francine: fif votes. a will sepp blatter get the backing to survive? deal or no deal, greek leaders name a debt agreement. and as the g7 meeting continues in dresden, we will hear from pierre moscovici. welcome to "the pulse" live from bloomberg's european headquarters in london. fifa members will set a vote in
elections for the next president of the football governing body. it follows drama in which several officials were arrested as part of a probe into corruption. support for sepp blatter appears to be weakening. in an exclusive interview, his former adviser accused him of "serious mismanagement." mark barton is outside the stadium in zurich where the vote will take place. what happened today? mark: i tell you what is happening right now. we are hearing that sepp blatter, the president, has asked for security to check the insides of the building, because protesters have interrupted the fifa congress. there's not just protests outside. behind me, we have palestinian protesters calling for the fifa congress to suspend israel. to suspend israel, you need a
two thirds majority from 209 members. to my right, you have protesters from qatar complaining about the conditions that migrant workers are experiencing in the building of stadiums for the 2022 tournament. we have protesters in front of me, to the right of me, and actually inside the 65th fifa congress and they have interrupted the congress. it is an incredible day. it is a day of david versus goliath david being the brother of the king of jordan, you know who it is. goliath is mr. blatter himself. the whole procedure has been overshadowed by this massive scandal that erupted two days ago, this indictment of 14 officials on charges of racketeering, money laundering bribery kickbacks to the tune
in some cases of $150 million. this is rampant corruption that has gone back over two decades. i spoke to an advisor to sepp blatter over the last two decades. i asked him a simple question. hisais blatter corrupt? >> his management of fifa was not free of corruption. giving the tv rights for one dollar to an airline in exchange of a vote, maybe it is not corruption, but it is serious mismanagement. mark: he also said that fifa wasn't corrupt, but some of its members clearly were. he also noted that the investigation centered on american officials. he said investigations in the future could center on other
confederations. there are six global confederations. asia, africa, europe, north america, south america oceania as well. that is something to consider. the math is very simple. sepp blatter needs to thirds of the vote. there are 209 members. every member has an equal vote. that means montserrat, the caribbean island with 4800 people has an equal vote to brazil which has 200 million people. blatter has been focusing on the likes of the cayman islands. $2 million of fifa money has gone to the cayman islands. blatter turned up in the cayman islands with his grand groundbreaking ceremony in 2009.
what is interesting is that the caribbean backers of blatter say they may shift their support of prince ali. the asians, longtime fans of blatter as are the south americans and the africans. the math, at this stage, doesn't add up for prince ali. francine: you've also spoken to a number of football officials. what is the mood like in zurich? we are looking at protests behind you. is it one of anticipation or mistrust? mark: there's been so much going on. take the european ruling body, yesterday saying that the presidential vote taking place in the building behind me should be suspended for six months. they threatened to boycott the election.
they held their confederation meeting yesterday afternoon. they decided it was best to protest from within. they decided not to boycott the vote, but many will vote for prince ali. i spoke to national leading figures from holland, germany, israel, palestine, barbados. here is what they had to say about sepp blatter. >> a disaster like this we never had in life before and there's only one chance. we need a change. a change means that we have to vote for prince ali. >> after all this, what happened in the last 10-20 years, and now again, we cannot just say, i had nothing to do with it. >> blatter has been there for a long time. it is hard to believe that he didn't have some suspicion that
something was going on. >> giving away the tv rights for one dollar to an airline in exchange of a vote, it is serious mismanagement. >> for all the labeling that sepp blatter wears, there's never been any hard evidence that sepp blatter is corrupt or that he ever took bribes. what happened is that a lot of other people did that during his governance. that's where he's been labeled with this stuff now for just about the rest of his life. >> if it is true what i read in the newspapers, that $10 million has been remitted, don't tell me that the executive president of fifa doesn't know about it. >> this all happened on his watch. when these things happen on somebody's watch, is it right to keep that person in charge? mark: one of the members you heard there, the head of the
dutch football association, who until a week ago was standing against sepp blatter, i asked him yesterday when did you last speak to toblatter and what did you say to him? he said he asked him to stand down. yesterday, the head of ua the, the french footballer, he asked blatter to step down twice. the election is on. it will take place this afternoon. he needs a two thirds majority. if that doesn't happen, he will need just a simple majority. it is ali versus blatter blatter the favorite. francine: thank you so much. i'm looking forward to the coverage. mark barton in zurich. switzerland's economy shrank the most since the financial crisis in the first quarter.
gdp fell 0.2% after a revised growth of 0.5% in the previous three months. economists surveyed by bloomberg had forecast stagnation. japan's economy has limped into the second quarter with poor data as well as a drop in household spending. people left the job market and inflation fell to zero. consumer prices excluding fresh food and the affect of last year's sales tax increase were unchanged from a year ago. j.p. morgan chase is to cut thousands of jobs over the next year. the bank seeks to contain expenses. that's according to a person with knowledge of the plan. jpmorgan has been consolidating cutting mortgage workers, and reducing the ranks of tellers as more customers use mobile phones and the internet. still ahead, greece frustration. we are live in dresden. and, nigeria's new president.
policy or cap we are live on bloomberg -- "the pulse." we are live on bloomberg tv and radio. greece's predators have demanded the nation makes commitments to overall its commitment. greek prime minister alexis tsipras held a phone call with the german chancellor and the french president last night. let's cross live to dresden and our international correspondent, hans nichols. what is the latest from the g7? hans: the latest is that not enough progress is being made. we've heard that from pierre moscovici and the french finance minister. juxtapose that with the latest out of athens. yanis varoufakis is again saying that all sides are close to a deal. he's saying that while insisting that greece will not accept recessionary measures area -- measures.
the dynamic hasn't changed. what has changed is the sense of urgency, that time is running out. listen to how mr. moscovici put it to me. >> time is running short. we need to speed up in order to get to this agreement that we all want. although there are progress there is still a way to go. there is still some more progress to be done and some substantial reforms that need to be delivered to the country. that is absolutely necessary. hans: francine the sensitivity of negotiations have gotten to the point where we are parsing the difference between potential or possibility about the potential for a greek exit. i'm going to read the quote to you provided by the imf after some back and forth in the dispute about whether madame lagarde was misquoted. "i hope the europeans --
this idea that there's a distinction between a potential and a possibility gives you a sense how tense things are. we expect greece to dominate one of the final sessions here. overall we will try to get a read out and report back to you. guy: hans, -- francine: cons, walk us through the latest on the deadline when that 300 million is due. hans: we have this provision from the 1970's that the imf can take a monthly payment that is due at the beginning of the month, bundle up, and pay them in the last part of the month. the imf has raised that as a possibility. that gives you a little bit of time.
earlier, we spoke to mr. sapin. here's what he said on the urgency and velocity of the negotiations. >> the talks are progressing faster, but not fast enough to conclude. everyone needs to be in a discussion mode that is harried, concrete technical, but also sufficiently political, to reach an agreement in the coming days or weeks. every day that passes makes the issue more urgent. hans: francine, the pattern that we've seen over the last 48-72 hours is optimism from greece shot down by actual officials who are trying to get to some sort of agreement. june 5 is when that payment is due to the imf. but there may be a little breathing room there. guy: hans nichols there in dresden. francine: greece's creditors say an agreement is not near. ricardo barbieri thank you for
joining us. give us a sense of the urgency. the imf deadlines are not that firm, yet we still don't have an agreement. is the possibility of a greek exit now higher than just two days ago? >> i think it is. we are still in the most likely scenario. the greek government takes it to not even the 11th, but the 12 hour. maybe they complete the negotiation once it has completely run out of money. for the time being, i'm afraid there isn't much new. no one had a exactn -- an exact estimate of how much liquidity there is and how capable the government is to harness that liquidity and use it. it looks like they've done reasonably well on that count however, things are getting more difficult.
we have more payments to the imf in june, and credit payments -- francine: to the ecb. that is the big one. >> then you have to make assumptions as to how much cash they have to make that payment. my expectation has been that something would have to happen in june, i had of these -- ahead of these july payments. francine: use of the focus was on what christine lagarde told the german papers, that was retracted saying we are closer to a greek exit. it seems an assumption now that if there were a greek exit, we could live with it. is that fair? >> it is part of the negotiations, the stance that the european countries of the imf have to take. if they say this is the end of the world, they don't have any bargaining power. francine: would it be the end of the world? >> for me, no.
the way i put it is, this would be a moment however, it is as if we've been talking about lehman for five years before it happened. francine: but the markets don't listen. the markets are surprised that we talk about interest rate rises from the fed. >> if you positioned at the beginning of the year for a major stock market correction because of greece, you would have underperformed. so there is a risk that everyone is thrown into, staying long or longish risky assets and then called out in a correction. but i do think in general that the system is in a better position to withstand this potential greek exit. i still think the effort is on keeping greece in the euro. francine: do you think that qe was put in place to protect
countries from negative great events? >> it is one of the factors, the unspoken factors that probably led to qe. i think the more important factor was that europe, for many years, resisted taking this option. the u.s. did. the exchange rate of the euro was quite strong. the euro essentially absorbed all the problems from around the world and suffered from a substantial rise in unemployment. i think at some point, something had to be done to preserve the currency union. francine: what is your take on euro-dollar? the dollar is now rising. are we going to see real growth in europe rest and mark -- europe? >> we are going to see moderate growth, as we did in the first quarter.
the growth rate was around 1.6%. i think the second quarter, the outcome will be similar. at the moment there is a 0.4% protest -- forecast. i think we will see slightly faster economic growth, but i don't think we have signs or reasons to expect that we will see very sustained economic growth, unfortunately. francine: thank you so much ricardo barbieri. the japanese economy limped into the second quarter as household spending fell, people left the job market, and the central bank's key inflation gauge slowed to zero. james, is there any sign that inflation will pick up to where the bank of japan wanted to be? james: there is no sign that inflation is going to pick up to
where the bank of japan said it would be. they said it would be about 2% now. in april, it was 0%. if you strip out the effects of energy prices, it is only about 0.2%. the numbers have slowed from march. the majority of economists we speak to end the bank of japan say there is a strong possibility they will go negative sometime this year. the inflation picture is not good for the bank of japan. governor kuroda expects falling energy prices to cause a pickup in spending from consumers and companies. as we saw today, consumers aren't doing that. they cut their household spending for the 13th month in a row in april. not only is inflation not picking up, consumption is not picking up, and business outflow is weak as well. overall, the data are very bad for the economy and the
inflation outlook. francine: today's data is a first look at the second quarter. japan's economy rose 2.4% last quarter. how is the economy looking as a whole? james: in the first quarter, you saw about 0.5% quarter on quarter growth in private consumption and the same in spending. as i said, we are looking at 80's greece -- looking at a decrease in private consumption. output rose 1% in march, but was down year on year. the data we have for the second quarter also not very strong. it -- there's no certainty that it will fall negative, but it may not be an extension of growth from the first quarter. francine: james mayger in tokyo.
looking at the banking sector jpmorgan is set to be slashing more jobs. here with more is caroline hyde. how many jobs are we talking about? caroline: we are talking about thousands. the saga continues. still more shedding of the jobs at j.p. morgan. according to the "wall street journal" it could be more than 5000. the reasoning is, consolidation in the back office. we are getting a sense according to people familiar that it is going to be overall $4.8 billion they are trying to shave off in terms of expenses. jpmorgan said that back in february. when you look at where the cuts come from, the back office mortgage workers. they don't need so many. and, cashiers. the people who serve you behind the banks. it is all about mobile phones. online banking.
clearly, this is a way they can help strip out costs to the tune of almost $5 billion. cost cutting is a priority for jpmorgan. revenue is stagnating. how on earth do they get their interest income up when we've got record low base rates in the u.s.? this is all done to protect the bottom line. francine: caroline, put this in perspective. how big are these cuts given the size of the bank? caroline: 5000 sounds like a big number, but this is the biggest u.s. bank by assets. it is only about 2% of employees. put it in perspective with what we've already seen. already seen 6000 jobs in the last 12 months cut i jpmorgan. that's what they stated in their april statement. if you look through the bloomberg terminal, you can see the scale of job losses since
the financial crisis. in's 2008, 5 million jobs have gone across every single sector. jpmorgan has cut out 17,000. it is still substantial, but less than hsbc has cut, less than bank of america, less than rbs, less than citigroup which has cut 52,000 jobs. we've also got to remember that they are shifting the load around. according to people familiar they could be holding steady. they could be boosting the asset management, the wealth management. deutsche bank said some things today in their asia business. it may not be taking jobs out of the system in general. francine: caroline hyde there. coming up, africa's biggest country. the new president is going to need more than good luck if he's going to succeed. we have plenty more coming your way on the challenges for nigeria. a reminder, you can follow us on
francine: welcome back to "the pulse" live from bloomberg's european headquarters in london. here are bloomberg's top headlines. the g-7 meeting of finance ministers and central bankers ends today without any sign of a deal for greece. we asked what will happen to a greek banks if the nation defaults. >> if such an event would happen then the amount of the situation of the banks will have to be redone.
then, the exporters of greek banks to the public sector in greece will suffer further. francine: fifa's 209 members will vote for their next president today. current president sepp blatter is seeking a fifth term as the head of football's world governing body. in a week where several officials were arrested for corruption, he seems to be losing support. he will face jordan's prince ali in the presidential runoff. president francois hollande says he wants france to remain part of the european union as he hosts david cameron for talks yesterday. the u.k. prime minister will continue his tour of europe today, meeting german chancellor angela merkel and the polish prime minister. now let's turn to africa and the swearing in of the president-elect. to take a look at the challenges he faces, we are joined by the
head of emerging markets at ubs and bloomberg's gavin serkin. welcome. thank you so much for coming in. gavin, let's start with you. bukhari has a lot of challenges. there's corruption there's fuel problems, there's a lot of -- the economy -- so what are his priorities going to be? gavin: if you rewind a couple months to the election, this was delayed because of the violence in the north, the threat from boko haram, which has killed 13,000. that was priority number one. the momentum is on his side. we have seen the military crash those boko haram strongholds. number two priority was corruption. that is going to be harder than fighting terrorism. corruption is endemic. we've seen it with the national
oil company. the former central bank governor accusing the company of withholding billions of dollars from nigeria's budget. the third issue is something that's come up this week, which is the fuel shortages. we've seen 18-hour queues at petrol stations. we've seen planes being grounded. nigeria has to sort it out. africa's biggest oil producer needs to sort out oil coming back to the country as fuel. >> francine: what do investors want to see? we are seeing live pictures of the and operation. what does he need to do? >> to push ahead and remove the corruption, but specifically to reform the oil sector. it is ironic that he was the one who set it up in the 1970's, and now he might be responsible for dismantling part of it.
how they go about dismantling the state assets to improve the fiscal deficit situation in nigeria, the long-term growth potential, because they need to improve production as well. investors are quite focused on africa. they are quite willing to invest in africa. nigeria being the most populous nation in the continent does have population on its side. i'm not convinced of the idea that -- [indiscernible] nigeria thus far has been a one trick pony. it needs to move away from that. otherwise it will suffer the same fate as russia did. is nigeria moving towards manufacturing? these are big questions. i don't think they are being answered now. francine: you think they are not being answered because it is not on the radar yet? we talk about boko haram. he's been distracted. >> i think there are other
things. institutions in nigeria are relatively weak. we've seen a big savings pick up in nigeria but that has been due to commodity prices going up. education hasn't picked up. if demographics were all that mattered you would go to syria pakistan, and afghanistan. what you want is places like postwar germany, postwar japan korea, taiwan, where industrial production can pick up. before that, you need strong institutions providing education. you need a strong industrial base area nigeria remains off. francine: gavin, we have the international investor perspective. this is also what people on the ground want. gavin: diverse a vacation is the key priority -- diversification is the key priority, but the key concern is to get energy going.
they have to survive with power cuts. that is an expensive business to be in. from the international investor perspective, the liquidity squeeze on the myra is a huge issue -- on the naira is a huge issue. the big players on the market aren't going near naira because it is difficult to know whether you can sell the debt. francine: we are getting live pictures of the inauguration. you can see secretary kerry doing the rounds with the european presidents. i think i also saw the head of the european commission. when you look at nigeria, you were mentioning that nigeria is in the top 10 for investors in the coming decade. if they get this right, they'll win. gavin: demographics isn't everything, but if you look at nigeria, this is a country that
has very special demographics. it is going to take -- overtake america in terms of you and projections in population. that gives a huge potential for consumer related sectors to come up if the economy can diversify away from oil. this is an economy that could blow the example of the brick nations. >> i'm more bullish on the east african story. i think kenya is doing a good job. i think botswana rwanda, uganda, these other companies -- the countries that are likely to grow faster. this is where you can see out servicing coming through. nigeria is similar to russia in many respects. it is largely a commodity story with very different demographics. if you wanted to sell more in nigeria, i think you would be quite successful. if you are looking for the big
productivity pick up, you don't have the raw material in place just yet. francine: we are looking at some pictures of the inauguration. it is quite grandiose. this is not his style. he is more austere. gavin: that is the reputation that he's got. this is a politician that's made a big stance about fighting corruption by setting an example. he's not somebody who has these flashy cars and lashing living -- and flashy living. he's reputed to be down to earth. how much of that is his real persona is difficult to answer. corruption in the political world is as endemic as anywhere else. politicians in nigeria are among the highest paid in the world. he is starting at the core within politics itself. then he's got to go out to the national oil company. he's got to go to institutions
which aren't effective, partly because of this corruption because most of the spending is taken up by paying employees, delivering the money that goes to various people are rather than delivering services. francine: let me ask about china. we had the shanghai composite down six 15%. do they have a firm -- 6.5%. do they have a firm handle on this? >> this has been a momentum-driven market. the politburo has been happy with stocks going up in china. monetary commissions in china have been tightening. the recent policy stimulus in china is to come to that. china is going to loosen policy more. many investors think china is going to ease monetary policy. china's easing is of a completely different variety. when china eases, it helps
chinese companies. it does nothing for the cost of equity for global companies. it impacts -- the fed impacts the cost of equities on the planet. the dollar is the currency in which most of these companies issued their debt. what china does is hopefully help earnings for companies globally. we do think that will be ok. the key issue is construction. that is still weak. i think they are running to stand still. they are easing, but they are able to ease only as much as they can keep growth at 6.5%. francine: interesting. thank you so much for joining us. coming up, the true cost of our everyday fashion choices. a new documentary sheds light on the social implications of our fast fashion mania. ♪
years. it is the first time the g7 meets in the context of recovery. the question is, how can we have strong growth which is capitalized well to create jobs and reduce inequality? the key word is structural reforms. everybody insists on the fact that when you have a cyclical recovery and we have one which is solid, we need to strengthen it through structural reforms in sectors like the labor market like financial sectors, or to boost investment. that is what the commission tries to do. hans: overlaying that optimism is concern about greece. what sort of status update can you provide? >> we didn't talk about greece here. wolfgang schaeuble wanted it to be an open debate between the members of the g7 plus the institutions here, the imf, the ecb, the commission. of course, we know that greece
is the preoccupation. i would say that today -- well, there is work in progress. we made good progress on greece in the last few weeks. we are now talking on substance on reforms that could be delivered. we have two parameters. the first one is time. we need to speed up to get to this agreement that we all want. the second thing is that although there are progress there is still a way to go. there is still some more progress to be done and some substantial reforms that need to be delivered. a comprehensive set of reforms is absolutely necessary. hans: could that include pension reform? >> we started discussing pensions but we are not that year. hans: [indiscernible] >> i'm not entering into details. the discussion is global.
as we say in diplomacy, as long as everything is not included nothing is concluded. francine: here are bloomberg's other top headlines. avago technology has agreed to buy broadcom for $37 billion. the offer makes it the biggest technology acquisition ever. avago will pay $17 billion in cash and $20 billion in stock. google has unveiled a range of new technologies at its developers conference in san francisco. the latest offerings include a new android system with improvements to its gadget google cardboard, and android pay, which will goad head to head -- which will go head to head with apple pay. switzerland's economy contracted the most in six years. gdp fell 0.2%. the swiss franc has been cited
as the reason for the disappointing data. it has been just over two years since the disaster in bangladesh that killed over 1000 workers when a textile factory collapsed. hitting the big screen today is a new documentary that digs into the cost of fast fashion. bloomberg sat down with the executive producer of "the true cost." talk us through the business response to the disaster. when we talk about fast fashion it is h&m and zara. >> first of all is the way that businesses have responded to the people who were affected by the disaster. more than 1100 people died. it was the worst tragedy of its kind in bangladesh. dozens of charities contributed to a trust fund. h&m, walmart, contributing to this. but of course it is not just
about giving money after a disaster. it is what you do to prevent it happening. there has been a bangladesh a court. more than 200 brands and 1500 factories have signed up to solve all the safety issues in the factories. they are getting new signatories all the time. they are all developing these corrective action plans. they put out a press release this week, giving an update on how far they got. i had to call them to check the number. out of 1500 factories, how many do you think have completed all the works required? francine: 10%? nejra: two. two out of 1500. they verified only 5% of the issues being corrected. they do have that ambitious target and they are working very hard. of course, we talked to someone
who thinks it is not just businesses that have to do more, but governments too. >> that is a highly regulated industry. why doesn't the same happen in fashion? the problem is that the government's are enslaved by these businesses. the country now relies on these businesses to operate their to exist. if you change this, if you took the business out of the country, the country would collapse. nejra: the garments and textiles industry makes up about 80% of bangladesh's exports. >> francine: thank you so much. it is an important factor that we often forget when we go shopping. still to come, read your engines. we talked to the new $500,000 lamborghini supercar. details after the break. ♪
♪ matt: christmas has come early for the superrich supercar fan. lamborghini has just come out with this new a ventador. it costs $500,000 and has 750 horsepower. we are going to try it out at this formula one track. yeah! hit the brakes. just steering, the grip, and the downforce makes this car so exciting! ahh!
cornering is where it is at! 200, 225 250. we've driven the lamborghini on the track. now we are testing it out on the back roads of barcelona to see what it is like in the country maybe an urban setting. already, i'm noticing that the gearbox cannot decide what to do. it is shifting back and forth looking for the right gear. at low speeds, this automatic gearbox does not seem happy. i'm going to shift it into manual mode. another thing that lamborghini has improved upon includes the steering. what they call lamborghini dynamic steering is a system they developed to allow easier turning of the wheel at lower speeds and more stability at high speeds as well.
those were some of the most insane roads i've ever driven, and the car is, i would say it is perfect because of the power and lightness but it is huge. for thin, tight roads like this, it can be a little bit scary and that's not necessarily bad. i kind of like to be scared. let's take it back to the track. that is where this beast really belongs. unreal. francine: i'm not sure how to bring all the excitement of matt miller on the road into my market check, but i will try. this is the swiss franc. let's go for it. it has had a rough ride. switzerland's economy shrank the most in six years. this is a picture for dollar-swiss franc.
0.9435. today, gdp fell 0.2% in the first quarter. we initially had a growth of 0.5% in the previous three months. no one was expecting this. we were expecting it to flatline. we are watching g-7, watching greece, also watching the u.k. referendum. that is what the twitter question is about. what should david cameron tell angela merkel today? also, what should angela merkel tell david cameron? just a reminder, you can follow us on twitter. for those listening on bloomberg radio, "the first word" is up next. for our viewers, a second hour of "the pulse" is coming. we will be hearing from the ceo of lamborghini. that is coming up next. we have luxury, the g7, switzerland and these allegations against fifa as well. mark barton is in zurich.
in the united states. i am francine lacqua. this is "the pulse." we are getting breaking news in terms of gdp for greece. the greek economy contracted .02% from the previous quarter. we know we are not going to get any good news from greece. greek economy contracting 0.2%. i do not know if we have the euro-dollar to show you. look the negotiations are not going well. they're not going well at the g-7. the greeks seem to be more optimistic than what the international creditors are. a lot of people are saying they still have a week. that is the deadline when they have to pay 300 billion to the imf. the greek economy contracting 0.2% in the first quarter from the previous quarter. let's get straight to hans nichols at the g-7. greece's creditors have warned
that a deal is not imminent. what is the talk of the town? is a disappointment or just negotiation tactics? hans: it seems like a mixture of disappointment mixed with frustration, because every time greece says we're close, we hear a rebuffing here in dresden. the most recent comments saying, time is running short. they want to see an acceleration of the talks. and they want to see real progress. >> time is running short. we need to speed up really in order to get to this agreement that we all want. the second thing is that although there is progress there is still a way to go. there is still some more progress to be done. some substantial reforms that need to be delivered to have a conference of set of reforms which is absolutely necessary if you want a good agreement. hans: now, even though greece
was not officially on the agenda, it was talked about at the dinner later at night. there is the second session this morning where there is an opportunity to talk about it. that is the one we will be focusing on. they may be talking about the latest out of greece. the latest is they are close to a deal. we've heard that before. also, they will not except with the considered to be any recessionary measures. and that could mean a restriction on reforming pension reform. that is another clear sign there needs to be pension reform inside of greece. francine: what is the latest on that june 5 deadline? is that a firm deadline? hans: it is not firm and the sense that the money does not
have to be transferred from a greek account to the imf on that date. it is firm in the sense that everyone is coalescing around appeared in agreement would likely have to go back to the parliament. all the individual 18 member states and approve it. here is the leeway. there is an obscure provision from the 1970's in the imf. only zambia has used it. this would allow you to make your payments at the end of the month. now, the imf said that is a possibility. greece has said they will be clear on whether or not they will avail themselves of that possibility. the bottom line is they need the cash to transfer. as of now, and looks like they do not have it and will not have it unless unless there is an agreement. one other thing on deadlines -- it is not going to be on sunday. that is very clear from eu officials. let's listen to what mr. sapin had to say in terms of the timing. sapin: the talks are progressing
faster but not fast enough to conclude. everybody needs to be in a discussion mode that is sufficiently hurried, sufficiently concrete, sufficiently technical but also sufficiently political to reach an agreement in the coming days or weeks. every day that passes makes the issue more urgent. hans: everyone at the end of this press conference is going to be focused on madame lagarde. yesterday she talked about the potential of a greek exit. the newspaper reported it as a possibility. everyone will be pressing her on how likely she thinks it is, what needs to happen for that not to be in eventuality, and what the next steps are and how much time is left. francine: hans, they give so much. hans nichols interest in. fifa members will today vote in elections for the next president of football's world governing body. it follows a week of drama in which several officials were arrested as part of a u.s. probe into corruption. support for incumbent sepp
blatter appears to be weakening. in an interview, his former adviser accused him of "serious mismanagement." mark barton is outside in zurich where the vote will take place. today's big. mark: it is all happening. we have had some arab music,'s french music. and protesters you can see right there. the palestinian football authority won -- want the fifa congress to suspend israel from the group. saying that is really travel research on soccer personnel violate the association rules. that is one protest taking place. have a look at the other protest taking place. this is an anti-blatter protest. you can see a man with a giant head. this protest has gained hundreds
of thousands of signatories. it is also protesting against the treatment for workers in q atar. the 2022 world cup is taking place in qatar. in the treatment for migrant workers has been the center of much attention in recent years. this is just a protest. the main event is taking place right behind you inthe 65th fifa congress got underway at 9:30 local time. it is essentially an event to look over the past year to celebrate the brazil world cup. but as we know it is the overshadowed -- it is being overshadowed by possibly the biggest scandal in fifa history. this indictment of 14 officials. what has been very interesting today speaking to many people, has been a chat i had with michael payne, the former ioc marketing director. he says politicians should be no
ted as well in all this scandal. payne: you have got the politicians jumping on the bandwagon to say this is all terrible. and it is terrible. but the politicians need to look at their own involvement, because governments have always been using billion dollar trade deals to influence votes. to influence votes at major sports events. nobody is talking about that. mark: that is something new. something we have not heard from fifa delegates from a number of representatives here. the finger should point to the politicians. francine: mark, i really like the background music. you should do all your hits like that, even in the studio. you spoke to a number of high-ranking officials. what is the mood like ahead of the vote? mark: i mean, you can imagine since this broke on wednesday,
it it has been absolutely crazy here. i have spoken to a number of officials, leading delegates from i taly, from germany. here's what they said about the president sepp blatter. >> the right way is to give the vote to the other candidate. >> i believe that outside of europe, he has a better chance than me. if you add up the votes he is going to get today and maybe some other confederations will follow our example, he has a chance. so we should take that chance. >> it is time for change. it is not a question if he is in some cases, if he is guilty or not guilty involved are not involved. it is time for change because you need fifa as institution with credibility, with integrity. and that is difficult, may be impossible to weave in this
value if you do not have a change at the top. >> at the end, it is not so important -- but it is important to have policy and structure, helping football to develop further. >> we are going to vote for the person who we think will serve football in the best interests. mark: we started with the palestinian protest. we finish with the leading football figure in palestine. and also the leading footballing figure in israel. i shoved cameras in both their faces last night. it will not want to miss what they had to say. >> as far as two days ago, they were very happy with our proposals because we have what we call here -- the four points document, which was issued from prime minister netanyahu to b
latter and then to the palestinian authority. i know they are very happy with this solution.. the problem is that i have a feeling the initiative of the palestinians here is not sports. and it is not the sports delegation that is coming to palestine region. but they are trying to achieve other things which are not related to sports whatsoever. >> everybody had to trust me that i want to end this -- barring of palestinian football rather than to cause -- a problem to anyone tomorrow. someone come with meakness -- meekness to end the suffering and the grievances. mark: as the israeli football association -- have they given a new proposal? >> it's acting according to a
racist crazy, fundamentalist government which i think is wrong. mark: it is unsure as of now whether the motion to suspend israel from fifa has been table. what is on the agenda is the presidential election. it will take place later this afternoon. a 2/3 majority is needed. if that does not happen, a simple majority is needed. it is david versus goliath. sepp blatter is going for his fifth presidential victory. i will be here throughout the day with music. francine: very euro vision. i like it a lot. still ahead, it is gdp day in the u.s. a preview of what to expect after the break. ♪
francine: welcome to "the pulse " live in london. u.s. gdp is set to, after the show. we are joined by a senior economist and strategists. who says the impact of weaker u.s. gdp has not visibly affected the labor market trend. welcome to the show. give us a sense of what you are expecting of gdp and how much we should read into it. it is a little bit backward looking compared to the other indicators. charles: it is backward looking.
there will be a lot of changes compared to what we had in the first release a month ago. at the time, we did not have the trade data. we did not have all the information on inventories. you will have a big revision. gdp should come in around -.9%. not necessarily quite negative revision but then the question is -- how much of a pickup to we get? right now tracking 2% or so of growth. still suggests that growth in the first half of the year is probably 1%, which is quite weak compared to what we have had. francine: what does it mean for interest rates? i have been reading a lot of opinions and it seems like this is the policy question of the decade. is it really that difficult to pinpoint vagulely when it is? end of the year into next year? charles: i think we will see the
fed hiking in september. that has been our base case for sometime. we see that is likely. we know a lot of the weakness in q1 was temperature you had the port strike, a lot of bad weather. you had a big decline in business investment related to the lower oil prices. you are seeing a stabilization in business investment. maybe we are seeing a base there. maybe that negative impact will impact q2, but as you get into q3 you will be removed in a way. so you should be expecting q2 a slight rebound. francine: you are spiked in the markets to know this? no matter how often janet yellen tells the markets it is coming it looks like they are still surprised. charles: in a way if you look at what is priced in in terms of expectations, there is not that
much in terms of hiking price in september. there is not a full rate hike priced before the end of the year. so you could have some surprise if you start to see better data. if it was to surprise on the upside and the rest of the data going into september continues to be supporting the view that growth is rebounding to 2.%5% what that seems to be the consensus within the fomc there could be some members willing to put their -- and say, yeah, i am willing to vote for a hike. francine: what is think of stanley fischer's comments? he was more subdued. how much are they thinking about the strong dollar? charles: we already know that. they have told us in march that they look at the dollar, the strong dollar is having some feedback into the u.s. economy into their thinking.
but right now the dollar is actually depreciated slightly compared to where we were in march. especially if you look at the broad dollar basis, you are probably still roughly 3% lower than the lever we reached. there are some leeway there. it was not worse than it was in march. i do not think there will be a big impact at this point. but i think every, from stanley fischer matters probably a bit more. he is the vice chairman and he has a lot of experience as a policymaker. francine: -- and he is more global. charles: he is a very balanced person. he never has extremist views which are too hawkish or two dovish. -- too dovish. francine: what is your biggest concern for the u.s. economy? it strikes me that productivity is a problem in the u.k. but sometimes we do not talk about it enough in the u.s. when is productivity going to pick up? charles: at this point it is an
issue because productivity features into your potential. so lord potential means lower standard of living -- so lower potential means lower standards of living. the big question is why productivity is so low? because we have a measurement issue? there are a lot of problems with gdp. q1 is a good example that we do not get the seasonal pattern correct. the speed limit for the economy is lower but the neutral rate is lower than what the market has been expecting. so probably 350 is the new neutral in the u.s. and that is a long-term neutral not what you can reach in the short-term. francine: are you concerned about emerging markets? if we do have a rate hike in september, that is a little bit may be sooner than the markets are expecting. what does it mean for emerging markets? charles: i think the ratification is more the
surprise of how that will feed into financial markets globally. it will be the first hike in such a long time. the pendulum market has been used -- so lower rates for so long. that is where the impact will come from. francine: thank you for joining us. senior economist and strategists at nomura. coming up next, we talked chinese stocks. the shanghai composite has offered some of the biggest losses since 2009. ♪
francine: welcome back to "the pulse" streaming on the ipad and bloomberg.com. let's turn to asia. the shanghai composite index has offered some of its biggest days of losses since 2009. with a drop of more than 6% yesterday. let's get insight on what is happening on the chinese market. richard frost joins us from hong kong. great to have you on the program. another day, another near 25% wiped off a multibillion dollar company in hong kong. today it is ever grand real estate. is this is another example of the risks that lie in these markets? richard: yeah. this seems quite specific to hong kong in terms of the large decline. daily trading limits in china prevent that. but with this company today, interesting similarities between this one and hangery from last
week. the company about 70% controlled in terms of its shares by a billionaire chairman. it had a huge run-up of 120% this year through yesterday, making one of the best gainers in hong kong despite being one of the most indebted among the largest chinese developers listed in the city. and with analysts not really liking that amount of debt. at least with the stock compared to hanergy there is a reason why we saw the plunge today. they try to raise money at a slight discount to where the shares had closed. they did not get enough. they had to sell at a 20% discount. hence we saw a 27% drop today. again, a slightly worrying sign to investors to see such use volatility where it is not clear the reasons behind some of these games. -- these gains.
francine: we will continue monitoring them. we also saw -- the gdp --is that because people are too busy gambling on stocks to go to the casino? richard: it sounds ridiculous to suggest but if you look at the correlation between gambling revenue in macau versus turnover in shanghai, the two have gone the opposite direction. macau has had 11 straight months of declines. it had become the biggest gaming hub in the world after china allowed foreign investors such as sands to come in there. part of the reason for people know longer spending so much money in terms of gambling in macau, china does not want people to do that in the same way. you have got the anticorruption campaign. they made it harder to go to macau.
francine: welcome back to "the pulse" live in london. i am francine lacqua. these are the top headlines. the g-7 meeting and central-bank resident ends today without a sign of a deal for greece. we spoke to the ecb vice president who says that he hopes greeks were remain in the eurozone. >> our assumption is that there will be a greek exit in the end, even if an agreement is not reached quickly there may be
some turbulence, but not certainly the worst-case scenario. francine: fifa's 209 members will vote for the next president today. the current president sepp blatter is seeking a fifth term but in a week were several officials were arrested for corruption, blatter seems to be losing support. he will face georges prince al hussein in the runoff. the swiss economy contracted the most in the first quarter this year. gdp fell 0.2%. the strength of the swiss franc has been cited as a reason. let's check some of the data and some other currencies. let's check on the markets. jonathan ferro is here. jonathan: the dax down 1.33%. equities just rolling -- we are 30 minutes into the open. we go much lower. down by 3/4 of 1% on the ibex.
london not missing off on the selloff, down .4%. a little bit a risk off? yes. but that risk aversion and the equity market not reflected in the bond market. bund yields are lower by two basis points. but lower on the periphery. italian yields off by 1.85%. you can pinpoint the tension with greece. but the deal has been going nowhere for a while. blame whatever you like. interesting stuff this week has happened in asia. not just on the shanghai comp that plunge yesterday but the move in the nikkei in japan. in the green by literally a whisker today. in 11 straight day of gains, the longest winning streak since 1980 and. but the data does not really stack up against what the equity market is saying today. if you look at the data coming out of japan, household spending falling. you look at inflation data.
you strip out the impact of food, strip out the sales tax hike last year, and inflation the bank of japan's preferred reading 0%. not looking pretty. maybe that is one of the reasons we have seen this yen weakness. dollar-yen pushing to a 2010 high. this is the first loss in five days for the dollar-yen. the yen coming back by a 10th of 1%. that is the scene. euro-dollar. 1.0981. a little bit of euro strength. francine: thank you so much. fifa members vote today on their next president. sepp blatter is being challenged by prince ali hussein. this after week when fifa was hit by a string of arrests. what is next for fifa? a spokesperson for corruption and sport initiative joins is us
now. give us a sense of what you would do today? sepp blatter, does he need to step down? deborah: we think he should step down because he has not delivered the reform process he promised when he was up for president. francine: is it more about the reform process or the fact that he was in charge when the foundations -- the allegations surfaced. just because of that, he should go? deborah: it is both. he announced the reform process when there were allegations of corruption in the past. he said it was time for change. he did bring in some changes. they have reformed a bit, that they could do an awful lot more. and we do not think he is the right person to do that. francine: how would you do it? is it changing from th -- changing the voting system? deborah: it is changing the structure of fifa. but we have is an organization that is registered as a charity. it is not transparent. they need specific measures to win back trust.
these could include publishing a lot more data about their financial position. they could publishing human -- remuneration of their senior executives. have an outside body determined that for them. they could do a number of key transparency issues, bringing nonexecutive directors on board to their committee. these are the things we would look for in the next term. francine: why haven't we had that? these are allegations that have been swirling around. this was a huge week for fifa but we have had implications allegations. so this should have been done. deborah: which is why we think blatter should go. transparency is a buzzword for them. not something they employed. we want the tone to be trusted. we do not think that sepp blatter is the person to do that. however, the whole organization could do with a dose of transparency.
you could see more information as i said before published on a range of issues. you can have a follow the money policy. it could have anticorruption programs on its website to see exactly what they are doing to fight corruption and bribery. you cannot find any of that. they have a code of ethics. that's it. francine: d think the next person, if he does not get reelected, will do it? what kind of person does it take? it is not just the president of fifa. it has to be from the bottom up. deborah: i think you have to have a number of people to stand by that reform. and fifa is a kind of organization that has been run over the years as, almost a clan. you have got all the confederations. they have an awful lot of money out of fifa. why do they want things to change? that is what it will take someone who is a very strong leader. and perhaps pressure from the outside. we have seen the sponsors come
and say we are not happy paper have they should do more. francine: you are from transparency international. one of the things we have been talking about with officials on the ground is that their stated answer seems to be, it happened at other organizations. this is something that is not as big as people make it out to be, but if you really dig deep into other organizations you will find similar things. is that true? deborah: well, yes. obviously businesses face corruption scandals all the time. they used to get rid of the man at the top. and they try to have more trust in what they do. they publish more information about how there are going about anticorruption. we believe it is important that you publish that information you follow up on it, and you monitor it. yes, it happens everywhere but fifa is not a business. it is accountable to the fans a football, not to shareholders. they do not have to give out dividends.
they do not have to give up profits. they just have to deliver clean, good world cups for the fans around the world. and that will take strong leadership. break the cycle of in- transparency, lack of transparency. francine: thank you for joining us. spokesperson for corruption in sports initiative at transparency international. rev your engined. lamborghini is out with the new $500,000 supercar. we will hear from lamborghinis ceo after the break. ♪
francine: welcome back to "the pulse." opec leaders are meeting in vienna to discuss the outlook for oil. i spoke to saudi arabia's oil minister last week. he suggested the world's largest oil producer would begin looking to diversify. i think opec is next week. we are preempting opec. let's listen to what he told me. >> in saudi arabia, we recognize that eventually one of these days we are not going to need fossil fuel. i do not know when, 2040, 2050 or thereafter. so we have embarked on a program to develop solar energy. why?
when we look up, we have the sun every day. francine: so what does the future hold for saudi energy policy? joining us is a professor at the king fahd university of patrolling. also tim coulter who is covered the oil markets for a decade. i could say almost two decades. thank you so much for joining us. tim let me start with you because we have the been writing great stories on the web about oil. opec is meeting soon. and it looks like they are not going to do anything. why are they wanted to keep prices at these levels? tim: there are a lot of different theories. i do not know that we have any great answers on that. one interesting theory might be to just a late -- delay the expansion of renewable energy and continue continue the dominance of oil. francine: what does it mean?
this is basically the saudis driving what opec does. they have been doing so for two decades. but it is unclear to me whether it is to stare down iran or whether it is to stare down shale gas or whether it is to stare down all the non-opec producers. mohammed: interesting. i think saudi arabia has been consistent in the message that market forces are now determining oil prices. it no longer accepts the fact that it is going to be a producer. it did that in the 1980's. it saw production come down from 9.8 million barrels to 2.2 million with others taking its market share. it also saw that in 2008. so, basically now it sees opec with its 30 million barrels out of 90 million in the world as basically driven by market forces. francine: does it really see
itself -- they know they are the kingpin in this. mohammed: i think this is where the markets are putting a lot of emphasis on saudi arabia's role to determine oil prices. i think the minister has made it very clear and presentations in germany and elsewhere that we no longer are going to be putting out statements of what is a fair market price orand the market should determine that. so saudi arabia is not going to be a swing producer. it can only do that if there is international crises or short term supply disruption. but otherwise, it really sees itself that swing producers are now non--opec. now shale. for example, in the mid-1970's, 1980's, and 1990's, it was a traditional oil producer. francine: is that right?
are we reading too much into the intentions of saudi arabia to keep the price at this level? tim: i don't think so. no. i do not know why you would. francine: i'm trying to understand because i have heard both arguments. i have heard you are saying -- they do not want that role anymore. when we spoke last week at the paris summit and business conference on climate change, he was very clear in say they are going to start off exporting solar panels. but for the moment it is a supply and demand issue. then i heard off the record some oil major saying that this is to stare down iran. how much oil is going to come from iran? tim: in the short-term, presuming that the sanctions are lifted and that there is a deal, i think the estimates that have come from our oil team is 500,000 to 1 million barrels of
oil a day. it will grow over time. francine: do you think that is one of the factors are not? mohammed: i think saudi arabia knows it will take a long time for iran to come back. to add that 1 million barrels. in the meantime what saudi arabia is doing is trying to preserve its market share. we've seen oil production going up from 9.8 million barrels in november when they said no production cut to 10.3 which is almost the highest in a decade. so what all opec members are doing are producing as much if they can if they have the capacity to protect their market share against an increase from iran. tim: but saudi arabia is not producing as much as it can. their capacity is well above -- they have 2 million barrels there. mohammed: this is not something they can just switch on. having a spare capacity does not mean they do not have it. they have already invested. you need to also drill. you need to have new wells.
what you see over the last few months is the number of rigs being prepared for that eventuality. so yes, they do have the spare capacity. i hear a lot of people say that in times of need, does saudi arabia have that 2 million barrels extra? they have proved it before in times of emergency but it does take time. francine: for opec, you do not expect any changes next week? mohammed: absolutely not. from the shortfall in prices to $45 which put a lot of the members under fiscal stress, at 65 but i do not think saudi arabia wants to see oil prices go up to $100 a barrel. tim: do you expect their production will increase in the next two months? we have seen it rise half a million barrels of the last few. that has been surprising. if you say will continue to creep higher, an interest in developing. mohammed: they increase applies because of two things. the closure of the neutral zone
production with kuwait. at the same time, we are entering into the hot season. now they are pumping and for the domestic refineries. francine: when of the stories we have been focusing on. it has been one of the most read on our website is something that came out of china. the fact that we can look at peak oil in two y ears. is it something you worry about? mohammed: peak oil in china? francine: oil demand in china peaks in two years. this is something we heard from one of what the refineries in china. tim: this was the comment from the chairman of sinopec. that is two years from now. diesel is so intertwined with the economy. sa peak in diesel in china two years away is an astonishing thought. mohammed: we cannot depend just on fossil fuel exports. we have to be an energy exporter.
now, people might say well this is a bit too far. but i remember saying this to my students when president kennedy said we were going to put a man on the moon. everybody thought this is impossible. he said, we are going to do it. francine: to be fair, saudi arabia does -- solar panels make sense. tim: why anshasn't this happened already? solar has been growing dramatically but it has not happened in saudi arabia. mohammed: that is a good point. with the changes in saudi arabia, the restructuring -- we are moving away from the ministry. now i think it is going to be a focus on concentrating on energy, making sure and maybe there is a possibility of creating now out of these realizations and energy manageme -- energy ministry that will focus on efficiency and bringing in these players in saudi arabia that are concentrating on solar and other energy issues under one umbrella.
that is one of the most exciting things coming out of the new organizations and saudi arabia. tim: it is actually going to happen this time? mohammed: it is going to happen this time. francine: thank you both. now, lamborghini is out with a new half million dollars supercar, the aventador. i am saying it with an anger sachsen. -- an english accent. bloomberg spoke with the ceo about the automaker's newest addition. winkelmann: who is buying this car? aventador owners? this is the fourth we are doing. there was one which was -- the second one was the diablo. it is only the fourth time we are doing it. we have a high expectation from the customer side. matt: the special editions that you do, how important is it to the lifecycle -- how many will you do in the lifecycle of a model? winkelmann: we never speak about
the future because we have to surprise our customers but special editions, if we have a good idea, it is something which is related to us or to supply like we did now with this e dition on the aventador, because this is a unique supplier. he is exclusive. since the foundation of automobile lamborghini. we thought this was a good match for us. matt: you develop those tires with this car. what does that mean to lamborghini, on how important is the ring as a test for your cars? winkelmann: it is very important because the ring is long and it has long, straight, difficult corner. only a super sports car which is covering everything is able to do a perfect let time. even if you have other fast cars, they are simple, unable to
do it because they are good on the street or the corners -- but the balance of the two, this is making a difference. we are very proud of the super veloce. our customers tend to use the cars over the weekend. sometimes they use or some of them use them also on a daily basis, which is very good. and we are trying more and more to bring our customers and the fans on the racing -- with activities not only to go fast and experience the maximum speed and handling, but also to teach them what this car is able to do. from safety to high speed and really to be owner of the car. matt: who is your customer at the end of the day? do you look at the guys and gals buying your cars. is a wall street persons, lottery winners? winkelmann: we look into it. it is a lot of self-made men. they are owning a business. usually they are male. the youngest are in asia.
francine: nowfrancine: for a look at what we are watching for the rest of the day. allen, david cameron continues his european tour in berlin. he is meeting the german chancellor. what kind of reception is he likely to get? allen: well, he'll certainly be hoping for a warmer reception that he received in warsaw. we just received a symmetry the polish government, which was saying the polish prime minister strongly opposed british measures of suggestions proposals to curb benefits for immigrants from poland. so, in berlin, cameron will be hoping for a far warmer reception. in terms of what he can expect from merkel, i think we will get lots of warm warts. she certainly wants to keep britain in the eu, but what she is prepared to do -- she's prepared to go, it is not really clear. but i think it would be style over substance. francine: bloomberg news editor.
will they say no to sepp blatter ? he cannot monitor everyone. that is what he says. the new normal of american housing markets. we will speak with michelle meyer's -- bank of america merrill lynch. this is "bloomberg surveillance " live from our world headquarters in new york. i'm tom keene. joining me brendan "up all night fifa" greeley. brendan: the vote is later this afternoon. it looks good for sepp blatter. the only thing that will change anything today -- democracy within fifa will not do it. tom: if he wins, does he not speak to the u.s. and the caribbean and the europeans? brendan: it is already happening. what is interesting is what the europeans will do. i want to see what the european association is going to do. tom: