Guy good morning. Welcome. You are watching the pulse. I am guy johnson. Francine lacqua will be here a little bit later. She will be rejoining. Talks about greece and creditors are dragging on. The reports of progress, no breakthrough to guarantee the flow of liquidity to greece francs and they are doing to make a payment of around 200 made euros tomorrow. Lets bring in our reporters. We are joined by phyllis. Lets start with you. Where are the differences and the gaps . Reporter the same a red lines of the labour front and reform on the cell of state assets sale of state assets. And these sides are talking about during the negotiations and we will have the differences by the European Commission latest economic forecast. Those are to be released in the next hour. Maybe we can understand why there is israel difference in a fiscal assumptions between the two sides. Guy looking for to that data. Talk me through this imf eu disagreement we seem to be seeing at the moment. People are talking about the imf and you have been different view of the world. What do we know . Guest the imf said greece will have a surplus and that means a big difference. The imf said they will go forward with our own part of several. 2 billion euros and we are 7. 2 billion euros we are expecting. Theres a meeting today between executive Prime Minister and ecbs president mr. Mario draghi a greece is expected to ask for a liquidity injection. Mario draghi will be convening tomorrow on the review for the greek banks. The difference between imf is even larger after these meetings and a review tomorrow. Basically you might give assistance and basically my to give further assistance to greece while basically give further assistance to greece. Guy thank you indeed. Lets turn to ian, hearing about the data we will see published by the European Commission. Give us a little bit more detail on what we will get on greece. Ian yes, this is a very critical data. The First Time Since the new government in greece came in a we are seeing what they European Commission thinks. We are going to see the debt levels and the forecast of growth or 2015 and 26 and if there is a different cut, it will have a very big effect on the negotiations between the eu and imf and greece. Guy so, that is the greek story print more broadly, what will we learn about the european economy . Ian wishart is a growing much at all . It is the question whether asking for three or four years. Is it growing much at all . Every time the commission bring out new forecast it goes up a little bit but not a lot. Greece is really difficult to define. Most importantly growth is difficult to define in countries like france and italy. Weighed down by debt and sluggish labor market and what we are going to see today is can it be any more optimistic for 2015 and 2016 . Maybe they will look to increase the growth target but no massive improvements. Guy that is required to deal with some of the levels. Ian wishart joining us from brussels. Vassilis karamanis watching that data in athens. Now theyre European Central bank thinking about delegating more power to the supervisory arm to avoid regulators but common more emboldened when it comes to supervising of europes banks. Lets talk about this Bloomberg School and bring in ecb scoop and bring in the ecb reporter. The ecb is achieving all of this authority and maybe a realization it may have bitten off more than it can consume . Guest what we are seeing is at least a little bit of indigestion and the early phases. Lets not forget it is a new institution of the mechanism and the biggest supervisory body for banks in the world. It is overseeing 123 banking groups. Doubt 27 trillion euros under management. This is certainly a very significant undertake. They have 27 trillion euros under management. All of the decisions have to go through the governing council which is the body which makes Monetary Policy for the euro area. That is about 6000 decisions a year. That is something taking up a lot of time for from policy makers when is be doing Something Else. Guy that Something Else is Monetary Policy a it is not important at the moment. The european economy is not on the forefront. Jeff black right. The 25 members of the governing council have plenty on their plates. One of the things we are hearing is looking at the appointment of a bank board or capital plans for a small lender in slovenia for example is taking up some of their time which they could be doing elsewhere. What were looking at is them trying to delegate a bit of that away within the european law so they can run more efficiently and that seems to be what they are trying to do. Guy jeff, thank you. Jeff black joining us from frankfurt. More on greece, the eurozone and ecb. Antonio joins us now. Nice to see you. Data later on. How bad is it going to be . Antonio greece has to [indiscernible] the fiscal revenues and they are going down very fast. Economies are going in reverse and also Tax Compliance has dropped. The second is growth and a story of federal prospects and that is not yet in the data. It is critical. The first one has ti be discussed. Guy if the commission forecast significantly worse growth for greece that will create a big hole in the negotiation for greece on the Second Program and potentially reaching into a Third Program if we get that far . Antonio Garcia Pascual that is right. It has to be fully funded. The bigger the fiscal hole, the more funds have to come in. There is limited for additional funds. The plan was to raise primary surplus of over 3 of gdp. The latest data suggest if they are lucky, maybe flat. Three Percentage Points of gdp is a difference of where they should be and where they are. It creates a fiscal problem. Guy we got into a solvency issue fairly quickly here. The noise out of the imf as reported by newspapers, increasingly to the point that agrees has a big solvency problem and we need to see data right off. Do we get to that level . Antonio Garcia Pascual it is a fair discussion. In order for greece and that is a sloping part a you would have to clear a lot of the interest. Principal debt restructuring that is a little bit complex. It goes further European Countries and not yet in the cards. The full discussion were been talking for the last year and a half that will have to come back to the table. I think something the europeans will try now. They want to see it completed. They want to see in that context and that could come if necessary. It is not in the near term discussion. Guy stay with us. We will talk about the u. K. And portugal. The portugal minister will be coming. Antonio Garcia Pascual staying with us. The radar on tuesday. Hsbc is due to report earnings in about 4 minutes. Investors will be looking well see how much they will set aside for fines. They talked about moving their headquarters. Hsbc profit almost doubled in the first three months. They saw every decisions Beat Estimates. They rose 88 to 2 billion francs. Lust as a lufthansa had a loss. The loss of 217 million euros. They have had reeling from the deadliest crash in its history when a copilot of germanwings unit flying and airbus crash into the french out. Lets talk about later on the show. Hsbc earnings will be out. 9 30 a. M. , the portuguese finance minister. And another great interview for 10 00 a. M. And will bes speaking exclusively speaking exclusively to the ceo of ryanair. Our twitter question of the day. What does michael have to do to get this is booking with his the business of booking with his carrier . The numbers are looking good. We would take a break. Well be back in a moment. Guy welcome back. You are watching the pulse. we are streaming on our new bloomberg. Com site. We are on your tablet and on your phone. We are on of the markets. Two days of campaigning before the general election. Hoping for a lastminute surge. To form a majority government. What are the tactics we are talking about . Reporter good morning. Weve seen David Cameron starting his 36 hour marathon. The finish line is election on thursday. He is campaigning in london at this morning and talking and criticizing the labour party on the record are the economy as says it comes down to the economy. It chinas in with what he was talking about yesterday when he was talking about labour and the criticism about whether they brought everybody along in this economic recovery. This is what cameron said. David cameron they got away with bonuses and pensions that you gave them. The people who lost their jobs and the family will could not make it through. How do you lecture us anna that is what David Cameron has been campaigning. Nick lego will set out on a crosscountry tour from lansing. Nick clegg will set out on a crosscountry tour from lansing. Some the tactics. The snp now saying any government that was formed without using representatives of the snp what be illegitimate. Even if theyre the Biggest Party trying to form it would it not be legitimate in scotlands eyes. Guy comedians seem to be part of the tact is at the labour party is using at the moment. Really kind of looking at the generation around that. Anna interesting. Tell everybody not to vote. He is a comedian. Long ties to the labour party in out campaigning with scottish labour leader murphy. Hugh grant actually tweeting in favor of alexander last week. That is interesting. You cannot get much of where this is going. Save to conclude there will be more comedians given their thoughts on where we should be putting our votes on may 7. This newspaper industry for what it is worth and the digital age of ours, a little bit more divided than perhaps the comedians and chefs. The independent has come out in favor of the Current Coalition surprising some people suggested it is the best way to hold the union together. Guy anna thank you. We will have a political show at 11 00. Hsbc came out. The stock has rebounded nicely. A pretax profit level a beat. Lets not the debt down to much get down too much on the figures. What does turned around is the Market Division has form strongly. They talk about the volatility and will see volatility pick up. Favoring that division. The fx revenue picking up within the Market Division. Right, lets get back to the u. K. Hsbc and one bank taking about its future in the europe ita European Union. Chief economist antonio Garcia Pascual is back with us. The lack of focus on europe during this election has surprised some people particularly. Half is surprised you the u. K. Is not talking about more for future within the eu . Antonio Garcia Pascual i think you are right. It is surprising. It is political and important topic from a financially economic point of view. The u. K. Probably is better off staying within the European Union. My guess bowl to bigger parties know that but it is a collision political issue. I suspect it will be made clear. I think those fears will hopefully be dispelled. Guy could we see it amped up . Most major parties are probably more on the side of looking for an exit at some stage in set of a referendum with the parties in favor. Antonio Garcia Pascual i think it is difficult to avoid especially with the current government in the future. And if there is a labour party coming in. The referendum is likely. What will happen is businesses will make it clear and the politicians will also have to make the case clear on the economics of it. And i think the majority wants to see it is to the benefit of the u. K. Guy when you build a model of the u. K. Economy to spit out projections you need to be talking about, how do you factor that in . What is the drag the referendum could create and how do you model that . Antonio Garcia Pascual one of the limits is whether a referendum is certainty or not and tied is critical. Just to give an example. You tell a business you will have a referendum that while fundamental influence on the financial sector. And you are only doing this is unnecessary. [indiscernible] it has to be brought forth simply because important decisions for the investment in a way could be dependent on whether the u. K. Stand states of the European Union or not. If i am the foreign investor in for me the important decision is whether the u. K. Is part of the European Union. It is critical. The short term would be the uncertainty. In interesting. We will leave it at their thank you for your time and thoughts. Antonio Garcia Pascual chief economist at barclays. Lets move on and talk about what is happening with ubs. My colleague manus cranny is in zurich and has been talking to the cfo. Almost doubling this time around. Walk us through the figure. Manus take a look at the five year chart free it is up nearly 7 . The market was looking for nine. Profit of 82 . Look at it that stock, not as high since 2008. Bestperforming stock on the smi 2015. There is no data to compare. The Investment Bank reacting. Delivers to the customers costs are down preserves. I caught up with the cfo today, tom. I asked if it is as good as it gets. Tom we are certainly really pleased with a Strong Quarter a really solid start to be year. All of our business is performed well in what was a challenging environment. 13. 4 and greater than 10 percent target and i think it shows of the benefits of having a strategy that is clearly defined and one defined early and one where you are disciplined execution. Im sure it is not as good as it gets a but it feels good. Manus the best quarter since 2008. The quality of the new money coming into the bank. Wasnt there was specific geography that did particularly well . Tom naratil we were pleased with the balance and the quality of that new money. If you look at balance, we had good contributions from aipac and from europe and we were positive old in and off both in and offshore. If you look at the Global Wealth management, good flows in the u. S. Diversification. Manus tell me what the appropriate might be as improvements might be. Raising sees, have fees, how do i know how it is . Tom naratil it has been a theme. We unveiled last quarter we will focus more on pricing on deposits and negative rate environment and some of the regulatory cops costs as well as high quality assets enough to carry against our requirements. What about rlda in terms of lending . When we talk about whats management Wealth Management clients, are there Different Things that they can do to change their behavior . Is it advantageous to us to extend the terms of their deposit . Manus if it is not good enough to go to the door of ubs, it goes somewhere else. Guy talk about the risk of business and where the threat lies. Manus negative rates are going to be there for reasonable period of time. It is interesting that tom pointed out it is about global growth. Tom naratil the biggest Business Risk i would say overall is going to be a new global slowdown in terms of growth. I think we certainly have a business that is cyclical to gdp. Environment and we are in if we continue to have a reasonable recovery and that will lead to centralbanks getting to a normalized rate environment. That is what all of us in the Financial Services industry where there you talk to ensure banking, we would like to see this move back to first positive rates and second a positive lease on the yield curve. Hopefully the fed will start the process. Manus he was not as a when they would have to charge of the what management negative rates. Trading is up 23 per u. S. Pe ers of 8 . A lot of work to do. A lot of work to do. Back to you. Guy no pressure. A bloomberg exclusive. Will speak to portugals finance minister and how greece could affect his recovery. You can follow us on twitter. I am guyjohnson. Francine lacqua will be joining us. Francine welcome to the pulse. Investors were underwhelmed by mcdonalds plan. The company will shift more restaurants to independent owners. S p cut shares a ratings were down. Guy a refund has lost its crown following two years of withdrawals and suffered more and billions of outflows. The longtime manager bill gross left in september. Francine luxottica reported earnings that Beat Estimates and net sales were up 20 . Guy portables rating is set to be reviewed on friday. Expected to raise the positive matching the green sheet economic recovery across europe. Will the cash crisis in greece nip it in the bud . Francine we how portugals finance minister. We have portugals finance minister. Article has done so much. Is greece exits, there will be no green sheets to talk about. Guest we expect it is possible to have an agreement with the greece and things will things have been difficult but we hope it will be possible to have a good outcome of discussion. Guy if it does not happen you are in many people mines a victim and does a keeping you up at night . In many peoples minds you are a victim and does it keep you up at night . How do you plan for this . Maria luis about kirk it albuquerque to find an agreement that can be accepted. The greek authorities and will continue to work on it and have a good out come. And the baseline scenario. Francine what would be a plan b if a did not work . We talk about it not working and the greeks not doing enough every sitting the right plan . If a default enough . Is the default enough . Tom naratil Maria Luis Albuquerque i do not think so. We do have a comprehensive approach that would be openness from the institutions and eurogroup to consider different targets and a different pace of judgment to take account of the wishes expressed by the greek people angry government. And greek government. 30s to be commitment to some as there are these to be commitment to some reforms. The necessity of having Structural Reforms across europe and we all benefit from Structural Reforms in other countries. Guy what if what is right for greece is not right for the rest of the eurozone . What is working with spain and your country may not be right for greece . Not every economy is made of the same and has the same problem. Is there a danger we end up prescribing each patient the medicine and it is not the same . Greece a means to do this and that is portugals view, is there a danger in may not be the right story . Maria Luis Albuquerque there is no portugal view. Remember there are 18 states all saying the same, the need to show commitment and necessary reform. The structural reform differs from one country to another. It depends on the fragility around to the economy. Theres a neat need to have structural reform and there are some basic features one needs to guarantee to be a eurozone member. It then there cap the different elements and then there can be different elements. It should be common to us all. It is part of the rules. Francine because there is no plan b, how vulnerable do you feel if they default . Maria Luis Albuquerque we would be worried. Europe was created and there is nothing that could be ok with an exit. In that context, it is difficult to predict what would happen. We have been keeping a significant cash flow for a while to get ready for any negative market development. It is not a plan b, a is not about greece. We do not put aside and amount of money because of greece. We are now back end of the market. There could still be events disturbing the Market Access and we want to be comfortable for a number of months so we can choose the right moment to go to the market without furthering the interest charges going forward. We have that means we are comfortable with any events which could lead to short lived kind of market disturbances. Wherever the origin might be area francine could it be a cash buffer . The ecb has stood behind in your country. Maria Luis Albuquerque we all remember when mario draghi said whatever it takes. It has been living to those words and really doing whatever it takes to save europe. That is the biggest guarantee we can all have for the euro area member states. That being said, we all have to do our share and you cannot expect that the ecb to do everything for you. The ecb will do their part and we have to do our part especially Fiscal Consolidation as Structural Reforms. The ecb somehow is buying time for the euro area and we need to do the right. It is not possible to sustain that the exit on monetary easing alone. You have to take this opportunity to do the rest a be and to be in a more sound footing for the future and that is what portable is doing. Guy the courts ruling around to the pension story obviously is trickier for you. Maria Luis Albuquerque yes. Guy how do you compensate . The court has not effectively taken some of the changes. How are you going to compensate for that story . Maria Luis Albuquerque we did compensate. And we now, this year in particular last year in particular we do not compensate for anything because growth helped. Growth generated on enough revenue for us not to need to compensate and we actually overachieved by the end of the year. Guy carrying on doing what it is. Maria Luis Albuquerque you cannot bet only on the growth a you need to do structural things because you need to be repair for the cyclical downturns of the economy. You have to be prepared for those. When you are assuming growth and the initial phase is fragile. You do not want to overdo it. If there is no need to substitute measures to achieve the target at this stage, it is probably better. Bearing in mind the structural changes that are needed and if you look at the program that was sent to brussels and in our parliament we continue to say there is a need to reform pension systems. If the need is still a we have to do it. Francine how confident are you that qe has worked and grateful that qe is there when you talk about possible greek default . Maria Luis Albuquerque while qe is again a demonstration of the ecb doing its part providing the necessary stimulus to the economy and providing ample liquidity so that investment and we will have no restrictions when it comes to funding. We have seen portugal investments resuming again. We have had an increase last year. It seems to be more significant now. It has a lot to do with confidence and when you look at europe, you see manning reasons at many reasons to be optimistic than before and in portugal and that is visible. People are more optimistic. We expect investment to pick up. The cycles happen in not only the vicious ones. When things return, they create a positive dynamic and hopefully that is the stage were entering in a now. Not only portugal but europe as a whole. Guy is the bank functioning again . Maria Luis Albuquerque; it is. When i met with the people they do not complain about the banks anymore. Guy recent or complain about the debt . Maria Luis Albuquerque that complain about the taxes. Not the banks anymore. As they said that they have good projects to lock in very attractive yields. Guy at the last six months or year or three months . Maria Luis Albuquerque it is i would say the last six months. Probably started about a year ago more or less. It has been driving across sectors and it is visible now that the banks want to lwns lend. When there are good projects, they compete to lend. It is improving. Francine if we do have a greek default or exit how do you help portugal . Maria Luis Albuquerque there is not an issue of any other economy. First, you hope it does not happen. First of all because personally i think it would be bad for greece and the greeks more theyre probably for anybody else. If there is an issue for the eurozone as a whole, it is not a concern for portugal or concern for spain or italy but the concern for the euro area. Francine how do you piece it together . Maria Luis Albuquerque that is the plan we are not discussing because we do not want it to happen. We are sticking to plan a. Guy everybody i talked to in berlin said as they are relaxed about greek leaving, is that correct . Maria Luis Albuquerque i would be worried. And i continue to worry it does not happen. Francine does qe play any effect in that . Five years ago, the markets were wild. We are not in a much better position but markets are unsettled. Maria Luis Albuquerque it helps a lot. Another evidence that the ecb will do whatever it takes to guarantee the survival of europes going forward. And also because it provides ample liquidity and the differences among different economies. That is something supportive to a market being more comfortable with negative developments if they emerge. Francine thank you for joining us. Minister Maria Luis Albuquerque finance minister of portugal talking to us under a bloomberg. Guy to italy and matteo renzi has seen his overhaul for election progress. Francine lets go to dan liefgreen. Dan Electoral Reform was one of mr. Renzis priorities for the last six months with changing italys labor market and put a lot a energy into this because he was getting opposition from within his own party to the changes he proposed. Not only opposition from the center right and mr. Berlusconi and also on board for a while in trying to find a bipartisan solution to this legislation. In the end matteo renzi had to fight for it and stood the opposition internal and external and got the lob pass. They key part is the measure that he claims it will bring more stability to italys government. The party that gets the more votes will be rewarded and what a majority of seats in the lower house of parliament. That is the key. It says the barrier of 3 for any party to reach and gets representation in parliament. That is a bit a low compared to some other countries, germany is around 5 . After the end of the day, matteo renzi pushed it through. It will take effect in july of 2016. If by chance parliament were to collapse between now and then that would be a bit chaotic for him. Guy dan, thank you. Dan liefgreen updating us on the latest. Francine we have earnings. Well take a look at it the break. Francine germany air carrier, lufthansa reported earnings, the first since the germanwings crash. What impact it didnt have on lufthansas financials . Guest it is not really visible in lufthansa apartment as lufthansas. The company did say there was a little bit of impact but did not quantify that. If you ask of them and they do climate to say it was limited to the germanwings brand which only has a good handful of airplanes. The bigger problem and let me try to build a bridge of the portuguese finance minister, the Interest Rate in europe. Mario draghi will do whatever it takes. A company like lufthansa that has a big pension deficit and portfolio, Interest Rates go down, pensions go up. That has resulted in a deteriorating equity ratio up 7. 5 in the First Quarter. Maybe a great number four bank but for a company that targets 25 percent equity ratio, thats pretty horrible. They may have to sell new shares to fix the Balance Sheet. Guy that is interesting. Any color on how you manage a business that is bent through such a tragedy . You have to still operate those airplanes and put staff on board a book passengers on the board. How do you manage what is going to be an extended mourning p eriod with running a business . Reporter we got a bit of color at the general meeting last week in hamburg when the company said the crash scarred of the company forever. And employees were afraid in the beginning to aboard those airplanes to work and sit in the cockpit or work as having a couple of days around easter time and employees were back in a normal state of mind. For the Company Overall and for the definition they do find themselves over safety of their services and it will take longer to get over that. The competition is not sleeping. The bad crash will not make ryanair slow down in germany and stop the golf carriers for pulling more capacity into germany. They cannot [indiscernible] kathryn bank richard, thank you. At 10 00 a. M. Exclusive interview with the ryanair ceo. Francine richard, thank you. Guy the twitter question of the day. Let us know. Guy a couple of days away from the election. The campaign trail. A critical part of this election and they want to make it look nice and relax and of here are the leaders are interacting with the general public. Francine just like everybody else. Guy the year of the selfie. Guest they want it to appear like that. The selfie part, theyre almost encouraging it. I was at an event with admin clad a was talking about a selfie. They can look like it is natural. I was at an event with a nick clegg and he was talking about a selfie. Francine do they choose the people . Chris they will say, shall we have a selfie . They know it looks nice like they are connected with the people. Francine was the most accessible . Chris probably they are getting kudos by saying we will talk to the people. Since the last election when labour missed, they are scared to go anybody narrow who might cause an instance. Guy one of yours. Chris actually, i would like to say it was planned. One of the situations. And pr know that lots of people are out taking pictures and it works. It looks like he is out there. Francine David Camerons sleeves rolled up. Lets get it. Chris a rally. Somebody else but this is when cameron realized he needed to roll up his sleeves because things were not going so well. It is captured pretty well. You can almost see the sweat on his face, shouting out. It was controlled. Every body there was affected. No big curveball question. Everybody there was vetted. Francine chris radcliff, thank you. Guy we will see you in a few minutes after the break. Francine new shares are soaring it. Guy construction has a 22 month low in april. That is two days before britain heads to the polls. Francine we speak with Michael Oleary about how his airline is attracting corporate travelers. Guy good morning to our viewers in europe. A warm welcome to those waking up in the united states. I am guy johnson. Francine this is the pulse. The eu has raised the inflation forecast from an earlier estimate and raising gdp forecasts. This is satisfactory news. For the rest of europe, its better than it is in deflation. This is the eurodollar. We are starting to see a lot about these great shoots. I know its practically nothing. Every little bit helps, especially when the recovery is so fragile. Guy they dramatically slashed the forecast for greece. This is where life is going to get very interesting. This is forming the basis of the negotiations that are ongoing at the moment. They reduce the amount of growth and greece is going to generate and that changes the relations to whether it is sustainable debt or hitting targets for the bailout. Is it negotiable in its current form . Lets try to put some flesh on the bones of that story. The country is still far away from International Creditors agreement. Marcus joins us from athens. How do we make the story about the growth forecasts slashing work with getting a deal done in the institutions . How do they Work Together now that the number is worse . Guest its a bleak number. Even the new forecast assumes that a deal is done it sooner. Liquidity returns to the economy. Even that 0. 5 is contingent on all of those things happening. Economists will speak and say that greece will get no growth this year. We will get gdp numbers next week. That will show the First Quarter that the economy probably went back into recession. Its a painful doubledip. When you consider it makes it much harder to make this work. So many things like the primary surplus in the overall debt number are contingent on this gdp number. Francine give us a sense of the reports were hearing about the disagreements. Nothing seems to be confirmed. Guest it is generally the reports have not been confirmed. The imf wrote a report back in 2013 looking the first greek bailout program. There would be disagreements between creditors. They tend to keep that behind closed doors. Publicly at least, it presents a fairly united front. Im not sure how much i would read into reports of disagreements with creditors. Guy what happens . Give us a sense of a timeline. The next couple of days are going to get interesting. Payments are due. Its going to bit get crunchy. It certainly feels like this is ticking faster. Guest next week is looking pretty crunchy. There are payments due. We are not looking at any problems. Next week, probably not either. The payments are a bit bigger and the margins are smaller. That is why we all we have this lingering fear of an accident. Of course the ecb is not going to discuss collateral haircuts. The Prime Minister of greece is off to frankfurt. When he went to frankfurt and met driving the same day, they lifted the waiver. They are looking for a slightly better results. There has deftly been from the greek government at least a pickup in the urgency over the last few days for sure. Francine marcus, thank you so much. He has the very latest on the greek debacle. Guy we are going to take a break. Would we come back, Michael Oleary will be joining us. What would it take for you to fly . Is no your thoughts. Francine welcome back to the pulse. Were live at Bloomberg International headquarters in london. Guy the Budget Airline is attracting 9 million passengers last month. There is still room for improvement when it comes to securing corporate profits. Joining us now is mr. Oleary, the ceo of ryanair. Are you happy with the last quarter . Is what you are doing specifically or is the market up . Michael we have traffic up 16 and the load factor is up 7 . I think its still a slice of consumers away from high fares and carriers to lowfare airlines. Francine how do you stack up compared to your competitors in the lowCost Carriers . Michael we have to increase our prices by 50 to compare with easyjet. More and more across europe they are cutting capacity. Those passengers have to go somewhere. We are expanding in markets including the u. K. We are seen a flood of consumers coming to us particularly as we enter the Summer School holiday. I am not certain they have done well. They have restructured. They have restructured and gotten out of the lot of the u. K. Shortfall. They floated off and got rid of it. They have largely given up on the short haul in the u. K. This is the strategy. They have been copied by some of the other flight carriers across europe. They are getting out of the short pointtopoint and of focusing on the long haul. Francine what does it take to attract more business travelers . This is our twitter questions of the day. They are asking for free wifi more friendly stuff. Jonathan thats why they are flocking to ryanair. No one has a friendlier staff than us. I think what business customers want is the same as economy customers. They want highfrequency and good punctuality and low prices. We are seeing huge surge in business travelers. We give tickets and reserved seating priority boarding. We are half the price of the other carriers. Guy people talk about this a lot. We get a lot of feedback on this. What is it that is going to make you do it where do the problems lie . What is the issue . Michael roaming charges across europe. We have 1600 flights a day across europe and the roaming charges are prohibitive. Its not a physical issue. You can fit the aircraft with wifi. The cost of the roaming charges are primitive and until they dont have those charges, we still operate and europe is not a european market. When it comes to connecting mobile its going to be expensive. Until the roaming charges come down, we couldnt afford to put on a free wifi and passengers wont pay for the cost of the roaming charges which makes wifi prohibitive. Francine why are your competitors do it . Jonathan i wouldnt consider norwegian a competitor of ours. Most of it is scandinavia. When you look at their results, they are not a model we would wish to follow. Their fares are 80 higher and they lose money. We make money. Customers ultimately start with the lowest fares. If we can provide lowcost wifi, it would be a great addition. They dont want high fares and wifi. Thats not a model works. Ultimately, you could waste too much time modeling. Whether its a greek exit i dont think there will be a u. K. Exit. I think when you look at the economic catastrophe that leaving europe would be, the u. K. Would shy away from a departure. They will probably get more concessions from europe as result. Im in favor of an european single market. I disagree with a lot of the political rubbish that comes out of brussels. Ultimately, it would be good for our business and tourism would boom. It would be incredibly competitive tourism. The u. K. , i think something similar would happen. A lot of it depends on what happens with sterling. They will keep doing holidays in europe. Guy you would have to rewrite some of the contracts . Michael i dont think so. When you look at norway its in the open skies. There is no way of going back from the uks membership in the open skies. British airways there is no way of them going backwards. If the Irish Government ever makes a decision they have been doodling over it for eight or nine years. Francine whats the future of aer lingus . Michael i dont know. It looks like the Irish Government is likely to accept the offer. That would lead to iag making an offer. When we do the board will consider it in due course. Guy where do you see them going and where are you hedging . Michael we continue to hedge. We are a hedge for our march 16 year. Where hedging out into march 17 around 60 of their a barrel. Were looking at fuel savings of 200 million euros. I think some of that will lead to lower prices. Its inevitable. In europe, fares rose. As oil goes down, prices will come back down. As we expand into more primary markets i think we look forward to driving prices down because that is what our competitors dont want in europe. Francine how much has the weaker euro helped you out . Michael not much. A huge portion of our business takes place in europe. I think it helps. I am not sure that our business when you look at the growth in our traffic, there is a Seismic Shift in the market away from high fare carriers to ryanair. We certainly have a surplus of sterling revenues. That is translated to a higher average yield. We think our yields we flat for the current year. Its one of those things. Its no big deal. The strength of the dollar is a much more pressing issue for us and other airlines because maintenance is priced in dollars. The weakness of the euro against a stronger dollar is a much bigger issue than sterling. Guy does it make you want to buy less airplanes . Michael no. We have abaout 380 on order. Boeing is making marvelous new airplanes. We have a extra speed seats and more legroom. Its going to transform. We are now entering into a time of growth and would expect to take traffic up. We will have lower costs and be more efficient. We are facing a very exciting couple of years. We have to manage the data. Other than that we have such a price and cost advantage over every other airline. I we have to do is be nice to our customers. That is working like a dream. We should make out like bandits. We struggle with longhaul because we cant find longhaul aircraft. There is no availability. What there is available is very expensive. Francine would your Business Model otherwise work . Michael in a deregulated market such as open skies between europe and the u. S. , we could go in and do it economy tickets. I think its doable. Only if we start off as we did in ryanair. That is not available for the next four or five years. For the next four or five years, we concentrate on growing strong in europe and the shorthaul market. The flights continue to see that market. Guy what was your reaction and your Business Brain telling you when the german aircraft crashed . Did it make you think of safety or how people will react with low cross Cost Carriers . Michael the reports were about the people in general. Your thought is waitandsee what the safety findings will be. They are emerging gradually over time. Where the first responses of the industry is to make sure that the two people are in the cockpit at all times. Even when we introduced post9 11 we had no insight. We were worried that if ever somebody had a medical issue heart attack or Something Like that, he would not be in there on his own. We didnt foresee the future. Most of the airline has adopted that two people in the cockpit at all times policy. We are waiting to see what else comes out of the investigation report. What measures made to be taken it lets look and waitandsee. If the industry controls some comfort from the incident, at least it was not a mechanical failure and a fundamental safety issue. It does not appear to be terrorism. Guy are you changing what youre doing on a medical basis with your staff . Michael that is an area we would not want to go to. All european pilots cant fly more than 900 hours a year. These are not people who are hard or stressed. They work in a very regulated environment. Board of is probably more of an issue than stress in the workplace. That is a challenge an needs to be identified. We will because this. Getting into an area where we need psychological evaluation for our employees on an ongoing basis im not sure if thats where we need to go. We need to look at the context. This is a tragic accident. The Safety Record is outstanding and pilot performance has been outstanding. I think we should caution against doing something silly in a panic or doing something silly in a panic until we get to the bottom of the causes and the safety recommendations. Francine thank you so much for joining us. He is the ryanair ceo. We will be back in just couple of minutes. Guy welcome back to the pulse. This is one of the tightest seats that the conservatives have in london. Francine everyone is still in net. And neck. It is amazing that the number of voters that are still undecided. They will hit the town and the scene. Guy the conservatives have this idea that there will be a late swing toward them. That has always happened going forward. You can argue he is one of the big guns in terms of his relationship with the general public, bringing them out. He has a tie and a jacket on. His sleeves are not rolled up. It will be interesting to see if his former school colleague will be dressed in a similar fashion. That would be David Cameron. Francine they came from the same school. I like to get your thoughts on this. What is the likelihood that we wont be able to form a government and the next couple of days . That this drags on . Guy there was a piece in the paper yesterday that the conservatives, if they get close to 300, that they may bring forward the queens speech. They are in place for a talk with the liberal democrats. There is a lot happening. It seems that they would get the first crack at forming a government. What happens after that is very interesting. It could take weeks, but it could be done very quickly. Last time people were very surprised by how quickly it was done. You start planning for a hung parliament. Francine you expect the worst and hope for the best. Guy i think thats a generally good philosophy to live with. Francine a lot of people are saying we will need a government that staves and power for more than just a couple of months. Francine welcome back to the pulse. Where live from bloombergs headquarters in london. Guy these are the top headlines. Francine investors were unimpressed with the mcdonalds turnaround plan. They are restructuring for segments. They will have more restaurants with an dependent owners. The shares were down 1. 7 . Guy pimco is has lost his crown as the biggest mutual fund. Bill gross left in september. Francine the italian ive where i were maker posted good sales. Guy london is playing catchup. Jonathan let me get you up to speed. London is playing catchup. We missed out on the rally yesterday across much of europe. We are higher on the dax by 5 . We have a little bit of a field good back step. They are raising forecast for growth. I think the big one and the headline maker in the european forecast is greece, there are some ugly forecasts, not just for growth but for debt. Debt to gdp to climb to 108 this year. Debt is on one trajectory higher. That is why these murmurings about division between creditors and the likes of finance ministers and the imf is likely to continue. What happens from there is anybodys guest guess. They are up basis points to 21 . Equities are higher in the euro is lower. A lot of moves in the market this morning. Ligety aussie dollar. Look at the aussie dollar. It is still up against the dollar by a 4 10 of 1 . The take away is that perhaps it has and in the ezine. 2 is the floor. That is to call right now. Maybe the narrative shape by the moves in the market, we wont get that right now. I am looking at sterling. The pound is unchanged by the day. Construction data is not pretty. Sterling is unchanged. Another sign of slowdown heading into the election. Guy thank you very much indeed. Francine ubs profits doubled. He spoke to the banks chief financial officer. Manus these are a stellar set of numbers. They are up 80 . We want to show you a chart. Look at this. We have not seen a stock break this high in 2008. The bestperforming stock in switzerland today and in 2015. Wealth management is doing a pretty sterling job. They are repricing but they do with their Wealth Management funds. We caught up with the cfo and i said is this is goes against . Guest we are pleased with what is a very Strong Quarter. We have a very sell it start to the year. All of our businesses performed well in a challenging environment. Our ot is 14. 4 . I think it shows the benefit of having a strategy that is clearly defined and defined early. We have a very disciplined execution. I am sure this is not as good as it gets, but it feels good. Manus Wealth Management is why people value your stock. The quality of the money coming into the bank, did you land a big whales . Was there anything that did particularly well . Guest we were pleased with the balance with what we saw. If you look at balance, we had good contributions from aipac good from europe. We were positive. If you look at the Global Wealth management, wed had good flows in the united states. Quality was good and diversification was good manus tell me what it might be are you turning the posits a way that it up possible . How will i know guest . In terms of pricing it has been a theme for us for the past two years. We unveiled last quarter that we are going to focus more on pricing on the posits a negative environments. From the regulatory costs as well in terms of what the cost of liquid assets you have to carry against ltr requirements, but about requirements in terms of lending . We are talking to our Wealth Management clients about things they could do to change their behavior that would be advantageous to them. Would it be advantageous to us in terms of extending the term of the deposits . Manus healthy and profitable deposits are what they are in the business of. Everything else is up to scraps elsewhere. I will leave you with the fact of the day their Investment Bank is up 23 . U. S. Peers are up 8. 5 . Credits weeks is up 6. 2 . Those are pretty stellar numbers. They are meeting the client needs. Guy manus, talk about risks. Lets talk about what the press is right now for this business. Manus i think what weve heard is repricing some of the deposits. He kept saying that would be 30 billion in deposits. The swiss rates are going to be negative for some time. What drives the business is global growth. Guest the biggest Business Risk to us overall is going to be a new global slowdown in terms of being procyclical to gdp. If we continue to have reasonable recovery, that will lead Central Banks to a normalized rate environment. That is what i think all of us in the Financial Services industry we would like to see us move back to positive rates and a yield curve and see rates return to a normal environment. Hope of the fed will be starting the process. Manus its all about the pace. I will leave you with that. Francine manus, thank you so much. Manus cranny is in your. Guy voters will cast their ballots. Labor and the conservatives are hoping for a lastminute surge in support of both needing to form a majority. Youre looking at live pictures. Boris johnson has a tie on and a jacket on. David cameron has not gone down that road. 106 was the majority of the last election. We have the latest. The sleeves are still very much rolled up in the tie is off. Francine any exhibition of passion he can give to the electorate, that has been the topic of late. That more passionate cytosine. Guest Boris Johnson is giving the introduction. As were pointing out, it was fascinating to see Boris Johnson giving this introduction playing with his hair a lot and all of his usual characteristics. There were so many mobile phones in the air you could not see boris. It was difficult for all of the official cameras to get the right angle through this sea of mobile phones. You can see the pictures that are coming through. As you can see, David Cameron is speaking out. He has started a 36 hour last push. Nick clegg is also stating his Campaign Going from london. All of it is trying to be antis p rhetoric. Ed miliband is going back to his base. Francine if you look at the polls, they are still not in. I sold saw a poll last week that said 40 could still change their mind. Guest many are still undecided. The poll overnight said 33 . That does not really help very much in terms of splitting the difference between these two. There are some interesting tactics coming through from the other parties. Ed miliband strategy is to scare the parties. If he is able to put together some agenda and that before the house, that could be the tactic that we see being used to stable the base. Guy is nick clegg feeling more relaxed . Guest last week we saw that poll which is where he is fighting for his political survival. That give a nailbiting finish to this race. Just last night, we get some further pulling from the guardian that suggests 42 are going to back neck clegg nick clegg. Maybe well will prevail little sigh of relief. I doubt anybody will feel comfortable until the get confirmation on how he is doing. Guest thank you so much, and edwards. That is a very latest in u. K. Politics. Francine wednesday and then thursday we book. Guy it is very coordinated on the map. Bloomberg has an interactive map. We will bring you all the results from around the u. K. On election night. Those colors will be changing quite significantly and we will bring those to you. Francine you will be able to read the map much better on election day. We will talk about the possible exit. We will have plenty more on that next. Guy we will take a break and be back in a couple of minutes. Guy welcome back. Youre watchingguy the pulse. We are live on bloomberg television. If it is reelected, opponents say that would cause uncertainty for business. We spoke to a handful of business founders to gauge their thoughts on a potential brexit. I think that more mobility is better. There is a Public Interest constraint and their communities where there are not enough jobs to go around and that creates tension. I can tell you that we are struggling to hire great people whether they were born here or someplace else. We remain open for business and attracting the best and brightest and most capable people is not just in the shortterm business. Its really critical for the u. K. To keep great momentum. In our london office, we had 16 different nationalities. That is not by design. Those with the best people we could find. We are bringing people from china scandinavia, etc. That is truly unique in london. That makes london superpowerful. No one likes uncertainty. I think specifically, we have huge success last year expanding to america. You dont have to comply with one set of rules. You dont have one system while europe is more complex. Anything which makes europe more complex is going to make the job of going there more difficult. Immigration is a real plus. It is good for businesses in this environment. That would be a concern. Europe is our biggest trading partner. The businesses i am involved in its important to make it as easy as possible to trade with them. Francine all right. With two days to go, those are some interesting thoughts. Lets get back to the next. Ubs shares are soaring. They beat expectations. Guy for more, we are joined by james. Good morning. Whats the top line . What is the take away here . The market seems to done reasonably well. Guest they are notable among all european banks for the magnitude of the Loan Loss Provisions a have made to multiply since the crisis began almost reaching 10 . Historically speaking, that is the average loan loss rate you would expect a Banking System to suffer in total. It may be slightly worse this time. You are looking at a bank that in many respects has done the Balance Sheet and crystallized losses. The great benefit to that is quarter after quarter they suddenly drop away to reveal all that underlying profit. Francine does this mean to the troubles are behind it . Is there more to come . Guest and what sort of format to the troubles come . There are troubles that are difficult. Initially there were marketbased troubles. They were relatively easy to serve in the near term. We had to change the accounting rules. Suddenly all of the securities could be valued at a relief price. The piper still had to be paid. The post Crisis Resolution was the loan loss. We get through all of that and at the end you have a third element where governments say it got nasty out there. We want some of that back. Guy we are now seeing loan losses come down. That is evident in these numbers. The levy directed by the u. K. Is problematic for the banks. Do they offset each other . Is it less of the loan loss . Put those two numbers in relationship. Guest loan losses are much longer. We are talking into the hundreds of billions of dollars range. The levy is much less severe. If you add it to the government related costs fines and litigation, then it starts to get quite big, especially for some banks. This gets Different Bank by bank. Bank of america has taken the brunt of the legal punitive charges. In the u. K. , lloyds has taken the brunt. It does go bank by bank. At some of this could be due to the fact that some banks are not robust enough to take their lumps yet. The authorities may be holding back in some areas. We ligety beneficiaries in the states of bailing out the Banking System, half of them were foreign banks. The money that is being clawed back when they tried it, it went to a government level. There are still plenty of scope. They can take more money away from european banks. When you look at a bank like hsbc it was a stronger bank from the start. There was much less likelihood that more stuff was stuck in the cupboard. Francine what you make of them doing a review . Should they change headquarters . Guest the thing about changing headquarters as it comes the huge amount of unknown. You have to be sure you dont want the status quo. You want to be sure that you are not jumping out of the frying pan into the fire. It originally came from hong kong. That can be seen as home territory and maybe there will be an appeal for individual executives if they think their tax environment might be more attractive. I think they have open negotiations with the u. K. Government. The government is unreliable on it. They might grow at it. These are all things that the hsbc wants to haggle about. They have options. Dubya carried away. Dont get carried away. Francine james, thank you very much for that. As we had to break check out these pictures from the met gala in new york city. She had quite the headpiece. Twitter was alive with criticism. She got noticed. It looks a little devilish, but why not. We are back in two. Francine we are joined by ryan. Guest the most important and need to know but disney is they are going to report before the bell. They want to allow their employees to attend the Memorial Service for goldberg at stanford. Sheryl sandberg is on the board at disney. Her husband was hugely respected in his own right. Then you get the earnings themselves. Everybody is about avengers. It only made a hundred 191 million. They were saying it could make more than 200. Maybe they are a victim of their own success and that is of people are going to talk about. Francine thank you. , thats it for the pulse. Keep it right here on bloomberg tv. Guy we are back and the couple of minutes. See you then. se by tomorrow. Greece must compromise tomorrow. Princess Charlotte Elizabeth diana olivia is too young to vote, and in Cinco De Mayo mexico celebrates a booming exports economy. Good morning, everyone. This is bloomberg surveillance. We are live from our headquarters. Im tom keene. Joining me, Olivia Sterns and brendan greeley. Olivia since 2006 the fbi had been investigating one of the suspects in the garland, texas, shooting. Agents reported him talking about fighting nonbelievers of allah. Two gunmen were shot and killed. They had opened fire on a Security Guard before being gunned down. The terrorist Group Islamic state has claimed responsibility through the isis radio channel also warned there would be more attacks on the u. S. In baltimore, streets remain called after a