A lori warm welcome to the pulse. Im manus cranny. Lets take you to the site of where the next debate on greeces future will take place. This is the German Parliament where we expect the debate to start. Already, theres a little bit of this and within the german ranks a little bit of dissent within the german ranks. A member of merkels Christian Democratic Union, the systemic importance of greece for the eurozone hasnt been demonstrated. There can only be one vote, and that is no. How many of the German Parliament will vote against the outline basis for a great deal . The german lawmakers say their countrys 86 billion euro a package today. Lets move it along and get to our reporters. We are going to cross to Caroline Hyde in athens, paul gordon in frankfurt. Caroline, lets kick it out to you first. I love the line that i heard this morning. You were given a hotel bill. On that hotel bill, the rate has changed already. Caroline not happening across the board. Many of the smaller restaurants have been given until monday to update their system, but at my hotel, i was charged 23 on my food and beverages. Just a couple days ago it was 13 . Implementation is already happening on the ground in greece. This is a problem already for the shopkeepers. The Business People are less likely to want to flash the cash. This is clearly what everyone is thinking about when they can get access to more cash. We just heard from the greek government, banks will open their doors monday at last am three weeks of closure. There is no relief in terms of capital control. If you are an exporter, you can send money abroad more easily. If you have a son or daughter living abroad, you can transfer 5000 euros every three months. But if you are living in athens still 60 euros max per day. You can save that until the end of the week, but still, there is no relief in terms of access to your money. A jeweler i was speaking to is still having grave problems. For three weeks, he has had no business. No one can afford the jewelry that hes making at the moment. Manus paul i listened to mario draghi. He never doubted greeces position. Im paraphrasing. He believed greece what main part of the eurozone. Are we being overly generous in terms of optimism . Paul you could argue he wasnt overly generous either in the sum of money, but the optimism it is a matter of conjecture. Not long ago the heavyweights on the board were saying a greek exit can no longer be ruled out. Now, draghi is saying we always acted on the assumption greece would stay in the euro. He is now assuming greece will stay. He is assuming the greek banks will in some form or another open. Still wants to see the ecb have its debt repaid, but he believes it will be repaid 3. 5 billion euros on monday. The mood seems to be at the ecb, time to move on. Manus lets get a little more that also seemed to be the intimation. He was quite clear this is partly because of the flaws within the euro area structure. Paul right. Youve got 19 sovereign countries using one currency. They are not always on the same page. We will see that today in the German Parliament. The level of dissent is what is going to matter on the vote. In france, michels upon michel sapin said nothing can happen when france and germany disagree. France is saying they should stay. Draghis point was, you have to get over these structural flaws. There has to be more cooperation. He referred to the report in late june which said that you could have a joint treasury within 10 years. In other words, lets move from a pure Monetary Union and get closer to a fiscal union. Maybe one day a political union. It took 100 years in the u. S. We are a little of the way there in europe. Manus sometimes the best things in life are worth waiting for. Thank you both. Bloomberg spoke exclusively with the European CommissionVice President about the ongoing greek crisis. Right now, we need to finalize the decisions to start the third Bailout Program for greece. Once the decision to start the negotiations is taken institutions, European Central banks, imf, can start understanding the memorandum with greece. Debbtt sustainability is one of the issues which is going to be discussed. Manus for more on the greek discussion, we are joined by Morgan Stanleys senior european economist. Great to have you with us. I dont know where to start. Madame lagarde says the greek plan is not viable. Capital controls are being lifted. The politicians are squabbling. What do you make of it . It remains to be seen whether implementation will follow. It is difficult to make the assumption at the moment because the imf has to be involved. Also, theres no nominal haircut in europe. At best, there will be long extensions of maturity. The imf has one option at this time. It is all very uncertain. You would expect many troika reviews and negotiations in case they dont go well. Manus a lovely line this morning, id love to say we will be back here in a year or two. It is more likely a few months. From the imf from the eu, from the ecb, these are the creditors. They havent got their house in order. How are we supposed to expect a deal to be done in three months . This is not a harmonious creditor group, is it . Daniele there are differences. I think it is much less about where there should be relief and more about what kind of relief one should have. There is equivalence between those maturity extensions and a haircut on the debt. They want to strike a responsible balance between the two. Manus you are the last economist of the week, so you get to call the debt extension that would work. What in your view is the maturity level we need to see to form a good basis for greece . Daniele imagine i owe you one Million Pounds. You can add a couple extra zeros. You can see that even though i have debt, in reality, you are giving me equity. It doesnt need to be that extreme, but it has to be very long, with a long grace period such as, greece doesnt pay anything at all for a couple decades. Manus lets talk about the capital controls. In many ways, this is symbolism for tsipras witches, the banks are open, you might only get 50 euros out, but they are open. Do you think capital controls are here for a protracted period of time . Daniele i think so. There is a distinction between a bank holiday and capital controls. People will be able to access the banks more easily. But capital controls will remain for a long time, probably for many months. It doesnt need to be that restrictive all the way through. Some of them will be lifted overtime. But i think they will stay. One has to strike another balance between the damage of those controls and the prospect of removing them too soon. Manus stay with me. We have madame merkel making her speech inside the German Parliament. Shes saying that europe has seen some of its most dramatic days, in reference to the greek crisis. This is the lower house in germany beginning its session on the greek bailout package. The Greek Parliament has already ratified the terms. One of ms. Merkels Christian Democratic Union domestically, there is a little dissent in germany. The systemic importance of greece hasnt been demonstrated. Theres only one vote that can be. They we understand there is near 50 potential voters of dissent within the bundesbank. As we get more headlines from ms. Merkels speech, we will bring that to you. Next, to end . Bank of England Governor Mark carney says the timing for a rate rise will be clearer before 2016. Then electrolux gets efficient. The appliance maker feeds estimates as it improves its european business. We will speak to the ceo. A little later, blankfein enters the billionaires club. Tweet me up here. This is our question. Is Lloyd Blankfein the epitome of american industry . It would not seem unreasonable to me to expect that once Monetary Policy mobilization begins, Interest Rates would proceed slowly and rise to a level in the mediumterm that is perhaps about half as high as historic averages. And in my view, the decision as to when to start such a process will likely come into sharper relief around the turn of this year. Manus welcome back. This is the pulse. That was the bank of england governor, mark carney. We are still joined by daniele antonucci. All of these global central bankers, not all of them, but carney and all of them, they are ringing the bell the death toll of 0 rates. Is the world economically ready to deal with hikes from carney and yellen . Have they missed the boat . Daniele Interest Rates will begin to rise in the u. K. Next year, in the first quarter, but with the potential for this to start somewhat sooner depending on what happens to wage growth. It is not very strong in britain, but it is coming back to some degree. This is what we will be watching. We think the fed will start sooner than that. Manus we like brave callers who make up their mind as to what will happen. This goes back to the European Economic debate. We are seeing more, some would say panic reactions from china. Another 4. 5 trillion yuan available to the market. Some say stop worrying about the equity market. But, chinese growth is absolutely linked to the european story. Daniele i think it is. Fundamentally, we are seeing that the china story is more important when it comes to the Growth Prospect of the eurozone. Yesterday, mario draghi mentioned the complex situation in the emerging market world as a risk. Manus im just going to get back into the merkel images that we have. This is Angela Merkel talking to the bundesbank. She is making some very forthright, not shocking comments, but she is saying that a debt haircut would be illegal. Germany wont agree to a debt cut for greece. The most important currency is trust. This goes back to the fundamental issue that germany is having with greece, which is about reestablishing trust and believe that the greeks will an act their program, will actually enacrtt the Structural Reforms that theyve suggested they make. This is no debt haircut. Germany needs to agree germany wont agree to a debt cut for greece. Lets bring back in daniele antonucci. This is clearly making the german position so clear. Debt relief, dream on. Daniele to come back to your point about trust, this is also the biggest deficit, i think. It may make quite an effort. It remains to be seen where that happens. If it does, we might be looking for those that reprofiling extensions that we talk about, but a haircut is not in the cards just yet. Manus i think its interesting that she says the timeout decision is with greece. What is your base scenario . Will they stay . What is your call on grexit . Daniele we havent really changed our view. The situation remains quite uncertain. We suspect it could take a year year and a half before greece risks exiting the eurozone. They might just do it because the numbers are daunting when it comes to the adjustment. It remains to the scene whether it can change so soon, so quickly. Manus great to have your take this morning especially when we have merkel on her feet in the bundestag. Morgan stanleys senior european economist, daniele antonucci. Coming up, we will be speaking to the ceo of electrolux. Off the back of better than expected secondquarter earnings. Stay with the pulse for that discussion. Manus welcome back. Electrolux has beaten analyst estimates for profit in the Second Quarter but a legal battle looms over its plans to buy ge. Joining me now on the line for our discussion is the electrolux ceo, keith mccloughlin. Welcome to the pulse. The numbers are good. Give me your view on europe. It sounds like things are right sizing. It is difficult to assess. What do you mean by difficult to assess . Are we not out there shopping . Keith western europe is getting stronger. What is difficult to assess is eastern europe, and in particular russia and the ukraine. Western europe is strengthening. Demand in western europe increased by 4 in the quarter. We are seeing that pretty much across the board. The weakness and uncertainty is eastern europe. And as i mentioned, russia and ukraine. Europe is strengthening. Manus keith, in terms of having confidence for the rest of the year how confident are you for the rest of the year . Youve made some big structural changes in europe. Wheres the rest of the big structural change for electrolux . Keith the team is doing a nice job on all cylinders. The efficiency, the operating cost performance of the business, is stable and improving. The mix is quite good, makes meaning lots of new products at better Gross Margins, better pricing. Demand is improving. I would say the business is improving. In a stable way, which is what you want. You dont want dramatic swings either way. The business in europe is healthy. Manus lets get to the big issue in the room. Electrolux was vigorously contested on its efforts to to oppose the ge deal. How are you going to challenge the department of justice . How optimistic are you that youve got a defense position that is going to shift them . Daniele keith we have been challenged. We are in litigation, so i cant go into too much specifics, but we are confident that their assessment doesnt reflect the marketplace that the appliance market in the u. S. Is and continues to be competitively intense, and this acquisition will offer consumers more choices of higherquality products at lower prices. That is what we intend to show in court. Manus what are you prepared to give up . It comes down to convincing regulators that it is good for me to have one Company Selling me the same not the same washing machine, but ultimately they are all made by you. What are you prepared to give up to actually get a deal done . What would you be prepared to give up any assets . Keith our primary position will be to explain to a neutral judge with facts what the Competitive Landscape looks like in the u. S. , and that it is the competitive intensity is increasing given many new entrants into the market. Manus should i be worried about margins in the u. S. . You say it is a competitive place. If i go to the other side of that equation, you must be fighting hard on price. Keith we are in the appliance business, so it is a tough, competitive business. Part of the reason for doing the acquisition is, their are significant cost synergies. Up to 3 million u. S. Dollars annually from this acquisition. It is quite accretive to the shareholders. Manus as a good ceo, a vanguard of the business, everybody has a Disaster Relief program in place. If the deal doesnt get done what are you lining up . Keith of course, our strategy isnt acquired ge appliances. That is not the whole strategy for the company. We have a strategy around innovation and profitable growth and geographic expansion and brand. The strategy doesnt change predicated on one single transaction. Obviously this is a big one and we want it to happen and we think it is valuable for our customers and our shareholders. But if it doesnt happen, we go forward and look at other opportunities. Manus the other dynamic for anybody watching this who owns your stock, you have some challenges in the u. S. Introducing new products upgrading some of the plants. Most ceos probably balk at this word, but when do you see American Business getting back to normal as it were . Keith i think we will be back on track by next year, north American Business. Manus tell me this. We sit here and debate at bloomberg whether the Federal Reserve will raise their rates before christmas whether the u. K. Will raise rates as well. Ultimately, there is a debate about the capacity of the american cymer the british consumer, to tolerate higher Interest Rates. Is that a concern for you for the business, in terms of the timing of Interest Rate hikes or is it something which lags and we dont need to worry about it for 18 months . Keith in the appliance business, Interest Rates and housing activity and Consumer Confidence and employment, those are the key variables that have high correlation to appliance demand. Interest rates matter. But given the low rates they are coming from to go up 50 or 100 basis points is not going to dramatically affect the appliance demand. Manus thank you for joining us this morning on the pulse. Lets see what the department of justice and yourself can come up. That is keith mccloughlin, ceo of electrolux. Some of the top headlines now on bloomberg. German lawmakers will have their say on greeces next bailout today. Chancellor Angela Merkel just finished speaking. She said germany wont agree to a debt cut for greece. Voting begins at 1 00 p. M. In berlin local time. The eu off rights bridging loans for greece and the ecb extended 900 Million Euros of emergency aid the greek banks. The greek deputy finance minister says the banks will open on monday but the daily withdrawal limit will remain at 60 euros. Bank of England Governor Mark carney said last night that the outlook for the u. K. s first Interest Rate hike will come clearer toward the end of this year. The remarks came after carney and policymaker david miles said on tuesday that the time is approaching to raise the key Interest Rate from 0. 5 . A Chinese Agency said to have funding available to support stocks. People close to the matter say they have about 3 trillion yuan on tap. The funding will be used to support brokerages and purchase stocks. Lets get more on that story with enda from hong kong. I dont know whether