Cracks and im francine lacqua. More than a Million People took to the streets of paris to show solidarity in the face of terrorism after three days of violence that killed 17 people. They marched in the rally which drew the largest crowd in french history. Caroline connan was at the march. She joins us now from paris. Caroline. This sunday will probably go down in french history as the biggest gathering in france, and in paris for the past 40 or 50 years. More than one Million People in paris, 3. 7 Million People across the country, and some very emotional and peaceful moments in the french capital. You had the families of the victims of Charlie Hebdo, of the supermarket, and the policewoman who was killed. There have been 17 People Killed in the last week in paris. They were followed by more than 50 heads of state, with some very unlikely duos such as Benjamin Netanyahu and Mahmoud Abbas next to president hollande, Angela Merkel, matteo renzi, David Cameron, and many others. There was some very emotional moments for example when president hollande hugged this Charlie Hebdo survivor. You also had a moment when someone in the crowd decided to hug a policeman. Many people in the crowd were wearing signs, we are charlie, we are all muslims, all protesting together. Many brought their children, their families. Some parents were saying that it was a duty for them to show their children that they were not afraid. President hollande said paris was the capital of the world yesterday. Caroline, what is next for france . We know that Francois Hollande is meeting with his main security chiefs and they are still looking for the accomplices of this attack. Thats right. For now, they are analyzing video of Amedy Coulibaly that is being checked for authenticity. He pledges allegiance to the Islamic State in front of an isis flag. That will be part of the investigation. You have a question of the whereabouts of the girlfriend of coulibaly. She is believed to have crossed the turkishsyrian border. There is a Cabinet Meeting in paris to talk about security. There will be questions about intelligence sharing, because as you know coulibaly and one of the brothers met in jail. Also, the role of social networks, twitter, facebook, all these questions that will have to be taken into account and analyzed in the next few days in france. Caroline cannot in paris thank you very much indeed. We will bring you the comments as we get them over the next few minutes. This is who is speaking at the moment. France is going to deploy 10,000 large Security Force tomorrow. That is one of the headlines. Just wrapping up comments to the press. A few more of those will come. Lets turn our attention to germany. The government has expressed concern that the events in paris may give momentum to the antiislam must movement. Lets go to hans nichols in berlin for the latest. How have germans reacted to the events in paris . There have been some rallies, protolerance rallies on saturday. There were 35 people that came out. The big concern is that what happened in paris is going to give fuel to this movement. This is a group that claims it is antiislamist. Many critics suggest it has many neonazi elements. What merkels government has done is proposed tougher antiterrorism measures. They want to make financing more difficult and increase penalties for german citizens or residents who go to potential Training Camps in the middle east and come back. That is the official response. Merkel is back in berlin. She was in paris and she met with ukrainian president poroshenko as well as Francois Hollande about the next steps for ukraine. In berlin, Foreign Ministers are meeting just outside of town. They want to see if they can have any progress going forward. What merkel has said is if they make progress, she may attend this summit and kazakhstan which poroshenko wants to bring together as some sort of normandy style conference on ukraine. Still looks like there is quite a bit of difference. Merkel spoke to putin on saturday night and urged him to try to influence the separatists in eastern ukraine. Thank you very much indeed hans nichols joining us from berlin. Lets continue the conversation and examine the political implications for europe. Some lawmakers calling for tighter security measures and border checks in the wake of the terror attacks. What will this mean for passportfree travel . The spanish and Marine Le Pen in paris have been talking about this over the last 24 hours. Lets talk about what happens next. The Senior Advisor to the Transatlantic Council on migration joins us now. Is schengen at risk elizabeth . I dont think the fundamental attendance tenants of schengen are at risk. The question is, how do you improve security in a context where people can move freely within europe . That is a question of both intelligence and trying to think through the ramifications of border measures. What weve seen our various different statements. Some people would like to see strengthening of external border checks. Some would like to see an occasional based on intelligence in border check. Some have suggested it is immediately necessary. It is unclear for what length of time that would be. What are we going to end up with . As you were mentioning, there are different parties and Different Countries calling for different things. There is the whole debate on europe as a whole. This puts in question the very nature of schengen. What are we going to get . A statement put out yesterday following a meeting of interior ministers in paris hinted towards the idea that external border checks would make stronger checks on eu citizens and those who have the right to free mobility but dont have schengen visas. Currently, what happens is nationals, noneu citizens, can have schengen visas and are subject to the strongest checks. The hint in the statement was that this might be extended to eu citizens. The question is, how do you do that in a functional and practical way . That could cause huge queues at airports. The question is what databases do you check those against . Do we have the intelligence to understand who might be a danger and who might not . The third aspect is, do you do this on a selective basis . Do you choose particular countries of origin, particular nationalities to target . That is problematic from the point of view of ethnic profiling. On the internal border controls the question is, how do you do that in a nonsystematic way . It has to be nonsystematic otherwise we are introducing internal borders. How do you do that in a costeffective way . To reinstate main border checks along internal borders would be an extremely costly thing in terms of Human Resources and infrastructure. Some countries may decide that they will take the shortterm option andriy institute this major border crossing. Do you think we will end up with a more fragmented picture . You might see in the future Member States teeing more willing to do immediate and temporary suspension of i nternal border control. Norway had a terrorist threat that they considered credible and they close their borders for a short time. I think we will see more occasional use of that provision within the schengen code. That provision already exists. Then maybe some discussion of extending those provisions and how you may change legislation to allow that to be done on a more ad hoc basis. I think the fundamental aspects of schengen remain strong. It is only a couple years ago that the 28 european Member States said this is a fundamental part of what it means to be a fundamental aspect of the you life and we dont want to give that up. It is something that politicians are concerned about. Also from the point of view of regular immigration. Ultimately, they recognize the benefits. Are we going to be in position where it is very hard for European Parliament to block the sharing of flight manifests . I think, certainly the European Parliament is coming under some pressure. What weve seen from the statement so far is, yes, they are willing to expedite those conversations, but they are not necessarily willing to give in on privacy which is core to what they believe is important to retain within eu legislation. It is a question of fundamental rights. Do you give up one fundamental right to protect another . Here, it is about privacy. There is a question of how far eu should go to pursue security aims and how far they should invade public privacy to do so. Elizabeth, thank you so much. Here is what else is on our radar. Amazon has won its first golden globe awards. The companies streaming service was honored for transparent, the series that follows a father that identifies as a woman. Jeffrey tambor received the award for being best actor in a tv comedy. Croatia has elected its first female president. She secured a narrow victory. Her election marks a political shift to the right after the centerleft government failed to pull the country out of recession. While croatias president is largely ceremonial, the vote is an important indicator of voter sentiment. With expectations high that the European Central bank will implement fullblown qe, the ecb Board Members have told der spiegel that there is no need for such a move now. Ubs chairman axel wbeber said he expects the ecb to take action at its next meeting. The ecb has already indicated that they would do something. They will not postpone that and announce an action. I dont think it will just be a Government Bond program. It will be sovereign debt Corporate Bonds, and there might be some condition on buying the higher graded Government Bonds in a larger proportion to lower graded. We will have more from that exclusive interview later on. Also coming up, shyer starts the new year with a new deal. After its proposed sale collapsed shire is on the acquisition front. Details of that deal, next. Welcome back to the pulse. We are live on bloomberg tv and radio. Now after a very busy 2014 and an a in the pharma sector is off to a strong start with shire offering more than 500 billion for the usbased nps. Here with more is simeon benedict simeon bennett. Also here is Caroline Hyde. Lets start with you. 5. 2 billion is the price tag. That is a 10 premium on nps when it closed on friday. This all got heated in terms of reporting in december. They are paying up for this company, but it is all about synergy when it comes to Rare Diseases. They want to build their expertise, shire does, so that is not only a strategic fit, but also it is growth enhancing. They say, we can afford it. It is interesting what they are going for and the risk they are taking. There are two untested drugs here. There is a hyperparathyroidism drug. The worstcase scenario with this particular disease is that you have seizures, and people can die. It is that medicine which nps has put forward to the fda. It is set to have the yea or nay on january 24. Why go into this particular asset if you havent got this deal signed off yet . According to shire, they want to help with the introduction of this drug and the price tag as well. They also have another drug, a treatment for short bowel syndrome. That, they predict, will bring 300 million by 2016. As yet, these are commercially unproven assets. It looks like shire has done their Due Diligence. Overall this is just about boosting the rare drugs expertise, boosting them as a biotech leader. Since abbvie had to walk away now they got some money from the breakup. Lets also bring simeon bennett, one of the reporters who broke the story. Given what caroline was explaining is there anything that was surprising in this . Does this deal just makes sense because Rare Diseases are part of the next frontier . Good morning. There was really nothing surprising at all. Really, the deal is a continuation of the strategy that the chief executive officer has laid out ever since he came in in april of 2013. Shire already had a presence in Rare Diseases at that point. He has really hit on that as the Growth Engine for the company, and has been on a shopping spree ever since then. I think this is the seventh deal since he came in. Most of those have been in this area of Rare Diseases. What makes these diseases are is that the fda has laid out incentives for companies to develop treatments for Rare Diseases that otherwise you can do nothing about. Extended Market Exclusivity, the ability to charge very high prices for these treatments so it has become a very attractive area. He is really making shire one of the leaders, if not the leading player in Rare Diseases. Can i ask you why weve seen the deal announced now . The fda is going to rule on the 24th. Why not wait until that announcement before making a decision to pull the trigger on the deal . Well it is going to be a large part of the answer to that question. If shire waits until the 24th and nps gets the thumbs up from the fda, the companys share price rockets and shire finds itself having to pay even more for a company that it knows it wants. As caroline said, shire has done its Due Diligence on nps. They were looking at this company as far back as march of last year. When abbvie came in and tried to buy shire, that deal had to be put on hold. After the abbvie deal, shire was able to look at and the yes again. It is not something theyve only just been looking at in the last few weeks or months. Theyve had their eye on this company for a long time. Now, they feel comfortable to do it. What comes after this . The ceo is also possibly looking to buy more, grow bigger, and make more acquisitions. This is the tactic that has been deployed by the chief executive of shire before it got waylaid for the abbvie bid. Shire was on the shopping spree. It looks like m a is going to remain one of the areas of focus for the chief executive. He said, they still have cash to splash. They have a 1. 6 billion influx. The breakup from the abbvie deal means they got more money. The ceo said over the weekend that given the amount of cash we generate and our ability to take on further debt we will still look at more m a to become a leader. There is a bit of a race going on for assets. Youve already got merck buying cubist pharmaceuticals. This was a previous target of shire. Shire is suddenly resuscitating all these particular deals. The company that previously was targeted, shire, is now the targeter. It wants to book itself out and make sure it doesnt become a target again. It is all about Rare Diseases. Caroline, simeon, thank you so much. Simeon bennett out of geneva and Caroline Hyde. Coming up next, how low will the euro go . Axl weber says it could drop. We have more on that exclusive interview. The French Economy minister is speaking right now, saying france and germany need to back the ecbs Monetary Policy. This makes it as much a political decision as a central bank decision. Anyway, we are going to bring you axl weber next. Welcome back to the pulse live on tv and radio. Lets talk about the euro. This is what is happening. You see quite a decline in the single currency on the chart in front of you. Within the last few minutes economy minister of france has been saying interesting things, that the coming ecb decision on qe needs Political Support and that france and germany must back it. Wow. That is an interesting story. We will talk about that when we come back. Welcome back to the pulse. Im francine lacqua. Im guy johnson and these are the Bloomberg Top headlines. The largest crowd in french history turned out for rallies to mark the worst terror attack in more than half a century. 3. 7 Million People took part across france. In paris, 56 World Leaders joined the marchers. Among the attributes were pencils in memory of the cartoon is who died, and placards bearing the hash tag je suis charlie. Divers have recovered one of the data recorders from the air asia plan that crashed. The search is still on for the cockpit voice recorder, which will reveal details of the pilots conversation just before the crash. Jaguar has announced it will at a sports Utility Vehicle to its range of luxury vehicles in 2016. The british carmaker will create 1300 new jobs at its plant in the West Midlands to build the suv. The production is part of a 3. 5 billion pound investment abroad and its lineup amid increasing competition. Mario draghi is likely to unveil a qetype policy at the ecbs january 22 policy meeting according to the ups chairman, axel weber. Speaking exclusively to bloomberg whether weber laid out his predictions for the euro. They will announce some action on the 22nd. I think the recent oil price has given a lot of pressure in europe to Consumer Price inflation falling very low. It is way below the target and the ecb has already indicated before that they will do something. What in detail, i dont think it will just be a Government Bond purchase program. It will be a mix of issues. It will be sovereign debt, Corporate Bonds, also some sovereign debt and there might be some conditionality on buying the higher graded Government Bonds. One of the consequences of it would be a cheaper euro, the devaluation of the euro. How much do you think that will help . It has already helped. You can see that the mere discussion around having such a program has already helped the euro come down from a 1. 40 to a from a 1. 40 dollar to a 1. 18. That has helped the european economy, but it helps all the european economies. Every time a country profits germany is among those that profits most. This policy does not necessarily eliminate the growth differentials in europe, but it helps europe as a whole to rebound. What it does also highlight is the difficulties europe has had trying to get out of this quagmire and that is very much also to be looked through the prism of this bifurcated Interest Rate environment with the u. S. And the u. K. Going in one direction, and the europeans and japanese going in the opposite one. That would assume, and i think every time we talk about it in the past, weve been proven wrong it would assume there is a longterm sustainable decoupling of the u. S. And the u. K. From the rest of the world economy. Europe will continue to have low Interest Rates, expand the balance sheet. The same is true in japan. There is discussion of monetary easing. There is a likely development of 40, 50 basis point Interest Rate reduction. I dont think the fed can continue on the announced and priced in path, because there will be some repercussions in the global economy. That was axel weber, the former bundesbank president speaking exclusively to bloomberg. The staff at the European Central bank is pushing ahead with models, providing as much as 500 billion euros in Investment Grade assets. Some members of the ecb executive committee are pushing back. Lets go to hans nichols in berlin. What is new about this opposition articulated over the weekend . Good morning, francine. This is the first antiquantitative easing salvo weve had since those negative deflation numbers that we had last wednesday. You are starting to hear the german argument crystallizing. It is not necessarily new, just charter. The downward pressure on inflation is all energy costdriven. Here is what she told der speigel. I do not see that consumers expect continuously falling prices. She went on to say, the benefits and risks of the program must be put in their proper proportions. Joining her, jens weidmann, also pretty much opposed. You have the netherlands central banker. You have a stony up. Later on today, we will hear from the austrian central banker as well. Maybe we have four or five no votes on this. At the end of the day, perhaps the more important decision is going to come from the European Court of justice. They rule on wednesday that this is a ruling from the german Constitutional Court. On wednesday, the court of justice will be ruling on monetary transactions. If it comes back negative, this could tie draghis hands of a little bit. Mr. Weber seems like he is on board, the quantitative easing is going to happen and the only thing we should be debating is the size and restrictions. Hans, the economy minister out of france made some interesting comments in paris this morning, saying that this is as much a political decision as a monetary decision. Weve always understood that there had to be some sort of tacit agreement from the politicians if we are to continue to push further into this uncharted water. That is quite an over comment to be making at this stage. If you are defending outright nonmonetary transactions and you are are crewing against you are arguing against the germans, mr. Macrons stating the obvious doesnt help your case. The case has to do with Monetary Policy. It is not political. The germans have always been crying otherwise. I think what is going to happen in luxembourg we might not get a final decision on wednesday it could hem in just what shape quantitative easing are National Banks going to be put on the hook if there is default . What restrictions will be on quantitative easing . I think that comes from luxembourg. It doesnt necessarily come from central bankers. Yeah. The credit risk of all of this is something that a lot of people are thinking about. Thank you very much indeed. Hans nichols joining us from berlin. Coming up vw makes a play to steal the Detroit Auto Show. The carmaker hits 10 million as demand in china surges. Stay with us for more. We are going to be talking about that. If you want to talk to us on twitter, join the conversation. See you in a couple of minutes. We still have huge dollar exposure and we want to be where the market is basically, not in europe, but in asia and north america. That is by all our expansion will happen in these countries. We Just Announced a new plant in mexico. That was the daimler ceo speaking to bloombergs matt miller. We will have more from that in detroit in the next hour. Mercedes debuted the gle coupe. That was yesterday. The midsize crossover is a direct competitor with german rival bmw. Bloomberg businessweek was at the auto show for a handson look. Is it a sporty highperformance coupe or a massive suv . It is a little bit of both. This is the all new mercedes gle coupe and it is a curious looking machine. It is tall and rugged and has wide wheel wells, yet the roof slants down abruptly at the end like a traditional coupe. It has all the classic luxury trimmings of a mercedes, including an eight inch entertainment screen, leather seats, and carbon fiber details. If it isnt as useful as an suv and doesnt drive as well as a smaller mercedes, why is the Company Making this car at all . Well it looks really cool and people will buy it. Bmw has made something similar since 2008 and it has sold extending the well. Astoundingly well. Mercedes will start making these soon and they will be on dealerships sometime in the fall. One of the biggest announcements out of the Detroit Auto Show so far comes from volkswagen. The automaker delivered more than 10 million cars for the first time last year. It hit that milestone earlier than everybody was anticipating. Ryan chilcote is here to tell us why. It has something to do with china. They want to produce not just more than 10 million cars. They want to produce more cars than toyota. If there is one place in the world it is good to start on that plan, it is china the worlds biggest car market. They produce the chinese bought more than 24 million cars last year. That is up from 21 million cars the year before. It is estimated to grow to 25 million the year after. Vw has done spectacular there particularly compared to toyota. Vw sold 3. 5 million cars more in china last year. That is more than one third of the cars they sell globally. We wont know whether theyve overtaken toyota as the worlds biggest car maker until the end of the month, because we dont have toyotas numbers. At the end of september, we know the numbers, and they were only 70,000 cars behind. It may be that theyve already overtaken. China is definitely a huge part. Audi had a very good year. Sales were up 11 . Audi is an interesting one. It is not just about volume. It is also about making money. One of the things you need to do is have a big profit margin. You look at a regular cwvw brand car, the profit margin is 2. 3 . It is nothing. Audi is a they make a lot of them though. Yes, they do make a lot. Heres the deal, the profit margin on an audi is above 10 . For everyone audi, it is like selling four vws. Audi produces more profit for the vw group than any of the other brands. It is a massive cash cow massive source of profit. Audi has not done that well in the United States historically. It had some reputational Customer Service issues going back to the 1990s. It has gathered ground. This is something they want to exploit. We are starting the detroit car show today. They are coming out, audi, with their Second Generation q7. The first generation of it appeared in 2006. It has been due a little bit of improvement. They are going to get that it is 25 lighter, comes with a tablet, you can have seven seats, and it is meant to target bmws x5 among other cars. Bmw does have that position of being the worlds biggest luxury carmaker. In addition to wanting to be the biggest carmaker vws other ambition is to be the biggest luxury carmaker. They have to take that from bmw. This is going to be just about the same price. But watch this space. It is possible that vw could overtake bmw and that helps it create more cars and cover the world. Ryan, thank you so much. Ryan chilcote with the latest on luxury cars. We will keep an eye on the Detroit Auto Show. Lets talk about dubai. This is the huge Property Company that exists there. Very much the epicenter of the financial story the crisis that the emirates experienced. It has reached an accord with its banks about the rescheduling of 14. 6 billion worth of debt. This is a statement that was put out in the last few minutes. Weve been waiting for this for quite some time. It has been an ongoing story to see how this debt is going to be restructured. We are getting a timeline of how that is going to happen. Dubai still has some fairly substantial payments that need to be made. This is part of making that more manageable. Coming up, a very british brand with International Appeal hits the catwalk in london. We catch up with the ceo of dunhill. Welcome back to the pulse live on bloomberg tv and radio. Lets get you some company news now. Scaling back, rbs is looking to put most of its Asian Corporate banking business up for sale. That is according to a person familiar with discussions that are taking place. The ceo is said to be in Singapore Today to discuss where it is to scale back in asia. That comes after the lender announced it is shutting its japanese trading business. Billionaire li ka0shings firm surged after a structuring announcement of his main companies. Cheung kong holdings gained 9 . This comes after the 86yearold tycoon proposed to reshuffle the assets of his companies into two new entities. Roche is said to pay more than a billion dollars for a stake in foundation medicine. This will give them access to genomic tests to treat tumors. Roche will get a stake of as much as 56 and the right to sales of foundation tests. It has been fashion in the british capital this weekend. First, a very british brand dunhill. Manus cranny caught up with the dunhill ceo, fabrizio cardinali. The hero is the product. I think that is also the weakness, number one, for this brand. We started to work a lot and to invest a lot. We have an amazing, fantastic office team. Talk to me about the international aspect. Two Biggest Challenges for every luxury brand slowdown in china and currency issues. How are you dealing with that . It is a challenge for everybody. I think that starting from china, china is a challenge since the new president started. I think that the era of gifting is over. I think everybody has to reinvent themselves. It is particularly important and we are working massively on training to have our staff ready to sell. I think it is the key to succeed also in the future. Thats what we are doing. All right, manus cranny is now here on set with us to talk about this great interview. This is a big deal. We dont often talk about mens collections. 12 billion pounds to the british economy. What you get a sense of from fabrizio, he is exdolce gabban a. He is part of the richemont family. He said it is all about self conception. That is what he is training the staff within dunhill to do. I love he said it is the Sleeping Giant. The Sleeping Giant in his mind is out for dunhill. If you look at the website, maybe it is for a slightly younger demographic than myself but he is going to 25 to 40yearolds who have the money. Are they going to chase the price point . The price points are already quite high. That jacket is about 1000 pounds. His view is to draw from the product range, to appeal more broadly. That is going to mean change. That is a ceo who has got big ambitions. In terms of china, that is the new phrase for luxury, self consumption. What does that mean in terms of how we spent rather than gifting . What does it mean . Changing the price, changing the product. If you use to buy that gift for a ceo, that was incredibly extravagant. What would you and i spend on ourselves . Technology and digital is the big part of it. I get the sense this is a ceo that has been up at the top table looking for money for investment in terms of this brand. It was a beautiful location. Heritage british brands at the moment are all the rage. Are they jumping on the bandwagon . You dont catch it in that particular piece. I started off by saying, do you want to the burberry . He said that is something they work on, but they emphasized they have an international aspect. America is where they want to go to. Europe is where they want to build. I do get the sense that moving from dunhill to a bit more of a funky focus. There is an amazing collection. There is an archive of accessories. Even if you cant afford anything in the shop, have a look at the collection. Menswear only. Interesting to get into the head of guy johnson. Manus cranny, thank you. [indiscernible] i dont believe that. For those listening on bloomberg radio, the first word is up next. For our viewers, a second hour of the pulse. We are going to be talking about the security changes in and around france. More troops being put on the ground to protect key sites. We will talk about how this affects the psychology of france which has been struggling with the events of the last few days. That is the view of one of our guests in the next hour. Just a reminder, you can follow us on twitter. We will see you in just a couple of minutes. Tightening security. Europe looks at greater monitoring of orders. Qe netsuite. Dachshund next week. The ecb will probably unveil bond buying in its next meeting and will bring the comments exclusively. Cracks s cracks s shire buys a pharmaceutical company. Good morning to our viewers and europe and those in asia. I am guy johnson. I am francine lacqua. This is the pulse. More than one Million People took to the streets of paris for solidarity. Ne they weret joined by 56 World Leaders and they joined the rally on the streets and drew the largest crowd in french history. Carolina was at the margin joins us. To the very impressive moment in france, the biggest gathering in french history since world war ii. 3. 7 billion people across the country, 1. 7 million in the streets of paris. A you can see it was and you can see it was hard to move. Most of the people gathered peacefully around the repub lique. The march was opened by the families of the victims and 50 heads of states and governments from all around the world. You had Benjamin Netanyahu and Mahmoud Abbas, next to president roland at Angela Merkel and David Cameron and renzi and all of these heads of states for the tribute to the victims. Many people came with their families. You can see, president Aland Hollande hugging journalism of Charlie Hebdo. Many people in france were carrying signs, we are charlie. What is next for france . They are trying to hunt down accomplices. And yes, you have Prime Minister bound this morning as eating on the radio saying and saying the Prime Minister on the radio this morning saying we are still looking and the person who shot a jogger in the eastern suburbs. That was on wednesday. The shooter has not been identified. You have the question of the whereabouts of the girlfriend of Amedy Coulibaly. We had cabinet members and friends and the g20 said the army and military will contribute to french security. To protect france and the religious sides and media and transfer. They will be as many or [indiscernible] thank you. Joining us from paris. To germany where the government has expressed concern that the events in france may give momentum to the antiislam movement. Hans nichols for the latest for how germans reacted to the events . Questions good morning. We have a good one. A good morning. [indiscernible] at the same time, old merkel bold both merkels government and other parties have called for people not to join. According to the press agency cartoonists from france not to use the victims of Charlie Hebdo as a way to exploit and increase their numbers. From the parricide, you are paris side, you push that. On the german story, Angela Merkel, which was in france she met with mr. Poroshenko and mr. Hollande and spoke of mr. Putin and urged him not to support to use his influence to bring that separatist of ukraines area theres a foreign minister meeting here and what merkel is saying is Foreign Ministers meeting goals successful on ukraine, she may attend him it in caucus gone later in the in kazakhstan later in the week. Thank you. Hans nichols joining us from berlin. Lets turn back to paris and social economic challenges facing president Francois Hollande. Am joined by an economist at barclays. Antonio, great to have you on the program. Give us a sense of what it means for france as a hold. We saw a france united after the massacre and is already divided. Will this actually be bring any changes to france . From the french government, a last chance, a reform. In the parliamentary committees which aims at improving productivity and longterm growth. It is important fiscal changes over the next three years and were talking about the expenditure cuts of 21 billion. And those are 2 key changes. A time for both of the centerleft and centerright i have to push into the same action and improve the perception of households may have Government Policies which is key. So far it is lacking. Thats a critical point, the confidence. The French Economy has been, if you look at the data in terms of the balance, there are places to be. The french are known for having confidence issues at certain points and that seemed to be affecting the Economic Cycle and you wonder if it will further exacerbated that. It is key. Humans are the keyword. When you look up indicators, you actually see the indicators are considerably worse. This actually being down. The real economy for households and Investment Decisions which have an falling behind. Thats a time to show decisiveness. A time in which to have a structured through parliament and into the parliament on the 26th after this commission is being discussed. I think it is really the time not to deliver. Its not looking great for hollande. [indiscernible] so again thhis is the last chance for the government to change. Lets hope they are looking at that interest. Thank you. Antonio will stay with us. Well be back. Chris will be talking at a ecb and i will play some for comments what had from the former president and yet been talking to us it will do some more of those comments and get reaction as well. Starting the new year with a deal after shy your is buying it forms was company. Shir is buyinge a pharmaceuticals company. That is next. In the ecb has already indicated they would do something. What in detail, i do not think it was just the Government Bond purchases but a mix of issues and sovereign debt and Corporate Bonds and also suffered death and maybe some rationale of buying the highest rated Government Bonds in a larger proportion. That was former president a ecb chairman, axel weber speaking to bloomberg about what he expects. Ecb staff are pushing ahead with fined as much as 500 billion euros in assets but some of the banks are pushing back. Lets get straight to our international correspondent, hans nichols. If the germans are pushing that what is it about the opposition she articulated over the weekend . We have the official German Response after we got the inflation reading, it was a 0. 2. What are the germs are saying it has to do with the price of energy and oil. Heres what she that with the spiegel. What i do not see is a consumers expect to continue falling prices and changing our consumption behavior. She went on to say the benefits and risks might be put in the proper perspective. If you do a count a figure who was going to vote in what way at the ecb you have the estonian a central banker am perhaps the dutch and we will hear later. The votes simply are not there to stop that to stop any quantitative easing. Perhaps a more interesting question is what happens on wednesday at the court of justice . They will be ruling on the Constitutional Court punted to them a few months back on whether or not out right transactions are illegal. Ruling on that case, they may, i stress may, . Real draghi on how he does quantitative easing easing not if he can. The French Economy minister talking about the fact that any signal qe of the leaders of europe and talk specifically about france and germany. Is he right about that . And we do see Angela Merkel backing the ecb and is pushed with qe is she over rolling once again the bank . Not that we have not seen once before. If that does happen the hypothesis, but if merkel comes influence of ports in some kind of way, well see how independent the german bank is from the policymakers. I am reminded of expression, the definition of a political back is when you Say Something that is true. There needs to be Political Support for quantitative easing. At the same time, the public theyre doing the to fulfill their legal mandate and keep inflation and get it back up and asked nothing to do with any sort of politics. It is purely monetary. That line is hard to keep when he makes comments like he just made. I think it makes the very cause of for which is advocating more difficult to defend on a pyramid legalistic basis. On a more legalistic basis. Hans nichols with the latest on the germans and the ecb. Lets get back to the euro area. Antonio garcia. What are your expectations for the 22nd . How important is the ruling and are the french right . Our expectations are that the type of qe has arrived, is long do. They took contingencies both on prices and the balance sheet. In fact, is point in waiting at this point. Inflation is incredibly low. I was not in greek with the fact that it is oil. Inflation expectations are dangerously low. I want consumers to stop postponing, it is too late. You cannot wait for that. To prevent that from happening and the time is now for the ecb. They cannot delay much longer. We are expecting everybody almost the quantity is now the 1 billion question. If they do not do more, will the markets be disappointed . It could be open more. We want to reach the one trillion for ourselves and will use all of the assets as will and into bonds. If that is not enough and print inflation up and expectations we will keep the door open to extend further. That kind of language. In terms of the german aspect in it wouldve heard concerns about all of this and the ruling , but kind of an early indication from the east j on wednesday. If the ease cj decides ecj decides there is a need to be more open, how will the markets read as being a negative . An important constraint would be the issue of seniority. If the ecb is [indiscernible] it is going to crate selloff. Create selloff. It will not go down well with the markets. The open end of it as well as the seniority potentially, we will know more and what happened important concept. Antonio, is quite a heavy month. Do we have the we have the ecj a ecb and the greek elections. If you look at the three main events, the greek elections . The greek elections, in a way, intertwined area the greek elections are quite important. The politics, yeah. It should be interesting. You have samaras and they may actually get to form a government in greece. And then you have spain the general elections and then the end of the year, the general elections. It is a party, very close. We are talking about the economy. That creates uncertainty. We do not know what policies actually support us. We do not know. Its the first time. How does the ecb deal with credit risk . Given the political backdrop, we know what samaras has been saying and a lot of greek debt in government has already a you could argue less is a risk. Talking about spain. A significant issue here. Theres a story out of this morning will be seeing. If it were to how does it deal with the issue . It is an important issue again. Buying anna q basis is something that makes this and has been mentioned buying on a basis is something that makes sense and has been mentioned. What is important here is a foregoing the risk sharon the basis that would july debt and building debt and that would build that. That would build debt. [indiscernible] we shall see. At the end of the day, the politics makes the into the issue. It should not but it does. To make qe more effective cut it should be neutralized. Then you have the bigger bank, which people with that you could argue we shall see whether it is affected or not. You have to give it a chance to be successful. If you bring up the issue of credit, the ecb is not the one that should bring up the issue. Less Monetary Policy and thats not what the ecb should be doing. But they will, right question is will be difficult for them not to. We shall see. One in which they delegate to National Central banks. And the Central Banks to maintain the rates. Bank attali a bank italia that have always been down to the rating agencies at said they do not listen. Again, goes against what has been suggested. The key here is not to again make the issue a fragmentation were somebody better. By delegating and the centralbanks we shall see whether they will do that or not but i think they should to make qe more effective. Antonio, thank you for that. Antonio Garcia Pascual and we are back in a couple of minutes. As london collections drop, bloomberg went to check out an online retailer. This collaboration, the secret service [indiscernible] the product you see you one by the actors in the film hanging over there. The brands we work in collaboration with our for the watches [indiscernible] another reason it is the first of its kind it reflects the support of merging content. [indiscernible] interesting stuff. Coming up, vw makes a play to steal the auto show taking place in detroit before it begins. We are going to give you a preview on this before we start the show for real. Welcome back to the pulse. Live from london. Im francine lacqua. Im guy johnson. Crowds turned out to work the nations worst terror attack. 3. 7 Million People turned out across. Secured among tributes were pencils in memory of cartoonists. Authorities have recovered the data recorder from the air asia jet. The search is still on for the voice recorder, which will reveal details of the pilots conversations before the crash. The british carmaker for indi as tesla motors tapa motors will broaden its lineup amid increasing competition in the luxury space. What is motoring today . That was bad. Along with the equity market performance. 2 weeks of losses, worst since 2008. Ftse 100 up. Dax up. Trading ahead of one big thing next weeks ecb meeting. Axel weber saying qe is coming next week. Benjamin yorkshire, the economy minister of france, emmanuel macron, saying government needs to back. As i walk away from my desk, the euro 1. 1796 brent lower. Down 2. 5. Goldman sachs slashing their threemonth forecast. Looking for wti to hit 43. Another big call in the treasury markets. U. S. Treasuries below 2 on the 10 year. The best start to any year since 1998. The 10 year dropping 17 basis points. One man called this steve of hsbc. The most read story on bloomberg terminal today. Hes looking for this to drop to 1. 5 . In his mind, yields could go lower. Thank you, jonathan ferro. 25 minutes from now surveillance with tom keene. He joins us from new york. Congratulations to steve. I love the story jonathan mentioned. Going against the grain. Major in a major money centered bank. That makes a big difference. We will continue this discussion. Tobias will join us from citigroup. We will look at the equity markets. We link it back to oil as well. On media stocks we had then banking to get on media stocks, weve been begging to get him on. Moffet, we talk about telecoms as well. Surat seddy will join us as well. Betsy from morgan stanley. She looks for cost control. Cost control might read the new thing of 2015. Tom keene with surveillance, 25 minutes from now a lot of m a in 2014 and it seems we are not done. The pharmaceutical sector off to a start shire offering for nps pharma. Out of geneva and Caroline Hyde lets start with you. 5. 2 billion is the price tag. 10 up on the Closing Price friday. On december 16 when reporting built up, it is up. Shire keen to get their hands on this company. The ceo says it is a strategic fit and we can afford it. It ticks our main boxes. These two as yet commercially unproven drugs. Very exciting Rare Disease Drugs in the pipeline and looking to become a winner for nps. A medicine for hyperparathyroidism rare disease. At its worst, this can create seizures that can kill. Going through the fda process at the moment. January 24 they will say it yay or nay. Shire once to get in on the introduction of the drug. The price tag will be lower if we had not gotten the final say so. There is another drug a treatment for short bowel syndrome. This could earn 300 million by 2016. 2 key pipeline drugs that will benefit the rare disease area shire has focused on since abbvie walked away. We are getting the company that was targeted becoming the target are. They are wanting to splash some cash from the breakup, 1. 6 billion. We understand that shire will continue buying companies. Good morning. It is clear that the ceo of shire is not done yet. This is his seventh acquisition since his appointment as ceo was announced in 2012. He has been on a shopping spree. Most of the deals have been in the area of Rare Diseases. One or two in ophthalmology but mostly in it Rare Diseases. He really sees this as a huge Growth Engine for shire. The fda has put in a number of incentives for treatments for Rare Diseases. Extended Market Exclusivity and the ability to charge high prices. It makes it a very appealing area. Does a company with a stable flow of drugs is that company less risky . Part because of the difficulties involved in science does it make it more risky . Im curious to know how this set the company up. The kind of discounts the market will look at. One thing to remember about shire Rare Diseases is what tends to get the attention. They get 40 of sales from treatments for attention deficit hyperactivity disorder. Which is a huge market in the u. S. Potentially a very diagnosed in the u. S. And underdiagnosed in europe. Adhd has been a cash cow for shire for several years. The market probably looks at that as being a stable and a large part of the cash flow and revenues of the companies that are not going anywhere for the foreseeable future. And there is higher growth or higher margins in Rare Diseases. I supposed shire has had a good track record with rare disease deals. The market probably thinks that Flemming Ornskov if he has done this deal, even though the drug has not been approved, the market is assuming the company has done it Due Diligence. There are not going to be any nasty surprises january 24. What is going to be interesting is the amount of m a yet to come. Even with this focus on shire buying nps, he is saying there could be more companies we had our eyes set on. Given the amount of cash and our ability to take on further debt. They have put more Bank Facilities in place. They say m a is on the agenda to help build them into a biotechnology leader. That is the golden goose for them. There is a race on. Already merck has bought a company. That had already been one of shires targets. Shire got dragged aside by the abbvie offer. It is back on the road, putting m a front and center. The best form of defense is attack. They do not want to be hunted again and they are going to will up build up. Are we going to see more m a activity surrounding Rare Diseases . I think we are. Shire are not the only company in this area. Sanofi is another big player in Rare Diseases. Theyve been vocal about the fact that they are looking for more acquisitions in that area. There are thousands of Rare Diseases for which there is no treatment. There are small Biotech Companies developing treatments. As long as the fda incentives are in place and biotechs are developing treatments, we are going to see more. Where you are not going to see so much m a in pharma is in the tax inversion arena. With the changes that congress made at the end of last year to take some of the appeal of tax conversion away, i think we will see less of that and more deals that have a strategic rationale to them. All right. Thank you very much indeed. Joining us at a geneva. Our European Business correspondent, Caroline Hyde. Preventing corporate data leaks. Cyber attacks are not going away. Will 2015 mean more spending on Cyber Security . Welcome back. 44 minutes past the hour. You are watching the pulse, we are live from bloombergs london headquarters. From sony to the german government, hackers heart business around the world. Lets bring in Good Technology ceo, Christy Wyatt. 2014 will go down as one of the years where we realized the full extent of the hurt cyberattacks can bring. Is there anything we can take away . 2014 was just the beginning of the conversation. I do not think it has truly been internalized. What the full breadth of opportunities are for the hackers. I think you will see the conversation escalate and, of course spending. The conversation cannot just be about spending. You will seat 1000 companies talking about 1000 fear factors. You have to think about what is the risk you are trying to protect yourself from and what is the most effective way to do that. This has been historically subbed out to the i. T. Department because no one else can get their head around it. Are executives beginning to understand the threat their businesses face . And as a result of which, starting to escalate it up the food chain . In 2014 you saw the move from an i. T. Conversation to a portland conversation. If you look at the u. S. The organizational impact. It was not purely technologists. When we are working with an organization, it spans. Hr wants to know employees rights are being protected. You have demand for new devices from the ceo to other employees who are used to having the technology. It becomes a discussion across the organization. That is going to get more complicated. Should this be government level . Like we had a police force on the ground what can a company, unless it is a huge company, due to prevent cyberattacks . There are simple things a company can do. You do not have a global you do not have to be a global bank. Where we see the most growth is in nonregulated industries. Banks and governments understand but it is the emerging companies. Simple questions like what is on my cell phone. The sony attack shifted the conversation from a large, government scale of sovereign attacks. People started realizing there is a lot of harmful information in simple things like emails. That is one of the data sources you will see across a number of devices. They are Pretty Simple questions. You have been talking about this threat and we have talked in the past about people bringing their own devices into organizations. That is an area in which you have specialized in the past. Do we get backwards in terms of our ability to mix our personal and business lives . Do they need to be more separate or can they coexist . As the landscape has evolved, so has the technology. Say you do not have to carry 2 phones to have a secure solution. We like to believe we are a living example of that. A lot of these technologies involved with these cases. I do not believe it is that kind of a tradeoff anymore. What we have seen in paris, the attacks over the last week, does it move the conversation into possible governments having more of a stronghold on intelligence . Looking at their citizens closer. What does that mean for Cyber Security . It is an interesting discussion. You see two voices rising, one on the side of privacy and one on the side of security. Those objectives are not always aligned. At the individual level we do not want to have big brother tracking our every move. In a crisis, i want to know exactly where that person is and what the best ways to find that person is their data. Where are they communicating from . Theres a government level conversation and an establishment of a framework that accomplishes both. Those have to be accessible in the right form but there has to be protection around the citizen. Part of that is technical. I think technology has evolved to the point where we can encompass both. There has to be a framework across business and government that folks can agree on. Thank you for the analysis Christy Wyatt of Good Technology. Carmakers are gathering for the Detroit Auto Show. Vw is trying to steal the spotlight. We bring you the news and preview the shows hottest models, after the break. We are hedged as we should be. Spot prices are not effectiveness shortterm. There are tailwinds. Gas helps to shift from cars to light trucks and suvs. Dallas dimers that was dailmers ceo Dieter Zetsche speaking to matt miller. Germans making waves in detroit. They showed up last night the gle coupe from amg, which is amazing. More amazing in person than it looks on camera. To compete with bmws x6 in the cross of our midsize suv statement that is so popular in the u. S. It will be interesting to see how they do. Youve been watching volkswagen. They Just Announced they have sold more than 10 million cars for the first time. They did that in 20 14. Part of their ambition to sell more cars than toyota. We do not know if they have done that because toyota has not announced figures for the third quarter. At the end of september, vw was only behind by about 70,000. It may be that they have surpassed. Leaving the detroit car show aside, part of the reason for that is china. China keeps getting bigger, 23. 5 million cars sold this year and as many as 25 million could be sold next year, up from 21 million in 2014. Vw sold three point 5 million cars in china in 2014, more than a third of cars globally. They have a huge chunk of market share. That has been a boon for vw. Theres good stuff for vw stateside as well. Matt they can actually sell volkswagen cars. The brand has been so weak. They got outsold by subaru, which i thought was amazing. Subaru sold 500,000 cars and volkswagen sold 366,000. The strength of vw they had a million different brands audi bentley they cannot move vws they are not selling. They are basically ubiquitous in europe. Not the case in the u. S. Vw has penned its hopes in the u. S. On an audi rebound. Which is doing a little better than vw but not as much as they would like. It is about catching up with the m w, the biggest seller of luxury cards. Have you checked out the q7 . Ar unveiling today. Audi unveiled more cars than any luxury brand. Audi narrowed its gap on bmw. Bmw sold 1. 8 million cars and audi sold 1. 7 million. They are getting closer and closer. It will be interesting to see how many new models they will show. In years past we have seen about all new models. Everything has been leaked, it has not happened this year. There will be a lot of surprises. Matt miller from detroit and Ryan Chilcote on luxury cars. That is it for the post, surveillance is next. Follow us on twitter. guyjohnsontv and flacqua. See you tomorrow. This is bloomberg surveillance. Oil reverses and plunges. Goldman sachs suggests markets will be turned upside down by lower crude. Facebook is the elephant in the room. Millions marched in french. Eu leaders seek to stop terrorism. This is bloomberg surveillance , live from new york. I am tom keene. Lets get to our top headlines. Oil down 3