About reform this year . Strange. What about your share prices . We had good performance at the beginning of the year. Hope the market will be tremendously improved in the next three years. We can deliver wealth to our shareholders. Ofrusaleo rusal. He doesnt see sanctions directed against his company. Back to you. Interesting to hear that he thinks there is zero probability the. S. Sanctions impacting russian economy. Thanks so much for another great interview coming out of the st. Petersburg international forum. We will return with the ceo of ctc media. Takes ukraine election place on sunday despite waves of unrest and violence across the country. Em marks is our man on the ground. I was in den nets could this week and of the five election commissions there, my latest information indicates only one of them is currently open. The people running two out of those five have been kidnapped in the last couple of days and released, but theyre not returning to work. The remaining two offices have huttered. Theyre been padlocked. Voters lists have been stolen. This calls into question all sorts of things. What are the consequences longterm of problems with the vote . Phone a few minutes ago with the number two of the. Bserver mission from the osce he describes a situation in den nets guess pretty awful and says this kind of intimidation continues will mean a catastrophe. One of the things we have to burn mind is the russian perspective. Ryan was speaking to Dmitry Medvedev a few days ago and he said was certain regions of ukraine not having record voter turnout, the entire elections will be called into doubt. That is a concern for any new authorities in the ukraine. Speaking to us live from the ukraine ahead of the big elections taking place on sunday. Less turn our attention to another top company story. General electric has agreed to toe alstom more time consider its 70 billion bid. How much more time here is alstom going to get . Three weeks. The wardy already has on board. They have endorsed his plan to 17 many of the assets, billion is a number you are quoting. Re are french government the french government will give ge more time to make its case. It will also give siemens more time to look at alstoms books. Anht now they just have expression of interest. Throughout this all, ge has been nothing if not confident. Here is what the ceo had to say. Know have to trust us to what we are doing. They have to get the industry minister to sign off on this planet what it means for france in france. Is a really, it interesting story right now. It hits on a raw nerve across europe, particularly here in britain with the proposed pfizer takeover of astrazeneca. Youre hearing a lot of protectionism from National Governments wanting to protect domestic business. What you think this is really going to come down to year . Is this a matter ge promising to protect jobs . What are the alstom shareholders saying . It. Wouldnt put price into i do think it will come down to job promises and what assurances can be made. Similarly, it is not Like Astrazeneca is a core british company. Swedenits foundings in and has units all over the place. M seems more a part of the french dna. It is really a question about industrial jobs and of france will continue to have them. What they alstom board is saying is that they will have more tied up and ge than if they were left on their own. That is simple. Will see why the seller of insurance and travel packages. Lashed its flotation prices olivia has a couple of decades before she has to think about saga. A check at the currencies. Lets look at the euro. Out of pieces of data the German Economy today. Business confidence declined. It seems to be decelerating within europes largest economy. It is key to the recovery within the 18 nation euro area. We have gdp data confirmed in germany. The economy grew by 0. 8 . The economy is driven by internal demand. It is on track for its third consecutive weekly decline against the dollar. You know what is incredible . The euro has held up through the past four years. It really hasnt moved much despite everything we have gone through. Lets get more on this from our david tweed. Or, german Business Confidence data out this morning, declining. It did decline. I think that is an indication that although germany has been the powerhouse of the european economies, there is the potential weakness coming up ahead. That weakness is coming up. Ryan has been talking about rush all morning. Theyre not wanting to make those hiring decisions. The interesting thing that that im notew with sure this indicates a change in trend. There is no mild water in europe its either hot or cold. Theres diversions even between core european states such as Frances Service economy slowing. Youre the expert, youre been covering the crisis since 2009. What are your big takeaways here . I think it is appropriate in a way that we sell the upgrades of greece and also spain today by two of the ratings agencies. I also think the reason for those upgrades was interesting because in spain they said it improving the Economic Growth and competitiveness as a result of the Structural Reforms that have been put into place. Increase they say the most challenging phases of the are already behind them. If these companies had been inside the euro, they would never have had these weaknesses exposed in such a way. Being inside the euro forced these politicians to have to take otherwise unthinkable Structural Reforms. In the end, even though it is such a long and painful process, by the end of it, maybe the eurozone will come out of this crisis much stronger than it was going into it. It is amazing, isnt it, david . Ive been with you since you started in television in 2009. The bond market, they were crazy then. The yields on the spanish 10 year is down to three percent. Italy is down to three percent. It has come so far and fast, hasnt it, in the last year . David, talk to me about your highlights. There have been many. I loved your recent lego packages. The highlight has been the chance to cover the sovereign debt crisis. It is been an incredible story. You are right, i am very route of that lego piece. Looking at the companys turnaround. The german elections were great. Coming up with a different way, different angle to cover the german elections. I managed to get a sausage and a cucumber into it a package. I thought it was a lot of fun. Theres also been in another highlight during the last four years and that is been learning that tv is not just us in front of the camera, it is about this guy talking in your ear, is about the woman up its make up about thethe morning, writers, the producers and directors. It is all about the teamwork that goes into television. That is something that was always a highlight for me. Learning tv is all about teamwork. It is not just about us in front of the camera. , were going to miss you. I gather we are nothing to lose you forever. You still will appear on the channel, yeah . I hope youll have me on the channel. Im staying with bloomberg. Im going to rejoin our colleagues in print. I will be based in hong kong and i will be writing about economics and policy. I will be writing about the military, i think. Really, i hope about the big stories that are taking place in fewa right now in the next years, mark. Tweedy, good luck heard it has been a pleasure. It is a sad moment. You will be missed. We have fond memories of all your work. You are truly right. It takes an enormous team the model we are very grateful to, to get us up here on the morning , particularly mark bartons makeup team. He is a diva in the chair. It takes in 20 minutes. Succumb, cooking the books . We will see why italy is about to start counting illegal drug sales and prostitution as art of its gdp. Welcome back. Were watching shares of saw that today. It began trading today in london. Ruth david is here. Us, i the three of closest to using saga. But such is life. How have investors reacted to the saga story . Definitely not as much of a big bang as its owners had hoped for. It is pricing at the bottom of the range. Trading today is up two percent, which is really nothing to write home about. It is horribly because it was a case of mistaken identity. They wanted to be treated as a Consumer Company which is higher valuations. Said they are an Insurance Company and they will be valued like that. It seems like things have gone a bit softer. Definitely. , actually, was the busiest for ipo announcements. It seems like everybody is racing to the door. If you look at ipo performances, there down four percent, compared to last year. Theink some of that is Economy Numbers that they had expected to be stronger in the First Quarter were not. There were some concerns about deflation and growth is not as strong as investors had hoped for. Theyre pulling back and saying lets be more selective. It is not good news for the. Rivate equity owners they all want to come out the door. Investors are saying maybe not, right now. Is a fantastic function. 941 ipos announced. It has been a boom year, hasnt it . The numbers are up, but the performances are down. In london, the ipo market is still pretty high. Come asba is going to well. We shall see. Ruth, good to chat with you. We will see later. We are back in a few minutes. Coming up, can russia reach a new phase of sustained growth . Countrys most influential businesswoman will weigh in. Afterl speak to her first the break. Welcome back to the pulse. Im mark barton. And im olivia sterns. Here are bloombergs top headlines. To troubled eurozone countries ratings their credit improved. Ratingd poors is spains level one point higher at triple be. B. And nationwide curfew is in place overnight. Violence in Eastern Ukraine is spiking ahead of this weekends president ial election. 16 ukrainian soldiers were left dead. It is the worst battle with separatists since the crisis began in march. Lets take a look now at how european markets are trading. Jonathan ferro has more. Six . We havee it the dax up by a quarter of one percent. A 10th. P by they offer insurance and holidays to the over 50s. I wont crack any jokes about my colleagues. Elsewhere, lets check out fx. Greece had their Credit Rating raised. Fire. Ds fuel to the im going to carry on mentioning until we get there, june 5, ecb. In your, put it diaries. Thank you, jonathan ferro. In 30 minutes time, it is surveillance. Tom keene joins us with a bit of a preview. Thrilled to bring our audience worldwide, robert formally alex clement on the same scene. On fashion, olivia, we have to get you better dressed in london. Robert work will join us with rba associates. Earlier withoring the very irish manus cranny. Im a crowd pleaser. Im getting ready for a threeday weekend. In europe on memorial day. We will focus on the indianapolis 500, as well, which is a big event. Holiday here as well, on monday. Will you be wearing a bowtie that is white come memorial day . Be sure to catch surveillance that is coming up. Lick it back to st. Petersburg. Insias biggest names business are gathering today. Ryan is standing with one of the most influential businesswoman. That is right, and those ceo of one of the leading content providers for television in russia as well. Yuliana slashcheva. Not everyone that is watching what your company does. Gives a brief description. Ctc is one of the Largest Video groups in russia. We are currently on four channels. One channel we only launched a month ago is cable and satellite. These channels do what . We do purely entertainment. Politics or news. You have another channel called ctc love. I am not sure i am the audience. Shareholders is sanctioned by the United States. Your listed on the new york stock exchange. How has the fact that one of the shareholders has been sanctioned affected your business . You know, we dont feel anything at the moment. Even on this decisionmaking. We are vented our strategy in onember and are going along the content side and the digital side. Obviously, you depend on advertising revenue. Some of the International Advertising agencies are still happy to place ads with you . , we hade First Quarter a hundred percent sellout on all our channels. Were already close to 90 . For the fouryear for the full year, we have over 90 . Betweene the standup russia and the United States having any effect on the russian Advertising Market at all . No i dont. Do think this standoff could some of the big u. S. International advertising deciding that they wont on russian channels . I feel it is very unlikely, because it is all about consumers and sales. Rush is a very big market for american companies. I do think that Consumer Companies will want to keep this market and continue to sell in this market. I do think they will go on with advertising. Why do think that is . Is because the Economic Forecast which was given by the russian government and because consumer demand ctc used to show american sitcoms and your version of ugly betty. We have Everybody Loves raymond. Russianhere is more content. True. Is that because of the conflict . To russians not get the jokes . What is going on here . Patriotism . Of course not. It started much earlier and it was not only a matter of american series and movies. Just International Content some time ago, it started five years ago. Culminationelt the of that about two or three years ago. Foreign content is stopped working in russia. It was just not working for viewers. Viewers one russian heroes and russian personalities to be on the screen. We do a lot of deals with the majors. We buy a lot of content from american majors when it comes to the big movies, but when it comes to the series as sitcoms and shows, russians want to watch russians. One of the trends that russia is not immune to his people not watching television and going offline because they dont want to be dependent on a program to see what they want. How are you repositioning ctc to capture those people . We diversify our source of revenue. The first sing a it to is how we we are already in the 10 months since i have been running the country running the company have increased 57 . Viewership is growing, not going down. Russia has a very high quality of free to air tv, maybe one of the best in the world. People will always watch free to air. The new audience, the new generation is more and more watching on different gadgets. Ctc is already there and will be there more and more. Our views on used to seeing so many female ceos from russia. Is it difficult to be a woman and do business in russia . I have been a ceo for more than 15 years. Cant say it is hard. Very often it is an advantage in a mans world sometimes. Women are more flexible. Very ambitious and flexible together. I combine those two things. Thank you very much, it yulia na. Thanks, ryan. Coming up next, youre going to like this. Italy is on a high. Explain how they are including the use of cocaine and other drugs in their gdp. Italys gdp is getting a little bit of a boost from cocaine. Drug sales, prostitution and smuggling will now all be included in this years gdp calculation. This is exactly what mario monti was hoping for when he talked about market reforms, but this is not a joke. This is not a joke at all. That would tell you one of the reasons why it is happening. There are eu rules that the eu would like all countries to adopt for one particular reason. Where the netherlands some drug use can be legal, some prostitution can be legal. Those you compare economies when youre calculating the eu budget . The benefit for italy is that they have a budget deficit target. Of course the target is a percentage of gdp. You want to cut last and spend more, boost gdp . Calculateth could you this side of the economy . That is what i am wondering. This is a black market. The idea is when a get it on the books. It is not like people are going to start paying taxes to their coke dealer. Exactly. Youre not going to get more of a slice of tax revenue, are you . In italy is reports of anywhere from 10 to 20 economy. That market is huge. It is in spain as well. Unemployment, if unemployment in spain around 25 . 50 if youre under 25. Is one of the reasons they are adjusting. Theyre not cooking the books. I wont say that. It is creative, i will give them t. T are the percentage change, you will not see much of a difference. The total, you may well do. His answering questions from Business Leaders at the forum. Can we listen a little bit . There he is, ryan has been speaking to a number of dignitaries and Business Leaders. Is so interesting how the message from so many has been that the u. S. Sanctions on those from the west having no impact on the russian economy. Theyre not even taking the threat seriously that the u. S. Would up the sanctions. He compared to the use of nuclear weapons. One of the more interesting since. S came from he said that he thinks when it comes to business, that the perception is that the worst is over. When everyone is worried about the impact and the remick and the ramifications of the secession, he says he thinks this is the peak of the crisis. Many are hoping hes right. Use use domestic spending that is keeping momentum going in the German Economy. Nursing a subtraction on gdp of about 0. 9 . Nursing services contract. And up next, the grinning voices that need to get heard in this weekends election. Welcome back to the pulse. The sale shows that Credit Suisse was punished in the bond moodyseven after downgraded its outlook. The car will be sold only in italy by 2016. It will consist of the nofrills it salon subcompact. Lon subcompact. Speaking of scaling back, hewlettpackard is cutting more jobs in addition to the 34 thousand positions already eliminated. Hp will cut 11,00016,000 more. For thirdure heading consecutive weekly decline . It looks like it is. We have two big pieces of Economic Data today. German Business Confidence declined more than forecast. They eurozones biggest economy will slow further. Growth is coming from domestic demand. That doesnt show too much balance within not just germany but within that eurozone as a whole area of germany remains the engine of growth within the euro zone, with france contracting and italy contracting and the netherlands ing, too, in the last quarter. Voting, for some citizens, could become a dangerous endeavor. Low turnout may undermine the whole democratic rosses. Marx reports from donetsk. She has supervised voting from the small office. This voting will be different. She told us. Ed, my life is not in danger. I am just doing my job. That little harder, recently, when armed men from donetskles republic of came. Her office was one that separatists forcibly closed. Hundreds of International Observers have arrived in kiev. Votes in kiev might be a tough task. Today it is staffed by a local volunteer militia. Outside donetsk we found members of Ukrainian Army too nervous to allow us to film them. Yesterday, several soldiers were killed. Elections always give us hope about something new, she told me. The governments, new president , that is the point of the election. However, and the new peoples republic of donetsk, any of those voting on sunday will not feel that same hope. But rather, fear. Marx, bloomberg. Donetsk, ukraine. Lets talk about the election taking place this weekend in ukraine, ryan. Was a talk on the ground . The russian president is going to make a big address at 11 30 london time. Hear people are waiting to is some kind of conciliatory remarks about ukraine. We had that deadly day yesterday. 16 soldiers killed. That doesnt bode well for the election. There will be more sanctions. Clearly, and nobody here at this forum wants to see more sanctions. Im going to be watching the russian president to see if he gives any clues. The message from so many of your guests is that the sanctions from the west are no impact on the russian economy. That of course should be news to lawmakers years in the west. Youre going over to kiev. Marx, what you planning to report on monday . Do want to say that the russian economy itself was artie in bad shape very some people it said that when you take the sanctions and layson into the general regression of the russian market, that is beginning to have a bite. Obviously, were going to watch the election results. Elections are able to happen in the south and east of the country. The international communitys response to derek monday is an incredibly important day, because the issue of russian sanctions, not just the issue of Ukrainian Territorial integrity, it dependsswise wholly on what happens on sunday and how that is perceived on monday. Ryan it has been great watching you cover. We will carry on with tom in surveillance. Thanks for doing this for the last couple of days. Of know the fault lines on this. We have a french state who is opposed to this deal. Where workers who are interested in their jobs. Thethe board of alstom and ceo of alstom wanting to tie up with ge. And have the ceo of siemens here in germany wondering if they can make a play. Do they want to play ball . We are here on monday, arent we . Us andk you for joining keeping it here on bloomberg. Tom keene and his team is coming up next from new york. There is definite Eastern Ukraine as kiev readies for us on the election and we speak to Robert Hormatz in this hour. Meg whitman and Hewlett Packer consider a lack of growth. Memorial day weekend beckons. Go 500 miles in indianapolis. Good morning, everyone, this is bloomberg surveillance. It is friday, may 23. Joining me is scarlet fu and adam johnson. Lets get to our brief. Businessght, german confidence was weaker than expected. Existing home sales newhome sales at 10 00 this morning and foot locker will report before the bell. That is the brief. Lets go right to the data check. Look at stocks, bonds, currencies, and commodities. Its an ever weaker euro. To 104 peris up barrel