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Amanpour
Interview with Council on Foreign Relations Senior Fellow for Europe Liana Fix; Interview with Former Ukrainian Economy Minister Tymofiy Mylovanov; Interview with University of Michigan Professor of Economics Betsey Stevenson. Aired 1-2p ET
Aired September 07, 2026 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[13:00:00]
BIANNA GOLODRYGA, CNN ANCHOR: Hello, everyone, and welcome to "Amanpour." Here's what's coming up.
Germany's far-right celebrates a historic victory as the AfD Party wins a key state election, but just falls short of a majority. We'll get the
details from Fred Pleitgen and analysis from German historian Liana Fix.
Then --
(BEGIN VIDEO CLIP)
STEVE WITKOFF, U.S. SPECIAL ENVOY: Settling these things is not easy, because if it was easy, everybody would be doing it.
(END VIDEO CLIP)
GOLODRYGA: -- a show of diplomacy from Moscow to Kyiv. President Trump's envoys, Steve Witkoff and Jared Kushner, meet Putin, then Zelenskyy. But
are Ukraine and Russia any closer to peace? I ask former Ukrainian minister, Tymofiy Mylovanov.
Plus, bond market turmoil. As experts sound the alarm in Europe and America, we break down what's going on with borrowing and interest rates
with economics professor Betsey Stevenson.
Welcome to the program, everyone. I'm Bianna Golodryga in New York, sitting in for Christiane Amanpour.
We begin with a historic result in Germany, where the far-right AfD Party surged to victory in a state election. While they fell just short of an
absolute majority, the populist anti-immigrant party is celebrating.
(BEGIN VIDEO CLIP)
ULRICH SIEGMUND, AFD'S LEAD CANDIDATE IN SAXONY-ANHALT (through translator): This election victory is a vote of confidence from the people
of this country, and we will live up to that trust. We will not give up on ourselves. We will never become like those who have rightly been punished
this evening. We are Alternative for Germany.
(END VIDEO CLIP)
GOLODRYGA: The AfD won nearly 44 percent of the vote in the eastern state of Saxony-Anhalt with record high voter turnout. It is a huge blow to the
party of Chancellor Merz, the center-right CDU. They slumped to around 17 percent of the vote. And of course, with Germany's dark history, for many
it's a troubling moment.
The AfD is still classified as extremist by the country's domestic intelligence service. As a result, all mainstream parties refused to work
with them, maintaining a so-called firewall, rejecting any cooperation on policies with the far-right.
Correspondent Fred Pleitgen is following all of this on the ground in Berlin and joins me now live for more. So, Fred, despite that introduction
there with the firewall that all other parties have agreed to, there are talks now among some parties, including on the far left, that may be
willing to form a government right now.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, there are. There's one that's called Bundnis Sahrah Wagenknecht, or BSW. She is also
someone who used to actually be in the left-wing party Die Linke in Germany and then started her own party. And there are certain areas between the BSW
and the AfD where maybe they see eye to eye on certain issues. Certainly, you can see that left-wing party also getting tougher or talking tougher on
immigration. Also, very pro-Russia as well. So, there certainly seem to be certain areas where those parties could work together.
However, Bianna, it's very much unclear whether or not they'd be able to form a coalition. It seemed as though today that candidate that you were
showing, Ulrich Siegmund, very much lukewarm to the idea of a coalition with that party. He thinks that there might be defectors actually from
Friedrich Merz' CDU Party that could come towards his side to then possibly form a governing majority. But all of that really very much up in the air.
The AfD says they want to have the governorship. They want to form a coalition. They want to govern that state. However, they also say that if
that doesn't work out, that new elections in that state is something that is certainly possible down the line. That, however, could take several
weeks, Bianna.
GOLODRYGA: And, Fred, as it relates to Merz's party and the CDU, this is the worst showing they've had, I believe, since reunification. And what
message were voters sending them?
PLEITGEN: Well, the voters in that state, and this is the way a lot of people in Germany generally feel, seem to be losing trust in Friedrich Merz
and his government. And it's certainly something that I think sent shockwaves through the Christian Democratic Union. You know, we were in
that state of Sachsen-Jahnheide at campaign events of the AfD, but also looking at talking to some of the folks there.
And in the run-up to the election, Christian Democratic Union, we were in that state of Sachsen-Anhalt at campaign events of the AfD, but also
looking at talking to some of the folks there.
[13:05:00]
And in the run-up to the election, most people believed, or I'm guessing the political parties here in Berlin also believed, the AfD might get
around 41 percent, maybe 42 percent, and that the CDU would get a little bit above 20 percent, maybe 22 percent, 23 percent. They're now down at
below 18 percent, and that certainly is much worse than even they had expected.
And one of the interesting factors in this election is that the candidate that they put forward actually polled above the candidate of the AFD. But
it seems as though the party in Berlin really weighed them down. And certainly, if you look at Friedrich Merz's popularity, the popularity of
the coalition in pretty much all the major issues, if it comes to immigration, when it comes to the economy, when it comes to battling
unemployment and reform, really very much down in the view of the voters. And that's certainly something that Friedrich Merz acknowledged today.
One of the things that he didn't do is he didn't say what exactly the consequences of that are going to be. He said we can't continue the way
that we've done before, but then really didn't offer a new path as to how that party wants to move forward.
GOLODRYGA: And following these results, the AfD describes them as dream results and now aims for 40 percent of the vote in the next federal
election, which under law must be held by 2029. Is this a sentiment that we're seeing in multiple states within the country, or is it exclusive to
this one?
PLEITGEN: Well, so first of all, the AfD is ahead on the federal level. They certainly are right now the strongest polling party in Germany. If you
look at all of the polls that you have here in this country, there's several other states also where they are polling pretty high. And one of
them actually has a state election coming up, Mecklenburg-Vorpommern, at the end of this month.
And if you look at what happened in the state of Sachsen-Anhalt, there were several factors that certainly came together. There was a lot of
unpopularity of the government in Berlin. Obviously, the issue of immigration was also one that was very big. But one of the other big
factors in this election was also the fact that the AfD had a very popular candidate in Ulrich Siegmund, who we've seen before. He's a very slick-
talking man. He was at a press conference in Berlin today, really professionally fielded all the questions that were brought to him. They
don't necessarily have someone like that in other states.
Nevertheless, Alice Weidel, who is the chairwoman of the AfD, she told me yesterday she believes that the results in Sachsen-Anhalt could be a
stepping stone for them to take power in Germany. She believes that Friedrich Merz's days as German chancellor are numbered, that he'll be out
of office by Christmas, and that then the AfD, if there are new elections, would have the chance to take power. Still very far away from that.
Right now, they're polling at, I think, around 27 percent, 28 percent on a federal level. And certainly, if this firewall stays in place, you've been
talking about most of the other parties saying they are not going to work together with the AfD. Right now, their path to power still seems somewhat
vague.
Nevertheless, one shouldn't underestimate the blow that the so-called established party, the Social Democrats and the Christian Democrats, took
because of this election and really the shockwaves that we're feeling in Berlin right now.
GOLODRYGA: Yes, no doubt voters there in Sachsen-Anhalt sending a message nationwide. Fred Pleitgen, thank you so much for joining us from Berlin.
Well, as we mentioned, the shadow of history loomed large over this result. No far-right party has won a state election in Germany since World War II.
Poland's Prime Minister, Donald Tusk, said that in his country only idiots and traitors can rejoice at the triumph of the AfD, whereas on the other
side of the political aisle, right-wing figures like Elon Musk are rejoicing. And even Russia appears delighted, given the AFD's pro-Kremlin
stance. Putin's envoy, Kirill Dmitriev, called it a historic win for the pragmatic AFD.
So, what does this all mean for Germany and Europe's future? Let's bring in historian and author of Germany Rearmed, Liana Fix, who joins me from
Washington, D.C. Liana, welcome to the program. Great to have you on from your perspective and focus on this particular issue at hand.
Let's talk about this state specifically. It is a rather small state, not very populous. Germany's former communist East Bloc, though, the
breakthrough, as we've noted, is historic. How did voters' grievances, in your view, reflect where the nation as a whole is? Is this exclusive to
this one state, or are they speaking a sentiment that's being felt beyond?
LIANA FIX, SENIOR FELLOW FOR EUROPE, COUNCIL ON FOREIGN RELATIONS: The answer to that question is both. There are issues that are specific to that
state, so especially to East Germany. This feeling of being left behind economically after reunification, it doesn't really transform to reality.
If you look at the facts, Saxony-Anhalt may be lowest in wages, may be very low in GDP, but it's performing now much better than it has done, for
example, 10 years ago or 20 years ago.
[13:10:00]
So, it's a perception feeling. It's a feeling of a lack of recognition, especially by the West, by West German countries.
But then there are also issues that apply to the whole of Germany. The AfD is not only talking about the economic shock to Germany that is taking
place right now. It is also talking about immigration issues more than any other party is talking about. And its pro-Russia stance is certainly a
stance that is not shared by any other centrist party, only by the populist far left.
And if you look at the demographics of those who have voted for the AfD in Saxony-Anhalt, it's the between 35 and 60-year-olds, that generation that
really lived through that transformative moment of German reunification, followed by de-industrialization in East Germany, by East German countries
being somewhat adrift to where they are right now.
So, it's this generation that is voting primarily for the AfD, whereas the older ones are still not voting in terms of absolute majority for the AfD.
So, in sum, it is specific to Saxony-Anhalt, but the AfD is really thriving on the shocks that Germany has experienced in the last couple of years, the
Russia shock, the Trump shock, and the economic China shock right now.
GOLODRYGA: And immigration as well. How much is this exclusive to Ulrich Siegmund and his appeal? And tell our viewers a little bit more about him.
He's 35 years old. He's a former fragrance salesman, and yet he was able to tap into voters' concerns that mainstream leaders simply missed.
FIX: Yes. So, in his public appearance, he appears as someone who could really very nicely be your neighbor, or could very nicely be someone who is
teaching football or soccer to your kids. He has this less threatening appearance compared to other AfD officials, and that is why he has been
able to ridicule what the centrist parties were saying about the AfD. They were saying, look, the AfD is far-right extremist. It's radical. It is
classified by the Domestic Intelligence Service as an extremist party.
His kind of nice and neighborly appearance really countered that impression and made the AfD appear less dangerous than it often does, especially with
its neo-Nazi factions that it has in its party. So, that's an advantage that he had specifically in Saxony- Anhalt that will be more difficult for
others to copy.
But in general, the frustration in Germany is really catering for the AfD and, as Fredrik Pleitgen mentioned, the frustration about Friedrich Merz
and the coalition.
GOLODRYGA: Let's play sound from Siegmund about this victory and why he says the result is a clear mandate for the AfD to govern. This, as we
noted, they are still a few seats short of a clear majority.
(BEGIN VIDEO CLIP)
SIEGMUND (through translator): What is the task now? It is a very clear mandate to govern. It could hardly be any clearer. This is the best result
achieved by any party in Saxony-Anhalt since 1990. Just let that sink in for a moment. If this result is not a mandate to govern, then what is?
(END VIDEO CLIP)
GOLODRYGA: So, you have him making this appeal. We should also note that the AfD promises more deportations, less emphasis on Nazi history in
schools, and more open relations towards Russia, even teaching Russian more regularly in classrooms.
What could he actually implement as of now? And how strong are those institutional checks, those firewalls that we just discussed with Fred from
other parties?
FIX: So, the federal states in Germany, they do have a lot of power. That is why Germany is a federal country. So, they have the purview. They decide
education issues. They decide domestic security. So, there's a lot of concern that if actually the AfD can govern in Saxony-Anhalt, that might
get access to sensitive intelligence information, to sensitive security information. There's also fear that those might be leaked to Russia because
of the AfD's friendly Russia ties.
So, there's a real debate about if that happens, how to make sure that the AfD is excluded from this kind of information. And it's not able to disrupt
all of the country. But then there's a real philosophical debate, raging especially in Friedrich Merz's party, about has the firewall contributed to
that success. Exactly because it always left the AfD out of power and never demonstrated, look, if the AfD is in power, they might not deliver the way
they promised they could.
[13:15:00]
Now, the other side says, look at Germany's historical example. 1932, conservatives thought they could tame Adolf Hitler in a coalition. This
taming with a radical AfD will not work. If they get a government, there's no taming them. They will disrupt not only Saxony-Anhalt, but they will use
it as a tool to disrupt also on the federal level.
And these two sides of the debate are currently clashing with each other, clashing within Friedrich Merz's party, which is why there's so much fear
that people might, or representatives of his party's elected officials, might actually turn towards the AfD, leading to a crisis of his own
leadership, a crisis of the conservative party that the AfD has designated as the main enemy. They have not designated the left-wing parties as the
main opponent, but the conservative party, because it's the one party that is standing in its way to power.
GOLODRYGA: It was interesting to see that Siegmund had called Merz a very good campaigner for us, that whatever Merz would warn against a vote for
the AfD, in his view, worked actually in their favor. What is it that Merz and his party missed here? And how much of this is still the legacy of some
of the policies of Angela Merkel, especially as it relates to immigration?
FIX: So, this is one of the founding myths of the AfD. Initially, it was a U.S. skeptic party, but then Angela Merkel saying we will not close the
borders in 2015 during the Syrian refugee crisis has been one of the issues that the AfD has really taken on and has really led to a radicalization of
the party towards the far-right extremist party that we see right now.
But what Merz has overlooked or where he might have overestimated his own influence on politics is really the triple shock that Germany is going
through, the geopolitical shock, the economic shock, especially the industrial challenge from China that is now hitting Germany more than any
other European countries. That is something that would be very difficult to handle for any politician or chancellor, and the AfD is really picking up
on this fear of change in Germany. It's really picking up on this fear that things that were true in the past, energy from Russia, economic security in
Germany, that all these past -- the past concept of how Germany has worked in the last couple of decades are being overthrown right now.
And he has not been able to provide the answers to that. Where should Germany stand in 10 to 15 years? He has allowed some historical
breakthroughs, especially Germany's rearmament financed through debt. But that, of course, now leads Germany's neighboring countries to wonder, what
if we have a militarily powerful Germany that then at some point might see the AfD in power? Not tomorrow, not in 2029, probably. What about in a
decade?
GOLODRYGA: And despite the fact that its economy has been lagging, it's important to remind viewers that it's still the largest economy in Europe.
What do you make of the affinity that the AfD in particular has towards Russia or at least the, I won't even call it hesitation, the real distaste
in helping Ukraine at this point?
FIX: No, there are real and direct ties between the AfD and Russia. There are regularly delegations of AfD politicians who are traveling to
Kaliningrad, who are even traveling to Crimea, who are traveling to Russia. So, we -- so, there is a real connection. There is a demand by the AfD that
Europe and Germany should build a security architecture that includes Russia, excludes the United States, actually.
So, the AfD is fundamentally a very anti-American and anti-Western party. And the AfD also wants an immediate stop of support for Ukraine and an end
of Russia sanctions. In Saxony-Anhalt, for example, this was the second most important topic, peace in Europe.
And Russia is, of course, helping that narrative by conducting an escalating hybrid warfare campaign across Germany, also targeting in
particular Eastern Germany. We've seen this with the Leipzig airport attacks, which contributes to these fears of escalation with Russia and
actually helps the AfD to position itself as the party that will bring peace to Germany and Europe, although that in their terms, peace would
actually mean appeasement.
GOLODRYGA: Right. And it's interesting that you note that they have taken quite a turn against the United States, the AfD Party, especially since we
had that support from both Elon Musk and Vice President Vance met with Alice Weidel, the co-chair, just last year at the Munich Security
Conference as well.
[13:20:00]
Strange bedfellows, but this clearly is a wake-up call, not only for Germany, but for the region and Europe as a whole. Liana Fix, author of
"Germany Rearmed," thank you so much for joining us.
FIX: Thank you.
GOLODRYGA: Well, coming up on the program, Trump's top envoy -- Trump's top envoys visit Kyiv in Moscow. But is there any sign of a breakthrough
that will bring Russia's war on Ukraine to an end? I discuss with a former Ukrainian minister.
(COMMERCIAL BREAK)
GOLODRYGA: We turn now to Russia's war in Ukraine and a show of diplomacy that, so far, has yielded few concrete results. For the first time since
Putin's full-scale invasion, President Trump's negotiating duo, Jared Kushner and Steve Witkoff, visited Ukraine. Standing side-by-side Sunday
with President Zelenskyy, they touted the importance of a peace deal. But, so far, the conversations have not led to a breakthrough.
Witkoff, meantime, has reportedly met with Putin at least eight times. A day before their sit-down with Zelenskyy, the pair spoke with the Russian
leader in Moscow. And while there may be words of optimism, Putin doesn't seem to have budged on his demands, including the key sticking points of
territory and Ukraine's NATO membership.
To discuss the state of play and where Ukraine goes from here, I'm joined by former Ukrainian economy minister, Tymofiy Mylovanov. Tymofiy, good to
see you.
So, I guess the optimist can say talks are better than no talks. This was a first for Jared Kushner and Steve Witkoff to visit Ukraine. Was there any
reason for optimism from your perspective or your Ukrainian colleagues' perspective out of this weekend that really brought little headlines?
[13:25:00]
TYMOFIY MYLOVANOV, FORMER UKRAINIAN ECONOMY MINISTER: So, you know, I was just swimming in a river, Dnieper River, next to my house, and there was a
drone, Shahed drone being intercepted. I think it's just -- they just left something. And so, we're already being bombed. So, I think this is
basically the attitude of most of people in Kyiv and in Ukraine, that it is great that there is an attempt at diplomacy, but it is also not clear, and
frankly, I think no one believes that there is any progress. So, we're all bracing for a hard winter.
GOLODRYGA: Well, you put things into perspective right there, telling us what your morning began like, and so many Ukrainians face that same threat
of just merely walking outside, could see a drone impact their lives. I do want to ask about the one headline that did seem to come from these talks,
and that is at least a U.S. push for trilateral meetings.
I know the last time this came up, President Zelenskyy has been pushing for them for a while. President Putin says he's only open to them if they
happen in Moscow. Has anything changed in your view that would suggest that Putin would be open to perhaps a more neutral location?
MYLOVANOV: I think that is actually possible, but I think Putin will continue to insist on Ukraine giving up territory, illegally recognizing
it, which is simply impossible to do constitutionally, and then limiting the size of the military in addition to neutrality. So, I think it's the
same package we have seen throughout the entire full-scale invasion.
And then, you know, if there is, from Putin's perspective, if there is a chance of this package being accepted, I think he would meet elsewhere.
Now, this package still is completely unacceptable to Ukrainians, in particular because of the territorial concession, including the territory
which Ukraine controls at the moment. That means committing our people to being occupied by Russia. No one can do that. So, I think this is a lot of
talk and very little progress so far, unfortunately.
GOLODRYGA: And in addition to that, even the day after any sort of deal could be agreed to, there's also the discussion that needs to be had about
security guarantees that the West would provide for Ukraine. That hasn't been raised at all yet. I do want to play some sound for you from Steve
Witkoff. This was, I believe, as we noted, his eighth meeting with Vladimir Putin. It was his and Kushner's first trip to Kyiv. Listen to how Witkoff
described their relationship with the Russians.
(BEGIN VIDEO CLIP)
STEVE WITKOFF, U.S. SPECIAL ENVOY: So, first of all, President Putin, thank you so much for having us. We were sitting outside just now, me,
Jared, and Carol, and then Yuri joined us, and we were all talking about when we retire, we'll have all these incredible stories and incredible
memories, and yours will be right at the top of it all.
(END VIDEO CLIP)
GOLODRYGA: When you hear those words, when there's clearly a relationship that has developed, between Witkoff and Putin over the last few years, does
that suggest perhaps an opening to some sort of path to peace or ceasefire that could benefit Ukraine at all, or does that raise more skepticism about
a fair deal, in your view?
MYLOVANOV: So, you know, I understand and I think most Ukrainians understand that you have to build some kind of relationship, and it is, you
know, neutrally friendly if you want to achieve some kind of concessions on both parties. So, you know, this kind of remarks used to scare Ukrainians
when they just started, but now I think people are OK with that.
What Ukrainians want is any kind of deal which will end the war and will ensure, I think that's really what Ukrainians want, ensure that the war
doesn't restart a year later or three years later. So, you know, we are OK. I cannot speak for everyone, but that's my sense. We are OK if people are
building relationships. You know, it's difficult to get the deal done. It takes what it takes, but we want to ensure that it is sustainable. I think
that's what's most important for us. We are now very pragmatic about this.
GOLODRYGA: Yes. Including who these players are, right? Because typically you would have, as we saw Ratcliffe, the CIA director, travel to Moscow a
few weeks ago. The secretary of state, the national security adviser, Marco Rubio, wears both hats. He hasn't been nowhere near this, but you're
pragmatic, as you note, and perhaps relationships could lead to some sort of consensus on an end to this war, and we're not there yet, five plus
almost five years later.
[13:30:00]
I do want to read to you a headline from Axios that just came across, in an interview that President Zelenskyy gave to Axios. This is Baral Ravid. He
said, The U.S. is exploring whether Ukraine and Russia could take steps to de-escalate the war during the winter while restarting negotiations toward
a broader peace agreement. Do you think that that idea stands as chance? Is it realistic?
MYLOVANOV: I think that actually might work because it hurts both countries. You know, both countries now can impose serious damage through
deep strikes. The front line is basically not moving. There is all this talk about a potential additional invasion on Kyiv or Chernihiv, north of
Kyiv. I don't think it's realistic with the drone technologies. This simply would mean a massacre for Russian troops, but Russia imposes a real cost, a
real-life cost on Ukrainians deep in the rear, and Ukraine does the same to the economy, so economies are suffering, people are suffering.
There is, you know, a mutual benefit to try to subside these deep strikes, and you can try to take it one step at a time and build from there. Start
small and then, you know, negotiate towards something better. In fact, I believe this is how it's going to go eventually. When we see signs of that,
we will be on the path to a real deal.
GOLODRYGA: In the meantime, we're only seeing escalation, more and more civilians being impacted by drone attacks launched from both countries
aimed at each other. President Zelenskyy did have some positive comments to say after these meetings and said that among the conversations they
discussed was air defenses and a winter support package.
As an economist yourself and winter just a few months away, what are some of Ukraine's biggest vulnerabilities right now? What does the United States
need to do to help today?
MYLOVANOV: Yes. So, you know, curiously enough, I was just talking to a contractor about my own house, making sure it's insulated, additional
insulated, and I have purchased additional firewood, even though I usually don't use it just in case so I can get through the winter in my little
house. And I think that's what Ukrainians are doing all across the country.
I think air defense is critical. Vulnerabilities are known. Energy, water supplies, sewage systems, logistics. But I don't think it's going to be any
different from the previous winter because Ukrainians are now used to very cold winters with blackouts. You know, I talked to my students today at the
Kyiv School of Economics asking them, are you afraid of the winter? They said, yes, a little bit of the blackouts, but we'll be OK.
GOLODRYGA: That is resilience for you. Again, coming up on already its fifth year of this war. Tymofiy Mylovanov, we always appreciate your
expertise and your personal perspective. Stay safe.
MYLOVANOV: Thank you.
GOLODRYGA: Thank you for joining us. Well, we turn now to Nepal. A national day of mourning was held for the victims of last month's deadly
flash floods, which, according to the country's disaster agency, killed at least 1,355 people. Nearly 5,000 remain missing.
Search and recovery teams are still out looking for survivors after four hydropower workers who were trapped in a tunnel for over a week were
miraculously rescued last Friday. And on the Chinese side of the border, authorities say at least 43 are confirmed dead and more than 500 are
missing.
But questions are growing over the transparency of China's reporting as desperate families struggle to locate missing loved ones. CNN's Simone
McCarthy viewed firsthand some of the devastation in the region as part of a rare trip organized by the Chinese government. Here is her report, and we
want to clarify that CNN still has full editorial control of its coverage.
(BEGIN VIDEOTAPE)
SIMONE MCCARTHY, CNN SENIOR CHINA REPORTER: This was Gyirong Port, the main gate, the immigration halls, customs, the parking lots where buses
waited, the last man-made structure pilgrims, tourists, and traders walked through before crossing between Nepal and China. That building, bridge,
road are gone.
MCCARTHY: This is the spot where a huge wall of water washed over a five- storey building in video that was captured on surveillance footage on August 26th when devastating floods and landslide hit the China-Nepal
border. I'm standing now in the area where that building was. You would never know that there had been anything here at all. It's just completely
flattened.
MCCARTHY (voice-over): What is left is an apocalyptic field of mud so deep that, in places, machines are cutting through about 12 feet of it.
[13:35:00]
The first teams did not arrive by road, they climbed, got on rubber boats and helicopters because the highway had been torn out.
ZHANG XIAOJUN, CHINESE RESCUE TEAM LEADER (through translator): All of the structures above ground had been swept away by the mudslide. It was really
heartbreaking to see. So, many of our fellow Chinese lost their precious lives in this disaster.
MCCARTHY (voice-over): Zhang also says at this stage they are clearing mud, layer by layer, searching for the deceased. There are no signs of life
nearly two weeks in. Chinese authorities have confirmed dozens of deaths on this side of the border in Tibet. But what the world can see of this loss
is tightly managed.
MCCARTHY: This is the first time that foreign media is getting access into this area where CNN is part of a small group of foreign reporters who've
been given access to this site, the first time that foreign media have been allowed entry here. But certainly, this is a place where there are many
questions about who is here, many families seeking more answers.
MCCARTHY (voice-over): Like Arushi Gupta's family in India. Those were her last messages to her father, less than an hour before the flood struck. The
33-year-old even included a picture of the Gyirong Port crossing as she approached the port.
This is her father's message to Chinese authorities.
AJAY GUPTA, DAUGHTER MISSING SINCE FLOOD: My request to them with folded hand is please provide any information you have about my daughter. I shall
be grateful to you. I am requesting China authorities to please share any details they have.
MCCARTHY (voice-over): More than 500 people remain missing on China's side of the border, roughly half of them foreign nationals.
MCCARTHY: There are many foreign nationals --
MCCARTHY (voice-over): When asked about the government's plans on releasing data about those who were at the port that fateful day, Chinese
officials say information about missing foreign nationals has been shared with their embassies.
PU WEIDONG, PUBLIC SECURITY DEPARTMENT OF THE TIBET AUTONOMOUS REGION: (through translator): After the identities of the victims' remains are
confirmed, the relevant departments will properly hand over the remains and belongings to the families. The specific procedures for claiming and
handling will be carried out in strict accordance with relevant regulations.
MCCARTHY (voice-over): And so, the search continues. But the answers may never come.
Simone McCarthy, CNN, Gyirong Port.
(END VIDEOTAPE)
GOLODRYGA: After a break, as global bond markets become increasingly shaky, what could it mean for interest rates and what can be done to steady
the situation? I discuss with economist Betsey Stevenson.
(COMMERCIAL BREAK)
[13:40:00]
GOLODRYGA: Now, to uncertainty in the bond markets. Interest rates are rising on U.S. government borrowing, and it's making economists anxious,
just as the total government debt has surpassed $40 trillion. Now, to put things into perspective, America now spends more on just the interest of
this debt than it does on its military.
And the instability isn't isolated to the United States. The U.K. and other European countries are also grappling with similar issues, with the rising
cost of borrowing prompting fears of an interest rate hike in the coming months. What all this means is the average person could start feeling the
pinch on everything from mortgages to everyday essentials.
To explain all of this, I'm joined now by Betsey Stevenson, a professor of economics at the University of Michigan and a former chief economist at the
Department of Labor. Betsy, good to see you.
So, let's just start out by acknowledging that for most Americans, most of our viewers, they've never bought a Treasury bond and they likely never
will. So, in simplest terms, sort of let's do an intro to Econ 101. Explain why somebody with a mortgage, with a car loan, with a credit card, why they
should care that the 10-year yield just hit 4.8 percent, the highest under Trump's second term.
BETSEY STEVENSON, PROFESSOR OF ECONOMICS, UNIVERSITY OF MICHIGAN: Absolutely. So, first, I do want to say I think most Americans actually do
end up buying bonds, but they buy it through their retirement accounts. And so, they're not thinking about it the way all these traders on the market
are thinking about it. But there is this sense which it does matter for people in terms of their retirement portfolios.
But let's step back and ask, why does it matter sort of more generally for people? And the way to do that is to think about you as a lender. If you
had money and you were going to lend it to somebody, what would you want to consider? And I want to say you have three things you're going to consider.
One is how much is that money going to be worth when you get it back in terms of the stuff you can buy? So, the longer you lend it for, the more
there's a risk that inflation comes along and sure, they pay you back, but what they give you back can't buy very much stuff anymore.
Another thing you might be thinking about is, well, who's willing to pay me the most? Give me the biggest fee for borrowing. And so, if there aren't
very many people out there who want to borrow your money, then you might not be able to find somebody who's willing to pay a lot. If there's tons of
people you could lend your money to, it's going to make it easier for you to think about, you know, who's going to pay that higher fee.
And wait, there's one more thing you want to consider, which is who can you be sure is actually going to pay the money back? And so, when you start
putting those three things together, you start to realize why has the U.S. government always been able to borrow at such low rates?
Well, people tend to think the U.S. government is the most likely to pay you back. That's given them low rates. People have really believed in the
Fed's ability to hit 2 percent inflation, even over a period as long as 30 years. So, that is not just going to impact short-term rates, but it does
affect that long-term rate 30 years down the line, because, again, people want to know what they're going to be able to buy when they finally get
their money back.
And then the other thing we have is A.I. tech companies, data centers. There's a lot of people out in that borrowing market right now, and so
there's a lot of people trying to compete for the money that you might be lending.
GOLODRYGA: Yes, making it very crowded, no doubt. Let's talk about what Scott Bessent, the Treasury secretary, tried to do over the last few weeks,
and I want to get your response as to whether you think it was effective, because it doesn't appear that the bond market at least thought that it
was. He doubled Treasury's buybacks of long-term bonds, going from $2 billion to at least $4 billion, and yields did drop for a day, but then
they bounced back right after.
[13:45:00]
What was he trying to do here, and what was the market telling him in that response?
STEVENSON: Well, I think what he was trying to do is just put -- you know, a little bit of -- alleviate some of the pressure on the market by saying,
you know, hey, there are buyers for these bonds. You know, I think the fundamental problem is this crisis is being, you know, driven by record
high government borrowing and by, you know, really big corporate sector, private sector demand as well, and that kind of buyback that he did just
doesn't do much to adjust those long-term challenges.
So, we're going to need to see a real plan on how we're going to deal with government borrowing, and not just in the United States, but this is an
issue globally. We see countries borrowed a lot of money when they were dealing with the pandemic, and they kind of got a taste for it, and you
haven't seen a lot of countries backing down on their borrowing, including the United States.
GOLODRYGA: Right. And to be fair, the U.S. has run a deficit for decades now, right, and each administration has come in and vowed to balance it and
to curb spending and something either whether unexpected like a pandemic or a war unfolds, and that promise is not honored. And the markets, though --
go ahead.
STEVENSON: I was just going to say, I mean, that's the challenge, is that, you know, if you go back to the beginning of this century, the U.S. was
actually running a surplus, and President Bush was like, wait, why is the government running a surplus? We need to give this money back to the
American people. And then the next thing you knew, we had a recession. And so, he needed to borrow more. At some point, you've got to accept that you
can't borrow during a boom if you want to be able to borrow during a recession or a pandemic.
GOLODRYGA: Because you never know how the markets or when the markets will finally be spooked enough to react the way they have. I want to also ask
you about how much faith and trust the market and investors have, not only in what the Treasury secretary was trying to do, but in the president and
his plan and his knowledge of the bond market as a whole. He said that the bond market spooking is what sort of stepped him away from the precipice as
it related to the tariffs last year. But he also had this to say when asked about what Bessant was doing in response to higher yields.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Did you direct Secretary Bessant to intervene in the bond market? Was that your idea?
DONALD TRUMP, U.S. PRESIDENT: No, not at all. No, he's a very capable man. He wanted to do it. He's very good at it. He is a good touch, very good
natural touch for the bonds and interest. And he did that, yes.
UNIDENTIFIED FEMALE: The yields have come back up since then. Have you talked to him about another type of intervention? Is that something he will
be doing?
TRUMP: We have many types of intervention. That's one. The ultimate intervention is our military. And if we have to use that, we will.
(END VIDEO CLIP)
GOLODRYGA: So, to be fair to him, perhaps he was addressing just the Iran war, saying that economically squeezing Iran is the preferred path now, but
a military strike is always on the table. But he did reference this in response to a question about the bond market. What was your reaction?
STEVENSON: Shocked. Surprise. The military is not an answer to the bond market, unless he means cutting spending on the military, which would, you
know, be a way to reduce the U.S. deficit. But I don't think he meant that.
Look, it -- you know, the problem with what's happening right now is it makes borrowing more expensive. And that is going to mean that government
borrowing and debt is going to become a bigger issue for this administration and for the next administration.
You know, this has been an issue that I think the president hasn't fully understood from the very beginning. You know, he's been urging the Fed to
cut short-term rates. If you cut short-term rates and that leads people to think that we're going to have ongoing inflation above 2 percent, that will
push rates on the 30-year -- you know, a 30-year mortgage up. Because, again, people want to be paid back with money that can buy the same bundle
of goods or a bigger bundle of goods than when they lent it to you.
So, you know, sometimes we have to really, you know, take some tough action. And this is why, actually, the Fed raising short-term rates could
actually help with the bond market.
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GOLODRYGA: You think that's the solution, now in the final few seconds, at least in the short-to-interim term? Do you think that despite the
president's threat that Kevin Warsh will ultimately, because he knows this market well, as you do, do you think he ultimately will decide on raising
rates?
STEVENSON: I think he needs to raise rates in order to convince the bond market that they can at least count on 2 percent inflation.
GOLODRYGA: Betsey Stevenson, we shall see. Thank you so much, professor of economics at the University of Michigan. Great to be a student in your
class for the day.
We turn now to Cuba, where a health alert has been issued by the U.S. following a spike in cases of diarrhea and intestinal illness across the
country. Trump's imposed oil blockade has made it a struggle to keep refrigerators running for food and medicines as the island relies on oil to
generate more than 80 percent of its power.
But could this have been avoided? Decades ago, Fidel Castro had ambitions for Cuba to become a nuclear-powered nation, only for the dictator's dream
to collapse, as CNN's Juan Carlos Lopez reports.
(BEGIN VIDEOTAPE)
JUAN CARLOS LOPEZ, CNN ANCHOR (voice-over): Blackouts aren't new to Cuba. They've been a part of life since at least the 1980s. Although not at the
scale of the current crisis triggered by the Trump administration's ban on the sale of oil to the Cuban government.
In 1982, Fidel Castro made a bold move.
FIDEL CASTRO, FORMER CUBAN PRESIDENT (through translator): The Juragua nuclear power plant has been the largest and most complex construction
project undertaken by our country.
LOPEZ (voice-over): The nuclear plant at Juragua would be the first step of a plan to wean the island off oil with the help of the Soviet Union
which would build and finance the project. Driving down the coast, we spot the concrete giant. Long abandoned, it was once expected to provide at
least 15 percent of the island's electricity needs.
LOPEZ: Now, that was back at the end of the' 80s, beginning of the '90s. It wasn't the best moment for this type of project so close to the United
States. A project that took too long, cost too much, and at the end ended up just being what it is today. Just ruins.
UNIDENTIFIED MALE: The Cuban premier, Fidel Castro, in Russia for a visit with big brother.
LOPEZ (voice-over): That's because Havana bet everything on being in the Soviet Union's sphere of influence during the Cold War and on Moscow's
assistance for ambitious projects like the Juragua power plant which sat under 200 miles from the Florida Keys and sent Washington into a tailspin
over national security even though the Turkey Point nuclear plant in Homestead, Florida had been operating 200 miles from Havana since 1972.
NICHOLAS BURNS, THEN-U.S. STATE DEPARTMENT SPOKESMAN: We've had long standing concerns about the quality of the plant's construction and about
Cuba's ability to operate it safely.
LOPEZ (voice-over): Fears of an accident stemmed largely from the world's worst nuclear disaster in Chernobyl in 1986. But the U.S. Nuclear
Regulatory Commission reported that same year to Congress that even though they had reservations about the project, Juragua resembled Western nuclear
plants and was not considered a threat.
In the end, when the Soviet Union collapsed, Havana came up dry and this now eerie monolith was left unfinished. This is Ciudad Nuclear, built to
house the plant's workers.
It's where I meet Luis Vargas, an electrician who was involved in the project.
What do you feel when you see the structure? I ask him. I don't know, Luis says. I feel a deep sorrow inside because many things were ruined. It's a
shame that it ended up this way because unfortunately millions were invested and we weren't able to finish it.
Francisco Perez, who also worked at the plant, remembers when Fidel Castro came to tell them it was over. He told us the truth, Francisco tells me. He
explained the situation, the problem they faced, and that they had to shut the plant down.
Juragua was the first of three nuclear plants that would help Cuba overcome a monumental challenge the island faces to this day. A growing demand for
electricity and a lack of capacity to produce it. This fading sign, in Russian and in Spanish, reads, may the atom be a worker and not a soldier.
In Juragua, it was neither.
Juan Carlos Lopez, CNN, Uruguay, Cuba.
(END VIDEOTAPE)
GOLODRYGA: And finally, taking flower crowns to great heights. This giant woman wearing a dazzling flower headpiece is entirely made out of dahlias,
grown specifically for the world's largest annual flower parade in Zundert in the Netherlands.
[13:55:00]
Crowds gathered for the 80th edition of this event on Sunday admiring the elaborate craft of floats ranging from pirate and nature scenes to medieval
and Asian-inspired designs. Each impressive sculpture can hold roughly 400,000 blooms with volunteers attaching them one by one over several
months. A beautiful and real labor of love.
All right. That is it for us for now. If you ever miss our show, you can find the latest episode shortly after it airs on our podcast. Remember, you
can always catch us online, on our website, and all-over social media. Thanks so much for watching, and goodbye from New York.
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