Governmenttral continues its biggest defensive so far against prorussian separatists as unrest spreads to the black sea port. Plenty to talk about. We have the ukraine Central Government, its forces taking atv power tv tower back from separatist. Lots of fighting, a local website reporting that seven have been killed in the fighting. The Biggest Issue is owed us storming Police Headquarters yesterday. Activist prorussian that were freed by prorussian what shall we call them . Militia . Well we have now is a situation where most of the fighting has been in the easternmost parts of the country right alongside the russian border. Now we have it in places like odessa, which is very much in the south. Why is it such a geopolitical why is it so important . I never thought we would talk about this so early. Republic of former moldova that became an independent state with the fall of the soviet union. Inside, you have an enclave of about 100,000 people which is controlled by russia. We have heard over the last few weeks, resident couldnt talking about his concerns about this president Vladimir Putin talking about his concerns about this place being blockaded. The russian government may want land bridgeocalled for the easternmost parts of the country. Price to a 13 month high. Ministerpanese prime is in paris today as a special guest. Joining us now is the secretarygeneral. It morning, sir. Q i for joining us today. Morning, sir. Thank you for joining us today. We have to tiptoe around the economy. We will not talk about the forecast, but we will talk about the economy. On howthe general read you give us a general read on how you see the Global Economy right now. There is no mystery, the Global Economy is better. It has been for quite some time. The United States moving to two or three percent growth. Europe is coming out of its recession. Japan is moving away from deflation, where it was from about 15 years. There is a slowdown in some of the emerging economies, china is holding its own. This is the way it looks. Better, but with Downside Risks and with problems in europe having to do with the banking ofon with the capitalization the number of banks. In the case of japan, the third abenomics has not yet been defined. , the economyates is doing well, though there was a glitch for the First Quarter because of the weather. Very strong, very vibrant labor market. Doing better with the housing markets. The u. S. Is good news. What does it mean for central the united within states . People have read the jobs report in different ways. The participation the lowest since 1978. Theres is not much evidence of wage growth. I think the tapering, not the is something that will continue to happen. It was predictable, it was inevitable, and desirable. Going back to normality and normal is good. We should not get addicted to the steroids. The u. K. Is in the middle because it got into the crisis a year later. Twoeuropeans are about years behind this process and we expect both the u. K. For somewhat longer, although the u. K. Is doing very well. The gdp growth and in the case of the european and the euro area, to continue to have low rates for quite some time in order to consolidate the recovery. You touched on japan, i want to come back to it because yes, we will hear more evidence of the third arrow from the Prime Minister. There has been a lot of talk and it comes to the third arrow but not a lot of implementation. Is this the last chance when it comes to the third arrow . Finallywhen mr. Abe is going to have to deliver on economic reform . Cannot be any implementation of the program if it has not been announced. As far as we know, this will be done in june. We are all preparing for that announcement. We have contributed to this announcement. Two weeks ago, i was in tokyo and we delivered to the Prime Minister our own contribution of what we thought was required for the third arrow and i have to participation in the labor market was an important component. They have 230 of debt to gdp. This is the highest ever in a g8 country. That is a constraint. You will have to do a careful juggling act between kickstarting the economy, which they are already doing. There is a nuisance and confidence there is a new sense of confidence in japan. What will be done on the important issues of structural change, like education, innovation, competition, deregulation, flexibility in the labor markets . More than a third of the labor is with shortterm contracts and does not have the basic guarantees. There is a dualism in the labor market and that has to be addressed. There are a number of issues on the structural side. Be the big test. The Prime Minister is fully aware and he will be talking about what is going on now and the plans he may have. We may see a very interesting premier here at the oecd. I would love to hear your view of what is happening in ukraine. The oecd suspending talks with russia about joining the oecd. Events really flaring up over the weekend. The crisis is escalating. What is your take on how this crisis is going to proceed and the implications for markets around the world . It is very serious and very untimely. It is not because russia or ukraine have great linkages in terms of trade or financing or investment to the rest of the world. It is that this is causing tension overall. Systemic tension, fear of further confrontations and that is having an impact. At a time when we were trying to build back the trust, trust is one of the big legacies of the crisis. We have slow growth, high unemployment, growing inequalities, and we have a destruction of trust and were trying to build up the trust. And then this happens and this is slowing down the process. This is bad for russia. This is bad for the world out large. It is very unfortunate. We are calling on all parties to deescalate and to bring the pressure down. We have postpone further talks for the time being. Clearly, when we will resume will depend on things on the ground, real events. Noticed on your website, you have this better life index. Many users have looked at this index and they have shared their view on what makes a better life. What interesting things have you uncovered . T is not just about gdp it looks at a whole array of things. It is something i thought worth touching on with you. We have had millions of people who have visited the ,ebsite in different languages which is going beyond gdp in saying what makes a life . Is it your income . Is that the overall level of wealth generated . The answer, of course, is no. We are measuring at least 11 other indicators having to do with security, having to do with engagement with your community, having to do with political commitments, having to do with the balance between your work and your family life, having to do with cultural and educational issues. A number of other things that make the quality of life. We are measuring it in different countries. Each country has different weights in terms of the important they give to all of these elements. This is a powerful weapon in order to tell policymakers what it is that people want. What they have to deliver to have more satisfied customers. At the same time, of course, this will help them to get it right in terms of the support they will get for the Public Policies they deliver. Always good to talk to you. ,ood luck with the forum resilient economies for inclusive societies. The oecd secretarygeneral speaking to us live from paris. Taking stock of the earnings season. Welcome back. Is 7 16 a. M. Ndon lets take a look at the corporate earnings season. Vice chairman of bnp paribas investor Partners Joins us live from paris. Good morning, william. How do you see the earnings season so far . It is the only factor that is expected to underpin equity markets over the course of this year. If you look at the year over year growth in the u. S. , it is too slow. If you look at the yearoveryear growth in u. K. Earnings, it is way too slow. Doing a better job in massaging the expectations. With respect to europe, it is simply disappointing and the street was expecting this year, Something Like 14 earnings growth. You than what you have said, are equity levels are at record levels in the u. S. , are they justified . Based on the view that earnings will accelerate. For the time being, this is what one should expect. This should give you more confidence about way that earnings would evolve. Europe has been represented by the strengthening of the euro against a number of the emerging market currencies. Recently, that has reversed. What is interesting is that everybody is thinking the trend for multiyields is up, markets are relieved when it see some dispersion, difference in quality on strength. It means the worsening Interest Rate environment is not yet imminent to start to shake the market up. That when when might shake the william . It depends when we would see the labor market data in the u. S. Broad set of at a indicators. If the vast majority of these indicators move in the right ,irection and start to flash people start to react. Obviousement to put the from janet yellen. The fomc member forecast will be looked at with a Looking Glass to gauge whether it is on for summer or fall next year. That would be something the market would have to work on digesting. Is that means yields in europe does that mean yields yields at record lows, will the compression will the yields continue to decline in those nations . There is a limit on how far you can compress them. Everybody is taking a view of the world. On the other hand, there are limits on how far you can compress. Ecb qe, prospect of the there is no reason why these yields would start to move up. We are in a very and nine market the nine market in europe. Thanks, william. Coming up, as the Ukrainian Government continues its defensive against prorussian separatist, we will have more from russia about the international reaction. Welcome back. I am mark barton. This is bloomberg television. Ukraine seeking to dislodge rebels from its industrial heartland. Reporter henry myers joins us from moscow. Henry, what is the situation on the ground in eastern and southern ukraine . Currently, the ukrainian inernment is continuing Eastern Ukraine. There were casualties, people were killed yesterday. Mainown which has been the town held by the prorussian rebels is still partly under their control. There is fighting ongoing in those areas. In the south, where more than 40 people were killed last friday, there was continuing violence yesterday, row russian activist seized a Police Station and there were more deaths reported. How was russia responding . Could warned that it intervene militarily. This outlook likely . At this stage, not so likely. They have been pursuing a strategy according to western countries and Ukrainian Government of infiltrating agents and assisting the prorussian rebels. They are using covert methods. The russian reaction was very strong, though, and the spokesman for president Vladimir Putin said he had been thinking very seriously about what to do next. Russia is receiving thousands of phone calls from residents of those areas who are asking for russian help. Butlikelihood is going up, the risk for russia would be immense. It would provoke largescale western sanctions and be fraught with military risks. Does that mean there is room for further diplomacy . The os cd isf coming to moscow on wednesday and the German Government is trying to revise the socalled geneva agreement, which was a deal signed on april 17 in geneva by russia, the United States, the European Union, and ukraine. They are trying, but it is extremely difficult to try to get back on the track of diplomacy. Henry, thank you. Heading downill be to the oecd for him in paris to look at Global Inequality with one of the people fighting to narrow the gap. Welcome back. Lets head out to jonathan ferro. At,wo traits to look chinese manufacturing, the hsbc reading. It is a contraction. Read across the market was pretty obvious early this morning. Weaker aussie dollar what you did tonight is the reserve bank of australia meeting. If youre looking at dollaryen, japanese yen moving higher. The dollar is getting weaker and money going into the japanese yen. Bloomberg tophe headlines. Ukraine is seeking to dislodge separatist in the industrial heartland with more military action. The government has regained control of a Television Tower seized by prorussian forces. A Top Republican center in the United States is calling for either even tougher sanctions against russia. The russian stock market surged. Would would do, i sanction the Energy Economy of russia, the banking system, and try to drive the russian economy into the ground. I would help arm the ukrainian people so they could defend themselves. Stocks in asia lower today after chinas manufacturing contracted for a fourth straight month. Belowbc index dipped analyst estimates. Conflicting reports on whether pfizer will make an enhanced offer for astrazeneca. The sunday times says pfizer will lobby shareholders forcing the company to accept the offer and warning there will not be an increased bid. Poorestn the worlds countries are still spending only one percent of their american counterparts. A new World Bank Report shows Global Economic inequalities have shrunk in recent years. Lets bring in philip jennings. Joins us from the oh ecb the oecd forum. Thank you for joining us today. Good morning. What is the message that you will be bringing to the forum in paris this week . The same is all about inclusive societies, inclusive economies. My basic message is that if we are going to have inclusive societies, we need to make a new deal at work. I am surprised by those figures from the world bank on economic inequality. We have record levels of economic inequality. Record levels of income inequality. We will not realize the objective of inclusive economies with a continuation of the unfairness and the distribution of the income that we see today in both the developed and emerging world. There have been poverty reduction, but at the end of the day, more than a billion people are still surviving on less than two dollars a day. And bad forainable business, bad for economies, add for our communities. That is the message bad for our communities. That is the message. It is about decent work and quality jobs. What is term vision for inclusive growth . It starts from the question of distribution. Reinstitute those Building Blocks we need to reinstitute those Building Blocks. It is not fair, not right that all of the income gains of the last decade have gone to the top one percent. We need to attack the problem of earnings at the top end of the income scale. Ceo salaries are off the scale, taxation has dropped, their disposable income has increased and it has not benefited the rest of us. We need to improve the share of wages. We can do this through living wage initiatives and to collect the bargaining, giving people a voice at the table. Giving people the right to organize into unions. Ensuring that working people have a seat at the table when we are talking about the distribution of income. We need active labor market policies. People are stressed out. They are under significant pressure to perform. This is not helping the working atmosphere in business or the wellbeing and communities and in homes. Question is atn the top of the pile. The secretarygeneral of the oecd was talking to me earlier about the risk of the loss of trust in governments. A loss of trust in the system from these high levels of unemployment. What are the implications of that loss of trust for societies across the world . Just the risk, it is a reality. The global Union Movement does its own polling, global polling of communities and working people around the world. They have lost confidence and trust in their political leadership. The risk is that the top one percent seems to have purchased the political machinery in terms of the messaging and investment and the lobbying process. We had this political process which is in an orbit which is not touching the day to day realities of working people. Working people do not feel the politicians are addressing their concerns about unemployment, about youth unemployment, about the fact that their incomes do not stretch to the end of the week or the month. The risk is this general corrosion of faith and institutions which is bad for democracy. It is also bad for business because when trust breaks down in business, when people dont believe what the Business Community is saying, it is not good for business and the products they are selling. A loss of trust is corrosive and that has to be addressed. We have had exclusive Economic Growth for a small portion of the population. We have to talk about the concerns of the 99 . One percent have made hay. Time for some sacrifice and new taxation policies. We have to have a policy of including the people and the benefits of Economic Growth. It is not happening. How do you implement taxation policies without hurting business . Lets not talk about the pain of business and taxation. The level of tax avoidance and evasion is off the scale. The highest earners in the developed economy is so slow as it is as low as it has ever been. These people have to pay their property taxes. In ordinary working man and woman, i represent workers in the service industry, theyll pay their taxation. They are good citizens, they understand fairplay. What we are seeing, using the language of hurt and pain is frankly nonsense. I am pleased to see the g20 is taking more measures to clamp down on tax evasion. I would like the left to discover its voice and have the courage to say that we need fair