In london. Manus first thing this morning, the german chancellor Angela Merkel says she is confident the International Monetary fund will contribute to greeces third bailout. Francine on wednesday, the German Parliament will vote on a rescue package. Manus speaking for the First Time Since euro area ministers backed the 86 billion bailout, Angela Merkel said she would consider debt relief to make it happen. Ms. Merkel with regard to the extension of maturities, we have room for maneuver. Just like we had in previous times, we did extend maturities. The repayment rates. It is always possible to do something else, but theres also a clear statement that they euro cant allow another haircut. Ourcine lets be to international correspondent, hans nichols, in berlin. How was Angela Merkels tone . Hans she was defensive. She knows she has a difficult challenge with the bundestag. She lost about 60 votes when they were authorizing her to proceed with these talks. We will see where that number comes in. What shes talking about here is a leap of faith. She has not guaranteed the idea that mr. Tsipras will continue to reform, will continue on what they say is a positive path. Way to go out of her praise mr. Tsipras, talk about how hes changed things around since they came to the brink. She has a little bit of give in terms of her finance minister, mr. Wolfgang schaeuble. Pass, 26 billion gets released pretty quickly. 10 billion goes to bank recapitalization. Then we start having a conversation about whether the International Monetary fund is going to stay involved. All they say is there needs to be substantial debt relief. In germany, they continue to pretend this is an easy thing to get even though they are only talking about extending maturities. The average maturity of greek debt could be extended to have about a 60year maturity. Merkel,ans, angela shes going on a hiring spree and looking for staff. Hans this is a great story. They are talking about austerity, preaching austerity in athens, and yet at home they are looking for household staff, drivers, and civil engineers. You and i are going to be drivers. We will turn it into a sitcom. An irishman and an American DrivingAngela Merkel around. We wont bring francine and because we know she would be the civil engineer. Shes very good at math. Francine im not sure whether it is a comedy or drama. Manus look at the combination. Francine hans nichols in berlin. We are joined on the phone by the deputy chairman of Angela Merkels party, Michael Fuchs. Great to have you on the program. How will you vote on wednesday . I cannot tell you yet because we will have tomorrow a lot of discussions among the leading people in our party. Ask thisto know, and question to both mr. Schaeuble and by chancellor, how is going to be the involvement of the imf . Board, if it is telling us yes, we will come on board in september and continued to finance greece next year, then of course i will vote pro. But imf is a critical question for all of us. Francine we understand that the imf has said they will be involved only if the eurozone grants debt relief to athens. This at the moment is not on the table. Is it not very likely you will get a response to your question by wednesday . Mr. Fuchs i understand there is still discussion going on between imf, mr. Schaeuble, and madame merkel. There might be some changes. One thing is very important. The debt sustainability is one of the questions which the imf has. Imf has to decide whether they think it is sustainable. Beerwise, it is going to dumping money and nobody knows where it is coming back. At the end of the day, it is a difficult weston to decide. Im really not decided yet. I want to talk to my people, my chancellor, and mr. Schaeuble facetoface. If youre chancellor and your finance minister say that we just have to trust the imf, again, does that mean theres a big chance you will vote no . Im asking because you voted yes at the last bundestag vote. Mr. Fuchs that was a different question, the question of july was just, are we willing to give a mandate or not . I trust mr. Schaeuble very much, so i give him my mandate. He has done well. Look at the results. The results are much better than we didnt expect in july, because in july, many of the prior actions which we have now, we are not negotiated yet. So the result is much better, but the problem is still imf. We always said if imf is not clarified, then we will not be capable to vote pro. So that is what i have to say at the moment. It is difficult to tell you the final result prior to the moment i have the chance to discuss with the leading people. Francine how many cdu and cfu lawmakers do you expect to rebel this time . Mr. Fuchs antonin it is difficult to predict mr. Fuchs it is difficult to predict. There were 60 people voting against it. It could be more. Francine because there is mistrust . Mr. Fuchs it is a question of imf. See the role of imf . Madame lagarde, after the depreciation last friday, came up with a strong statement saying, debt sustainability needs to be wellclarified. We all know that greece is going up to 200 of gdp, and that is a very tough figure. Imf is not willing to play along with such a figure. We have to find a solution. It is a majority question. But it has to be verified that imf, under certain conditions, is coming on board. Francine how do you see the perfect solution . If the imf stick to its guns, and madame lagarde was very strong, i think they are against debt relief, so how do you square that circle . Mr. Fuchs debt relief is not possible because of the eu laws. There is no bailout clause. We cannot just neglect it and forget it. We cannot just do it. It is only possible to talk about maturity and whatever. Debt relief, i dont think there is a possibility. Even the chancellor last night said no interview, she debt relief. Because of european law, i have to say. It is a law question. Francine you were mentioning that Angela Merkel interview last night. She seemed not to rule out running for a fourth term as chancellor. Do you think the greece issue will ultimately decide whether she runs, and what do you say her strongest point is leading to her success now . Mr. Fuchs she did not mention it. She did not want to give an answer. She was very clear that in this very moment, it is not necessary that shes going to tell the people whether she is running for another term. But im pretty sure she will. And i hope she does, because shes a great leader. Francine thank you so much, Michael Fuchs. A pleasure to talk to you as always. Manus lets bring you some live pics now. This is fifa. Hes holding a news conference, and this is to announce his candidacy for the upcoming fifa election. There you go. There is one of the names in the hat. Probably one of the most followed elections in the sporting world. These are live pictures from paris. Dr. Chung mongjoon. Francine heres a look at what else is on our radar. Japans economy contracted as consumers and businesses cut spending and exports tumbled. 1. 6 domestic product fell between january and march, ending two quarters of growth. New bloomberg study has indicated that chinas economy is growing more slowly than official data suggests. The survey of economists shows they think the economy expanded by 6. 3 , compared to the officially reported 7 . It helps explain why policymakers have stepped up stimulus. Francine chinas premier, li keqiang, has visited the scene of last weeks tangent explosion tianjin explosion. The number of People Killed in the blast has risen to 114 and 95 are still unaccounted for. Investigators are trying to confirm reports that the warehouse that exploded they have held as many as 700 tons of sodium cyanide. Tianjin port remains closed. Thes japan has raised eruption warning for a volcano on an island 31 miles from a Nuclear Plant which was restarted last week. Shaken by atbeen least 800 tremors in recent days, and people have been advised to get ready to leave. Francine malaysias currency has resumed its decline. A political scandal at home and slumping oil prices as well as a rate hike. The ringgit has hit lows not seen since 1998. Malaysias reserve bank has ruled out using a currency peg or capital controls. Manus the devaluation of the yuan has had a major impact on emerging markets. Morgan stanley say they identified 10 nations which could be at risk. Those are brazil, russia, singapore, south america, and thats just a few. Francine joining us now is credit agricoles head of ethics research. Right to have you on the program. When you look at emerging markets, it seems that the round is by no means done. That the pathase is still to lighten up on risk for investors. The chinese devaluation last week was seen by many as a sign of the underlying weakness in the chinese economy, which underpins concerns about Global Growth weakness. If you add to that the potentially imminent fed rate hike in september, thats not great for risk assets. More uncertainty means further risk reduction, further risk aversion. What is different from the Asian Financial crisis is that it is all happening so gradually. But it doesnt mean that a change in direction lies ahead anytime soon. The trend is still lower for many of these currencies. Manus this is different perhaps to the Asian Financial crisis that weve seen before. If we look at what Morgan Stanley are saying, they refer to the fragile five. They expand that. Where is the biggest ramifications . If you use china as a common denominator, you have to look at the currencies that have benefited so much on the back of that unrealistic expectation that the chinese economy will keep growing at a breakneck speed and things will perpetuate for the years to come. We are seeing the unwinding of that trade. Commodity currencies themselves are still dependent on the outlook for the chinese economy, the property sector, and the resilience of domestic demand. That confidence has been badly shaken by the stock selloff in july. On top of that, we have that evaluationinese yuan , and then the question is, if the chinese now want to switch away from domestic growth, back to exports, what the implications of that is going to be. Presumably, that means further slowdown in global trade. Bodes nottion, that well for chinese trading partners. I think they could easily expand the circle to developed countries. Japan could be quite honorable. Price back of that measure last week, we went long dollaryen as we think what the pboc has done was to reinvigorate a global currency war. Looking around the Central Banks and g 10, it seems that the oj maybe the closest to responding in kind. Francine given what youve just said, and the fallout we received from the yuan, does it mean the fed will postpone its rate hike . Not necessarily. The fed will want to move in september. It seems the likeliest venue for that. The domestic economy is still doing ok. This week could be interesting, with all eyes on the court cpi inflation. If it moves even closer to the 2 target, still quite an important signaling for the market. If anything, the september rate hike will become even a stronger condition for the market. The dollar could do relatively well. Manus you just mentioned japan could be the first centralbank to react to this. How much more qe do you think they could or should do . Where would that take dollaryen . Qe will comes that at the turn of the year. The bigger question is, what do they buy if they want to expand their Balance Sheet further . There are a lot of worries about the impact that the current qe is having on the markets. They are already quite a chunk of the total market. If anything, the expectation is that they diversify, expand the range of assets. All that needs to be confirmed of course. Francine all right, balentin, thank you so much for that. That brings us to todays twitter question. Are we done with the emerging market rout . Under pressure. The latest set of japanese gdp figures make grim reading. Manus welcome back to the pulse live on bloomberg tv. Francine japans economy contracted last quarter. Consumers and businesses cut spending and exports tumbled. Gross domestic product fell an annualized 1. 6 between january and march. Manus that was better than estimates of a 1. 8 drop. Lets cross over to bloomberg japans economy team leader. Brett miller. When you read this data, what does it mean for japan . From hisas the answer view. Certainly arebers a reality check for the government here. Although they were close to estimates, the estimates were really quite weak. Japan just crawled out of a recession last year. Two quarters of growth now and slipping again. That is bad news. What it means in terms of the bank of japans stimulus, that is not clear yet. The bank said it expects this weakness to pass. E will be watching closely wages and Consumer Spending are the keys to the domestic growth of the economy. Francine why arent consumers spending . I guess old habits die hard in japan. Weve had almost two decades of economic stagnation. That has taught consumers to save. Sales tax increase last year, which really did hurt confidence. Going forward, what we are seeing is Companies Making a lot of profits but not pouring that back into wage increases. Without wage increases, we are not likely to see consumers spending. Manus from the conversations you had and the one we just had, where are we . What happens next . Is there a hiatus before japan would take action . Brett not necessarily a hiatus if you look at forecasts from private economists. The most likely date they see is october for a possibility of stimulus. After that, some economists look to early next year. There are some now looking at the possibility of stimulus from the bank of japan in october. Francine brett, thank you so much for all of that. Hass Anglogold Ashanti emerged as the latest casualty in the drop in gold prices. The Mining Company has reported a decline of earnings which fell to 26 million. Francine thats down from 35 million in the previous quarter. Bloomberg has spoken with anglo golds ceo. Kevin, where does the ceo siegal going . Gold undergoing quite an interesting period. Betweenkely to trade 1000 an ounce. He contends that anglo gold has a plan to mitigate the impact of this. Theyve been spending across the globe as well as sharing in the capital cost of some of its mines. Manus how will the company deal with the current low gold prices. There is a debate that we are hovering around this 1200, but it is all down to the cost of production. Not everybody is equal in that regard. Kevin the only thing really that the Mining Companies have to deal with the lower gold prices is to reduce their costs. Anglo gold has reduced its cost 12 in the last year. They will look to continue to do so across the world, cutting exploration, cutting spending, and reducing labor costs if they can. Thing that they have got in their favor is that they are an international minor, and with the strengthening dollar does come a weakening of variance rencies, such as [indiscernible] however, they are beholden to the dollar gold price, which touched a fiveyear low in july. Francine kevin, will there be a strike . This is one of the main things investors are worried about. Kevin anglo gold gets about a third of its outlook from africa. At the moment, they are in the midst of wage negotiations. Y tabled their finer offer final offer a couple weeks ago. It was a 13 wage increase in some categories of workers. Both major unions have rejected that. At the moment, we are in a deadlocked situation. It is certainly looming large on the horizon in south africa. Manus ok, kevin, thank you very much for that. Kevin crowley in johannesburg on the goldminer and the future of strikes in south africa. Next, millions of protesters have taken to the streets. We will have a look at the indications for currencies and stocks in brazil. Manus lets have a look. Weve got a reprieve after last weeks selloff led by the miners and the oil stocks. You are seeing a reprieve around europe. London still down by 0. 25 . There is a big glencore report on wednesday. Weve also got oil dropping this morning as weve seen opec production may hit a record. They are producing more and more. Francine look at crude. It is 41. 7. It is also about a lot more production coming online from the u. S. Drillers. The big question is iran and what opec will do about that. You can tweet us. We are back in two. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Tand thats what were doings to chat xfinity. Rself, we are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Welcome back to the live from bloombergs European Headquarters in london. Manus here are some of our top headlines. German chancellor Angela Merkel says shes confident the International Monetary fund will join greece for the third bailout. Comments are the first since finance ministers back the 86 billion euro aid package. The bundestag lower house votes on wednesday. Francine japans economy contracted last quarter. Gross domestic product fell an annualized 1. 6 between january and march, ending two quarters of growth. That was better than the estimates of a 1. 8 drop. Manus indigo, indias biggest airline, has ordered as many as 250 airbus jets. The move further strengthens the playmakers lead over boeing. Francine chinas premier, lee k chang, has visited the scene of last week tianjin explosion. The number of