Restructuring costs, well be speaking to the ceo in around 30 minutes time. At least two people left dead in ukraine as antigovernment protests escalate. Well spoo well speak to the chairman of the second largest lending bank. And a surprise shakeup at pimco, Mohammed El Erian resigns as ceo as investors are turning from bonds towards stocks. Davos 2014 well and truly kicked off here. We have some brilliant guests coming up at Worldwide Exchange speaking to the r rwe ceo as germany unveils their latest renewables for Renewable Energy. He doesnt pull punches so well be getting his latest thoughts on that and have you heard of the china shale boom . No, but im looking forward to hearing about it. I wonder whether it will be as important for that country as undoubtedly it has been as the United States. Will it be as game changing, one of the big things. Well be speaking to a top expert. How is it there . Pretty cold but im wrapped up warm, fully prepared for this and speaking to some really interesting guests already this morning, one of the crucial things people are saying, when are businesses going to start employing the capital they hold. This is one of the key issues that came out but a sense of great optimism certainly from the number of people weve been speaking to, yes but risks still remain. Lets listen in first to what people have been telling us this morning about when and if companies will start redeploying some of that capital. Companies are so conservative. The ceos, cmos, cios, chief procurement officers, cfos dont want to make mistakes. People talk about m amp were aa which you talked about yesterday i dont think that will happen. I may be totally wrong. I dont think boards, if you look at the return of money to shareholders, you look at the buybacks and the cash position, it doesnt pay. There is actually quite a lot of investment. I think what youre seeing are not a lot of m amp were aa activities, only limited to two or three sectors. Win i speak to investors theyre keen we invest our money appropriately. Were not under appreciateeur to spend it quickly, were under pressure consistently to spend it wisely. Well my first guest is john nelson, chairman of lloyds. John just listening to what some of the Business Leaders, ceos are telling us about just when capitalist is going to be redeployed. Is 2014 the date where we start seeing that in. Were already seeing that to some extent, beginning to see some confidence particularly in the United States and the united kingdom. I think its still at a brittle stage. We could see some things taking us off track but i feel as everybody else does that there are some green shoots and one can feel these economies beginning to grow. Also very importantly i think weve seen some slowing of growth rates in some of the higher emerging growth countries which again seem to be now recovering a little bit, not dramatically but they are recovering. And i think the huge dangling debit of the instability in the Financial System certainly seems to be working its way up. Of course thats terribly important for confidence. The key phrase you mentioned something that takes us off track. Youre a risk assessor. What takes us off track or potentially could take us off track . Well i think, to be honest, i think political instability in some countries could take us off track where the right prudential policies are not being pursued. I think could take us off track. I think if you take, for example, the uk, where we are making Good Progress, but if the pressure is taken off, reducing deficits and Government Debt, at any stage, that could take us off track. What about the risks from within your own business, the insurance business, having to chase higher yields, products such as catastrophe bonds, weve had a warning from fitch this week just where the direction of the business is going. Are we underestimating the risks here . I think for the insurance sector, the key dynamic for the insurance sector is a sustained period of extraordinary low Interest Rates. That has attracted more capital into the insurance space, where youre seeing more graphically in reinsurance which is what a lot of the it he bait is about at the moment, and there you are seeing new kinds of Capital Markets projects coming into the insurance industry. Now, for lloyds, as a market, we are the only Insurance Market in the world. We are the leading specialist insurer in the world. We have the luxury that, as a market, we can frame the way in which we attract capital, the way in which we do business to suit the new dynamics. So we are in a relatively strong position, providing we keep evolving our end business model. Davos is all about new dynam dynamics, looking for new opportunities. You have your plan for 2025. Where is it going to take you in the next year . One year is very short. I wouldnt like to measure that, but i think where we are is were making very Good Progress in terms of increasing our footpoint in china, where we hope to open a branch in beijing, expanding our footrint in Southeast Asia and south america, latin america. I think were making Good Progress. Equally i see in the short term funily muff good opportunities in the developing markets particularly in the United States, lloyds is the number one provider and also in Continental Europe where we have in france and germany very interesting opportunities. Do you think well continue to see the growth rotation away from some of the developing markets into developed markets this year and beyond . Well, i think over the next 10, 15 years were going to see it. Along the way well have years where its all three or four years where the pace is different. I think if i was guessing in 2014 funnily enough for lloyds id see us having good prosecpes for the United States and europe. Were continuing to increase our footprint in emerging companies but that will take time. Youve insured the first vault to protect bit coins. The answer is i couldnt possibly comment. No comment, ill accept that. Thank you so much. Now russ i was talking to you about the potential for chinas shale boom. Were going to talk to the top expert in china about the potential there and whether or not chinas government is investing enough in Energy Security for china, that coming up very shortly. Well wait for that. Thanks for that. Head online for more coverage of thissors davos gathering and stay in touch with the weeks event following cnbc world on twitter. Also online a special report on what the experts here think could be the worlds biggest risks and join in that conversation also on twitter using biggestrisks. Germanys new Energy Minister has warned over making an aggressive transition into renewables in his first major speech, he said the estimated 24 billion a year annual cost for renewables could strike a blow for the countrys key industrial minister. Hell present formal energy plans to Angela Merkel today. What do you think about that in davos . Jules . Thanks, im joined by rwus ceo. You dont pull punches as far as the Energy Sector is concerned. What do you need to hear from germany today about where we take renewables and their process here . The first thing which the new minister already has announced is a change in the subsidy regime for renewables, the eeg needs a revision and thats what theyre working on with high intensity. The eu is going to announce their new process and focus until 2030. Yes. You have the problem going on in germany, strattic policies in different countries. Is this a problem at the eu level, at the individual country level as well in. Its both but the eu needs to give clear direction. We need clear targets for 2030. We dont know 2030 and beyond what the targets are for co2 reduction. Are we going to match them anyway, see a 20 renewables by 2020 . Is that target achievable . Well its certainly achievable but you need to start with co2 reduction. What is the target you want to achieve and if the focus needs to be on co2 reduction, then the Renewables Target is a secondary target and needs to start first with the ets and co2 reduction. We have the u. S. Shale issue playing into this also, importing cheaper coal from them, working against the policy of less co2 emissions. How do we balance those two things . You cant impress targets without expressing larger. Shale gas is one, countries that used to import becoming exporters as far as gas is concerned and it has an impact on europe as well. We need to refine our targets in line with the new realities in the Global Markets and be consistent on that one. If you cant be better maybe you need to be smarter. Where does your business go from here . Youre waiting for new targets from the eu, seen subsidies for Renewable Energy creating havoc for your utilt base. How do you plan to address theser us looking forward in the business . Its unfortunate. We are at a standstill at this moment in time. We dont know what to invest in, how much co reduction, what about coal, what about gas, its not clear. Secondly we dont have the money to invest in those things. The Energy Sector in europe is qualified by the global Capital Markets as uninvestable due to framework and lack of consistency in the policies. The talk youre going to sell off your oil and gas business dwe, the bid prices that are being rumored are fas less than the market value. Can you give us clarity on that and what you will do if you dont achieve market value at least in. I cant give you clarity. We dont speculate on rumors. It is on its way as scheduled and well see what comes out at the end of today. It is important we are focusing our business towards the more decentral and renewable aspects locally with the people. I this i thats the move, with he can develop things like smartphones, smartgrids needed in any transition of society, people need to make more out of the energy that you have and thats what we can very well support in. Quickly, what defines new Energy Context . What will define it oef the next 10 to 15 years . Very simple theres no one size fits all. Well see various solutions on a low voltage grid level at the consumers, heat pumps, photo voltaic, heat puchz, management of that and continue to see large power plants on the high voltage level for the industry, might run as a backup in times when theres no wind and solar so the integration of this system thats a complexity and what well see in the future. Peter terium, rwe, thank you. Thank you very much. Energy costs are far higher for the United States. Right now as far as the Global Markets are in europe, 1 40 into the trading day, just about 6 3, nearly 7 3, vaadvancers are outpacing decliners. The cac is up 0. , the ftse 0. 6. Abb right now down 3. 6 . Warning Fourth Quarter results will be hit by a 260 million charge, it will miss profit targets. The firm says its due to storm related delays and offshore wind farm projects. Later in the program well talk to the companys ceo Ulrich Spiesshoferp coming up at 6 00 the chipmaker, beat Fourth Quarter profit forecasts and dlird a fairly tough demand, a day after advanced microdevices warned of revenue, forecasting a 16 decline in the first three months of 2014. Amd saying sales of gaming could be soles were not going fast enough to offset slowing pc sales so amd in frankfurt down nearly 11 and ibm also down nearly 3 , a slowdown in i. T. Spending by many of chinas Stateowned Enterprises hurting ibms business, total revenue down to 27. 7 billion in the Fourth Quarter. Jules, back to you. Thanks, russ. One of the key focuses in davos is the new Energy Context we were just talking about here, bm sees the growth in energy over the next 15 to 18 years, 25 of it will come from china and a bigger deficit as far as energy goes than the u. S. Or europe. It is a crucial issue. To talk more about the idea is lin boqiang. Were concerned where china demand goes, what the output story looks for china the next few years and one of the proxies we use is electricity demand. Right. How good a proxy really is electricity demand for growth and output . I think electricity demand is a good possibility for economic growth. Chinas economy is so conscious on the industry and they are so kobs traited on the industry so put together they are a real good link between electricity and gdp growth. What is it telling us right now, what is the demand telling us about output for china Going Forward . I this i theres good news and bad news. The good news is that you look at Overall Energy demand, theres primary energy. China has been sold unsubstantially tu to economic slowdown from 10 to less than 8 . Most of this is structural changes that also leads to the slowdown in the Energy Demand. Most important i think that china is treating the environment at this point, big environmental problem last year so china is determined to deal with it so also to the Energy Improvement and Energy Demand declined. I have to wonder how much focus there is on this. China has twothirds of the reserves or twothirds more of the reserves of shale gas than the u. S. Does. Why isnt there more focus on the Chinese Government to unlock the potential here . I think theres issues to duplicate what is successive in the United States, because there is some issue, some environments. U. S. Companies are trying to invest, chevron, exxon mobil, signing agreements to come. What is the problem here . Why is there a stalemate . There is not a problem. Technology could be a small problem because to adapt to the china situation but what china situation, is it regulati regulation, state control . Also environment such as monopoly of the pipelines, that stuff and also theres a water issue in china. The United States doesnt have a water shortage, in china there is. Technology requires a huge amount of water and that could be a problem. By the way, it takes the u. S. Ten years. Be patient. China only started. Youre going to take ten years, with he heard it here first. Li boqiang speaking to us there, you heard it there, ross, ten years and we can talk about a china shale boom here. Okay. I want to quickly flip focus of course. Weve been seeing pictures of ukraine and the tensions going on there, that has an impact to russia and their involvement in the region but the question key, is it impacting the focus on russian business and investment there . Well speak to the chairman of vtb, Andrey Kostin after the break, stay with us. A credit to fault swaps on ukrainian debt has risen to a onemonth high after shots of violent clashes have thank have broken out in the capital city kiev after ukrainepolice broke through barricades and started arresting protesters. They are investigating two deaths. The government stepped away from the partnership in favor of a new deal from russia. Kiev revoked visas of several ukrainians in response to action against protesters. As that unrest continues what impact is it having on businesses that have a presence in the country and the region . For more, jules rejoins us from davos. Thanks so much, russ. Joining me is the president and chairman of vtb group, Andrey Kostin. I want you to go back to the top of the russias relationship with ukraine. First talking about growth, the imf and the world bank hav downgraded quite significantly russias growth estimates, 2 for this year. Is the economy in freefall . Well, we still believe that the economy is in recession but i agree growth is slow and that raises concern for the government, for the business community. The government is trying to resolve this issue in two ways, one is to spend half of the National Wealth fund on infrastructure, making more Government Investment and increasing projects. On the other hand trying to improve the climate. The government is not ready to spend more from the budget, the government is very much committed to a strict budget discipline. How do you improve the Investment Climate in russia with a years history about investors getting involved . I think the government is right in sticking to specific ways. They have a long list socalled road map and i think its moving in the direction. I think we set quite ambitious target moving on the chart climates of the world. Things are changing maybe not as fast as wed like to but i think its becoming good. You talked about development. Talk to me about the sochi olympics, 50 billion, is that a complete waste of money in the country where its needed elsewhere . I dont think so. The hotel where the major sponsor, cocacola, will be placed, and russia never had high class holiday resort, Summer Winter and these are investments not only for sport, they are veminvestments in a holiday sport which are very high standards and of course all olympics are some excessive spending but i think its important for as we mentioned the morale of the nation and also quite important investment project. Talking about the morale of the nation, you have to wonder whether the stagnation that youre seeing in growth at home perhaps makes russia want to be more present on the international stage. How do you see the relationsh