Good morning, everybody. Welcome. Youre watching the pulse live from bloombergs European Headquarters here in london. Im guy johnson. Francine lacqua is off today. She will be back soon. What else have we got coming up for you . Well, the brick is back. Were live with legos c. E. O. Look at the amazing turnaround. Cybersecurity heads underground. re going to go inside a mountain larry. Lair. Lets get to our main story first of all. Tensions rising in the ukraine. Kiev is telling moscow to back off. Ryan chilcote is following the latest developments from inside ukraines parliament. Talk to me about the latest developments. Tensions riseing with moscow. Oddly enough, the most recent and Troubling Development has to do not with this parliament but the local parliament in crew yains crimia. A group of about 60 armed men seized the building at about 5 00 a. M. Local time. Acting president just took that job on friday when the ousted president fled. What these men want that seized this building, they were in camouflage armed with weapons. It is not clear. They took down the ukrainian flag and put up a russian flag instead. Are the russians involved . They are not saying that they are. Meanwhile we have a mill exercise underway on the western border. Russias western border, which of course is shared with ukraine and the defense minister just a few minutes ago said there are russian fighter jets involved in that. Is that a show of muscle or a preplanned exercise . All of this has the united states, nato very concerned. Talking about the need for yause to stay out of ukraine d not by do not get militarily involved in any way. The situation in crimia, mainly a russianspeaking group of people. When Viktor Yanukovych was in power, they were talking about the western regions. Now that the opposition is in power, the concern is they could get sort of lose out if you will in this carefully ethnic mix within the ukraine. Nteresting developments today. The Regional Parliament building in crimia. Tell us what is going on in the building. Were waiting to see this new government formed. This new leader step forward. An interim government but an important one given the financial situation. Ill tell you exactly whats happening. Im inside the parliament. Right in front of me is the man that the opposition said they want to be Prime Minister. Surrounded by 5060 journalists that want to talk to him. They see man that is about to take the helm to lead the country for three months as they prepare for elections. He will be the guy that is the point man for negotiating that very badly needed aid with the i. M. F. , the e. U. , the u. S. Also he is the guy that obvious sli going to have to try and make sure that at least the territorial integrity of the country is kept together. Everybody wants to talk to him. He is walking in front of me now into the parliament where we are expecting this vote ometime today. He has been in the minister of finance, been in the central bank. They see kind of guy to cut a deal and keep things not guilty that sense. His political experience is one reason why he is actually not that popular with some of the demonstrators even though he was a leader of the opposition. They would like to see new blood. Nobody who had anything to do with the previous government. Thats who they would like to see in power. Thank you very much kind to. Indeed. Angela america sl in the United Kingdom today. Hans nichols joins us now berlin with details. What are we expecting today from ms. Chancellor . She is going to call for a more closely integrated European Union. She wants to strengthen it. Any changes to the treaty have to have that as their north star. A stronger more connected e. U. She will also be a addressing the British Public and wans to make the case why being in the e. U. Is good for the british economy. Just how strongly she calls for changes and how much we she gives to cameron for making changes, potentially for a treaty, may be where she is a little bit disappointed. She will be meeting with ed miliband also. The highlight of the tour from her point of view. Lets talk about this treaty issue. To a certain extent, there is a bond that exists between london and berlin at the moment. There is a sense maybe that they can see eye to eye on a number of issues. Reopening treaties and her finance minister has talked about this in the past. Could be problematic. It would be easier to work with an existing treaty. Thats what it comes down to. Can you refine these treaty arrangements without having an entire renegotiation. Cameron clearly wants to have more protection. This is the case he needs make in his own party. My view of what merkel is going to say, it is going to be difficult for her to satisfy glemp the u. K. , particularly in camerons party. She doesnt know exactly whether or not David Cameron is going to be in power when we get around to this referendum. Hans nichols, our International Correspondent. R. B. S. Has posted its biggest loss since 2008. The bank received win of the biggest bailouts in history. We have more on the numbers and they dont make great reading. No, they dont. Pretax operating loss of 8. 2 billion pounds. Consensus, 6. 7. Bigger loss than expected. Some big writedowns. We knew this was coming. We know they are going to cut costs by 5 billion pounds. They are going to shrink the Securities Unit as well. This is a lot of stuff we already knew, guy. On the subject of job losses, they are going to combine 7 divisions into three. Were not going to get a number for job losses. We lack detalse tail there. The other side of things we know they need to raise capital. How are they going to it . Raised over a billion pounds. What is going to happen with the u. S. Banking unit . A lot of people asking the question, they need to raise more capital. Will the process be accelerated . Is it going to be enough . You have to look at whether or not the current structure of Capital Raising is going to be enough. Whether more money is going to be applied. They keep losing money at this rate. More restructuring costs to come. The costs are mounting. How much more litigation costs do that they have to put aside . The bonus pool. It is down from the year before. In banking terms. This is not a big bonus pool, but when youre a bank 81 owned by the government and you have had losses for the last six years and you a bonus pool of 576 pounds. Everybody is going question it. It is hard to justify. Can you look at the two numbers, the loss and the bonus pool. What are you going to . Not pay them . Lose them . Lose talent . That is something that ross mcewan talked about. Around 73 which is punchy. The bonus pool, believe you and me, that will be the headlines for a lot of the newspapers today. Well dont conversation. We have guests lined up to take us through the credit angle on r. B. S. That is coming up later on. Shares are climbing for the worlds biggest publicly traded hedge fund. Here with more is our European Business correspondent, caroline hyde. A smile on the face of the c. E. O. It seems the Restructuring Plan is starting to bear fruit. Lets go through the positives. Assets, they climbed in the fourth quarter. A surprise buyback of shares. 115 million worth. That was more than had been expected for many. They are also cutting costs faster than many expected. 270 million by the end of next year and they posted a profit. Investment gaining particularly for the g. L. G. Unit. Client redemptions are slowing, but a long way to go. We have to remember that for man group. Assets are still off by 20 since 2010. Jpmorgan are saying there are still better stocks to pick out there. It is not quite turning around. Their biggest hedge fund, it has lost money and assets for three straight years. It has still lost money this year. A cautious outlook for man group. We are starting to see a turnaround. Analysts are starting to get more excited about the stock. Back to you. Caroline, thank you very much indeed. Caroline hyde. Still to come, building the brand brick by brick. Our europe editor david tweed is inside lego to find out how it became one of the worlds most successful toy companies. David . You know wouvent more important things about the lego brick . It is to be able to take it apart like that so that you can rebuild it. Ill be back after the break ithlogues earnings and at 9 00 15, well have an interview with the c. E. O. Good morning, everybody. Welcome back. Youre watching the pulse. Angela america sl in the u. K. Today and set to speak in london in parliament a little it later on. It may not be what cameron wanted to hear. America sl expected to call for a stronger, deeper e. U. Which conflicts with what David Cameron is promising. Offering a referendum to the british people in the next few years. 2 chairman to have pro e. U. Amnesty group, the european ovement. Howard, let me start with you first. The german chancellor is coming. David cameron has often seemed shares his merkel views. We need change. We need to make sure the e. U. Functions better. Do you think that is what were going to really hear today . First of all, merkel has a new Coalition Government in germany. So she is more constraint by the fact that she has got democrat partners. I think she is limited in what she can say. I think she is limited on what she can deliver to the extent we get changes in the future. They will be minor and not major and not sutcht to the asht that u. K. Would prosper better outside than inside. Were in a situation where particularly the u. K. , it feels like a binary argument. It seems the argument is more subtle. There should be a debate about the middle ground. How real sisk it that we dont have to go all the way to the realistic is it that we dont have to go all the way to extreme and that we can generate a situation which is acceptable to all . The European Union is the 50 of foreign investment. 40 of our exports it depends onmy. Membership. The fact of the matter is we should all Work Together to make the European Union work even better. Germany and the u. K. Have a similar agenda on creating a more European Union. If mr. Cameron wants to discuss in those terms. If he talks about repatriating powers, negotiating treaties, just one member state, i dont think he will get anything. Howard, the e. U. Could do less but do it better. That is a line that came out of a briefing that i read this morning. That sounds like a good idea. Do we need to leave the e. U. To get a better outcome . Is it possible that we can negotiate a better outcome from within. It seems the risks were taking in going to that extreme is quite significant. Well, i think risk is a word that comes up in order to promote peoples fierce. If you look at some of the most prosperous countries in the world, highest g. D. P. Per capita, high eths wealth per capita, like switzerland, norway, countries like australia. Emerging countries like israel. Singapore. They are prospering because they have flexibility and they can pursue economic policies, which are in their countrys interest in order to promote growth and jobs. Do we want to be associated with a europe which has a country like spain, with 50 youth unemployment . Is that the way we want to go . Is that the position of the fufe future or do we want to focus on our great universities, our great financial industry, services industry. All of which is deputyly embedded into the deeply embedded into the e. U. There are problems. They are well recognized. E need reform. Reform seem it is like a much easier and more pragmatic route than taking the extreme choice, which is to simply leave and wash our hands of the situation. It is so embeded in the culture over the e. E. U. Ill give you a tangible real life example in my own business. Im a beneficiary. We own a Housing Estate in berlin. We recently received an e. U. Grant to upgrade that estate. Were trying to do our best with the grant to improve the facilities for the children, the playgrounds, etc. , etc. Why would taxpayers be paying money to the e. U. For that money to then go back to berlin . Would it not be better that the local authority could distribute the money . It is so embedded. It is so cultural within europe. There are so many bureaucrats. People are lig off this system. Youre asking them, it is a difficult challenge. I think there is confusion this year. It is worth remembering that the investment of the European Union is making all around europe, generating growth for all around europe. If structural funds are spent in romania, youre creating jobs there, giving people money. By you create growth all over the European Union. Lets talk about reform, though. That seems to be at the heart of what the u. K. Ultimately wants. It wants the europe that is more efficient. There are inefficiencies in the way those funds are distributed. There are inefficiencies the way that brussels operates. How do we make brussels and europe work better . If we can achieve that then some of the things a that howard is talking about may disappear. It is worth remembering that the way this company works. There is democratic control over those institutions in a way that maybe there isnt in brussels. It has been a the growth, reforms that maybe make it more democratic and more representative. The European Parliament has more powers now form the you and me, here around europe. I agree with you, you have to make them all more accountable. Including the council of ministers that brings together the elected members to their member states. They should be more transparent an open about what they are doing. The commission should have its president directly elected. E have a new system now. Making the direct link between the on the ground and the person who is administering just very briefly. If they reform brussels, would you be happy or are you always going to believe you have to get out . There is no middle ground . I would have signed up in 196757 when we had r 1975 when we had a referendum to the free trade agreement. Im not looking for a large bureaucracy in brussels to regulate our industries, our courts, etc. Etc. Gentlemen, were going have to leave transit. Thank you very much indeed. Well take a short break and be back in a couple of minutes. Welcome back. Time for todays hot shots. There is no rest for the winter olympians who went from sochi to sweden. After two rounds, germany led the large hill individual event. Nice jump. And day one over the fracture cycling World Championships in colombia was dominated by australian bikers. They had a stunning lead in the mens individual trice win the gold medal. Race to win the gold medal. Lets check out the equity markets for you. 19 minutes into the session in europe. Further back from the stoxx 600. Ftse down. Cac 40 down by 1 3. Italy and spain showing losses as well. That is the focus for you. The Senate Banking committee happens at 3 00 p. M. U. K. Time. Check out the euro. Uickly for you, euro dollar. 1. 6161. Check out the regional numbers in germany. It is not just restricted to likes of spain and italy. You have regional inflation around 1 in those countries. What is the e. C. B. Doing . That is the big focus for next week. Jon, thank you very much indeed. We are going to take a break. Well be back in a couple of minutes and talk about lego and that number there. Good morning, everybody. Welcome back. Youre watching the pulse live from bloombergs European Headquarters here in london. Im guy johnson. My colleague, Francine Lacqua is off today. These are the Bloomberg Top headlines. Angela merkel is in london today. She will address both houses of parliament and have tea with the queen. She is expected to call for a stronger European Union during her visit. She will also try and convince the u. K. To stay in europe. We need to be market and england is part of that market. We need to deepen need to have a to move forward. If some countries dont want to move forward, they have to have their own way. Has won support of the kiev. An protesters in secretary of state john kerry says the u. S. Is formulating a Loan Guarantee to the country. Kerry also warned against any russian intervention. And investors are punishing r. B. S. It has posted its biggest loss since getting a government bailout in 2008. They have plans to shrink their government investing business and overseas operations. Now legos results have come out. David tweeth tweed is at the companys h. Q. In denmark. Good to see you. Guy, they have just been handed to me, these results. What we see is once again lego is powering ahead with an increase in sales of 11 . Im going to give it to you in u. S. Dollars to about 4. 5 u. S. Dollars. A little bit of a showdown from last year 25rks increase in sales but extremely respectable when you consider that the global toy market has been either slightly declining or has been flat in some markets. They have increased sales in all markets and what they are aiming to do and continuing to say they can do is continue to make market share. Let me give you the net profit, up 9 to 1. 1 billion. These are pretty good results. They are very pleased here at lego. You can see they have been smiling all morning. Let me talk to you a little bit about how they have managed to do this incredible turnaround. One of the keys is getting closer to the consumer and one of those consumers is what they call the adult fan s oflogue. The socalled were going meet a few of them now. In denmarks capital, copenhagen, 10,000 people under one roof. It is not a muskse concert. It is not a football it is not a music concert or a football match. It is a lego event. E grownups showing off their creations are adult fans of lego. It is fans like this that are inspiring lego designers. It is a round tile with a ole in the middle. The motor can run more freely. It hasnt always been like this. Logue has been protective of its packaged toy sets. The lego brand ideas didnt come easily. They welcome this with open arms. So much actually that they com