Bloombergs European Headquarters right here in london. Im guy johnson. Im francine lacqua. Also coming up, ever wonder what it is like to be a high roller in vegas . We look at the incredible perks and give you access to the most exclusive casinos. We begin with the latest twist in microsofts search for a new c. E. O. Erikssons vestberg is said to be a candidate. Another one added to the mix. Vestberg is still his 40s and driven. Im told he is motivated. He is young and p. R. Savvy as well. He gave the keynote speech at the conference back in 2012, the Consumer Electronics show. He is a scotsman. A handball player. Hers are elop of nokia also going to need body contact and fast hands to be able to move and direct microsoft into growth. The company is in the middle of this huge organization. Whoever takes his job is going to have some very tough challenges ahead. Maybe this makes vestberg adept to it. He has experience. Not only experience, kind of with microsoft in terms of its overall culture. He took over microsofts media unit, a Software Maker recently. He has acquired a part of microsoft giving him experience, but also he is a man who knows how to make tough decisions. Remember eriksson coming under stiff competition. He knows how the deal with competition and he knows how the exit businesses when he needs to. Ismant it will joint ventures. He managed to drive share Prices Higher for eriksson since his tenure. Sales have gone himplet the stock has gone higher and this is a man with a lot of experience in technology companies. He has been there for 25 years. He has had positions in china, brazil, mexico, the united states. He has made the role of c. F. O. And chief executive. He is an outsider. Is that a con overall rather than a pro . Remember, youre going to have bill gates and steve boll mer board of microsoft. Those two figures still playing a very active role. He also doesnt know the company that well. Thanks very much. Caroline hyde there with the latest on the microsoft search. The search continues. Ok. Lets stay with tech and talk about yahoo . Its chief operating officer is out. Marissa myer is said to have fired him. She was disappointed with his efforts to boost growth. Get this. He was in the role for 14 months. Not bad at all. European auto sales raced ahead with 13 surge in december. Lets get over to berlin where our autos reporter chad thomas has more. What is behind the surge and what are the markets surging particularly well . Hi, francine. Good morning. Not only was this the bigs gain in four years, it wases there fourth consecutive monthly gain. You could say were starting to see a friend here. Many markets did well. Half of the markets in europe post a gain of 10 or more with. E u. K. Up a whopping 25 spain being held by a cash for Clunkers Program in that countrys government incentives essentially and in the netherlands sales more than doubled in december and that is because taxes on cars are going up in january and so people rushed out to buy a car before that tax increase came into place. When we look at the automakers that did best, it was volkswagen and renault and volkswagen done well because of their discount brand. It has a couple of new models. Renault, it was their budget brand doing well. While sales are up, people are definitely still looking at the price when they decide what car that they are going to buy. Lets talk about pricing. I guess probably the comparisons, the comps probably make a difference yearonyear. We have come off some very low levels. Is it pricing that is making the difference . Is it the fact that all of our cars are getting older and older and we need new ones . What is making the difference . What impact is it going to have on the bottom line of these automakers. It is a little bit of both. The incentives did creep up in december in germany. Germany being the largest car market in europe. However, autoroast about seven to eight years old on average in europe. That is pretty old so people are going out and buying cars. One thing that is interesting is analysts are telling us used car prices are starting to increase. As used car prices go up and they get closer to price of the new car, it helps to get people buy a new vehicle and that helps automakers boost their prices on new vehicles. However, were still seeing at this point, very high incentives on new cars, so that is what is helping to boost this market. Well leave through it. Thanks very much indeed. Chad thomas joining us from berlin. Christmas trading helped offset a drop in sugar sales over the last quarter. Is sugar facing a longterm challenge . Jon ferro joins us now with more. Salt obviously was a big battle a few years ago. Tobacco. Is sugar now joining this list . It seems that way. If you were watching questions in the u. K. Parliament yesterday, one politician stood up and declared a war on sugar. It is going to be a big political hot potato in this country. One side talking about look, it is ok. If someone wants to get fat, let they want. Much as and then healthcare is funded by the taxpayer which makes this very, very political. Youre looking at 600 billion dollars on the obesity epidemic. That is a lot. That is why it is an issue in the u. K. It is also an issue in the u. S. Where the average consumption of sugar is 40 teaspoons a day. That is the average . That is average. Most absorbed by the beverage industry. Carbonated drinks. The problem is im a big lover of sugar. 40 a day. That is a concern. And you dont realize ns the sauces we buy and in the carbonated drinks. You look at a distribution curve on that. There are going to be some people who are going to be eating a lot of sugar. If you cut the children out of this equation, the number goes up. I find it fascinating. N ferro with the very latest there. Guy is in shock. I am slightly surprised by that. Ok. Lets move pofpblet we probably shouldnt. Renzi will present his 15point italian labor plan. We were talking about it with mario monti when he was here last week. Dan, first of all, does renzi have full support within his party . Full support . Probably not. There are still some remnants of the old guard left within this party that renzi has totally revamped. With his campaign over the last year or two essentially, remove the old guard. Bring in sort of new management with his team. So he has still got a lot of skeptics within the party. Nevertheless, i think he has got enough support, to, you know, try and get this package at the forefront to have governments agenda. I think as mr. Monti himself said the other day when you interviewed him, what is remarkable here is that this program of labor market reform revamping the market, making it more flexible is coming from a leftist party, the Biggest Party in italy now. It is not coming from the conservative side. This time it probably has a chance to be a bit more farreaching and get adopted by this government. Lets im sure there is some sort of ultimate political objective here and clearly renzi has ambitions. What is the objective here for him . He is still in his 30s. He has been very ambitious in terms over the political lie of the land, that he would like to have a leftist party push. What does he want to do with this . What is the ambition here . There is no doubt that renzi wants to be Prime Minister of italy. That is his game plan. What he is doing is adopting a program, if you will, right now, based on two pillars. One is the labor market reform, because it is a big issue. Look. Italys Unemployment Rate is still high. This economy is struggling to get out of recession. It is mot generating jobs. This is a theme that resonates with voters obviously. The other pillar is changing way the country elects its parliament, its politicians. Elect really a reform. If he can get those two things moving and perhaps done this year, then there is a very good chance that he will be able to get elected with a clear majority. Perhaps next year. I dont think he wants to force elections this year with the system the way it is, with the ground rules the way they are now. You know, it is too chaotic. Italys electoral law has been struck down by their highest court. They need to change the rules. Until that is done, it doesnt make sense for him to play his cards and force early elections. Otherwise there is a very strong chance that we would have an outcome like a year ago and another Transitional Government and another odd coalition, if you will. Thank you very much indeed. Joining us on the italian political story. Were going carry on that conversation in a few minutes being joined by a Political Science professor in rome to get his taken to political story in rome that is changing pretty quickly. Here is what else is on our radar. Richemont shares are taking a hit. They saw weak demand in china. The man behind the popular dyson vacuum clearance says the process of innovation unpredictable. He shares his insights on innovation with charlie rose. An it is process of the most wonderful journey. It is agony. A great guy to listen to. You can hear him at 10 00 p. M. U. K. Time. Amazon employees will be forming the companys first u. S. Labor union. They voted 216 to reject the initiative. Were going to head back to italy for more on the Democratic Partysing star, renzi. That story coming up in ex. Next. Now, there is nothing very original in the ideas of mr. Renzi for labor market reform, but the big new thing is that these ideas, which are pretty classical, come from the head of the Democratic Party. It was precisely because the then head of the Democratic Party wasnt able to move the majority of the party in that direction that we couldnt deliver as much as we would have liked. There was a compliment in there somewhere, i think. Yeah, a little bit. A little bit. Of course the factions it is quite hot. That was mario monti this week n the pulse. Renzi takes the spotlight today at the democratic meeting. Pleptsing his 15point plan on labor reform. Are his policies hype or are they going to take italy somewhere . Lets discuss all of this with a Political Science professor in rome. First of all, does he have the right policies to actually push it through or is he just striking to stir the boat . I think what he said, he certainly has a right. They are not very original for that matter. The problem is certainly there is a novelty in that he has managed to take the leadership of the Democratic Party. That is a novelty. That is the real novelty. Is he going to be able to carry on such reforms . That is a problem. I am slightly more pessimistic in this connection. Because i think that the italian economy, the italian bureaucracy, especially, quhschs closely intertwined with the economy is such a jungle that it is very daunting to even think of trying to simplify it and carry on such plain reforms. That is my point. If i may mention a metaphor. It is like a highway or a street full of roadblocks. Unnecessary road blocks and then such roadblocks stop cars unnecessarily because the people who form those roadblocks are employees. They were hired at some point in past and need to justify to some extent their existence. This is what is going on in italy is he going to be able to reduce those roadblocks . Is he going to be able to streamline the italian bureaucracy so that his reforms can take effect . That is where im more skeptical, honestly. Here is a young guy representing a new political generation. Working inside a leftleaning party. If he cant deliver this it would seem that nobody else can. That is a pretty Bleak Outlook for the italian economy. Yes. I agree with you. Unfortunately, i completely agree with you. But this doesnt make me more optimistic. Im, lets say, i look at his endeavor with a certain amount of skepticism. No related to the ideas or the genuine enthusiasm that animates hip. This is not him. Question. A he is followed by the majority of the people his party because they have realized what you just said that this is almost the last chance for italy to get out of the dire situation in which it is. Ut i still remain a little skeptical as to him being able to carry out such reforms. There are road blocks in the way of electoral reform. The trade union, which hasnt been mentioned to the best of my knowledge, which is one of the roadblocks. It has been turned into a roadblock by time. And i understand your skepticism. But do we need to be a little bit more optimistic . After all, it is optimism that actually elected barack obama. I agree. Lets be a little bit more optimistic. Without forgetting the reality. All right. Thats fair enough. Ill take that. Thank you so much. Well have to invite you back on when we know more about mr. Renzis policies. All right. Were going to take a break. Still to come on the pulse, ever wonder what it is like to e a vegas whale . Well give you the perks of that lifestyle. Looks great, doesnt it . Welcome back. It is time for hot shots. A big win for australia and chinese. Pulled off some perilous flips in difficult conditions. Day 10 in one of the toughest offroad races. That looks like hard work. That does look like quite hard work. That is a very big sand dune. Lets find out how the markets are trading. Im trying for a segue. We can do it twice in a row. Manus. Over to you. I cant wait for fridays introduction. What i can tell you about these markets is that volume y50u7s are rising. There is a bit of a split. Volumes are about 60 higher than they have been for the past 30 days. Autos are rising. The beige book in america found it pretty hopeful. For me, it is all about london. Not the bridge. It is about the miners. Rio tinto is doing what it promised investors. Cutting expenses. Beating targets. Record output for the last quarter. Takes bit on the back of that. The chinese, get this, the chinese hit a record import in terms of iron ore. It is actually a lot. Back to you. Manus, thank you so much. Manus cranny with the latest on the markets. As we head to break, it is time for todays the pulse number. 58. 7 million, that is how much kate moss, who turned 40 today, made last year. See why she is still a super model and on top of her game when we come back. Welcome back to the poles. I am francine lacqua. European car sales surged, the biggest monthly gain in almost four years. From lagarde the imf has urged policy makers to fight deflation that may hurt what she called a feeble global recovery. Deflation must be fought decisively. The ecb is set to toughen the requirements for they cap up. The central bank has recommended a six percent buffer. Manas has more details on the stress test. The ecb is lifting it. You had that conversation with him. You need to raise the benchmark. What is an a grade to get from school to university . It is higher than the american. When thent would be americans did there stress testing they had slightly keener balance sheet. They had raised capital. We are in a very different paradigm. They had tarp. They had all those nasty things, and they get better. We dont have the proclivity for but we have to agree to benchmarks. Be seen as more credible. Maybe a bank has said these are manageable. Perhaps even less than you might thought. Have thought it would be more onerous than this. The one thing that catches my 2011ith a scenario from that equities were dropped by 15 . I think you should have spoken to people in ireland. I think the credibility of a stress test is going to be important as well. How do you price them . Thats what theyre not doing. Government bonds will be no risk waiting. We stress test them. I leave you with this. Bad debt. Is goodou decide what and what is bad . Ask a spanish banker, and asked the swedish banker. Between the two you will begin to understand about the lack of harmony in terms of how you recognize a bad debt, when you recognize a bad debt and how bad the Balance Sheets really are. There is a long way to go. Thank you so much for the latest on financials. Lets go from frankfurt to vegas. Ever wonder what it is like to be a highroller in vegas . 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They are also seeing the online retailer getting more shares. America is a bright spot, may be helped by las vegas. It is all about china. China sales to climbing. China gigantic the region far less than we anticipated. Sales. P nine percent factor in the strength of the euro, and sales only went up three percent. The reason we are seeing a of lack of because giftgiving. We have been told about this. We are not allowed to drive the politicians. To bribe the politicians. Jewelry that is suffering the most. , theseier, mont blanc are the things they own. This is why we are seeing such of slowdown. Also, watches as well. We are seeing a big fall in the strength of growth. We knew the exports from switzerland into china were