Transcripts For BLOOMBERG The Pulse 20150414

Question from the audience. If i can find in john was be in the audience wisby in the audience who should have a microphone. He will have a microphone so. People in this audience slightly more obsessed with tax. More on that subject. John a number of questions. Anna one on tax evasion versus tax avoidance. John i was always brought up to distinguish between tax evasion being something illegal and tax avoidance which is something you said we have the right to pay the least tax. And it does seem that if there is so much a blurring of the edges of the talk of politicians now between what is legal avoidance without trying to invest. And actually what is evasion. Could there be a little bit of clarity on that distinction . And why it is blurred so much in a lot of the rhetoric . Anna we will start with you. Talk about the scourge of tax avoidance. Chuka umunna i think everybody talks about it. There is a difference between evasion and avoidance. I do not think it is a difference between planning and egregious avoidance. I often have this discussion with Business Leaders. I have talked to them about all of this. One thing that we have trust issues in politics and something we are not in a position to lecture but we have to recognize in spite of the incredible thing British Business has done for the country in providing jobs, we have trust issues in business. It is a very unattractive argument to make to your customer, your communities in which business exists. The law allows us to do certain things and were going to do them. If you do not like them, frankly you politicians should get out. There are lots of things that we as citizens would like to do and the law allows us but we do not do because of our care and consideration for other people in society. That is the starting point for this debate. Quite a lot of consensus on this of all political parties, people think what we say in westminster is quite extreme in hyperbolic you will not hear what we actually hear from constituents on the doorsteps. This type of issue makes of them very, very angry indeed. It suggests it is more for some people and large corporations and another rule for them. That is bad not only for society but for business in my view because it diminishes the standing of society and reduces trust. We all in politics and business got to build that. That is why become such an issue. Anna nick . Nick boles i disagree. I think it is about social responsibility. I cannot explain to a shopkeeper while he is paying a higher percentage of his profit in tax them lots of very Large Companies with very wellknown brand names which i will not to mention all live television. I cannot really explain to individuals working in my constituency while they are paying a high your a higher tax. Of course, theres a difference between evasion and the, very basic avoidance through taking advantage of Government Schemes to encourage savings for their own form of a aggressive of ward is a you know what they are. And people are always inventing new ways and they are very clever people who will come all the time and, with new ways. Excellent we to clamp down on. The previous government did not clamp down. And we have to clamp down on them. We have further to go in regard to a big corporations, big global corporations. Anna i will come to you in a moment. A show of hands. We hear the stage social responsibility and tax avoidance, tax avoidance are we sure we are clear in the room the definition of tax avoidance of these days and what is ok and what is not . Can you raise your hand if it is not entirely clear as people who should have a knowledge of accessible tax avoidance of these days . There we go. Entirely unscientific but i would say probably half of the room put up their hands. A room full of Business Leaders who are not clear in their minds what is ok tax avoidance and what is not. It is an issue. Vince cable the boundaries are blurred because of that are blurred. We introduce at the beginning of a last parliament the principal. The cyst behind it is that people set out sense behind is that people set out to perverse the legislation of tax. Abuse of tax avoidance. As nick said, where not talking about where the government clearly is setting out an objective want to encourage people to save and take advantage. That is absolutely different. What will happen in the next government will be increasingly less about abusive tax avoidance. That partly relates to companies trying to use complex arrangements around transfer of pricing or valuation of intellectual property to avoid paying Company Taxation whether profits. There will be increasing coordination between governments. Certainly, we have seen the stories are round hsbc and that kind of practice is completely unacceptable. And governments will find ways of stopping it. Two concrete things. I introduce a public register of ownership, which is legislative four. It is possible to trace the owners of companies when it was not possible before. To crack down on that kind of avoidance. The practice of banks and probably accounting companies, too, setting down to give advice on how to avoid tax. That will become illegal. I think were all in this. We are all on the doorsteps. Nothing is more cellular tory the leading a small trade that has been screwed to get the last bit of value added tax. They see the Big Companies of the world paying very little. That actually destroys the spirit of entrepreneurship. Im afraid the next government will be be abusing tax avoided. Nick boles if you got an idea of something, go to a nurse in your local hospital and explain it to her for three minutes. If you can explain it to her for three minutes and she thinks it sounds reasonable, it is ok. If she gets pretty angry with you, it probably is not. Anna there sounds like it could be an app for that. Chuka umunna i do not know if the camera picked it up but speaking to those who advise you and as i said, spoken to be heads of all of big firms about this. They know the difference. And so, if they understand the difference then know. That should be on the fis they are giving. In the that should be the advisor they are giving. The understanding of egregious tax avoidance means and what the next described and what vincent described people deliberately put in play structure which have their principal goal getting around making the contribution our society expects. You cannot expect us to invest in infrastructure skills and r d and all the rest if we do not have the money to baby to do that. Thats all society asked. How the money to be able to do that. Anna some people were looking for a change of tone on tax from those in government, it seems like there would not be much change in the parliament whoever takes charge. Lets get to another question we had before this. This is from sean fox who cannot join us. The single biggest saving tell this is would be combining National Insurance and in contacts into a single tax into income tax into a single tax. Will the parties do it . An office has called for this to happen. They levied on different time periods. Vince, you have been doing this job for a little while. Why not . Vince cable before my party got into government, we looked at this in opposition. It is an attractive idea except for National Insurance carries with it some degree of pensions for example. Partially linked to your National Interest contribution. There is a legal and ethical issue. I think a more tricky problem is when you actually look at the structure of the taxes, you get break point a different level and combine to produce some very strange outcomes with very high rates of marginal tax at difficult points. What we have done, also the policy originally of lifting the threshold of income tax which was done as a coalition project. It has been very successful. Arguably, one should be doing the same for National Insurance. It can be extremely expensive to do the two together. It is simple for location and i can see the superficial attractiveness. The practicalities defeated in all government the anna George Osborne say he is sympathetic to the idea. The imf said in the time has come. Nick boles George Osborne is probably listening to the Prime Minister. It is probably unlikely to be in it. Not that i can guarantee you. Were all instinctively sympathetic to it. The central ideas that havent been done for you usually not been done for a reason. We are quick to take up a attractive ideas that are easy. We want to win votes. If they have not happened, it is a reason. Either because it is expressive or not as beneficial as a first appears. And this, it is both. Anna it expensive and might be difficult but people in this room make expensive and difficult decisions all the time. Is it that they would be to invest in the shortterm term to make about longerterm . Nick boles it is an attractive idea. I do not think it would have a transformative effect on employment growth or disposable income. That it would counter the priority of the level of financial commitment it would involve. At a time where we all trying to bring down our borrowing and public spending, it would be quite you would want it to be a humdinger to justify the cost. Chuka umunna i will be born to say i agree with the boat both nick and events. Oh, dear. I think two different animals. People looked into the details that the differences are quite hard. Anna it must matter to business. The single biggest saving to business. Should we have another show of hands . Who would ring it is a good idea . It would make a big difference to business, cost of doing business to see a merger of these two taxes . Put your hand up if you think its a good idea. Not overwhelming on that one. Maybe we will move on. Lets move on to a broader question. We have Richard Whitlock joins us in the audience. Lets see if he has a microphone in hand. A question about richard couldve the panel give examples of how you will put the nations economy i had of your partys ahead of your partys self interest . Anna a complicated question. One that we would be grateful for your thoughts. Any thoughts . Lets start with vince. Vince cable we have demonstrated that is what our priorities are which is it happened in my case to be ive fought most of my political life in supporting that. The National Interest to sort out what is an economic emergence. I think was demonstrated from the parliament situation. We can rise to the occasion. The next problem and will be different. Theres a lot of tough economic decisionmaking. That kind consideration is not relevant. My partys role is for the duration to stop at the other two main parties and veering off into extreme directions. We already have details on what it might intel. Maybe coalition or supporting the government from the back benches. Anna if there is no emergency, could you still going to a coalition . Vince cable it is possible. We need to show some humility. We do not pick the next government, the people do. And the party that gus the largest number of seats has the option of trying to form a government and they could do it on their own as a minority or invite other parties. And it will be constructed in that situation. Nick boles the observation is i am slightly amused when i listen to particularly vinces leader. The argument is for perpetual im not sure is the most attractive to the public. I actually think that towards the end of the campaign we will see a debate around whether or not people want a coalition or major governance again. Ask of the country to give us a majority. The National Economic interests first in our policy and the additions we made last year whether or not to match the tories in having a referendum was passed on the mazda list difficult political situation. It is not the most popular institution out in the country. With had a difficult few years, it out of the financial crash. Whenever wet had a financial crises, people do, communities tended to turn on themselves and seek to other people and blame other people for your economic problems. We have seen in the past. My father arrived in the 1960s and 1970s and people were blaming black and asian. The current people to blame our eastern european. I do not think it in keeping the British Values and we should a absolute no trouble at all. And the decision not to match the tories in the referendum frankly allow our policy to be taken hostage by the u. K. And the easiest thing for us to do politically would be to say, we going to do this referendum. We agree with nigel on these things. We said, no. There a lot of Business People in fact, nigel said, ebola matches. You will be doing a referendum too. We decided no. You will match it. We didnt believe in we do not believe that National Economic interests is in the opinion. By the way, not to say that it is a referendum we could win. Absolutely it could be won. There is that risk. We did what we believe to be the National Interest. Anna theres lots of differences. The last time i spoke to the bbc they said their members want to stay in the eu but what a referendum. Chuka umunna everybody wants to reform the European Union but i hated this kind of sulky obstructionism that suggests the u. K. Gets run over in europe which is nonsense. During tony we were able to marshall a majority behind the british stand. David cameron is the first Prime Minister was ever lost the vote on the european council. What the colleagues insist say to me is they want particularly Northern European countries and they want to see the u. K. Retaking its leading and leading in europe the charge for reform instead of seeking and sulking on one side and moaning about everything. Anna we have a different statement earlier. Nick, your response to the question about putting the nations economy ahead of your partys self interest. Nick boles vince is right. Two parties with common goals. We work both personally and as parties very constructively together. The worlds predicted the coalition would not last and it would follow part and it would not get anything what a fall apart and will get nothing done and none of those have been proven to be true. What is true is that the british people do not like coalitions. The coalition is they have not enjoyed experience and they would like a clear result. And the truth this ultimately there is actually one clear result of available which is a conservative majority government. The position on the polls in scotland are absolute crystal clear. Every single poll makes it clear that the labour party will lose a huge number of seats and cannot form a majority without the support of the s p. Smp. Ultimately, we will respect the actual votes. They may say they do not want a coalition and they do not Want Parliament but thereve also may produce a hung parliament. Live where the democrats constructively and David Cameron put it down on the table. We will deal with reality in what they choose. It is very clear they want a clear result. Is sounds like you ripped off scotland and shown no interest in winning any support. We have challenges in scotland. Completely disingenuous. You should be looking to win support there as well. You are supposed to be a party. Nick we are realistic unlike your part. We will win one or two. Vince cable we have moved on from the world i grew up in. Lets take nicks proposition. Lets say in the next couple weeks and they get enough to get a majority of seats just over 35 of the popular vote. That is one in four of the electorate voting. Just imagine a government in that position with 3 4 of the lectures having neither voted for them or against them trying to run through over five years extremely unpopular policies. This a recipe for serious instability, not just the border but boy generally. The great strength of our government is that we came into power having representing a majority. If you add up the votes. It has been difficult for sure. Working together has not always been easy. We have a fundamental legitimacy. People are harking back to 40 or 50 years ago when you got a single party government. Just thinking about that is gone. Anna markets are nervous . Vince cable it is about one party trying to warn run the country. Thank you anna thank you very much. We have to say goodbye to our tv audience. We will continue into the room from the British Museum. Lets get a final one promise you will make in the room. You have 30 seconds. One promise, one business policy that will be a redline if going to a vote by vote. Vince cable i am not in a position to provide redline it. We will continue to keep Corporation Tax low and bear down regulation and cut spending in a responsible and steady way so this economy carries on growing. Nick boles like nick, we do not have read allies and im not here to determine them. First of all, i want to maintain the longterm strategy we have got of industrial strategy. I would be very concerned about a very deep cuts in public spending that undermine our ability to provide skills and infrastructure. Entry into European Union and the referendum is potentially destabilizing. Chuka umunna i am not in a position to set out red lines. If we end up in a referendum this would be our relation with your a you can take of the uncertainty created by a Scottish Referendum to multiply that can to give you says all the uncertainty of business in this country and as an avenue which we go. That is why we are and what we will do is keep the u. K. As a member of the European Union. We are not going to have this and are referendum which by the way the deputy Prime Minister has not said he will not go along with. We will keep this country in the eu if we left, it would be a disaster for bloomberg viewers and businesses and his world. Anna we will pick up on that. Check out that is the tv broadcast of the business election debate. Dont forget you can catch coverage you can see of the smp. All of that on the bloomberg programming later today or this week plus coverage of the Northern Ireland vote. And dont forget tomorrow we will be recording and thursday broadcasting a debate. You can watch is now a live stream at bloomberg. Com live if you want to continue to watch. Francine welcome to the pulse. I am francine lacqua. We are getting breaking news. The inflation data is unchanged. The figure is as the rope and that matches estimates of the cause of a very slight increase. The figure is as zero and that matches estimates of the analysts because of a very slight increase. Lets check on the Market Street i do not know if we have guilds for you. The currency is the one you want to look at. Lets bring in government reporter and she has been working on the economy chain. Thank you for joining us. We are watching politics and the u. K. And the pound dropping a little bit. After the cpi enemies were not in deflation. Reporter one figure showing it would not have been the end of the world. 0 is a lot more passable. Francine how does it read across politics. Four weeks away and do people like of these numbers . Svenja what it means is people feeling better. Wages have started going up a little bit and also the inflation figures are direct result of Energy Prices falling. That is the first thing that we know us. For the government and David Cameron, pretty good news. People saying it translates more to the incumbent. Francine overall, a lot u. K. Politics and we had this great debate on what it means for what is in the future, the conservatives the manifesto today. Svenja odonnell absolutely and that is todays big news preheat devised margaret thatchers right to buy to extending. It is what he calls the ideal of home owning democracy. It is potentially giving more than one million families the chance to buy their own home. Francine we have the labour manifesto yesterday as something very interesting happening is tradition you see, the tories as more hardnosed. More for the richer and the wealthy. The labour the officer. They are trying to be seen as more difficult in terms of fiscal spending. The tories trying to be more palatable for the people have less. Svenja odonnell we are seeing both parts are desperately trying to get the polls to move. They have not moved significantly in wins. For labour, showing they are fiscally responsible and things would be a disaster if they win the election and take control of the company. Economy. And for the tories trying to show they care about working people and they will policies helping the poorest. Most of the plans involve huge amounts of cuts in welfare. There turned to counter the fact. Francine for example, building homes to replenish. These are pledges with had before. Svenja odonnell the sticky think with this pledge is it does not address the prior issue. A few commentators and analysts have warned you may promise, but no government in the past years have been able to deliver that. First event thank you. Svenja odonnell Bloomberg News government reporter. Coming up at 11 00 a. M. In the u. K. Is the leader leanne wood for that conversation in our politics show with the guy johnson. Here are the top headlines. Nokia is in talks to acquire alcatel. They said the companies are in advanced talks for a combination. It will strengthen equipment business and better compete with ericsson. Lvmh reported a 16 increase. They saw growth in the americas make up for slowdown in china. Shares are up 30 this year helped in part by a weaker euro. The heir to the ritchie fortune was convicted. The highprofile case filed the followed that hsbc helped them evade taxes. Coming up next the biggest movers other day and how to nokia and out the tell shares are alcatel shares are moving. The major indices. These are the equities markets. Ftse up. The currencies is where the whole story is playing. The cpi figure and in the u. K. At zero inflation for the month of march. The second month in a row. A little bit of movement on the turkish lira and the yen. We will go to that next. Francine welcome back to the pulse. We are streaming on your tablet your phone and bloomberg. Com. Lets check in on the biggest movers. Caroline hyde is that the touchscreen. Caroline another day, another deal. It is alcatel and nokia driving down no key or share prices. It will be the purchaser. Some of that cash nokia sold is handset unit and got 7. 5 billion dollars. About 5 billion euros in cash and walked to pay more to get its hands on alcatel. We saw the shares spike higher up almost 20 in trading at the highest point since 2008. People are wondering if this deal will get it done. The french government have to sign off. The french government in previous time has been reticent to let these big deal to go through and maybe they feel it is a strategic move. It is about Network Equipment for he it is about your play stations antenna it is about the stations and antenna from one computer to another. Everybody digesting mobile and looking at netflix. This why would need heavyduty equipment. We have seen a little bit of reticence from companies out there. The mobile operators to increase the infrastructure. That is why we consolidation within europe and combined. It would be the secondbiggest Network Maker in the world. They would be behind ericsson. L they would and they would leap in front of huawei. This is a company that has been hit so hard are the driving down oil prices. Oil spiking up today. The stock is risky but we think the price target could move up. They see 4. 63. 4. 33 in fact for a price target. East africa and it is not too expensive to ramp up in those regions. They say they have seen the discounts in term of the overall Balance Sheet concerns that is already well factored into the price. Time to get your hands on oil. Francine thank you. That leads us to the twitter question is m a the moneymaker this year . You can tweet us. So figures released and another month of price growth for it to break down the numbers is the chief u. K. Economist philip. Great to have your program. Will this have huge invocations for what the bank of england can do . And implications on how i feel richer as a voter . Will it translate into the election . Philip certainly good for the party. Not translating to such a that we are getting real wage growth but that is real benefit to consumers that may translate. It doesnt seem to be material and the balance with so finally balanced. It should be a home parliament. Francine the boe party makers who are divided on the outlook for inflation, are there risks to the downside . Philip rush not so much. We think the indices that is the trough in the annual rate on the cpi. Back over the months ahead and even on the back end agreed to round two. We will be seeing a very brisk pick up in the inflation rate just as the oil price starts to drop out. The bank of england is quite relaxed around how long it takes to get inflation back to the 2 target. Thats because it is pretty gloomy around how quick unit wage costs will pick up. The data we have it shows that some of that may well be misplaced with wage costs over 2 year on year. The underlying inflationary pressures ultimately be driving u. K. Inflation and what about the 2 target over the mediumterm . Francine you are telling me after this falling price, where going to see a pickup so these prices are only temporary a you expected to pick up by the end of the year . Philip rush a big pickup in inflation we think is personal interest rates. They although they recognize that inflation is low for oneoff reasons, the faster it is so low could under some circumstances translate into the more deflationary psychology. It means that they would rather wait until they necessarily no doubt inflation is going to be stronger before they start to move. Even though we disagreed with the kind of position of the mpc seems to be in a where not expecting the first hike until february of 2016. Press event it would be a small rock francine it would be a small rise and then a trend . And then a flat line . Philip rush if they had gone earlier, they would have to move may be inputted all hold for a little while. Because we believe the bank of england has waited too long before starting, it would have little choice but to have 25 basis point in the quarter. Aligning with the inflation report. You could make an argument as you they should be going faster because it would cause it to deliver tightening that would be difficult to predict. We think the layout of that of 25 basis points is what it takes. Francine thank you. Philip rush the chief u. K. Condiments. The u. S. Has objected to russias decision to left a ban on delivery of air Defense Missile to iran. The russian president repealed the selfimposed 2010 provision on delivering the system. It is a new challenge to president obamas to win domestic approval. The u. S. Secretary of state john kerry has for lawmakers that more time is needed to complete the final Nuclear Agreement with iran. A committee will consider legislation that will give congress the power to review our richard any deal. Several Top Republican say any questions about framework are undergoing. Florida senator marco rubio has become the third major republican to announce his run for president in 2016 for he joins ted cruz and rand paul in the run for the white house. He is the son of cuban immigrants and would be the first latino president. A german engineer company has created an army of bionic ants. Their goal is to a college complicated tasks up by working together. Accomplish complicated task by working together. We are discussing how the factory of the future would work. We have them and they are doing their job. They have one big target in mind to build a nest. Years now, we are demonstrating this learning from nature and transforming into industrial applications and captured these ideas in an approach with the audience. We are demonstrating how bionic ants have the capability for individuals but also do decisions, we need more ants to move bricks or Something Like that. A little bit like the Automotive Industry to demonstrate a car nobody can buy. For example, the trekking the camera system recognizing the task. The communication tools processors for all of it. Francine we have more coming up. How they could lend a helping calw claw in the kitchen. Check out this crazy video. The french climber. He took 70 minutes decline this building relying only on chalk and tape on his fingers. Francine welcome back. Lets check in on these european indices in terms of what we are seeing we had record highs a couple of days ago. They are off the highs for you look at the ftse gaining 0. 2 . A lot of stories around m a. Nokia and alcatel the big m a story of the day. And the currencies. The pound and turkish lira. Inflation basically stagnating for a second month in march. This seems as restaurants and hotels bear the country from deflation. What it would it mean when people will feel a little richer but implications for what to the vop would boe would do. The lira is want to look at. Dollarturkish lira. Falling to a record in this is more more investors are saying elections and that is adding to selling pressures and dollaryen. The yen climbed for a 30 day against the dollar. We spoke to advisor of mr. Abe. For electronics ces. For robotic kitchens welcome to the future of cooking. We are making a crab bisque. We saute shallots in melted butter. It cooks how i would cook it. He knows how to cook but he wants he has every reason to be scared stiff by the machine in front of him. The right way every single time. It is the ultimate sous chef. You do not have to shout. Nothing separates him. Using 3d motion. Rather than just being like tim, the robot is tim. Created, it features a hand used by nasa. The possibilities are combining robotics with Everyday Technology that were taking for granted. Tims recipe could be downloaded from itunes enabling a whole new digital infrastructure. If youre not sure about entrusting a machine with your sharpest kitchen knife theres nothing to be scared of. What can you do with your hands without your brain . Downloading somebodys ip should be more than recipes. It is unlimited. A limited number of people. This is why the machine should change our lives. The company cap tight about how much it costs. Seven running get for 18 years. They hope to roll it out in a few years. They have been running it for 18 years. Tom gibson bloomberg. Francine welcome to the future. Welcome to cooking. You can have the robot. I give it a thumbs up. Bloomberg radio radio more nokia and alcatel. Nokia confirmed it is in advanced talks with alcatel. We will look at it in the wider m a sector. Is m a the moneymaker this year . You can tweet us. We have a couple of other interesting stories. Is m a translating in the buoyancy we saw for stocks . We had a record of the stocks is hundred last way. Now, their little unchanged. Alcatel is gaining. Nokia is actually losing in terms of what to the Oil Companies are doing. Caroline was here and telling does about it. Companies rising for a 6th day. Oil advancing for a 4th day after the u. S. Predicting the shallow bowl is actuallys shell boom is actually slower down. I will leave you with some pictures. Francine nokia in talks with its rival. They are in talks to buy alcatellucent and will look at the m a impact. U. K. Inflation. Well look at the political implications. Lifting the ban on iran. Russia will allow missile sales to the country drawing reaction from the u. S. And israel. Good morning our viewers in europe. Good evening to nose asia and welcome to those just waking up in the United States. Im francine lacqua. This is the pulse live from bloombergs European Headquarters in london. The Corporate News this morning comes from nokia in merger talks with alcatellucent. Lets get more to the potential deal. Caroline, what do we know . Caroline it is confirmed they are eyeing up alcatellucent. Nokia put out a statement today. They came out saying it would be a full combination of the two companies. Of course this is telecoms equipment, francine. This is about getting your phone calls, your data from one mobile to another. This is about the equipment you need that the big mobile companies rin vesting in. It is all about expanding the portfolio, transfering all of the data that we use, netflix, house of cards for example. To be able to expand regionally. This will really boost nokias presence, it is already big in china. 1. 3 billion mobiles there. Also the United States. This is an interesting area for presence. Nokia very much focused on europe and on asia. Alcatellucent has the contracts with two main players when it comes to United States. They have the ones with Verizon Communications and at t. In fact, it makes up a quarter of their revenue. This is an area where they can join together and become what the number one wireless equipment maker, the number two telecoms quim maker in the world second only to arkseson. Meanwhile ericsson. What is the price tag . Some say as much as 30 billion. That is what exxon b. N. P. Paribas are saying. Nokia has a higher premium. 36 more than alcatellucent. Also it has some cash to splash. Since they uploaded their mobile phone unit. They stole that from microsoft last year. They have about 5 billion euros sloshing about that they want to invest. The question is the french government going allow them 12347 remember the french government has not like giving away some of their key assets deeming them too crucial, but will they say yes to this one . We understand government officials are trying to get the signoff and come to an grem that jobs will be protected in france. Meanwhile nokia also is going to let loose some other cash, pull on other purse strings. Yesterday we had a bloomberg exclusive that nokia was looking to sell its overall mapping unit. This is called here. And it could be worth to the tune of about 2 billion euros. They have already gone out to uber saying do you want our maps data . Nokia knows 90 of their revenue comes from networks criminate. Some of it comes from maps. Every four out of every five cars that have a Navigation System use nokias here. This is an area they could be looking to sell out to uber and other car makers. German car makers we understand are interested. They dont need to sell this to find out to deal. They have cash already and they could do a stock sale as well or indeed pay for it with some stocks. We understand they are looking to focus in and this is all about the new chief executive really looking to focus for this company, no longer just being in map that really try to go in where they think they can dominate. Francine thanks very much caroline hyde. We are getting breakthrough news from the french government. They want to have a say in these matters and at the moment they want to details to have job and planned cuts for this nokia bid. The french have been in the past a little bit protective, im hesitant to use that word because sometimes they talk actually much more than they bite. But the french government saying they want to see the details of this plan. If we take a step back on what this means for m a, lets bring in an executive from m a. She has been with us for a halfhour. Great to have you on the program. Thank you for having me. Francine a lot of investors trying to get involved. Does it make sense overall or is it because borrowing costs are too cheap . I think it is a combination of both of the if you look at the sector in general it has not been very successful at doing m a as tralling last 20 years, you have had a lot of very expensive ones. A few years later you look at it and say we have lost that. The second is lot more disciplined. From that standpoint it is better. We discussed geographically but it would make nokia the number three in Wireless Radio Network with eriksson and it could help them be more efficient. It is about efficiency. It is about restructuring. I think so in a low growth world you to find your growth in cost cutting and efficiency. The fact that money is still quite cheap i think is probably, you know helpful although alcatel has 8 billion cash on the Balance Sheet. I think it is not the only factor. It is positioning and structure in an environment that is quite you know competitive. Francine thank you. Stay there. Well get more on your thoughts. Were just getting a couple more headlines from the french government saying nokia needs to present details for the possible job cuts and the impact of this nokia bid. They are also saying that they want the new entity to keep quite a strong french base. The merge Company Needs to maintain a strong french base. Lets get more with richard windsor. He has been covering nokia for about 17 years and joins us now on the phone. First of all everyone expecting a combineags that would be a little bit less aggressive. It would be bits of alcatel. This is the whole thing. It seems like these are two companies that have been struggle allege lot. Will they form a winner . It is very difficult to say at the moment simply because what i suspect this combination is about is achieving scale. What you have in the Infrastructure Market at the moment is two very big players. If you are sf youre stuck in the middle you have a significant problem. I think the idea here is by combining nokia with alcatellucent hopefully would provide a Strong Enough company to compete. Francine tamente richard, were hearing news the french government saying they want to maintain a strong french base, from the french government. Are nokia going to be scared away from french demands . It is not impossible and to be honest with you, my suspicion is that where nokia originated these discussions if, they did originate these discussions, the initial feeling was or request was i only want the wireless dont necessarily want the fixed line piece. I suspect that the french are going to put extra demands on the closest transaction it is going to make it more difficult to execute and these transactions are horribly difficult to get right. It makes it a little bit more complicate and difficult. Francine what does it mean for their rivals . Im sorry . Francine what does it mean for their rivals, for the industry as a whole . It all comes down to execution. If you look historically what has happened in the past when you combinations like this, is eriksson has gone on the offensive and maintained its market share gap over the competition. If nothing changes, i would expect the same to happen. However, they have shown a good ability to execute on the turnaround of nokia networks. They have a pretty good chance of making this work. It will live or die by how well the merger is executed if that is what it comes to. Francine richard said it all depends on the execution. That was the point you were making as well. When you look at the management, is there a confidence they will pull this off . Megamergers are always difficult to pull off, especially in this difficult environment. Clearly the plan this is the first step. The plan needs to be studied and as you said it is quite difficult sometimes to negotiate with the french government. The longterm goals are quite different. But in this case, it looks like it would make sense, in an industry that is quite difficult and under quite competitive pressure. We mentioned that the world needs make room for some of the Chinese Companies that that are coming onboard. I think that is a natural process of consolidation. Francine when you look at m a in general, this is our twitter question of the day. Is m a the money maker in 2015 when you look at these stocks that are record high q. E. In europe is here putting a blanket on everything. Is it tough to make your money in m a . Is it just a little bit of pot luck or can you go for Strategic Industries that will be consolidated . What is interesting is given where prices have come from, as you said, equity prices have gone up a lot. Is this the right time . I think the price is not the only thing. You have clearly the cost of buying which is still very low and in europe is lower with q. E. But also the confidence to make acquisitions and to feel that you can take that condominium or make that commitment and up to really 1218 months ago the world was not as confident about the post crisis world. You have toy look at it, i personal was seeing that financials is a sector where you still have some very Large Companies and also some Smaller Companies and that could be quite interesting over the next 1218 months to see if we have a bit of na that sector. Not only the technology, not only acquiring the geographical exposure but because we have regulatory pressure they might be marriages or weddings within the financial space that would be quite interesting. Francine really interesting. Thank you very much. Pimcos chief Investment Officer for Global Equities and she is sticking around for the first halfhour of the pulse. Still ahead, russia lifts its ban on missile sales to iran. And coming up later today, the 21yearold masters winner Jordan Spieth will be on bloomberg tv. You dont want to nace interview. That is at 4 30 p. M. London time. Francine now russia is lifting a ban on the delivery of a Missile System to iran drawing the ire of the u. S. And israel. Hans, what does this actually mean for the progress of Nuclear Talks . Hanz the russians are saying they are doing this with goodwill. It is growing to greatly complicate any time agreement after that preliminary deal on april 2. What were talking about here, the s300 Missile System, there is already a net 400 system which 45s been sent to the chinese. Russia said they are lifting the ban. They made it clear it would not be points in israels direction. It cannot serve objective purposes and will not offensive purposes. Hanz some of the criticism of this if russians noong have their first foot in the deal if sanctions are lifted to have access to all the commercial opportunity there, this deal alone is estimated to be worth some 800 million. Francine hans, keep it right there. I want to get her take on all of this and then well talk about greece. When you look at the oil price, it seems like we factored in a little bit of this iran deal. Yause is playing tough and giving russia is playing tough and giving a clear signal that it is there and tds belligerent. What does it mean on how you play the equity markets . We noticed clearly the increased fragmentmentation. I think it is 20 for geopolitics and somehow people are still thinking it is 20th century. The world is different today and russia is playing a different role. The fragmentation in the east is something they are involved in. Were seeing it in syria and in iran. We have to get to the fact that this is a different regime. In portfolios clearly the oil price we believe is going to be you have clearly the impact with production and the result of lower rigs in the shortterm you might have a little boost but for a little while we think so you to have some in the sense that they are good assets but at the right price. In term turnovers geopolitics, one thing that people have not really discussed too much and i think it is very interesting, is what china is trying to do with what they called their belt and road project. This investment along the road, bringing russia and china and mongolia and korea and all of asia closer together is another towards the west and geopolitician. Francine what worries you the most . Investors dont worry about this or at least the markets are not telling us worry about this. Is it russia, the possible deal with iran . Is it greece . I think what worries me most the complacency. I think it is the fact that we have to adjust not only to 25th century to politics but also to the and it takes place all over. That is fragment tation that comes in a low growth world. We just have to adjust to it. Francine complacence ji what my feeling is when we look at the markets. I want to get your take on greece. They have denied the report in the Financial Times that they could be preparing for that default. How badly do we know how badly greece needs the cash . Hanz we dont know because we dont know what their incoming tax flows are going to be for april. Bond yields across the board have been up this morning even after greece denied this report that they were praying for default. Today greece needs to roll over some 1. 4 billion euros and treasury bills. On april 17 they have another billion to roll over. Most of that is being bought by greek banks. They seem to be getting lifelines incrementally every week. That is not a huge issue. The larger issue is what happens in may. There are 770 Million Euros that greece is going to have to pay to the i. M. F. Bigger than their payment they had to make in april. The question is will they have the cash view . This is going to be decided at the big summit. I know we have a lot of deadlines but this seems like a final deadline, sometime in the end of april. Francine . Francine that is the problem. There is a feeling in the markets that we have a lot of deadlines. How do you play this . You either believe what people in power say is that they want to keep this union together or you look at the nittygritty on a daytoday deadline. I think if you do the daytoday deadlines you might lose the plot to a certain extent. That creates a lot of volatility and headline news. The other fact is that the e. C. B. Is providing a lot of liquidity. So we have to go step by step. It is mot very easy or pleasant but that is the way it is and we have to take it all the way to the end of the negotiations. Francine thank you so much. Hans nichols in berlin. Thank you both for joining us. I think we covered a lot in 20 minutes. Up next stateside growth for lvmh. Keep it right here. Were on the pulse. Francine lvma reported a 16 increase in First Quarter sales. Andrew, can we extrapolate and think this will have an impact on the sector as a whole . Good morning, francine. Well, a lot of the activities that they have been taking in analyst speak selfhelp, they have been looking at navigating more difficult economic circumstances by for example retooling the Louis Vuitton brand which makes up a bulk of profit and large share of revenue as well. Having more luxurious materials and more selective distribution. Those kind of activities are helping drive the growth but it is undeniable that there must be some across for the sector particularly when you look on the spirit front, lvma reporting that cognac was up. It could point to a better situation for other distillers. Francine what does that mean for lmp vma Going Forward . You mentioned the higher price point and more luxurious fabric. Is this going to translate into their strategy directly . I think were looking here at what lvmh is going to do over the course of a year. An anticipation of sales across the board with a particular rise in cognac. That is what market will be looking forward to. But also they have an analyst presentation at 3 00 p. M. Today. I think they will look at price increases and rebalancing between europe and asia where the pricing difference is at an alltime high. Francine is this more of a luxury sector story or this feels like euro weakness. Something that may impact all the exporters. I think it is both. It is confidence and zumer confidence for a segment to have population currently it is bringing competitiveness in different areas. You could say whats happening is the reverse image of whats happening with the First Quarter and the strong dollar. Francine thank you so much for joining us. She joined us for half an hour. Were back in two. Well be talking a little bit later on the the 21yearold masters winner. Francine welcome back to the pulse live from bloombergs European Headquarters in london. Im francine lacqua. Here are bloombergs top headlines. Nokia is in advanced negotiations to acquire alcatellucent. In a statement they said they are the companies are in advanced discussions with respect to a full combination. The move would strengthen their communication business and allow them to better compete with eriksson. Lvma reported a 16 increase in First Quarter sales. They saw growth in the americas make up for slowdown in china. Shares are up 30 this year helped in part by a weaker euro. An heir to the nina ricci has been found guilty of tax froud. Fraud. Ricci is the first of about 50 french nationals to face trial. Youll hear plenty more stories like that. We also had u. K. Consumer prices out in the last hour. The u. K. Dodging deflation. Lets see how the markets are reacting. We had a little bit of pound weakness . Jonathan got some movement in the fx market. It is a blanket sea of red. Losses of over 1 on the ibex in spain. The the miners are charging ahead. It is the banks pulling us down. Pulling back from record highs on the stoxx 600, europes equity benchmark. The Movement Really is in the fx market. The u. K. Dodges deflation for another day, another month. In line with estimates. Despite that weakness at 1. 4629. Core, you strip out energy food alcohol, tobacco from inflation and you get a core price of 1 below expectations. Maybe one of the reasons were getting a little bit of weakness up by 1 3 of 1 against the dollar. For me, i get excite about the bond markets. 10year yields, record lows of 0. 14 . Lower also the german twoyear. Negative. 29 . They have a q. E. Bond buying program and they have a threshold which is the deposit rate minus 0. 2 . German twos threes, fours trading below that threshold. What does that they can buy . What does it mean for future of this Bond Buying Program . Moodys out this morning warning that the e. C. B. Could run out of securities from some countries. I imagine what they mean by some countries, they are probably starting there in germany. Back to you. Francine thank you so much. Bloomberg just hosted a business election debate. Business policies were discussed with the people that could be setting the policies after the may general election. Anna edwards was the moderator of that debate and joins us now. Who was part of the debate and what were the highlights . Anna good morning, francine. Yes, here at the British Museum we were joined by nick boles. The shadow business secretary and vince cable also joined us. He is a liberal democrat, business secretary of course. We started out talking about fiscal responsibility. We had a room full of people who know a lot about fiscal responsibility. They were finance chiefs having to make their own fiscal decisions every day. In a sense. It was interesting to put that audience face to face with these people who want to set policies for business. I put to him maybe the labor government was going to borrow 100 billion. He said that wasnt a figure that he recognized but we had an interesting conversation about that. Continuity was something that a number of the conversations we had here on the stage brought out. One said we are the labor party will not want to rip up and start again. We heard from the c. E. O. In the u. K. Elect and said that was something the Business Community was pleased to hear about. Interesting conversation about the difference between tax avoidance and evasion. We had another questions before this debate took place. The audience clearly very confused as to what kind of avoid sans ok and what is not ok. What is too aggressive tax avoidance . Half of the people here seem to still be confused about what that meant. It was fascinating that all of the parties represented on the stage, none suggests we were going to see a change in tax avoidance. That is still going to be something that politicians will be taking aim at after may 7 no matter what the government looks like. Francine . Francine thank you. Lets keep the conversation with the election. We have the green party launching their in london today. At the top of the hour, it is David Camerons team. Lets bring our politics team. Joining me is the government reporters. The pulses very own guy johnson who snuck up on me to sit down. In terms of what were expecting from David Cameron, it is a pledge for more Affordable Housing. Well, it is and it isnt. It is to give people a right to homeownership. A million or so voters had a better reason to vote conservative. It is about giving tenants in housing situation properties the right to buy in the same way that a Council Tenant would. The big issue is more housing. Supply is the big issue in the Housing Market in britain. Critics saying it is all very well giving people to the right to buy their home. It is great politics but what does this mean in terms of policy and in terms of the housing shortage crisis . Francine they have promised this before and never delivered. They have promised to sort of match the amount of council with more Affordable Housing being built. The extension to Housing Associations is a new thing but they have not delivered on that. Some figures, the National House federation say that of all the Council Properties sold off, only in fact not even 50 have been matched by a new housing stock. Francine guy, this is great. In the last 24 hours, we have the torries trying to be more friendly and labor talking fiscal policies. It is a reversal. Guy does anybody believe any of them . You a sense that im beginning to get the feeling that the torries are nervous and you wonder whether or not the next 2448 hours will start to see some changes. Im curious about that. It is role reversal. It was interesting to see how ed miliband was scored in terms of what he said in the reality of what he said. It was just vague. It was really vague. And that is a bit of a problem for people trying to run the numbers. Cameron, well wait and see. Well talk to lee janne wood from wales and get her sense. She said she is not talking to labor yet but you this kind of real feeling this block between the greens and the and you wonder how that relationship between these three women is going to work in period post the election. Im interested to get her take on that. Tracy do they have to Start Talking now . If we are looking at a coalition, do they talk now or do you wait until the election and then go full power . You can Start Talking now but at the end of the day, until those numbers are on the table you cant really set the red lines. What you can do is say there are some nonnegotiable areas. We all know that that means. When it comes to the crunch, if it means forming a government or not, nothing is off the table. Francine it certainly isnt. Thank you very much. Dont miss the politics show here on bloomberg tv. That staferts in 20 minutes. Guy johnson and anna edwards. Guy actually it is just me. Francine coming up, well introduce you to a machine called yumi and ask its maker could it be after your job . Stay with us. Francine welcome back to the pulse live from london on bloomberg tv. Robots are either senseless drones or after all of our jobs. At the worlds biggest industrial fair, they were trying to show a different side to the detroits. A yumi robot activities. There are Many Industries that maybe have a lot of small part it is so accurate it can put a thread into a needle. That is the accuracy of yumi. It is a selflearning robot. It can learn the movements. The second piece is it is outside over the cage. It has a sensor in there. Thirdly, it is fully connected into the process. The robot you can order them today and you can order it just below 40000 u. S. I think yumi will change the world. It is a fantastic opportunity to create competitiveness in companies. A lot of people are concerned robots might be replacing jobs. The truth is the highest robotized countries have the lowe lowest unemployment rate. It is really a way to safeguard competitiveness for companies. Francine now lets stay with the theme of Technology Helping business. You heard a. B. B. s c. E. O. Saying robots would not replace human jobs. Lets discuss with david elkington. Joins us now for an exclusive interview. Great to have you on the program. Tell me exactly what you do. This is basically the program that allows a company to engage sales on a purely robotic basis. Robotic or Engineering Software basis. What were seeing is just as we saw a moment ago were seeing Technology Help make our lives better in other aspovekets life. Were seeing it do the same thing in work space and so what we provide is a platform that learns and gets more sophisticate and smarter and helps salespeople be more effective at what they do. It is not just about helping salespeople sell more. It is trying to create an environment where it is a more friendly way to interact. It is about the consumer being able to tpwhy a way that is comfortable. Francine this is not replacing salespeople. Do you ever see it at some point replacing salespeople . C. E. O. S say i like the human touch but actually we could be in i guess a space where 80 of the transactions are done through a computer. So at the end of the day, we love to buy from people. It is because you want to look somebody in the eye and you want to trust this person. What technologys responsibility is to help make that process as streamlined as possible. That is what our platform does. Do you love when somebody calls you during incidenter to sell you something . We hate that. But salespeople do it all the time. How obvious is it to not call when youre putting your kids to bed at night or to email you at a time youre not going respond, like 2al. Thats what they do. Francine how is this different from just general study on statistics . We are applying some degree of Machine Learning and artificial intelligence. We have roughly 2,000 companies that use our technology. Microsoft, sprint, level 3 groupon. Companies like that. It is learning from the best pragues of all of them. As they use our technology, were aggregating all of the information and we have Machine Learning algorithms that process that. Francine this is data crunching. It is on a massive scale. We have 14 million sales interactions. The salesperson is selling to somebody interacting to somebody. On top of that, we have over a trillion Additional Data points a month on things like weather and sporting events. We know if it is sunny in paris and rainingly london you should be selling it to london because people are indoors and they are working. However, if it is wimbledon and somebody in the u. K. Just won there is a euphoric effect and you should be selling to london at the time. Francine big data is going to be like 8090 of a successful company. However it means that youre not what people want to buy before they even know what they want to buy. Is that a Fair Assessment and how do you turn around that . Big data is a misnomer. It is storing a bunch of data. Predictive an litics is about using big data to be more effective in sales and every aspect of business and life. That side what it does. Think about in the consumer space. Amazon know what is we want to buy better than we know. Francine it is a little bit scare combrifment it is a little bit scary. Im go into amazon and go im not going to shop. I trust them now. They know a lot about me now. They billed built some degree of trust. So some degree we provide data and information, our vendors can help us be more skelve in buying and and interacting with society. Francine now here are some of the other top stories that were watching here on bloomberg and the u. S. Has objected to russias decision to lift a ban on the delivery of a Missile System to iran. Vladimir putin approved it. The repeal adds a new challenge to president obama. And in a private briefing, the u. S. Secretary of state, john kerry told lawmakers that more time is needed to complete a final Nuclear Agreement with iran. The Senate Foreign Relations Committee will give congress the power to review and reject any deal. Several republicans said it is unresolved. Marco rubio has become the third major republican to announce that he is running for president in 2016. He joins ted cruz and rand paul in the race for the white house. He is the son of cuban imgrans and would be the countrys first latino president. The u. S. Secretary of state needs to convince a Skeptical Congress at home. Well tell you how john kerry is doing after the break. Francine welcome back to the pulse live on bloomberg tv and streaming on the ipad and bloomberg. Com. Lets take a look at nokia and alcatel shares. Nokia being in talks to buy alcatel. This would be the industrys largest acquisition ever. Nokia down on the news. Alcatellucent gaining some 12 . That was todays twitter question of the day. Is m a the moneymaker of this year . Well it certainly would be if you had any alcatel stock. This was some of the answers we received over the last couple of hours. From steve collins, he said well, it only makes money for the banks involved. Another response he said it will be interesting to see if any big u. K. M a deals will be done before the election. You can continue tweeting us. Tweet us at guy johnson tv. He is on politics and he will be up in 10 minutes and im at flacqua. For another look at what were watching for the rest of the day, were joined by hans nichols. John kerry is trying to get support from u. S. Lawmakers on this iran nuclear deal. Hanz his job got harder. Yesterday secretary of state john kerr briefed house lawmakers. Overnight, we had news that the missile deal for iran from russia is going to make kerrys task harder when he tries to sell this in his old stomping ground, the United States senate. It looks like there is a bipartisan consensus. There clearly is to have legislation that would require congressional approval of any iran nuclear deal. The question is will it be veto proof . That is 2 3 majority. Senate republicans may be one vote shy of that. That is where the real tension is. Francine it will be on the agenda when g7 ministers intermediary meets in germany. Hanz coming out of that, not a lot of reason to be optimistic about the Ceasefire Holding in ukraine. Ukraine will dominate the g7. There will also be a lot of russia and iran talk and just what you do to get this potential Nuclear Agreement over the finish line. Remember, a lot of the key parties are going to be there. A lot of them will be gathered. One of these days were going to do a tour of all of the cities and see who has the best restaurant ansd the best trading. Francine all right. Im in. What about greece . Does it have the money or not . Are we going to talk about it until may 9 . Hanz the banks have what happens today is they have 1. 4 billion in t bills. They have not had a huge problem rolling them over. The banks keep getting more liquidity from the greek central bank. They go for the assistance at the e. C. B. That remained open. They increased that. Were just south of 72 billion on liquidity assistance. The question is what happens at the end of the month when they have to pay salaries and pensions. Has this slowed down the Greek Economy and slowed down Tax Collections . They need that revenue to pay salaries. They need an infusion of e. U. Cash to meet their may and june payments to the i. M. F. And the e. C. B. It is call coming down to april 24 meeting. Francine lets go. Were in. Hans nichols there with the latest of what to watch. That is it for the pulse. Guy johnson will be joined by lee ann wood. And in the u. S. , tom keane and surveillance. Later today well be speaking to 21yearold golf champion Jordan Spieth. Keep it here on bloomberg tv. This is bloomberg surveillance. Tom german yields indicate further distillation. The too big to fail earnings season is upon us. We go beneath the headline data with jpmorgan. America is divorced from reality , the cost of attending Olivia Sterns eight wedding. It is tuesday, april 14. Im tom keene. Brendan greeley is off. Eight weddings or nine weights . Brendan olivia i want to 13 weddings last year. Marco rubio says its time for his generation to lead america during he held a rally in my auntie to say he is running for president. He is just 43 years old. He did not target any of his republicans. He went after hillary clinton. A leader from yesterday