Headquarters in london. Lets get back to our top story. 290 eight people have died after a Malaysian Airlines jet was shot down over Eastern Ukraine. The Ukrainian Government lames the attack on prorussian rebels. They deny any responsibility. U. S. Officials say it appears a russianmade missile hit the plane. Ryan chilcote joins us from kiev. Lay out the case for us. Good morning. Good morning. It is threefold. It begins with audio recordings. We spoke with the Ukrainian Foreign minister and he said their intelligence officials intercepted a conversation between a prorussian fighter at the crash scene and a Russian Military intelligence official. This is according to the ukrainians. The fighter on the ground saying that he believes it was a civilian aircraft. The advisor, the Russian Military intelligence official this the allegation from the ukrainians asking him what evidence there is of that. The fighter on the ground says, they did find the backpack of an Indonesian University student. That is playing nonstop here on ukrainian television. It is certainly exhibit a in the Ukrainian Governments case that flight 17 was brought down by those progression insurgents. Onibit b would be a posting a russian social media site by one of the rebel leaders where he claims responsibility. A brags about taking down Ukrainian Military transport plane. Aftere that posting just flight 17 was downed. The allegation is that maybe they made a mistake. The postings were removed. He cant verify the authenticity of the recording or the postings. That would be exhibit d of the argument. Finally, if you look at the history over the last week or two. Ukrainian officials will tell you they have had more and more military aircraft being brought down by the insurgents. Those aircraft, not just helicopters and fighter jets, but transport planes. They are increasingly getting taken down at greater and greater altitudes, suggesting the ukrainian insurgents have gotten their hands on sophisticated surface to air missiles called buc, which would allow them according to ukrainians to take down flight 17, to strike at an altitude of 33,000 feet where it was flying at the time. This did take place in Eastern Ukraine. A fairly violent place. What kind of investigation is underway . What you have right now is a group of about 600 prorussian insurgents guarding that site. They say they are keeping it safe. Normally you would have National Aviation officials onsite or at least perhaps interNational Aviation officials investigating the wreckage. Of course looking for the black box and deciphering what was on the black box. Because this is in the middle of a war zone that is not happening right now. There are talks to get a ceasefire in place whereby the insurgents in that area right now would allow some access to osce officials and ukrainian officials. If that happens it would be more of an International Investigation. Perhaps more objective. We are not there yet. Ryan chilcote on the ground for us in ukraine. This is the second tragedy to hit Malaysia Airlines this year following the disappearance of flight 370 in march. Lets go live to bloomberg tv malaysia in kuala lumpur for more. How is this playing out in malaysia today . It is understandably a somber day for malaysians. Information on the illfated flight. Families are waiting at the Kuala Lumpur International airport for more information as we await more details from the Upcoming Press conference which is going to be hosted by the transport minister. He is the incoming transport minister taking over from the acting transport minister who oversaw the management of the mh370 tragedy. This is a challenge for this new transport minister. There is a lot riding on how he will oversee this part of these tragedy. What about that is what about the business itself . Malaysia airlines has been under pressure. Airlines has had a string of bad luck one could say. It has had a pretty tough year so far. Down more than 30 year to date. It is shouldering about 1 billion in losses over the last four years. This is calling into question plans for a revival for the beleaguered airline. Its major shareholder has said that it intended to release plans to restructure within 12 months. This incident really put such plans into disarray. Malaysia airlines is attempting to be transparent as far as it can and it has rerouted all european flights into and out of europe that it operates. Thank you very much for joining us. Lets move on. Israel has launched a ground offensive in the gaza strip. Soldiers, bulldozers and tanks move in after 10 days of airstrikes failed to stop militants firing rockets at israel and ceasefire efforts collapsed. Elliott gotkine is live in tel aviv. What is the latest . Thatna. The latest is houses of booths are now on the ground in the gaza strip backed by heavy artillery and tanks. The Israeli Defense forces posting footage on youtube of night vision images of these tanks entering the gaza strip right about 10 00 last night. So far there have been reports of about 20 deaths in the gaza strip. Baby are also reports of a being among the casualties. Know fromwe also previous experience ground offenses do lead to higher casualties. There have already been more than 220 palestinian skilled in these last 10, 11 days of fighting. The last time there was a ground offensive, more than 1000 died. Both faced sides both sides ccusations of war crimes. One israeli killed. Theisraeli army saying soldier died while fighting hamas terrorists. Any indication about how long this operation is going to last . The israeli army and the we are waiting for Prime Minister netanyahu to speak. They have been clear that this is an openended operation. First among the objectives is to destroy tunnels that militants have been using to burrow underground from the gaza strip into israel to carry out attacks. What really pushed netanyahu and his government to authorize this Ground Invasion was this incident yesterday morning when 13 militants emerged from a tunnel dug from gaza. They were spotted. One of the militants was killed and the others returned back to the gaza strip. , it is mucheen harder to detect all of these tunnels even with the most Sophisticated Technology. Detect all ofd to these tunnels which the militants have been digging underground from the gaza strip into israel. That is the main objective. Elliott, thank you. Program, former secretary of state Hillary Clinton speaks to charlie rose in an exclusive interview about the downing of the Malaysia Airlines plane and potential implications for the russiaukraine conflict. And as we had to break, youre looking at live pictures from malaysia. A News Conference is set to start shortly on the plane that was taken down in Eastern Ukraine. We will bring that to you later. Welcome back to the pulse. Lets get back to that press conference taking place. The Malaysia Airlines plane was shot down over Eastern Ukraine. The malaysian government is delivering a statement in kuala lumpur. Lets listen in live. Malaysia condemns in the strongest possible terms [indiscernible] the ukraine government will investigate we are having a few problems with the sound. We will see if we can get the sound back. Lets rejoin that press conference. Malaysia will send representatives. Also welcomes International Investigation into and urges parties to cooperate to ensure such an investigation can be completed. Integrity will be preserved out of respect for the investigation. The airlinelines has arranged 40,000 to be flown to amsterdam. Will dispatch a special rescue team. , 15 medical staff [indiscernible] today Malaysia Airlines released whose nationality could not be verified. Funny one 21 of these passengers identities [indiscernible] 24 malaysians, 27 australians, nine from the United Kingdom, filipinos. Ns, three is in theirlines process of notifying the next of kins of those involved. Once all families have been contacted, will be released. The responsibility for releasing further information about the investigation rests with the investigating authority which in this case is the national bureau. The flight path taken by mh17 was approved by the interNational Aviation organization and the country whose airspace they passed through. [no audio] there was no lastminute instruction given to the pilots of mh17 to change the route of the flight. Malaysia airlines released a theement which shows and systems were functioning normally. Before i take your questions, i theike to reiterate support for International Investigation. 298 passengersng and crew. Our thoughts and prayers are with their families in what must be an incredibly difficult time. Thank you. Ladies and gentlemen, the floor is now open for questions. [indiscernible] could you please identify yourself and the agency you represent . [indiscernible] [indiscernible] next question, please. [indiscernible] that is the malaysian transport minister giving us an update on the latest information he has about that malaysian flight that went down in Eastern Ukraine. We are going to take a short break here on the pulse. Back in two minutes. Welcome back to the pulse live on Bloomberg Television and radio. Lets see how the markets are trading this hour. Jonathan ferro has more. Second day of losses for european stocks. Ftse 100 down by 0. 5 . An inch. Wn just geopolitics absolutely dominating market sentiment. It is all about what is happening in russia and ukraine and the middle east as well. Israel he hit the boots hit the ground. They are going in hard. The concern of course is escalation risk. The bottom line is an absolute tragedy. Lets hope that is what it is going to take to get these guys to get together and sort it out and deescalate the situation. Elsewhere, you are looking at bonds come a money going into the german bunds yesterday, record yields almost on those. You see yields a little bit higher today. 1. 16 on the 10 year but that is low. Elsewhere, money coming out of the russian ruble yesterday for a fifth straight day. Dollarruble over 2 . What a move yesterday. In russiahe concern and the ukraine of how this outs out is clearly laying in equity markets and affects as well. Thank you very much, jon ferro with the latest market reaction. We will take a short break here. Lets look at those pictures from kuala lumpur. Malaysias transport minister is giving an update from the malaysian point of view. The government is to investigate. He welcomed any international help. He said there was a need to preserve the crash site. We will be back with more after a short break. Welcome back to the pulse lets get back to malaysias transport minister. Hes giving a News Conference on the jet shot down in Eastern Ukraine. We will not be [inaudible] my question goes to the root. Many airlines were told not to try that route because of safety concerns. I mentioned airlines were going to other destinations. Route for aken this long time. Many, many years. The route was safe. [inaudible] can you confirm if there was a mayday issued from the cockpit of the plane . Was it shot down from the cockpit first . I dont have any information on this. We did not receive any distress signals. [inaudible] hold on, hold on. A different route. After the incident. Now you are still flying that route . No. Question. China central television. Sent a message before the attack. Can you confirm the flight was on the route before the attack . What is the reason . Right route. S the [inaudible] question. How many days do you think you will have access to go to the crash site . [inaudible] preparing to go to the crash site. They will create a safe corridor for us to move through the carsrash site. Right, ladies and gentlemen. Just one final question. All right. One final question. The black box. [inaudible] we are just getting authority under ukrainian authority. So a do you think this is willful act of terrorism or miscalculation on the part of war . All of these speculations, any facts we know now [inaudible] all right. Thank you. That was the transport minister of malaysia giving us the latest details to come out of that press conference. He giving us details of the people who lost their lives. 173 from the netherlands. 20 still unverified. Lets go to kiev. 298 people died on board this aircraft. What else we know on the ground in kiev . Everyone is racing to blame the other side what is happened. It is human tragedy. The east a war in of the country. We have the Ukrainian Government accusing the prorussian rebels of shooting the plane down. They have provided some audio recordings saying the intercepted telephone conversations between a prorussian fighter at the crash scene, on the phone with what was a russiansay military Intelligence Officer that may have been inside russia. First takes responsibility for taking down the plane. N response to a question from his supervisor if there were any weapons found at the scene. He says, no, it looks like it was a civilian aircraft. He points out they found the backpack of an Indonesian University student. The insurgents say they did not take the plane down. Did post leader that he had just taken a plane down, thinking it was the Ukrainian Military transport plane. If you look at the conflict over an last week, we have seen escalation of insurgents taking down Ukrainian Military aircraft. Not just helicopters but fighter jets and military transport planes. It is plausible that that could be what happened, particularly when you consider that what weve seen is that these aircraft that are getting taken greater at ever altitudes, suggesting that perhaps there was some very Sophisticated Technology in the surfacetoair missiles that the ukrainians allege the russians provided to the rebels that the rebels took down flight 17 with. We will speak with euro control about control of airspace. On the groundise that a passenger plane was flying over Eastern Ukraine . Certainly a surprise to me. I guess when you have to think about geographically is that Eastern Ukraine is smack in the middle of the Transit Route between western europe and southeast asia. Prior to the conflict, there were 400 flights per day transiting through that airspace. When the conflict began, that went down to 100 flights per day. Obviously, flight 17 was one of them. What i think is alarming is we did have this escalation of Ukrainian Military aircraft lowertaken down and at altitudes. Flight 17 was flying at 33,000 feet. The restricted airspace ended at 32,000 feet. Why didnt someone say, that is cutting it too fine . We should avoid the area . The transport minister from malaysia was saying that 15 out in theirlines association of asiapacific airlines have been flying this route. Thank you. Lets goet to moscow. Rush is denying responsibility. Putin blamed ukraine for the attack. For more on the russian reaction, henry meyer is in moscow. What is the latest . This morning, the speaker of the Russian Parliament has accused ukraine of criminal byponsibility for the crash saying they should not have allowed the Malaysian Airliner to transit over that airspace. Russias very much on the defensive here. President putin issued a statement in the early hours of the morning after having held what looked like to be an emergency meeting of his cabinet in which he said ukraine bore responsibility because the thedent, the downing on aircraft happened over its territory. It looks as though russia is going to face intense International Pressure over this incident. Of course, that may have severe repercussions in terms of how this conflict involves. Evolves. Talking about pressure, we heard from the australian Prime Minister saying this is going to be a test for russia. We have heard from members of talking aboutmany how russias invitation is at stake. Is that the kind of pressure being felt in moscow . I think the fear in moscow is that they have been facing a lot of pressure from western countries, from the u. S. And european countries, but by and large the broader Public Opinion in the world has not been against russia. That could change. The number of nationalities involved in this crash, this could mean that Public Opinion level turns against russia. That is what they are concerned about. Thank you for joining us. Break, israels Prime Minister benjamin just started giving a statement. We will bring the headlines from that as we get them. We will take a short break on the pulse. We continue to look at the tragic Malaysian Airlines crash. Ukrainian officials alleged that a surfacetoair missile was used in the attack by prorussian separatist. s Senior Defense consultant edward hunt joins us. Thank you for joining us. What is your assessment of what happened . Know the aircraft was above 30,000 feet, it wouldve had to abandon mediumrange system. At least not one of the shoulder launched shortrange devices. Those missiles are in operation with ukrainian and russian forces. There is a possibility, which is not been confirmed, that one of the separatist groups may have managed to get access to one of the systems. If this was to have found to be a russian system, is it the, does one conclude that the russians plied its supplied it . Or are there other ways of getting their hands on this weaponry . This was developed by the soviets. Six to has 628 batt eight batteries. Weapons tend to be acquired at heart by the opposition. It is possible one of the systems was acquired by a separatist group when they overran the military base or other inventory. Ofnormally during times conflict, Defense Forces would be in touch with Civil Aviation to ascertain if there were any Civil Aviation aircraft in the vicinity. Given this was an insurgency, within a country, perhaps that is where communications broke down. Do you have anything to add on how this would normally work . That is a very good point. Normallytems do not operate in isolation. They are normally connected to a wider control network which has access to civil air traffic. That way they can remove targets from their list which are civil aircraft. In this case, for whatever reason, that check was not made. A decision was made to engage this aircraft without verifying whether it was military or civilian. Wedo we know, how will know more about the weapon that was used . How long will it take to ascertain . , the damage we have looks to have been extensive. It likely that this will be easy to identify what caused this jet to go down or will it take a long time . Historically, it normally takes several days or maybe weeks to ascertain exactly what happened. Seeing as the wreckage is accessible on land any expert team would be able to identify a detonation of a missile. There will be residues and pieces of the missile which would indicate the type that was used. That wont necessarily show who fired it. Is it normal practice in times of conflict that Civil Aviation are able to fly above a certain asset altitude that is safe. What is your experience in conflicts in the past . Ofnormally there is a margin safety included, whether it is a horizontal separation keepaway or a vertical separation to remain a certain altitude. An assessment is made about the risk of this happening. A policy is filed. In this case, it turned out that the risk was underestimated. This particular circumstance traveling above a certain altitude did not manage to save the aircraft. Do we know about the flow of weaponry from russia into the hands of separatist . The russians have downplayed their role in Eastern Ukraine. The west alleges they have a key role in supporting the insurgents. Dowe have facts about the flow of weaponry . Think there are that many hard facts. There have been pictures of weapons which look like they could have come from outside ukraine. But the russianukrainian forces use similar pieces;. O f equipment. It is difficult to conclude that a piece of equipment was provided from a certain area. They give for joining us. Edward hunt. Well take a short break on the pulse. Benjamin netanyahu has just started giving a statement. He is speaking at the moment. He was speaking. We will continue to monitor that address that is taking place in israel. The ground operation started in two gaza. Benjamin netanyahu was speaking prior to a cabinet session. Well continue to monitor that press conference in tel aviv. Stay with us. Welcome back to the pulse live on the following is a paid program. Television. Japan is poised to join the worlds nuclear club. Two plants may Begin Operating as soon as october. Even with Nuclear Capacity restored, there are Environmental Concerns that the nation will remain too reliant on coal, oil, and natural gas. Backed by amaker russian billionaire has agreed to install its units for a south korean power plant owner. The deal may be worth 15 million. Energy will install the initial fuel cell at the south korean plant. 1. 25 millionive a contract. Involve an option for a second system. China is three years behind on a project that would make it the worlds biggest market for offshore wind. Plan in 2011 toout a build 500,000 offshore wind in four years. Officials have said that they will not be able to meet their initial goal. 10 of thean turbines are in place. Welcome back to the pulse. Hillary clinton weighed in on the incident in an interview,the Malaysian Air crash. The former secretary of state says that if there is evidence linking russia to the crash, europe should do more to support ukrainians. The first question is what does europe do . The United States has been very clear in both its criticism of russia and putin and support for the new ukrainians government. There has just been a new round of sanctions that president obama himself has announced. As you know, the europeans have tried to figure out the best way forward. I was recently in europe. A a lot of questions about whether or not russia was really the aggressor. Whether putin was really dangerous. How and that the evaluated . From my perspective and i have the benefit of not being in the government. If there is evidence linking russia to this, that should inspire the europeans to do much more on three counts. One, tough in their own sanctions. Make it clear there has to be a price to pay. Two, immediately accelerate effort an announced they are doing sod to find alternatives to gazpromm. Russia has not diversified its economy. It is largely dependent upon gas and oil. Thirdly, do more in concert with us to support the ukrainians. There has to be more help on their borders in order to prevent this pourous border allowing russians to go back and forth. To help their military obtain better equipment, better training. The Ukrainian Military has been much more focused and more successful. But nobody cares themselves. Weighing in on behalf of the insurgents, there is a lot more that needs to be done. On notice that he has gone too far and we are not going to stand idly by. Europeans have to be the one to take the lead. It was a flight from amsterdam to kuala lumpur. There should be outrage in european capitals. Hillary clinton there. For those listening on radio, the first word is up. The second hour of the pulse here. We will listen in malaysia and kiev and moscow and all around the world where we are starting to get reaction to the events that took place yesterday. And we will focus in on business. We will ask the ceo of electrolux and ericsson how tensions in the ukraine are affecting their businesses. Stay with us on the pulse. Ukraine accuses prorussian rebels of shooting down a Malaysia Airlines jet. Ground invasion gets underway as soldiers and tanks move into the gaza strip. Israels Prime Minister says men in the world hold hamas to blame for the violence. In company news, arrogance icssons er share surge. Warm welcome to the program, everybody. Welcome to those just waking up in the United States. Im and edwards. Time in london is 10 00. 298 people died after a Malaysia Airlines jet was shot down over Eastern Ukraine. The Ukrainian Government blames the attack on prorussian rebels but they deny responsibility. U. S. Officials say it appear that a russianmade missile hit the plane. Ryan chilcote joins us from kiev. What is going on at the crash scene right now . Well, the crash site itself is guarded by several hundred insurgents. This happened in Eastern Ukraine. The Central Government of ukraine does not have control of the territory. This is a part of that space that is controlled by insurgents. They have been going through the wreckage. There are reports that they found the black box. Their reports that they may send the black box to moscow so that the data can be mined. This is not your usual cresting. Normally you would have National Aviation officials or interNational Aviation officials going through the wreckage and looking through it and looking at the black box. In this case because this is happening in a war zone, that is not what is taking place. Now, there are talks set to begin right now as we speak the contactnsgst group, russia, ukraine, and the prorussian separatists. They are supposed to be discussing a ceasefire that could last between to two for our days, that would get officials give officials access to the site so there could be a more full and more objective investigation. But they have not agreed on that yet. Thank you. Ryan chilcote in kiev. One. Of thes on ongoing stories we have been covering we are getting news this morning that abbvie is going to buy shire for 52. 48 pounds in cash and shares. Shire considers the terms to be fair. The deal is adding to adjusted eps of 1. 00 per share by 2020. They are giving as many details in terms of the tax outlook, meaning that they will cut the tax rate to 13 . We will assess this and get reaction for you shortly. Lets get back to our big focus, the malaysian plane that was shot down in Eastern Ukraine. Joining us is brian flynn. Thanks for joining us. Tell us how many aircraft have been flying across this route. And how Many Airlines have decided not to take this route since the violence has erupted. Ok. Good morning the number of flights that would be going to the eastern part of the ukraine airspace would be something approaching 300. However, there are only a proximally 100 or so flights the main overflights between europe and south asia. You have ukrainian domestic traffic and out of the Russian Federation going north to south. That is in the entire airspace. The part of the airspace that is close, we are talking about half of that. Were in the process of quantifying those flights. They are already taking rero utings. It forn, how normal is aircraft to fly over conflict zones . This is not one nation against another but i know in times of conflict, typically aircraft, civil aircraft can be diverted. Is it normal to fly over this even ifconflict zone, it is at a higher altitude . Of course it is not a normal situation. We, unfortunately we have had some previously, if we go back to the conflict that occurred more than 15 years ago in yugoslavia. Yes, there were times when the airspace was closed. They were later times when the airspace was closed at a certain altitude. A matter of judgment by the state with the Sovereign Authority for the provision of air Traffic Services in the airspace concerned. Our job in euro control is to implement those decisions. Nation with in all of the authorities to to close cooperation with all of the authorities. Whos final say . Madee route as such are available by the Sovereign Authority to the air Traffic Control authority. Is part of routes the sovereign airspace of the country. It is the countries is possibility to make those routes available. Our job is to implement those decisions and ensure those decisions are complied with. Thank you. Im sorry. Thank you very much for joining us. We appreciate your contribution. Brian flynn from euro control. Lisicki closer look at how lets take a closer look at how geopolitics may have an impact on business plans. The ceo from electrolux joins us on the phone. Lets kick off with the numbers he reported today. Your latin american business. There is a lot of visibility. Spell out how that part of the business is performing. America, as you know with the Macro Economic decline, in brazil and argentina, we have seen in the first half and including in the Second Quarter fairly significant volume decline. Good job of done a setting a lot of that with price action and mix action and cost action. But the market has declined year over year. We talk about low visibility. Going forward, it is hard to arity,t with a lot of cl given the elections in brazil, what that looks like. We think you will be negative in the second half. Albeit not at the same rate as q2. Mergers and i positions are big theme at the moment. And acquisitions are the big theme at the moment. Is not our m a strategy. Our strategy is profitable growth. M a is a tool in the toolkit. The primary strategy is profitable growth and key product areas and countries and geographies. It is not our lead strategy. It is growth. We use that when we see an opportunity that make sense. Ge appliances be such an opportunity . We do not exclude any particular geography. We are focused on where does it make sense for us relative to bring in more value to our customers . More efficiently. If and when there is an opportunity on the them and they said that fits that we take a look at it. Whenu join us on a day many are trying to work out how geopolitical tensions might intensify. We have been living with a tense environment for a few months. Are you noticing any impact on your business in Eastern Europe . Is is having impact on the ground in terms of the products that consumers are confident enough to buy . Given that we operated over 100 countries around the world, we feel and we are impacted by geopolitical turmoil. So whether that is in Eastern Europe or in the middle east or venezuela or thailand. We are in all those countries. We have got people on the ground and our businesses impacted. I would say, yes we are impacted by when there is turmoil, particularly in war like conditions. Is our business in the ukraine impacted . Yes. Ukraine is not a big enough market to move the company, but it does get impacted when you have this kind of turmoil. Of course, if they can do for her to defer purchases, when things are uncertain, it happens, yes. When we spoke to a month ago, you were talking about how you thought the eurozone was out of recession. When you see things heading from here where do you see things heading from here . Seeingr if you are anything in the numbers that would give us clues. So, of course, very hard to predict the future. But in terms of the numbers, the demand for appliances in europe both western europe and Eastern Europe were again positive in the quarter. Up 1 respectively for both regions. So we have maintained what our guidance, our forecast that the well be up 1 to 3 for the full year. Thank you for joining us. The ceo of a lecture looks. Now electrolux. Youre looking at live pictures of german chancellor Angela Merkel. Shes speaking about the malaysian jetliner. She is calling for an independent inquiry. Thes urging purtitin to end conflict in ukraine. Lets get back to breaking news on abbvie. Carolinas here with the latest. The deal seems to be done. 32 billion pounds worth of the takeover deal. 48, that is what the shareholders of shire, a drug company. Rare diseases is what they focus on. They will get 52. 48 Pounds Per Share in cash and stocks. If you are a shire shareholder, you will own 25 of an entire company with 137 billion of sales. This is going to be a huge drugs company. The whole reason this is so advantageous to abbvie is that they will be able to have a 13 Corporate Tax rate. That is being sliced, reducing this. They will move their legal address to the United Kingdom rather than the United States. Their management are not moving. Most of the company will be run out of america. They are run out of north chicago. But it will be domiciled in the u. K. For shire are in basingstoke. The fact that they wilderness against what seems to be a push coming from jack lew. Hes desperately trying to undo the attraction of moving your headquarters abroad. Been talking about that because some people have been wondering how long it will take the u. S. To close this loophole that is making the tax evasion looking so attractive to u. S. Companies. Some of said that Congress Needs to do something. Others say that there needs to be a bigger overhaul of tax legislation. You end up with this not moving anywhere. It is interesting. Of course, we had jack le lew come out saying i want to propose a law that makes it far less attractive to move your tax rate to the u. K. To escape u. S. Tax rates. Ill back date it to may. That is when the astrazenecapfizer deal broke. Companies want to move out of the United States because their Corporate Tax rate is in excess of 30 . If you move to the u. K. , you can cut it to 13 . Astrazenecas deal unraveled. This is one of those deals that manages to harness that. That is not seem to be a brake clause. Yinghe moment, abbvie is sa a breakup fee would be cap that 500 million. They are banking on the republicans will not allow jack lew to update the loss in less they push through a wider tax overhaul. It is a clear case of a company trying to moving out of the u. S. , cutting the tax rate, and seemingly the board are willing to recommend the deal. It is fair and reasonable and 32 billion is where it should be. Today is the deadline by 5 00 p. M. Lets head to berlin chancellor merkel is speaking there. Ysns, she says russia, she sa there is much evidence that the plane was shot down. She is calling for an independent inquiry into this plane and the ceasefire. She is stressing the need for a diplomatic solution. Here is what Angela Merkel is trying to do. Shes trying to boxed in putin. She is saying yes, diplomacy is the only way out. She is careful to say that russia bears some responsibility for the conflict. She is clear, talking about this idea, there is so much evidence that it was shot down. Day unfolds in europe and the states, it will be increasingly difficult to deny the fact as folks like Angela Merkel are saying that this plane was felled by a missile. Then the question becomes, where is the missile shot from . All evidence suggested came from the ground on areas controlled by the rebels. There needs to be a ceasefire and independent investigation. Vladimir putin is going to have a very challenge to permit a day. Merkel is weighing in on this. We will see what she says. More this press conference is ongoing. Indeed. Stay with us because it occurs to me that this puts germany in a very difficult political situation. On the one hand, there are tensions with russian over what has been happening here and on the other hand, the comments Angela Merkel is referring to the spine between the u. S. And germany. Germanys u. S. Is most important ally despite the spying. That is very much on the agenda in germany. The spying issue is here. Merkel has been careful to put a firewall around it. Clear that that will not affect either u. S. Cooperation on trade talks, which is a big issue, or security in general. It is worth noting that both Angela Merkel and germany in general along with the u. K. And David Cameron are further out than their european colleagues on stricter, more shaharsher sanctions. Were on stage 2. The idea of going to level three. Merkel is the tip of the spear on that. Yes, there is massive differentness and and awkwardness between the u. S. And germany, at least these are the ukraine may appear to be on the same page. Visavis ukraine, they appear to be on the same page. Benjamin netanyahu has been speaking. When we come back, were live with more from tel aviv. In todays new energy, teslas electric sedan is among the cars being considered to carry european leaders. Australia has scrapped its market approach to fighting climate change. The government has won approval to discard the levy which require 300 companies to pay for their Carbon Dioxide emissions. Tester is now the largest polluter per capita among industrial nations. Now the largest polluter per capita among industrial nations. The investment is aimed at accelerating growth of nonfood stock crops which can be used to produce biomass. Lets turn to one of our top stories today, the crisis in the middle east. Israel has launched a ground offensive in the gaza strips. Tanks moved into the coastal after 10 days of failed to stop missiles fired at israel. Elliott gotkine is live and television. Benjamin netanyahu has been talking about this. What has he been saying . Surprises to what he has been saying. He has been saying that the army has been told to prepare for a significant expansion of this ground offensive that began at 10 00 p. M. Local time last night. Restoremate aim is to peace to israel and stop the rockets being fired towards israeli communities. He also says that many in the alone, to hamas to be blame for the current situation. Hamas rejected the ceasefire proposal by egypt. Israel had accepted it. There is no love lost between hamas, an offshoot of the muslim brotherhood. In egypt. So Benjamin Netanyahu has been saying, and defense minister saying that hamas will pay a heavy price. Hamas has said that the israelis will pay a heavy price for the ground offensive. Indication as to how long this ground operation is going to last . Some reports in the media suggesting that maybe oene or two weeks. This is an openended operation. It ends when the operation has been completed. It will become tweeted when the rockets have stopped being fired towards israel it will be completed when the rockets have stopped being fired towards israel. Used titles to dig underground from gaza to infiltrate into israel to carry out attacks. This was shown yesterday morning when 13 militants emerged from a tunnel in israel and were spotted by the Israeli Armed forces. At least one of them was killed. And the others escaped back into gaza. Weve seen the rocket fire onto israel has not been affected from hamass perspective because the iron dome has been taking out all of the ones that would cause major damage. It is much harder for israel to deal from the air with these subterranean tunnels. That is a personal reason why we have thousands of israeli boots on the ground in gaza. A big concern that we could see many more civilian casualties. The total casualty count is around 260 in gaza. A fair number of those innocent women and children and the elderly. Thank you. Coming up, pressure on putin. N jetill the malaysia crashed change the way nations regard russia . Welcome back to the pulse. The government in kiev blames the crash on prorussian rebels. Separatists are denying the accusation. We spoke to the Ukraine Foreign minister. We intercepted a number of calls between the terrorists who were talking about having shot down the plane. Thewe been translating phone calls in english and other languages. And we will put it on the internet and news channels to provide a clear proof who shot down the plane. In israel, Benjamin Netanyahu says forces have started a ground operation in the gaza strip. Military advanced into the palestinian enclave last night. Israel is ramping up its military campaign to stop airstrikes. Speaking last hour, netanyahu says that the army is preparing for significant expansion. Lets get more on the, that story. Charlie rose spoke to Hillary Clinton about israels ground operation in gaza. There has been a report that israel has announced an invasion of gaza. Well, i negotiated the last ceasefire in november. This was fair, november, 2012. Rockets were raining down on israel. We had an internal debate that i the book about whether or not the United States should get so actively involved in trying to prevent what if that point was the calling up reserves for a potential invasion of gaza. I thought we should. Made that case to the president. I flew from cambodia to israel. I met with the Prime Minister netanyahu, the internal security cap that. Made the case. They were receptive to the case. That we wanted to head off an invasion. They were within 48 hours of invading. And we have a set of parts. That the israelis a set of principles that the israelis wanted hamas to agree to. It was the first test for morsi. He had a relationship with mahamas. General assissi does not. Had never done anything like this before. It was New Territory for him. He had to persuade hamas leaders who he did not know so well. A muslimught he is brotherhood president , theyre closely connected. We set a time for the ceasefire. In this case, there are big differences. Obviously, the leadership of egypt has changed. Of weapons andg more effective missiles and now even drones has changed. And the iron dome. Was effectiveme the last time but it is proven to be more so because the numbers of missiles have increased. I think israels assessment is that with the stockpiles of weapons that are now in gaza, that it would be difficult to get a reliable ceasefire. Egypt did announce a ceasefire. Israel said yes. Hamas said no. That is where the space is not being filled. Do you support the israelis . Easy question. It is not an easy question because i would prefer not. That is why i flew from cambodia to prevent an invasion last time. Not on the inside. There have been a lot of phone calls and outreach. And working with arabs and others to try to influence hamas. And to try to get them to stand down. Hamas they feel like they are totally corner. They have got egypt under assisi on one side. Theyve got israel not willing to, and i do not blame them at all, for suffering missiles. Hamas may feel like they have nothing to lose. Hillary clinton there. In 25 minutes, it is surveillance. Tom keene will join us from new york. He is here for a preview. Geopolitical tensions certainly dominating things today no question. Were focused on these two stories. We will lead with the Malaysian Air crash in ukraine. We have a set of guests that will inform the audience on where we are now and where the investigation is going. Then of course we will go on to israel and gaza. As you just are the comments from secretary clinton. We have any number of guests this hours. Former ambassador from singapore. We hope to speak to him in the 7 00 hour, particularly on the reaction in his neighboring malaysia. Very much part of the history of singapore. Core oftalk with anders core consulting about the geopolitics of ukraine. And Ryan Chilcote in kiev. And our own reporter will join us. There is business news. We will look at a very successful Earnings Report for ibm and google among others. Yes, indeed. Thank you very much. Tom keene in new york. Lets take a look at how the markets are trading. This is how those tensions are playing out in the fx markets. Yesterday moved higher. Dollar against the rubble up by 2 . The biggest move since. March back to march of this year to see those kinds of moves when russia went into crimea. Not seeing a big pronouncement yesterday. The ruble coming back a little bit. The move is not so pronounced. The dax is down by 3 4 of 1 . The ftse down by. 64 . The big mover. Abouthope it is not just escalating risk. We hope these guys get to the table and deescalate. This is a good reason to do that, the tragedy. The big move is shire, up by 2. 58 . The deal is done. Abbvie to buy shire. How much does it cost to bring your tax rate down . And domicile your company in the u. K. Today was the deadline. They have got the deal done. Jonathan ferro with the latest market moves. Lets turn back to our top story. Ukrainian governments and prorussian rebels are trading accusations over the Malaysian Airlines jet that was shot down. The jet crash follows the imposition of new sanctions against russia that targeted Major Energy Companies and banks. That have an earlier this week. Joining us is a consultant. Earlier this week we were talking about wrapping up sanctions from the u. S. And a little bit from the eu. Do you think that this results in more sanctions . Eu Foreign Ministers are going to be discussing the downplaying on tuesday. Eventually, our were going to end up with further sanctions . O we are not expecting me eu t announce which corporate targets they will target over the crisis in ukraine. That is something that has been announced that it will be done. The companies have not been decided yet. And the council gave itself until the end of the month. We cannot expect these names kobe announced earlier. And there will probably be more of them. A bit more high profile done before. You talk about the timetable that was set out in terms of escalating sanctions. You have to overlay that with the timetable now around investigating the plane crash. Or do you . Do World Leaders reach their own conclusions about whatever influence putin had and carry on regardless . Because any investigation at the crash site could take a long time. You wonder how long it will take to get answers. An investigation of an aircraft could take a year. In the meantime, it is pretty much clear that now most of the world lays the blame with the separatist. And this is how the policy decisions will be constructed, asthe basis of what happened opposed to what exactly will be the results of the investigation. Tell me how europe really form some kind of consensus around this . We have seen tensions within the eu. Those countries that rely on de capacity tra because they import gas or export. Those countries are hesitant to apply sanctions. Other countries have one more keen. Have been more keen. You add on top of that the onssure applied governments that have lost people in this plane crash. There will be tw conflicting influenceso. There will be a call to resolve the situation. There will be a problem because there will be an equally strong pressure on poroshenko in ukraine to expand the military operations. And there will be public pressure on the governments that lost citizens. The public will demand some sort of action, some sort of resolution, some sort of reaction to what is have it. Has happened. We will see a lot of noise over the next couple days between these two conflicting influences. Eventually, it is likely we will go back to the consideration before this happened. To you think the west will be pushing. The west is pushing for more talks on this. Surely that will be the pressure the west will apply, not the pressure on portion ago and the Ukrainian Government to increase military tensions. Be too simplistic to assume that the best o west exercisesthe one sort of pressure. That is why we still do not have any really whiting sanctions from the eu. There is more likelihood for more whiting sanctions now b iting sanctions. What kind of investigation do you think is likely to be possible on the ground . The level of violence, the separatists have talked about a ceasefire. Theyre willing to have a ceasefire over coming days to allow investigators to carry out their work. Is it likely that conflict an opportunity is given to investigators agreed to a ceasefire will be difficult. If that ceasefire will hold is a completely separate problem. The previous ceasefire was ignored. Also, that particular area is controlled by the radical groups on the part of the separatist. We understand that it is the more radical groups in charge of this territory. Some of the evidence has been removed, including one of the black boxes. Investigation, whether it starts right now or perhaps it should have already been started, or whether it starts in five days time when some sort of ceasefire is agreed, those would be quite different matters. Thank you so much for joining us. Lets turn our attention to other company stories. Saric sen has beaten estimates with its numbers. Its shares are searching air accident has beaten estimates with its numbers. Has beaten estimates with its numbers. Lets talk about the numbers. It is clear that some of your china and thein middle east and india, it is very much the emergingmarket story. Had good growth in these markets, but we can always clearly see that the seasonality, growth in the first and Second Quarter very much dependent on our north american operation. That came to flat sales yearoveryear. We saw gradual improvement on our profitability which was an improvement from last year and even from the First Quarter. We are on the track of transforming the company. But if the same time improving profitability. It was a quarter in o expectation as managementur. What are you doing about the sales . You say they are flat and north america. What you doing about the sales that did not perform up to expectations . What do you see for the rest of the year . Ou talk about north america. We were very clear in the Second Quarter last year that we would have lower activity level and north america. America is very important. Our position is strong in the north american market. This quarter is coming back from the First Quarter with much more capacity on the networks. At the same time you can see that we have africa that is still down. When it comes to investment. Say that the broadband mobile internet is very high and the predictions for the next five years for subscribers will be added. It is more about the cycle of investment in africa. Are tw that is different areaso. The middle east is very good. Indeed a very good as well. We see a mix of the 180 countries we are into. Some are performing better. There are the cycles of investments that are different. You say there is a mix of products you are selling that helped you, that added to the numbers. Tell us more about where that goes. Do you continue to see the low Margin Expansion deals are not in the driving seat. And it is a highermargin capacity contracts that are driving you through . I think that what we see right now and what we saw in the First Quarter the larger projects which we have a good visibility on. In the second in half of this year, gradually coming in. Sales but morere growth and capacity, on projects coming in. Which means we will have some pressure on the margin but on the other hand, capacity is harder to predict because that depends on what type of new pho nes are coming out and how big is mobile and broadband. We are in 180 countries. Where all around the world. Capacity is harder to predict. Coverage will come into the base in the second half of 2014 where we have new networks in china and in other markets of the world. Let me ask you about your business is in Eastern Europe and russia because clearly the geopolitical tension has been building for a while. Do you have any sense as to how impacted already are businesses have been in those parts of the world and where it might go from here if this geopolitically tense environment is maintained . Of course. We are following this very closely. And listening. Of course, it is a very political situation in ukraine and russia. If i look from a business point of view, ukraine has a little bit of a tougher situation in the First Quarter. People had to work from home. Close. Staying very in russia, we are rolling up we are very close to them. We came to russia. We are close to this market. We try to understand what the impact can be. So far very little Financial Impact for ericsson. Thank you very much for joining us. Cssons ceo. Eri we will take a short break. Lets get some companies. Volvo shares are down five percent. Secondquarter earnings missed analyst estimates. Quattro sales declined. Rtin fell. Remi ma shire has agreed to buy is the. Latest deal for u. S. Company to shift its Tax Residency abroad. 10 51 in london. We will have more on the abbvie deal when we come back. Welcome back. It is a time for a look at what were watching for the rest of the day. We are joined by Caroline Hyde gotkine. Tt youre watching the Israel Ground offensive into gaza. Very much so. The ground offensive began around 10 00 p. M. Local time last night. D accordinge widene to Benjamin Netanyahu speaking a short while ago. There are thousands of israeli boots on the ground backed by tanks, heavy artillery warships and fighter planes. So far the israelis say they have killed more than a dozen militants. One israeli soldier has been killed. In total, more than 260 palestinian deaths. As the ground operation continues, the casualty figures will inevitably rise. Thank you. The other big geopolitical story we are watching centered around the malaysia aircraft, malaysia aircraft brought down in ukraine killing 298 people. Allegation as to who is at fault have been traded on both sides. Ukrainian government says they would like help from the beoing. Ns, the dutch, they are inviting International Airspace controllers, they would like help from all sides to try and investigate what was happening. The transport ministerin malaysia gave the nationalities of all those people on board, except for the 20 who they have not yet verified their nationality. We are keeping our corporate stores. And the m a frenzy that started some months ago. Andnd it looks like abbvie shire have got a deal. Yes, they have agreed on a 32 billion pound price tag. 3 vie shareholders will own of the company4. Shir will have a stake in the companye with 137 billion in sales. A u. S. Companies shifting its tax addressed to the u. K. . Ving a task from 32 to 13 surveillance is up with tom keene and the team. You can follow me on twitter. Have a good weekend. This is bloomberg surveillance. States assess a service to air missile killed 298 over Eastern Ukraine. Blames russia. Vladimir putin places responsibility upon ukraine. There is a continued search for mh 17s black boxes. Bombards the south. Hamas says israel will pay the price expensively. Good morning, everyone. This is bloomberg surveillance. Were live from our World Headquarters in new york. It is friday, july 18. Im tom keene. Joining me scarlet fu and adam johnson. Theseith the latest on two Major International stories is scarlet fu. Latest on the two big stories of the day first, we want to get to the Malaysian Airliner. Russia and ukraine each blaming each other for the disaster. Ukraines state Security Service says that intercepted phone conversations