Welcome. You are watching the pulse. Airbus is lifting off today its new bestselling jet. It will happen around 12 00 to lose time toulouse time. And its the firstever combat mission for the f22. The pentagons most advanced fighter in action over syria. Lets get to our straight our top story. Mario draghi said he is not targeting the country. Just deliveredas a speech on the single currency. Lithuaniaalking about joining the euro. Me is the lines joining the euro shows the currency is attractive. I would say the euro is not very attractive right now. I guess he is trying to say, back in 2012, if people were joining the euro the way they have, where is it to go . The for mario draghi, that is an an invitation to the eurozone. It is the bigger countries and the structural reform countries they baltics show that reforms are possible without the valuations without devaltions without uations. We have been talking about air france a less couple of days. There is no way that france would do the kind of internal we hear reform bantered about. It is a word with no meaning. You have mario draghi and hollande talking about reforms. If youre talking about corporate strategy, you cant. You cant talk it up. Doing something about it is Something Else entirely. Couple of days a ago made the exact point. Reforms. Talks about but as soon as it gets difficult for you, you fall. There has been a lot of talk about the germans softening their stance. Recently was very a punchy, digging his heels, really pushing his view that we are not going to do more, particularly on softening key. Softening on qb. Dont mistake the thermometer for the illness. Everything is compressing at the moment. The question if that is a reflection of reality. You look at some of these debtgdp ratios. We will continue to monitor what is going on. We have been speaking to the italian Prime Minister about the ecb. He said the Central Bank Policy must be a consummate be accompanied by reform. At this moment, european not a reserve. Of power is more than European Central bank. For draghi for the future, i think the first thing in this moment is realized structural in our country. This is the commitment. Now the situation is in the hands of the government, not in the European Central bank. Draghi makes very in port of things. Now it is the responsibilities of government. Are you saying that he shouldnt go forward with quantitative easing or it wouldnt be effective . Decisions the recent about a similar quantitative easing, my personal pinion, the decisions are good. The results after the first month and after the period in the siding about small and medium entrepreneurs, for the moment, it is impossible to give a judgment until the fourth concrete results. We will bring you more on that. An italian business getting punchy about what needs to happen next. Renzi needs to go faster, further, focus on a few things. We will get ricardo barbieris take. We will talk about renzi, draghi, france. Air france, its management has caved in. Extension ofd european units. The strike is still on theoretically. Yeah. They made this offer. They caved. They said, ok, we will scratch on that and instead focus on transavia france. They call this a 100 row france project. They asked everyone to get back to work. The unions are meeting this morning. They will get a statement sometime today from them in response to what air france has offered. At this point, the strike stands. This is what the pilots wanted, isnt it . The government has their backs and the pilots win. It does seem like the pilots have got what they wanted. The government yesterday, there was always back and work, and suggested that the transavia your project should end. s so the strike continues. Did they just come out that . Air france pilot strike continues. Yeah, the strike is continued. The talks will continue today. This is a spokeswoman saying this within the last few minutes, talking about talks with the unions that are ongoing. Even this is not enough potentially. There is obviously more that they want. We will have to keep hearing and seeing what he sticking points are. What is the view of the industry of what is going on here . The unions, they pilots are key figures within this company, but they have held the company for ransom and won. That have done this before. The union has been fairly strong. There are problems within fans in terms of labor unions and the laws that protect those unions. Other companies have managed to work in france and expand. Work. Is a way to make it that the stock is rising on the back of this. That, maybet everyone is feeling like it was going to be fairly positive so we will have this day what happens have to see what happens now that the pilots have rejected it. There is not a formal rejection at this stage. On the back of this news, we are trading at 7. 8. Thank you very much. Speaking to the boss of europes biggest budget carrier about the air france tellingmichael oleary, me that the french union rules makes the country and an attractive place for expansion. I think france will be the company the country lest interested in growing. The way they operate some of their Union Legislation with the base we have in my say in marseille. Grow rapidly in spain, italy, germany, Central European the u. K. Will grow easily. We are going three times daily from glasgow to london with lower fares and more frequency. We are happy to expand in those markets where we see a lot of opportunities. Until the french sort out their legal structures and particularly their north korean attitude to unions and protecting unions, i think we will be fairly slow to open bases in france. You have expressed in the past dismay about the way the pilots approach this industry. What advice would you give over to air france right now . Policy he isy the presently pursuing, making concessions to the pilots, which are ludicrous concessions, would not expand trans onvia transavia. To thoseto stand up unions. If that means take a strike for a week or two weeks, take it. You dont get stronger and better competitive airlines by giving concessions to the least work sectors in europe. Eventually, even the french will work that out. Michael oleary talking to me a little earlier, yesterday afternoon to be specific. Is the profitt that will be the upper end of the range that will be put out by the airline. Ryanair share prices up on this. Up quite nicely on the back of this. We get mr. Connolly speaking a little bit later. Mario draghi speaking on lithuania as we speak. That is the governor or the chairman of the Central Government of lithuania. Integrationg that is the critical factor moving forward. Needs more integration, not less. Euro trading 1. 2 713. Welcome back. You are looking at live pictures from lithuania. Questionshi answering from local press not local press, a member of the eurozone will actually mean. Tosaid he will be prepared do more when it comes to protecting and driving growth within the eurozone. Lets get a sense of what this morning is about, what we really learned what the next ups are. The moon this morning, the eurodollar driven by the fact that are your draghi is prepared to do more. This is not necessarily new. Given what else is going on, it has taken on significance. 1. 27. Euro approaching it is a bit more than i personally expected. I was looking for a level of 1. 28 in the fourth quarter. The position of the euro has picked up a little bit and makes the job of the ecb and a bit easier in that they do not have pressure immediately to come up with Something Else. At the same time, they must give the details of the new abscovered bond program, about which we know very little. I have seen many investors in the past few days and the general feeling is they are skeptical. They dont think the ecb can buy as much as perhaps 500 billion aros of abscovered bonds and sharp period of time. At some point, something a slap to be added. Canraghi is convinced he get the Balance Sheet significantly higher than that, get more money into the system than that. Working, the next logical progression is that he has to look at other asset classes. Between an interim step abs and full qe . According to the ecb, yes. First of all, on the size of the Balance Sheet, a lot of people look at the size of the Balance Sheet in 2012. Eurosee 3. 1 trillion where it is now 2 trillion. I think the ecb wants to expand the assets held for policy isposes which at the moment 7. 100 billion. Realized by the teal is also a the tltros question. So there is some uncertainty on canspeed in which the tltro size the Balance Sheet of the ecb. They also need to buy assets. But a bsf and cover it would proceed relatively so it but abs would be relatively slowly. It could be Something Like corporate bonds, agencies. European agencies before they get to a bsf and covered bonds. In terms of the substance of what the ecb will be doing, they will be buying bonds issued with a pool of guarantees by government, essentially even though it would go through the markets, in my opinion, it would be budget we something close to efsf with thes intervention of the ecb. I dont think. Government bonds are the last resort. The thinking is that if you condense further sovereign spreads, you take away any disciplineenforcing mechanism. There are signs that the market. S facing in some qe i think there must be a significant reluctance to go to government bonds even though in terms of your qe and lament implementation. He is also saying the ecb in its commitment to conventional policy, we will see how that one goes. My big question of the morning when does the government side of this equation start to kick in . Italian businesses are cross with renzi because he is not moving fast enough. Eric schmidt saying, you want to get out of this whole . Start innovating. You are not going to get any progress. We have hans nichols outside a german Shopping Mall. It will be closed on sundays. Look at the picture across europe. This guy can do what he wants and he is doing everything that we can to make it happen. But wheres the help . Wheres the assistance . Actions the government to take this story forward . Right, so limited. We see fighting taboos, fighting things that are considered part of life. , the pilots jobs can take down an airline for things they dont like, expansion into europe. Theyve also ryanair was in a very good mood the boss of ryanair was in very good mood expand they wanted to out of france. The next step of the story, if the contracts of the violence would be the same as air france. In other words, the pilots want the Lowcost Airline to have the same contract with the pilots. The silos,t change these incredibly wellsupported silos within french industry. I am absolutely convinced, when i look at how successful large corporations in france have been, france also looking at its scientific and Technological Capabilities would be able to rival germany and do even better than germany in some sectors of the economy. Its just that it cannot remove the shackles that constrain economic growth. I think this is true in general in europe. I think renzi keeps making promises. He keeps touring the world. He is now in the u. S. Making the right noises. But the real test is next monday generalcalls the directorate of the democratic party. And he must find a compromise solution that will not split the party but will deliver a liberal market reform that is credible. Toause that is really key peoples willingness to invest in italy. Fire peoplet effectively, your willingness to hire would be extremely limited. This is common sense. You dont need a phd in economics to figure it out. Yet, more than 40 years after the law was passed, it is still extremely difficult, not impossible, to change it. We will see what happens next monday. We have to take a break. You can look at equities higher but this is the one big mover in the fx market. That drops below 1. 27 since november 2012. Mario draghi speaking right now in lithuania. No big headlines driving this will lower. But it marks Something Else. That is not using her deaths that is not your weakness but Dollar Strength. Currencies, the dollar is up against every single g10 currency this morning. Welcome back. These are the Bloomberg Top headlines. Talkingenzi has been about the need for growth over austerity in europe and told us that job creation was the key to improving his countrys economy. We have been speaking exclusively with the ceo of deco. Think it is going in the right direction and it is absolutely needed. We dont have to forget that italy is in a recession, two quarters of negative growth. I think it is a signal to the political environment, hey, reforms are absolutely needed to get people back to work. Made a 43tually has Million Pounds that recovery in tesco share price. Shares inllion tesco an agreement with goldman sachs. It comes days after tesco says it overstated forecasts. Eric schmidt has been speaking to bloomberg. Says europe needs to promote talent and innovation. Europe has to choose innovation. Europe, i the model tough situation entering a third recession, the only way for europe is to embrace innovation. By that, they will have to have more festival labor markets. They will have to do a lot of work to create local companies. There is plenty of talent in europe but the model has to shift. Eric schmidt speaking here on bloomberg. Joining me now is john a flow rate he. Conferencee google in paris which is looking at this whole issue about the right to be forgotten. Rome,e been to madrid, to how close are we to getting a better understanding of how europes relationship with google will work moving forward from here when it comes to the issue of privacy . Good morning. We are getting closer but there is quite some traveling to go through still. Ome ideas are clear compliance is never in russian. The book in question. The question is how to implement the general strategy that has outlined by the European Court of justice and see what is in store for the future. In terms of what this means in the wider issue for privacy and the internet and europes relationship with the internet, do you think the direction of travel is the right one . Do you think we are beginning to define how this will work better here in europe . Where we in a situation we are overblowing this, that europe is doing itself a disservice by overly focusing on this one issue . I think there is a risk of overemphasizing one particular fundamental right, privacy, against another fundamental right, which is the freedom of expression, freedom of speech. Thisld be astonished if conflict were left unresolved. At the moment, there is a privilege pensions towards privacy when it comes to the contrast between privacy and freedom of expression. We hope we will be able to reach a more valuable balance between the two. If girl if google was a european company, do you think it would be taking a different attitude . Is hard to speculate on something that is not the case. My point is really that the into of u. S. Interference european privacy is large over the past year in terms of the headlines that have been my have been made, from spying on Angela Merkel and issues the way that google is handling their data. European action to the United States or is this a European Reaction to an issue that we feel is not being taken seriously . As you outlined, the environment has been unhelpful to resolutions to diversions. In other words, politics and the spying disaster have made all possible damage to anyone who wanted to find a common solution. Well, than thinking, instead of a fight between two different parties, i would like unfortunateas circumstances in which it is harder for her want to fight to find a solution. But politics, business, Security Issues have not helped at all in this particular circumstance where we want to find a way of harmonizing two fundamental rights. When we get these rules finalized in november, how do you think they will end up being . They stray from the draconian side of things, how do the other Companies React to that . Do they give up on europe . How do they work through these rules . I can only speak personally, but i believe there is a very strong interest in making sure that is worked out. A little bit like a marriage that is going through a difficult moment. Both sides want to make it work and i believe that politics on one side and business on the other and more american philosophy about rights and a more european philosophy about rights will find a convergence. That is not easy and requires a huge effort. At the moment, sometimes you have the impression that effort to be increased. Have been stunned that it has taken so long for Silicon Valley to wake up to this issue here in europe and maybe there is a penalty to now be paid for that. We will leave it there. Tech. Continue to talk apple has been hit with a 12 punch. Numerous users have complained about their new iphones bending in their pockets. Ms. Execution once again. Execution once again. There are a lot of bs hating apple. I am sure kevin cook is banging his head against a few walls. The iphone 6 plus, the 5. 5 inch screen, can work. Can warp. The casing seems to slightly warped, slightly bend and this as come under great wuhan hooha. Eight, asftware, ios a whole. It needs to be able to receive phone calls and some cannot. So they are addressing it. They say they will be updating us and is a can with a new version in the next few days. Thethe only way to rectify situation is if you uninstall and go back to the operating system had before. Timing if you have this new phone that you are excited for. 10 million have sold over the weekend. Now it is unraveled. This perfectly choreographed unveiling seems to have gone slightly awry. It did happen before. The math wasnt so good in the previous nature. The Mapping Software did not help and gave google the upper hand. Slicklly, it is usually when it comes to apple. Bending, not so. And it stays bent. That is problematic to put it mildly. Lets bring in my low, the author of psychopaths of Silicon Valley which i guess is pretty relevant today. Reputation ha