Headquarters in london. I am mark barton. And i am Olivia Sterns. We begin in ukraine. Lets get straight to ryan chilcote. Ighting continues to rage both sides stepping up their attack. Ryan is in kiev with the latest read it looks like the country is seeing some of the deadliest violence and the crisis began. What is the latest you are hearing on the ground . Good morning. The Ukrainian Government says they are going to push on with the fighting in the east of the country. The death toll from yesterdays battles stands at 40. All of those on the rebel side. It includes russian nationals. You will remember that several dozen russian fighters came from russia itself into eastern and identified themselves as chess champ chechaners volunteers. If they were, they were there on their own private business. Clearly, this is becoming a very messy affair. Lots of collateral damage. An additional 31 people injured. , which the Ukrainian Government did capture, was also damaged, so it remains closed. The osce, which has a Monitoring Mission for foreigners in the region, still has not been able to contact them in the last couple of days. Forhe optimism that we had the first 12, 20 four hours after ukraine got it president elect 24 hours after ukraine got its president elect, has evaporated. Just yesterday, we were talking about how this potential might be rough, but things have gotten worse on the ground. Exclusives ontwo crimea and an interview with ukraines foreign minister. I think we have just lost the signal to ryan. As i just reminded you, you can look forward to our exclusive interview with the ukrainian prime minister. Aboutof questions for him the potential Government Strategy to try to combat this growing insurgency in the south and the east. A french official says that ges offer for alstom has been approved. Caroline joins us with the details. Good morning. That is right. That just came in. With thef ge just met french president this morning. He told the french president that he would improve the offer and protect more french jobs. There has been concern of the french government using losing french jobs. G already employs more than 10,000 people in france. He came to defend his proposal last night. Besaid alstom would not absorbed by ge. Have a listen. We come to build. We do not leave when times are tough. That we canonfident compete and win with our french businesses. To reassure the french government and the lawmakers last night, he also said that ge could sell its rail business to alstom and that the Nuclear Operations of alstom would remain based in france, something that was a big concern of the government because they want to preserve frances Nuclear Energy independence. French government has explicitly voiced their preference for siemens to make a bid. They also had a word at the hearing. What did they have to say . That is right. Important because the French Finance Ministry has been very impatient about the siemens bid. He said last night that the bid from siemens would become would come by june 16. That would include a swap where siemens would get the real unit in exchange for energy assets. That would create some combination between the german highspeed trains. That offer has the favor of the french government, who has been supporting siemens bid. Back to you. Thank you so much. We will continue the conversation on alstom later in later on the pulse. Europes clinical leaders are clashing over top jobs. Juncker as the next European Commission president. Bonds nichols joins us. Is this in response to the surge of protest parties in the parliamentu elections . It is a little bit of that read we are talking about a delay of potentially a month to pick a new Eu Commission president. For folks like yourself, who are waiting with bated breath, we will have to wait just a little bit longer. Here is the issue. According to these new treaty rules, they have candidatewide heads of party candidates. These are supposed to be based on the party showing in the polls. It is supposed to be based on the top candidates and you have more relevance for the Eu Commission president. It looks like we are leaning towards a backroom deal. Remember, the center right party of juncker got 34 . He appears to be in the pole position for the job. However, he has challenges. Namely, lukewarm support of Angela Merkel, perhaps the most important figure in discussions. David cameron, while not name, isg juncker by opposed to his candidacy. The hungarian minister is openly opposed. Martin schultz, who ran against juncker in the parliamentary elections, said he would support him. What we have is a mess. We have a month to sort it out, maybe longer. Mark that mark, that means you can book your suite in brussels and report live. Where does german chancellor Angela Merkel stand . Going into the meeting, she said that juncker was her candidate. Coming out, she said they have a broader tableau of suitable persons. That sounds like an Angela Merkel who is ready to trade horses. She wants to have a say on who the president is, but it does not look to me as though juncker is 100 her candidate. Hans nichols in berlin. Is pushing further into skin with its latest acquisition. Here with more is Caroline Hyde. Nestle once again splashing the cash. Is howbillion dollars much they are spending. Katscompany that makes kit wants to refine your wrinkles. That is the area they are going into. They want the right to sell value products valiant products. Filler and toxin is what they have bought, but it is all about revitalizing your skin. It is an interesting tactic. They are getting further into beauty and skincare. Just back in february, they spent free . 6 billion adding their hands on control of their joint venture with loreal. That is a dermatology business. Psoriasis,d on acne, really overthecounter, but sometimes prescription, drugs. Management wants to get out the wrinkles, we think. It is a dominant player in food and beverage and also in baby formula, water. Competition, worldwide. We are seeing a rate of growth for nestle using up a little bit. But beauty is surging. We have emerging markets, middle classes, china, japan. In india, these sorts of areas are very focused on buying into beauty and health care. You can get that little bit more bang for your buck in terms of profitability. Gamble arerocter and doing exactly this, selling off some food rents and getting into expanding their personal health care. That is where the money and the growth is. There is also a huge amount of money in the u. S. They make a product that is a big rival to botox, owned by allergan. They have about 10 of the overall market. But this is huge. It sort of solves Plastic Surgery in the u. S. I think nestle is trying to get more into the asthmatic procedures space, you could say. So nestle is very inquisitive here. It is. Look at the specifics when you look at nestle. In the past three years, they have done more than 20 deals. They splashed 18 billion. Potentially, we should be looking at some of the u. S. Rivals, the likes of valiant. They are taking some commercial rights to sell from that product in this deal. It, 50 billion on the maker of botox . We have seen valiants debt load soar. It is trying to make such inroads via acquisitions. Just putting off the bid when it comes to valiant. So far, investors seem to like what nestle is doing. Grow what itaid to can do organically. It will take bits and pieces from around the world. It is not getting the rights to do in the United States as well. What is the difference between frown lines, facial wrinkles, and folds . I think you probably know more than anyone, mark. I have done several stories on allergan. Botox is a 2 billion drug globally. It is a filler. The frown lines are called your 11s. ,hese are called crows feet your socalled smile lines. This because the fda recently approved botox for this new indication. Botox is also used for migraine headaches. And the folds . We are not so sure. You are so useful, we cannot find any on your skin. Not something for you to worry about, clearly. But big business if you want to stay young. Which i do. Improves its ability to win the battle for alstom. We are back with that breaking news. Welcome back to the pulse. Ges ceo has made an improved offer for alstom. That is according to french officials. He and french officials met earlier today to discuss the deal. A saxon banke from analyst. Thank you for coming to speak to us. The news is just raking. Ges offer is more precise and strengthened. Offers jobs and decisionmaking in france. How close do you think immelt is to winning over the french government and getting alstom . Good morning. Actually, i believe that immelt made a very good offer. We can expect that, regarding jobs, it is a work in process and we can expect more concessions regarding the offer from General Electric. It was a very swift move on the government to put pressure on the ge offer. Isdo you think that immelt inching closer to attaining control of these units of alstom . Is he winning the battle to win over the french political system or not . I truly believe, i am very confident that ge will win this battle. The only issue right now is that wants somegovernment guarantees regarding jobs on the nuclear independence. Ge will winnt that this battle, but we have some time left and it will take probably a few weeks before we get a negotiation outcome. It was the french government who asked siemens to make this offer for alstom to compete with the bid from General Electric. Does that mean that you think siemens offer will not be credible . The head of siemens has said that they will make that bit before june 16. Bid before june 16. Lets not forget that General Electric shareholders excuse me, alstom board of administration has supported strongly the General Electric bid. Siemens, i believe that this please oust him. Alstom. Siemens is pushed by the french government to make an offer. Is there anything that siemens could do to appease oust him to appease alstom . The only thing that siemens can do is to improve its offer. We understand that siemens might make an offer in cash of 7 billion euro. This is compared with General Electrics bid. Needs is to get a lot of cash. The only thing that siemens can do is to improve on the offer. I do not think there will be a bid from siemens which will board ofstoms oard administration. Is there not a concern that siemens and alstom could raise some regulatory concerns . If you combine the trains and the energy units, arent there going to be concerns for the competition authorities . Exactly. The swap posed by siemens is not good. I think there is some issue regarding the competition in the european union. Lets not forget, there are many bidrlaps if there is a between siemens and alstom. On only thing we can focus and we understand in france is that the french government is pushing siemens to make an offer in order to get a better offer from General Electric. Move from is a sweet the government. Have the results of the european elections over the weekend, where, of course, hollande and his party did so badly, has that changed the dynamics, the political dynamics of this deal or not . It has a Strong Influence on this deal. The government is looking for a broader electorate after the failure of the organic collection. The goal of a government is to get the best offer from General Electric. Adversely, what we are seeing now is the move to make this offer much better. Rex thank you. Thank you. Lets get to todays pulse nu mber. Iphones, ipads and mac users in australia are being held their ransom for as much as 100. The customers have been remotely locked out of their devices. The message appeared on their phones demanding they pay a ransom in order to regain access. The hacker goes by the name of oleg pliss, who seems to have gotten access to a database that contains account information of the apple customers. Who haveing that those reset their passwords are able to regain asked regain access because you cannot add or change a lock on a device that already has one in place. Those without security measures are not so lucky. If you have the security measures in place, it is not as bad as it seems. Just a reminder to put a password on your phone. Change your password. It also raises concerns when you talk about the internet of things, having your whole home connected via a wifi device. You are going to want to put a password. Apple is saying that this is not a breach of their cloud servers. It was discovered by breaches to other sites. It goes back to the old axiom, keep changing your password. It is pretty funny though. Ransom at 2 00 a. M. , when we wake up. I am sorry, my iphone was held ransom. X we are back in two minutes. Welcome back to the pulse, live on bloomberg tv, also on radio and streaming on your tablet, your phone, and bloomberg. Com. Jonathan ferro has your asset check. Into trading, lets check out some of these equity markets for you. Footie 100 does nothing, the cac 40 does nothing, the dax does nothing. It looks boring. The stoxx 600 clinging onto a sixyear high. Data out of europe, not exactly contracting for 24th straight month. Out of germany, that was the big surprise. German unemployment rises for the first time in six months. We were expecting a drop. Look at the unemployment rate. Compare and contrast that to everybody else. You will get a good picture of those divergent economies. Expectations just keep doing this ahead of next week at the ecb meeting. A rate cut looks nailed on. Can they do more . What is the risk of them underdelivering. Some saying they will surprise. Back to you. Thomas ato come bloomberg exclusive. We are live in kiev with ukraines foreign minister as the government unleashes an unprecedented offensive. And the first look inside crimea. We get rare access to the region to see what life is like inside the occupied territory. You can follow me on twitter. Tweet us and tell us what you think of the show, what you would like us to ask the guest, and whether or not you think mark has frown lines. Welcome back to the pulse live from bloombergs European Headquarters in london. Im mark barton. German unemployment has increased for the first time in six months. The number of people out of work rose to 24,000. Economists forecast a decline of 15,000 jobs. German Business Confidence decreased on word that Business Growth is slow. Juncker won the most votes in European Parliament but his call for a more centralized e. Sumbings drawing more distractors. Will push government on against russian forces. They killed dozens of rebels at donetsk. Crimea is starting to feel very russian. Ryan chilcote visited the region to find out about life after annexation. The trouble with crimea starts with getting there. At its narrowest point a twomile body of water separates it from russia. Roads that go to ukraine are all but because closed. The only way to get there is to strait s boat across is until russia builds a bridge that spans the distance. There is no need for a passport. As far as they are concerned, this is a domestic crossing. Ever since russia an exed this area, crimeans have been somewhat stuck. The ukrainians are not allowing men between the ages of 1860 into you crane, even with ukrainian passports. They call us terrorists. Cash machines and credit ards dont work. Even in the cradle of russian ukrainian irst money and hen rubles. Golden arches and much more stand deserted. Tourists also face obstacles. To visit the place where the allies met in 1945, world war i buffs must travel to russia. A couple of months ago you could come here without a visa. Not anymore. There wasnt any unrest while we were in crimea, but russia is clearly concerned there could be. Gathering of the regions uslim minority was banned. Russias newest Tourist Destination is breath taking. Just beneath the surface, there are problems. Ukraine cut the water supply and further inland, they are expecting drought. But most crimeans say, even with all the trouble, it is a price worth paying. Lets head out to kiev now where ryan chill coat has an exclusive interview with the Ukrainian Foreign minister. Thank you very much for joining us. I want to start by asking, you now, what you can do about the annexation . Your government said they will never recognize the annexation. When i was there, it looked complete. Recognized ever the annexation of crime cra. Crimea. E are trying to with russia against the annexation. You said youre going to sue in international court. Where do you stand in that process. Is there any precedent for doing Something Like that . Has a country ever sued over annexation and how much do you think the russians owe you . We can go for different ourts in the case of crimea. And the arbitration business and i think that it is very difficult now to amount of money. Sure. It is a lot of money. It is much more than is that part of it . Do you think this will become a negotiating look. On the development of our relations and talks with ussia. It is very tough to get an agreement on this. Most likely we will with gazprom. But in case of crimea, we think we have to start with the issue of human rights with the European Court on human rights. Where do you stand with investors . I know that the government obviously has banned banks that were operating there. Are you not happy for you cranians to invest in crimea post annexation and what do you think about the likes of shell and other Oil Companies that had deals with your government to explore for oil and gas off the crimean shore that i guess now will have to go to the russians, wont they . If they want to have business in crimea, it is considered part of ukraine. Find out if they want to have business or continue their business if they have their business in crimea. We do not think that it is right decision to go through russia to the crimea. Have any of those Foreign Companies come to you and said what is your view . There were some approaching the ministry of economy. I felt better to talk to them to find out at what state this negotiation is. Tell me about the fighting in the east. Porshenko made it clear his intention is to double down. To ratchet up operations there, where is that going to go . Doesnt that put ukraine on a collision course with moscow which said you have to stop this . Look. What is going on in Eastern Ukraine is very much the result of the support from russia of this growth. And the the recent development as proved that russia is supporting these roups with the ammunition. If russia are focus in the groups, the militant groups, in Eastern Ukraine it would be easier and faster to restore order in this region. Give us an update. Any news on them and their health and where they are . Established a group of experts from Law Enforcement nit. The information that they are in the region and they were kept by the russian they called themselves. So we are now trying to find out how to get in contact with them. You havent actually had any contact with them yet . Not me personally. I dont want to the information at this moment. Continue working on this. Good luck with that. Thank you very much for joining us. That of course the ukraines foreign minister telling us about not just crimea but the very volatile situation in the east of the country. Back to you. A very interesting interview. That was our exclusive with the Ukrainian Foreign minister. Authorities are looking into claims glaxo paid bribes to push sales in china. What exactly has glaxo said . So far it announced there is a formal investigation going on in the United Kingdom into their foreign practices and the way they sell their drugs. This comes just two weeks after Chinese Police handed over results of a 10month investigation into alleged bribery of dock task force and hospitals to use Green Bay Packers owe smith cline drugs. Glaxosmithkline drugs. It comes very soon after it. It is not just china that we should be keeping an eye on. You have lebanon, poland, iraq. A number of other countries also seemingly been afflicted by the wrongdoing as well. Allegations of wrongdoing. Allegations of bribery in the of Green Bay Packers owe Green Bay Packers owe smith cline drugs. Took over the helm in 2008. Now back to 2012. That is when glaxosmithkline held its hands up and said we plead guilty in the United States. A record fine is what they had to swallow. 3 billion related to illegally promoting their prescription drug. They immediately admitted defeat in 2012. Yes, already, the United States sales force no longer have their bonuses linked to their sales numbers. That hasnt been rolled out worldwide yet. Also at the end of last year, they said look, we will have plans to stop payments to doctors for speaking at medical events for attending meetings. That is not going to happen until 2006. Meanwhile the chief executive has to face slump sales in china on the back of these allegations. Sales down 10 in the last quarter. That hit profit by 18 . It is quite phenomenal some of these headlines here. Accusations of expenses, trading in sexual favors in china. Coming up, mark carney wants more wi anchede less me in global finance. Why capitalism must reassess. In recent years, a host of scandals in fixed income Commodity Markets have been exposed. It is not enough to prosecute the guilty to the full extent of the law, although that will be done. Authorities and market participants, it is both, authorities and market participants, must also act to recreate fair and effective markets. In the bank of englands view, this will require changes to the hard and soft infrastructure of markets. Mark carney calling on World Leaders to help build trust in the financial system. He is not the only central banker making headlines this week. Lets bring in the head of Market Research at mitsubishi in tokyo. Good morning. What is priced into the europe . Come off its highs of almost 140 of a month or so ago. Were at 136. What is priced in ahead of next weeks meeting . Pretty much everything. It is fully priced. I think a targeted ltro trying to improve credit flows is also priced. Liquidity injex also. Scrapping the 1 reserve requirement. And some kind of mention of the prospects of queque perhaps at of quantitative easing at some point. To there any left surprise them . Very difficult, i think. Perhaps something on quantitative ease. I dont think were at a point in time where that is going to be there is a regulatory in terms of the a. B. S. Market. The sovereign debt market, it is very difficult as well. We need a bigger external shock to the economy that would force the e. C. B. Into taking that action. Is this as low as the euro goes derek . What are going to be the riving fact ofs . If there is no surprise or very little surprise next week, it makes sense we get a rebound euro dollar. The other problem and the big conundrum that the markets are debating, a pickup of growth after zero growth in q 1 in the United States, but yields have continued to move lower. That is another note of caution suggesting euro dollar can break. Im very cautious around these levels. What do you think it can achieve . Do you think it will do anything for inflation or anything to ease lending . We need to see the details of the ltro. Perhaps that can help in some of the periphery countries with regard to credit in small and medium sized firms. The broader picture, not a lot. The negative deposit rate is nothing about the change in the behavior of banks. Well probably still have the same abt amount of eck sess. A lot of people say it doesnt even work. Were all talking about Forward Guidance. Central banks trying to encourage the market thinking that rate consist remain low. It does strengthen the Forward Guidance argument from the e. C. B. I think it results in a broader reduction in Interest Rates. It is having an impact in terms of expectation when rates perhaps rise. Good question on the yen. It is one of the stronger currencies in may. There is more monetary easing. Many questions surrounding japan. The b. O. J. Is pretty much ully priced out of the market. He is sad he expects the annual coronation to start drifting higher during the year. At that point in time, they will have to come to the table and acknowledge that. It impacts his credibility. On top of that, given the scale of the monetary easing, it doubled the money supply. What can they do further . That is really going to make a change. Like the e. C. B. The b. O. J. Is praying for a u. S. Recovery. Something that lifts the dollar and takes away some of the pressure on the Central Banks to act more aggressively. Thank you. Well see you in two. Thank you. In todays new energy and news study, only 11 of the Worlds Energy is used fshtly. What is being done to address the issue . Joining us is an analyst at energy pro. Thank you so much for joining us. You said were going through a great revolution in Energy Efficiency. What do you mean . Were at the start of a revolution of energy forget si that could be just as important as shale gas. We never hear about it as an energy resource. What is this 11 figure . 11 reflects the fact that of all the primary energies, oil, gas, coal, nuclear, renewables that we use, what we get out that is useful is only 11 . That is pretty pathetic really. What are you trying to do with it . How does that work . Energy efficiency is just now being recognized as a potential and emerging asset class that people with invest in. They can invest in projects and improve efficiency and get good, solid returns from those projects. Up until now that has been difficult. They tend to be very small and are not standardsized projects. Through projects like the Investor Confidence project in the u. S. , which is coming to europe, we can help standards Energy Efficiency projects and make them for investable. What are the tips for businesses . The main thing is energy is a really strategic issue. There are all kinds of security issues, cost issues, price volatility issues. The best thing to do is have somebody at the top broad level take a real interest in energy fficiency. Drive through programs of change and think about energy. What are your thougs about the internet we talked about google buying next. It is one of the key areas where we can make big savings by making equipment smarter. That is a good example of that. We will see you in a second. Well be back with more and for those listening on bloomberg radio, the first word is up next. For our viewers, the second hour of the pulse is up next. Well be talking about michael kors. Face time pays off. Strengthens the bid after meeting the french president in paris. We bring you an exclusive interview with g. E. s foreign minister. Who should take the top job after protest parties surge in elections. Good morning. Good evening to those in asia. Good morning to those just waking up in the United States. This is the pulse live from bloombergs European Headquarters in london. G. E. s improved bid according to a french official. Were getting reports they are promising to create 1,000 jobs in france. Thats right. That is according to a report. That was major concern from the french government. Remember just a few weeks ago when president hollande said that the g. E. Offer was not acceptable and he was demanding more guarantees in terms of jobs. They are bringing the guarantees on the table. The c. E. O. Flew to france to meet with french lawmakers last night. That was the major concern on the jobs front. He said they would not be absorbed by g. E. We come to build. We dont leave when times are tough. I am quite confident that we can compete and win with our frefrpbl businesses. The french government is saying that g. E. Still needs to. Rk on the rail immelt said last night that could be part of the package selling their business. He has his work cut out for him. Siemens also spoke to lawmakers yesterday. What did they have to say . That is right. It was the head of the french unit. They have been pushing for a siemens bid. It is very imparking lot about having the bid come forward. According to where they would get siemens well unit. In exchange for the energy asset. Many analysts we have spoken to this paris said the french government is pushing for a siemens bid in order to get a better offer from g. E. To reassure French Public opinion especially after the socialist party had a historical defeat last sunday in the european elections. Back to you. A lot of it sounds like political bluster. If russia were financing and supporting this the estimate the militant groups in ukraine, it would be easier and faster to restore order in this region. Lets get straight over to ryan in kiev for more. Good morning. Good morning. Ukraines Central Government has vowed to push on with its military operation. The death toll from the fighting yesterday alone stands as 40 and that number includes russian nationals. A couple dozen russian fighters came from russia itself to the east of the country. They identified themselves as chechen volunteers. Our reporter spoke with the leader of the Republican Party of chechnya. You just heard the Ukrainian Foreign minister accusing russia of allowing people to come across the border and also funding them. In the process, they appear to have damaged the arpte to the extent that it airport that it cannot receive any aircraft. This is a big airport. Services an area that includes about 5 million people. That is no small problem. Also the Observer Mission in that part of the country has gone missing. We talked about that with the Ukrainian Foreign minister as well. They have located them through an intermediary. Their wellbeing is still under question. There is a lot of chaos still in the east. The big issue is that russia has told ukraine it will seize that military operation. Clearly the situation has the performance to get worse. Back to you. Thanks, ryan. Speaking to us live from kiev. Youll hear more from the exclusive interview with ukraines foreign minister. Something you wont want to miss. Europes political leaders re clashing over top jobs. Jean claude juncker. Hans, to what extent is this a response the surge of protest parties in this past weekends e. U. Parliamentary election . Well, the strength of the protest parties has a lot of National Leaders concerned about the direction in their own countries and unpopularity of the european union. You know, what was this new election or the new treaty was designed to do was have more direct voting for the e. U. Commission president. To have more relevance. If you take that treaty, that would put Jeanclaude Juncker in the pole position for the top job because his party got 34 of the vote across europe. The highest total. However, he has lukewarm support from Angela Merkel, a member of his own party. David cameron. While not mentioning him by name is also said to be opposed. He is hinting that he is opposed. It is odd think strength or the support to have socialists, the man he bested, mark schultze, who now supports him. Francois hollande now supports juncker. It will be wrapped up quick plism maybe at the end of next month and junk err still has slidification to do. He still needs consolidate his power. This has to happen quickly. Olivia . Where does merkel stand on all of . You said she offered lukewarm support. She is the most powerful politician in europe. Is she really a key maker here . It depends on when you get her. Heading into dinner or out of dinner. Heading into dinner she said he is our candidate, that we support him. Coming out of dinner, she sounded less commital. We have to look at a broader tableau of suitable persons. If you hear Angela Merkel say she is looking at a broader tableau, that is a clear indication that he has more work to do to get this job. Thanks so much, hans. People are usually feeling a bit more friendly or softer after a nice meal. Are you implying something to do with alcohol here . New york city i wasnt. I was just saying no, i wasnt. I was saying one mark barton could be a little bit crabby if he hasnt eaten but after a nice meal, talking with friends. Wine. Who should be the next president of the European Commission. Well put. Glaxosmithkline faces a criminal investigation in the u. K. Authorities looking into claims it paid bribes to push sales of its druggings in china. What exactly has glaxo said . The statement came out at 7 00 p. M. Yesterday in the u. K. There is a criminal investigation going on by the fraud office in the United Kingdom into commercial selling practices of glaxosmithkline, how they sold their drugs. Glaxosmithkline also said they are committed to operating its business in the highest ethical standards. It comes just two weeks after the Chinese Police handed the results of a 10month investigation into sales practices in china. They allege that bribery happened. They allege that dock task force, hospitals were bribed in return for using g. S. K. Drugs. Now there is no explicit word from the s. F. O. That they are analyzing chinese businesses, chinese selling practices but certainly it seems two weeks after that. It is not just china we have to be worried about. What about other countries. Since the investigation in china, other countries such as poland, such as iraq, have also seen allegations that g. S. Skmbings doing wrong. That they are bribing when doing deals. Legal experts have been warning about this for ages. In the u. K. And u. S. , glaxosmithkline and other Drug Companies could be exposed to prosecution for their dealings when abroad when in foreign countries. Cross your mind back to the u. S. Already since 2010 the Justice Department has been investigating this amongst the various Drug Companies. The c. E. O. Vowed to clean up glaxo in 2012, caroline. Is pressure mounting on him if it has got to be, right . He has been at the helm since 2008. He of course held his hands up in 2012 and said we admit guilt. They admitted g20 summit in 2012 to the illegal promotion of prescription drugs. They failed to report safety data. They had to pay a 3 billion fine. A record fine to the u. S. Justice department. So since then, an dry witty has been under pressure to change things up. He put an Incentive Plan in twounl. U. S. Sales force, no longer will your bonus be attached to the amount of sales that you get. But he hasnt really brought that to any other areas of business at glaxosmithkline. He is still working at separating bonus from sales in the rest of the world, equally, they have just at the end of last year said that there are plans to stop payments to doctors going to attend meetings for giving speeches, but not nnl 2006. Why is this 2016. Why is this taking so long. Pressure coming to andrew witty, the c. E. O. Profit down 18 pnth. For glaxosmithkline as a whole. There are worries and investors are going to be voicing it. Still ahead, the fickle word of fashion as brands go in and out of style. Can michael kors stay ahead of the pack . That is coming up next on the pulse. Welcome back to the pulse. This is the pulse live from bloombergs European Headquarters in london. Lets have a look at the euro. Headed for its biggest monthly decline in four months. There is a lovely chart from the start of this year which shows what has happened over the month. The big talk of the town was the e. C. B. Will add to monetary easing next week. And a gauge of the u. S. Dollar poised for its first monthly advance since january. We have a report tomorrow on initial jobless count. Everyone is looking at it ahead of the important e. C. B. Meeting next week. You know what else everyone is looking at . Handbags. Michael kors reports later today in the u. S. Is the brand still in style, our next guest seems to think so. Thank you for joining us this morning. Michael kors clearly on a tear here. The stock went public in twounl. It is up four or 2011. Up four or fivefold. Posted a 60 gain in sales and profits. What is michael kors doing so right . They are in the right place at the right time. A much more affordable price point. It is not just younger girls. 300 to 500 pounds, lets be honest. That is not a teenagers allowance. This is still the working class womans accessible luxury. They have pretty much priced out mainstream consumers in the west. Having said that, michael kors cues a lot younger because there is a lot more fashion in the brand and color and fun in the brand. That tends to feel, having said that even to the working woman, Everyone Wants to dress younger and that is helping. What is his true luxury . It is relevant. Were talking about lots of tiers of luxury here. How broad these days is the term luxury . It is used almost too broadly. The likes of michael kors is not necessarily real luxury brands. The fact is these Companies Sell to consumers who love the idea of being the jet set but are not necessarily the jet set. They can get a piece of that by buying a little bit of michael kors. If you look at the real high end of luxury, the likes of ior or hermes. Not every brand has the equity to carry that off. You have the middle ground like gucci, prada. That is very interesting, though. You would have always thought that prada and gucci were the high end of luxury but because they are pricing their bags between 1,000 and 2,000, the middle. The top is hermes. Consumers themselves, the very rich, 1 want to be exclues i. They like more exclusive brands with more limited editions, things you wouldnt see with someone else. Gucci and prada have to have more innovation. They are seeing a slowdown. We were talking about burberry last week. Their strategy so far has been to raise prices and raise prices. Some brands have the equity in the product to do that. They are bringing in lot under marketting to consumers in a different way. Doing well in europe, isnt it . A couple of years ago, no one had heard of it. What about the holdouts. People in europe who are still a bit skeptical about americas attempts to produce luxury fashions . Is it winning those over . I think there is always going to be the day hard who is think europe means luxury. A lot of americans luxury still and a lot of asians. It is interesting that actually because of the price youre starting to see the poweror social media, there is this buzz behind these younger brands that youre starting to see more and more people adopt the prand and will open to the fact that you can accessorize quite quickly. Some other names in the sector. Kate spade, tori birch. Do you think they have the good to compete . Very much so. It is part of a bigger trend. Luxury brands have raised the price point so much that all of these brands have the room to come in. They have to watch that point. For now, i think, there is a trend where there is a big market and these people are all there is room enough for them all to win. That is part of the image. Youre still selling a dream. You think youre walking next to hermes and are something on the same street. I have to ask you about coach. A lot of people would have said carved out this accessible luxury sector. Now the stock is tanking down 26 year to date. Sales dropped 14 in the holiday season. Very bad news. What went on with coach . Too much logo. When you have a segment like that. It has to be cool, mark. It is that simple. It is exactly that point. Whenever girl has a coach handbag, you dont want one anymore. What was the 36,000 pound handbag you were talking about . That is hermes. Have you seen any of that around london . Preorder, twoyear wait list i would assume. Were talking crocodile, python, ostrich. Are you an ostrich girl . You think i would be here if i could buy a 32,000pound bag . Thanks so much for joining us. Were become in a couple of minute back in a coum minutes. Stay with us. Google is taking its Driverless Cars to the next level. All the driving work will be done using Energy Efficient software and censors. They have a top speed of 25 miles per hour. They hope to release prototypes in the next couple of years. And former u. S. President bill clinton spoke at a conference here in london. He said he is optimistic about a deal between china and the u. S. About greenhouse gases. Im encouraged by the agreement that the president of china made with praub to try to do something about hydroflour rbons, produced almost exclusively by room air conditioners. The people of chind india and other hot places need and deserve air conditioners but they can be produced so they dont emit h. F. C. s and it can make a real difference and create new businesses. Did you listen to his speech . Did. It was a terrific speech. I have to say, the president is known for giving terrifically good speeches. He talked about how to expand capitalism and make it more exclusive. He talked about what the Clinton Foundation has done to bring down the cost of drugs and also in a way where the generic suppliers were still actually making a mark carney said we want more we and less me in global finance. Stay with us. Welcome back to the pulse live from bloombergs European Headquarters in london. Im Olivia Sterns. Im mark barton. European leaders have endorsed Jeanclaude Juncker for the next e. U. President. His calls for a more centralized e. Sumbings drawing detractors at the time. Ukraines government says it will press on with military operations against pro russian rebel fighters after a day of ignificant casualties. Economists have forecast a drop of 15,000 jobs. Business confident decreased on concerns growth is sloge. Nestle is pushing further into health care with its latest acquisition from valiant. Nestle here looking to get into the botox game. Wrinkles. The your not that you have any. Youve been trying to get me to frown all morning. I cant frown. Im sure you wont be plumping your lips any time soon. This is what the maker of kit kat wants to get into. Beauty and health and skin. They are parting with already 1. 4 billion in cash for the rights. As we were talking, it is basically fillers, boosters, revitalizing your skin. It is a trend we have seen with nestle. They have already parted with 3. 6 billion to take full control of a venture they have with loreal. That is the unit they have full control of. Treatment for acne and psoriasis. At the moment, chocolate, coffee, and the likes, they are really dominating. Nestle is the biggest supplier of water as well with their water bottle brands but the margin is also good. Profitability isnt so good. When youre looking at the middle classes, the likes of emerging markets, china, india, looking to get into health care and skin products the, the margins are better, the growth responsible far better. We have growth in the realm of 10 yearonyear with the dermatology unit they have with loreal. It slipped a bit last year. I have done a lot of reporting on this. It is a 2 billion drug. They have about 85 of the filler market. Botox is sort of the scotch tape of toxins. You wouldnt think it is something you would like to be known as. They only have about 10 of the mark. It is a huge growth area for people in the west. People in emerging markets who are trying to look and feel younger. Number 11. Explain what 11 is again . 11 for the frown. The first indication. Try to frown, mark. Crows feet. This is big business. Nestle also on a buying spree here. Three years, they are the most inquisitive food company out there. Globally. They have done 22 deals if youre counting this particular one, 18 billion in excess of is the money they parted with. It just shows they are not afraid to bolt on where they cant grow themselves. They cant organically get into a market, they just start purchasing. One area maybe they need to eep an eye on is valleant. Talking about wanting to buy alergan for botox, 15 million. Number five in the Drugs Industry within two years. Thanks to Caroline Hyde. In 25 minutes, it is account surveillance with tom kean in new york. And who has no wrinkles never frowns. What are we looking at today . Im looking at a need for botox in june. Right here. This has been a problem. The crows feet. There is something about Olivia Sterns and Caroline Hyde complaining about wrinkles that makes me age. Were going to age with another gentleman, ian bremer. Wholl join us for our 7 00 hour. So much to talk another. Not only the european elections, a quiet day in ukraine. Ian bremmer. Ill spend a good amount of me with dr. Bremmer on thailand. Well talk about the coup in thailand. John ma low will join us. Malloy will join us. Looking forward to it. Thanks so much. Be sure to watch surveillance coming up on bloomberg tv. Lets stay with ukraine. Time to give you some rare access inside crimea. It may be recognized as part of ukraine. It is starting to feel very russian. Ryan chilcote. Talking about life after the annexation. The trouble are crimea there. With getting the only way is to take this oat across the strait. These russians are entering ukraine. Sually as far as they are concerned, this is a domestic crossing. Crimeans have been somewhat stuck. A new passport can take weeks. The old ones are not very helpful. The ukrainians are not allowing men between the ages of 18 and 60 into ukraine. Even in the cradle of russian orthodoxy, prices are quoted first in ukrainian money. Russian rubles, smaller. Golden arches and much more stand deserted. Tourists also face obstacles. To visit the place where the allies met in 1945, world war ii buffs must travel to ussia. A couple of months ago you could come here without a visa. Now that is that it is under moscows control, not anymore. There wasnt any unrest while we were in crimea, but russia is clearly concerned there could be. Gathering of the regions uslim minority was banned. Russias newest Tourist Destination is breath taking. Just beneath the surface, there are problems. Ukraine cut the water supply and further inland, they are expecting drought. But most crimeans say, even with all the trouble, it is a rice worth paying. In the last hour, ryan also spoke to ukraines foreign minister in kiev in an exclusive interview. We can go to the the human rights violation, the commerce law. The maritime law. It is a law. Also the arbitration. The business. I think it is very difficult now to amount of money. It is a lot of money. It is much more than is that part of it . Do you think this will become a ing te it all depends on the development of our development and talks with russia. We are still in the process of negotiations. It is very tough to get an agreement on this. St likely, we will start the with gazprom. But in case of crimea, we think we have to start with the issue of human rights with the European Court on human rights. Where do you stand with investors . I know that the government obviously has banned banks that were operating there. Under ukrainian law from operating in crimea. They have all packed up, shuttered and left. Are you not happy for you cranians to invest in crimea post annexation and what do you think about the likes of shell and other Oil Companies that had deals with your government to explore for oil and gas off the crimean shore that i guess now will have to go to the russians, wont they . If they want to have business in crimea, it is considered part of ukraine. Find out if they want to have business or continue their business if they have their business in crimea. We do not think that it is right decision to go through ussia to the crimea. That was ukraines foreign minister speaking exclusively the ryan chilcote. A lot of people assumed they were annexing because they were going to bring a net benefit to russia in interpret s of simply economic, but russia is actually going to pay a lot to buy crimea. How much is it going to cost them . Yeah, well, annexation isnt cheap. The russian government estimated they will drop about 48 billion on crimea before this decade ends. If you think about it, it is a peninsula of about 2 million people, 600,000 of which are pensioners. Those pensioners when yime crimea was part of ukraine, got about 300 per month. As soon as russia annexed it, putin hiked those pensions by 50 and by july, he will double them wen to bring them again to bring them in line with russian pensions. Teachers, dock task force, and the like. The same thing is going to wages, th their doubled or tripled. Then infrastructure. You have the issue of bank deposits. They took the ukrainian depositors, crimean depositors money with them. The russian state is reimbursing those people with a guarantee up to 20,000 per depositor. Annexation is not cheap. Sochi 2. 0. 14 sbl what russia estimates they spent on the sochi games. Then of course you to think about the opportunity costs with the economic isolation of russia itself. They are spending money on crimea, meanwhile they have capital flight and no investment coming in because everybody concerned about the threat of more sanctions. They are struggling with recession at this point. Ryan chilcote live from kiev. Thanks for another great interview with the foreign minister. Coming up, the business of money. Will cash remain king . Well discuss next on the pulse. Welcome back. This is the pulse live on bloomberg television. Shares are rallying today after the worlds biggest Bank Reported results. The company said its operating profit jumped despite a change in currency market. Will cash remain king in a world that is moving toward digital wallets . Very good as to you once again. How soon before were done with money . [laughter] well, on the way here, i did i think ogle search, the first was issued in 1640something. It has been around a while. Pounds and pence and dollars and cents. Consumers still like it. I dont think were seeing it yet. Any suggestion that people are done with cash. But i think this convenience thing, being in control of your money. Being on your mobile phone and seeing your balance at any given timing sending money to family and friends without putting it in the post, cash is here for a long time to stay. The growth in digital banking, there are some incredible statistics. Representing a clear threat to people who make the paper notes. I think having had a quick glance of what they said today, the volumes are still there. There are plenty of bank notes and issue. Banks havent really reached out and touched consumers in the rural part. You have a mobile phone but you never seen a bank before, that is probably the way youre going to interact with finance. What are we capable of not yet doing when it comes to mobile money . Everything in money is about cceptance. You can use them in lots of places. You can go to a raupt. A bar, a shop. You can use them. That is acceptance. Cash is accepted everywhere. Whether it is the shad owey economy or the reel economy. Until a new currency has mass market acceptance, it is never going to take off. Amazing statifpks. 7 billion mobile connections on the planet. Less than half of adults have access to a formal bank account. President clipton was in london yesterday speaking about haiti. Only 15 of haitians have Bank Accounts. 85 have cell phones. They immediately went to mobile banking what does the future of mobile banking look like . We talk about mobile money as three different things. They are part of the same journey. Mobile banking. 2. 2 billion Bank Accounts on the planet. S the pretty hard to imagine all of those wont be accessed by mobile phone at some stage within the next 1020 years. Internet banking is a 60 pep tration. Mobile will catch up with that if not overtake it. The idea that youll pay a bill or send money to friends and family, it is easier to do it than it is to write a check and put it in the post. The final bit is the idea of mobile shopping. The idea that you use your mobile phone to make purchases whether in stores so youll go in some markets and remotely when youre out and about. Is the future direct ransfer . Will it still be through an intermediary like mastercard or visa . Great question. The idea of creating new schemes, visa and mastercard are connected with every bank and retailer. That is hard to replicate. It is interesting you mentioned google. It is a lot of speculation. Who is going to try and intercept and be the custodian of your money. You get your sl ray at the beginning of the month. Do salary at the beginning f the month. Google, amazon, apple is where all the fun stuff happens. Yes, it is monetize the business to make sure that doesnt happen because we work with the banks. Very difficult from a regulatory perspective. We as consumers should be comfortable with someone not a bank looking after huge amounts of our money. How do you stay ahead of the pack, alastair in this marketplace that is changing . Hugely competitive . Look, someone wrote a report a few years ago and described it as inspired dullness. We have to be etch thetic to big banks. Their systems have been around for a long time. It slowly moved forward. It was a translator between the two. Is it viable . Good question late 1990s, we had lots of talks of new currencies. We talked about it a minute ago. Pounds and pence works. If the consumer feels that currency is acceptable every where, they trust it. If you put money somewhere and youre not sure youre going to get it back at the same level. We started asking will the bank note disappear . Will banks disappear . I cant remember the last time i went into bank. Everything you say is by the mobile. Is there less of a need for banks . I think that the physical building, were seeing banks around the world now looking at that Branch Infrastructure saying if customers were on the train on their way to work, they probably only need to speak to a bank manager once a quarter, why do you have so many bricks and mortar real estate businesses . The challenge, though, is you have to continue to service all consumers. Although you dont go into a bank a lot, as a consumer, youll always wan to feel your money is in a safe place. Of this talk, it is the californian thing. This Silicon Valley idea that someone is going to disrupt all the banks. Who needs a bank anymore . When you an issue and people lose all of their money and you cant get access to it them . Consumers are going to start saying good to see you. Thanks for joining us. Well be back with more on the pulse in two. Lets get a check on the currency markets. The euro headed for its biggest monthly decline. The euro against the dollar ince the beginning of the year. As you can see, this month, monetary ll it add to easing . Next week, we spoke with Derek Halpenny earlier. He said most of it is priced in as in the e. C. B. Will cut Interest Rates and move the deposit rate to a negative level. There isnt too much downside for now from here. It is time for todays what were watching. G. E. Has improved its offer for alstom according to a french official after a very unusual appearance by jeff immelt, the c. E. O. Of g. E. It is rare, isnt it . The c. E. O. S speak to the french. What he said was we have come to build. He guaranteed this would create jobs in france and they would keep Nuclear Assets in france. He is pledging 1,000 new jobs in france. That ticks the jobs element of francois hollande. There are some concerns there. Very entertaining to see how that turns out. The dow rinds ever higher and gold slumps and we look at your opportunities in stocks and real estate. Leader get out of the way Microsofts Nadella speaks. The rich ari dish ari the acquiring summer playgrounds. This is bloomberg wednesdayce, this is may 28. Esci is with us today. Adam johnson has our morning brief. She is wearing her rangers blue. You know it. Only because i am from queens. Big rangers fan. You get another game to continue being a fan. German unemployment unexpectedly increased for the first time in six months overnight. Economic data in the u. S. , we get them Weekly Mortgage applications. We are going to get some earnings today michael kors, cracker