Youre watching the pulse live in our European Headquarters. Germanys finance minister said the e. C. B. Has now run out of ways to help the eurozone. That puts the burden on governments to spur Growth Without critically running excessive deficits. Data will be out in one hours time. He spoke with caroline at the annual meeting. What mario draghi is saying again and again is that it is not to the e. C. B. To implement because Monetary Policy cant the parliaments and we agree 100 , Monetary Policy policy has to take its responsibility. Monetary policy can only buy time. The underlying problems. Fiscal policy. Economic policy. In this globalized economy we have to work for ongoing again and again to announce competitiveness because markets are changing very fast. If you look at what is going on in the global economy, there are varying problems. Every member said we have to stick on to enhance competition. If we will be come placents, even in germany, we are fine tually but if we would not continue to enhance our competitiveness in coming years, would lose. Should the e. C. B. Do more to fight inflation . I dont think that the e. C. B. s Monetary Policy has the instrument to fight inflation to be very frank. Interest rates are on a historical level low. U cant solve the problem in lowering Interest Rates. The liquidity of markets is not too low. Even too high. Therefore we have the problems. I think Monetary Policy has come to the end of its instruments. Therefore what we urgently need is investments. Regaining confidence. By investors, by markets, by consumers. Germany, we have of course our economy geopolitical risks in the given situation. But on behalf of our exports but our growth is driven by internal mand because have a consumers and investors as well and the reason we have such a high confidence is that it is sustainable. We will stick to what we have promised and we will continue to stick on the investments to increase, we have investments. We are working on this. Of course we have to expenditure for research and development and thats what the french government has also decided to do. Fascinating stuff. Caroline join us us. You also talked about the french reshuffle. What were his thoughts on that . Yes, the visit of the finance minister had been planned for a long time. Of course he didnt expect to be such so much in the spotlight the middle of these this crazy week for france, the Cabinet Reshuffle and the austerity policies. He told me he was not happy at all that the former economy ministers comments about austerity, prices, directly pointing the finger at germany. Remember he said that austerity policies in europe where were dogmatic and absurd. Here is what he told me about this debate. To be very frank, we were not very pleased when we got what the former minister of the economy said over the weekend. We have been happy that this has not been agreed by the president of the republic, by the Prime Minister. He also told me he endorses the new economy minister. That he sees as a more pro business liberal economy minister for france. He said that competitiveness is going in the right direction. Now of course he says he is confident that france will stick to the rules but as you know, the deficit targets of france have already been burdened and french deficit will be above 4 of g. D. P. This year. He said he is confident his french colleague will do everything they can to bring the deficit back to the 3 target and of course germany need france to recover because otherwise it is holding back the whole eurozone growth. Especially at a time when germany is also going through their slowdown. The minister also told anyway the German Economy is being by russian sanctions even though he doesnt realize their growth targets for this year. Back to you. Were looking forward to hearing more from that interview. Thank you very much indeed for bringing us that. Were back in paris a little later. In the meantime, lets move over to ukraine. The nation says russia has invaded and president poroshenko is asking the world for help. Hans nichols joins us now first there was a u. N. Security Council Meeting and then president obama spoke. In terms of how united the front is against russia and the information we have, where are we . Well, it seems like there may be Division Within the u. S. Government. When the u. S. Ambassador to the United Nations spoke, her language was much stronger than president obama when he went out a few minutes later and spoke to the cameras. He declined to call it an invasion and basically said this is an escalation, continuing behavior, pattern of behavior from russia but it didnt mark an invasion. That is a crucial distinction. At the same time obama ruled out military action and after that press conference, the white house put out a statement saying that president obama and Angela Merkel had spoken by phone and they are talking about consequences. Merkel seems to be inching towards another rounds of sanctions but not new secretary tomorrow sanctions. Much of this will be discuss tomorrow at an e. U. Leaders meeting in wales and next week you a nato summit. The backdrop to this is Vladimir Putin is praising the rebels inside ukraine. Remember this is southeastern ukraine along the water there. So a different front from where they were before. At the same time, 20,000 this is according to nato, 20,000 troops are on the russian border. They are there. No one quite know what is putins next move will be. Everybody is watching carefully as we begin to inch our way into winter. Were talking about more sanctions here and we had energy talks between the e. U. And ukraine and gazprom and were thinking about how cold it could potentially get this ecked winter. Well, well know a little bit more on how much progress they are making. The e. U. Has a plan. A shortterm payment and International Arbitration trying to solve the longterm dispute. We spoke with the e. U. Energy minister. Here is how he put it. It would be to afterwards have decide be effective for everybody. He plans to head to moscow tomorrow for more talks, guy. He said look, clearly the e. Sumbings making contingency plans, is aware of the fact that yaws could cut off all natural gas supplies to europe this winter. 15 of supplies is going to be a very big and very cold story. Guy . Yeah, and youre going to be monitoring that very closely. Lets turn to our top company story. Tesco shares are under a little bit of pressure. They cut the profit forecast. Lets find out how much of a basket case it is. Caroline hyde is here. It is not like this is the first time we have had bad news from this company of late. It is not. This is the worst since january 2012. What happened is philip clark had town vail the first slash in profit forecast in two decades and he hasnt caught a break since. On his departure, he is going to leave a month earlier than planned and they had to make him swallow all the bad news. You have to cut the Capital Expenditure and slash the dividend by 75 . Now we want to bring in the brand manager rather than the shopkeeper, dave lewis. This is a company that has seen just this week, posting they had the worst sales decline in two decades. Market share has fallen sub30 . Now 28. 8 . Discounters are eating at them from the bottom. You and i are becoming savvier. Were going our discounters and buying our meat and products. Tesco is a huge asset in the middle that cant is this then getting all the bad news out before the new boss starts . I think certainly yes. They have a whole load of bad news there. They are trying to clear the deck. You have to ask yourself what can lewis do . He has to rebrand tesco. They have been trying to make changes. The changes to a certain extent worked. In london they were already up to that refinessed 80 stores. And the sales have risen there. If you go to bank, if you go to a store there, if you go to white chapel, it is more about the indian spices. I was in notting hill for the carnival. They had all the caribbean products. They are trying to make it far more local. It is working at the moment. Is it a question of time or totally changing their entire ethos and make is that your the products that the premium and the likes of unilever krks he that . A very big worings a lot of people invested in the current culture. It is going to be interesting to see whether one can deliver those changes. When you have 30 of the market, where do you go from there . 31. One would hope. But that hasnt been the case. They have not suddenly hemorrhaged. This is a huge juggernaut that has piled a lot of money into real estate. They have invested in restaurants and bakeries and coffee shops trying to keep up to date but this is years of underinvestment they are trying to play catch up to. I think for the time being it is going to get worse before it gets better and the shareholders are worried. Slashing dividends is never appetizing. Certainly not. Still to come, the robot sidekick has literally out of this world. Well show you how Japanese Technology is helping astronauts handle isolated space travel and well show you the unusual companion and the difference he is making. Draghi saying again and again hat is needed. That is the german finance minister speaking to us exclusively. He said the e. C. B. Has pretty much run out of twice help the eurozone get growth going. It is now up to the government to do more to spur growth. Is that true . Does mr. Draghi listen to him . Should he listen to him . The head of maker Economic Research joins us now. Do you think draghi has run out of road . Not at all. Structural reform is a good thing. But it will take years to implement. We have already seen more than five years on from the global nrble crisis that any adjustment euro land managed to achieve will be the expense of loss of output and record unemployment. Unless those Structural Reforms are supported by monetary and fiscal policy together with the necessary debt writeoff, euro land is headed for demand deflation. Staggering that the eurozone is still, especially in the corporate and the government sector having excessive debt. Right. Now if that has to be worked out, what the e. C. B. Could do is u. K. Style quantitative easing. But contrary to what quite a lot of central bankers think, quantitative easing doesnt work through compressing the premium and the credit channel. What it does sin ject money directly into the economy bypassing the banks and supporting nominal domestic emand. Q. E. , when you have yields where they are at the moment. Are the opportunities to be missed . How about the opportunity to do full q. E. Already passed us by because were factoring in a much more different scenario than the one the u. K. Continue bait or the u. S. Contemplated when they implemented q. E. . It would have been a good idea to have q. E. Or to have had q. E. Earlier but that didnt happen. That is not to say that it is not a good idea for the e. C. B. To still go for q. E. And as i was trying to explain it is not through yields that it would work. It would work through supporting the amount of money this the economy. Would they be better would there be a better way of doing it than than buying government assets . That is the problem in euroland in terms of the political opposition to that. Yes, other assets would be a good idea. It become vrs tricky, though, for the e. C. B. To judge what other assets it could buy. Certainly their plan for the a. B. F. Market that, market is too small. What the eurozone needs is large q. E. So then which other assets can they buy . Equities . Bank debts. All kinds of other options could e out there. Im challenged by the idea that q. E. Is the best ox option here in europe. Im curious to know whether or not look at all the options. Im wondering how they are running through the the various options on the table at the moment. If q. E. Is not a good option, what would you say would be a good option in your view . Im not sure. I agree with you that the a. B. S. Market is too small. You heard what carney and draghi said about trying to expand that market. The it is something that would take time. If q. E. Is all were left with for Government Bond q. E. , the only thing were left with . Pretty much yes, id say. What we might see next week is en further lowering of the already negative Interest Rates in euroland in order to incite banks to take the but that is very much the wrong method. Trying to stimulate the take up of more debt in an economy that is still suffering from excessive debt, that would not be a solution. O then you look to well, in terms of Monetary Policy, leading to the fiscal Structural Reforms, what else can the e. C. B. Do . And it can bypass banks inject money directly into the economy. It will allow the necessary structural adjustments and the necessary and must stress writeup of debt to go through without severe recession. And the e. C. B. Has that option. Or has that policy too. Now on the other side of the story, yes, it would be a good idea if the eurozone wasnt so fixated on this tight fiscal policy. However, that seems highly unlikely to change and yes, Structural Reforms are needed. Is it more likely that the germans will accept that we embark on a massive program of q. E. Given their fear of hyper inflation or is it more likely that they will accept the fact that maybe we need to start changing the fiscal rules and allowing more spending to take place. It strikes me neither of those two are comfortable options for berlin to deal with. I think what is likely to ppen is that the e. C. B. Will ultimately go for q. E. But it will be much smaller in size than needed. And i think the germans will be more prepared. Isnt q. E. Almost the worst Case Scenario here though . If we end up with q. E. But it is not big enough . Yes. Yes. I would agree with that. It will be worse because it will create a sense of for a little while that maybe it is working in terms of its support to asset prices and it wouldnt be. And especially at the moment you ill have this very pro cyclical push to require banks to raise their capital to asset ratios. Well have to leave it there. Thank you for joining us. Ive taken up too much time. Well take a break and see you in a couple of minutes. 268 is how many Miles Per Hour the fastest train can travel at. The train floats above the tracks to reduce friction of course. It cost around 1. 2 billion to build. Hello, everybody. Welcome back. Youre watching the pulse live from bloombergs European Headquarters in london. Im guy johnson. David cameron is making another plea to scottish protesters to emain a part of the e. U. He said there are huge benefits for being in the union. Our Single Market is one of the greatest advantages. If we Stay Together scottish businesses have better opportunities. Consumers have more choice. Scottish people have more secure jobs. All of those great advantages at risk by going into the great unknown. President obama does not have a strategy for confronting the islamic states ouffed iraq. He ruled out plans for immediate action in syria adding that air strikes in Northern Iraq will ontinue. The e. U. Are blaming russia for thesque nation fighting in ukraine. President putins troops have crossed into the country. The two groups are discussing the possibility of more sanctions. Ok. Lets stay on this tensions with russia. In an exclusive interview, germanys finance minister said the crisis with ukraine is impacting the German Economy. He warned of dangers of military scalation in the region. There are crisis that is caused by russia does harm our economy. You have to be clear in the hierarchy. To stabilize the political situation. To make clear and sure that we will not fall back in we will borders and iolence. We want to have partnerships of course. Everybody wants to have partnership. As close as possible. But of course everyone has to stick to the rules. We cannot accept that this will that it will be violated by force. Are you you need to revise your growth tact for this year . No, we have been very casme. Careful. Had experts in the economy a higher forecast for our growth. We have been very careful and we were not so optimistic. Targets and economic targets. Germany is a big customer of russian oil. We want common persistence by ll europe. Angela merkel is working again and again and i think we have been rather successful in finding a common european position together with the united states. What we have decided in the Financial Markets and i think what we are trying to find is the right balance, not to work for escalation. And to help russia to correct its own policy but to make clear to russia, russia has paid a rice. It is not really acceptable for russia. The german finance minister. She also asked him about the political turmoil in france, this after the governments reshuffle earlier this week. I think it was a good decision and we are fine with it. I have met my french colleague, who used to be the finance minister. I am happy that he will ontinue. Do you think that the french Economic Policy is in the right direction . It is it is what we agreed we have to do. We were not nk very pleased when we got what the former minister of the economy said over the weekend. We have been happy that this has not been agreed by the president of the republic, by the Prime Minister. The economy has the same as the finance minister the Prime Minister yesterday from the university where france will work on enhancing competitiveness. Which is crucial for all of us or Sustainable Growth. We have to regain confidence. By markets, by investors and consumers. To stick to what we have agreed o. I think france will do what is needed. It has been agreed again and again a