Return to Transcripts main page
Connect the World
Jury Found John Edwards Not Guilty; Syrian Government Denying Responsibility for Houla Massacre; Israel hands over remains of 91 Palestinians killed; SpaceX Dragon Splashed Down in the Pacific, Safely Returning to Earth
Aired May 31, 2012 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BECKY ANDERSON, CNN ANCHOR: Tonight on CONNECT THE WORLD, a categorical rejection of responsibility.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The security forces did not enter the area before or after the massacre.
ANDERSON: A Syrian government's investigation finds security forces had nothing to do with the Houla massacre.
(END VIDEO CLIP)
UNIDENTIFIED MALE: Live from CNN London, this is CONNECT THE WORLD with Becky Anderson.
ANDERSON: Although U.S. accuses Syria of a blatant lie in its explanation of what has been an appalling crime, there are many who are campaigning for military intervention in Syria. And tonight, CNN's Fareed Zakaria tells me why he thinks that's not the answer. Also, ahead.
(BEGIN VIDEO CLIP)
I'm sure, I'll go back for -- before the next elections.
ANDERSON: Vowing to return, a Pakistan's former president tells me how he wants to save his country from disaster.
And the Queen's nearly 2 billion people around the world. These young royals cheat (ph) and treat granny. Ahead are the Queen's Diamond Jubilee, a look at Her Majesty's family ties.
(END VIDEO CLIP)
ANDERSON: First off tonight, the Syrian government is denying all responsibility for the massacre in Houla, blaming the vicious killings on armed terrorist gangs.
(BEGIN VIDEO CLIP)
They're raging enough to filing its own investigation into the slaughter of 108 civilians last week. It said, "The victims belonged to families who", and I quote, "refused to rise up against the government."
Syria denies its troops had any role in the killings. The statement, immediately rejected by United States.
QASIM JAMAL SLEIMAN, HEAD, SYRIAN INVESTIGATIVE COMMITTEE (through translator): The place where the massacre was committed is an area where armed terrorist groups are present. The security forces could not enter the area before or after the massacre.
And the area is far from the check points where the security forces are positioned.
SUSAN RICE, U.S. AMBASSADOR TO THE U.N.: Quite simply, it's another blatant lie. There is no factual evidence including that provided by the U.N. observers. They would substantiate that rendition of events.
(END VIDEO CLIP)
ANDERSON: The United Nations also said it appears, should be a militia man carnapper killings who's, technically, armed gangs of thugs widely believed to be linked to the Syrian regime.
Well, tonight, we've got a special guest to give his self-perspective on the Syrian crisis. Fareed Zakaria is host of "Fareed Zakaria GPS" on CNN, colleague of mine here at the network.
Fareed, incredible as it may seem to many watching you, Assad regime categorically denying involvement by official security forces in this appalling massacre a week or so ago. "A blatant lie," says the U.S. Your thoughts.
FAREED ZAKARIA, CNN CORRESPONDENT: Well, it clearly is a blatant lie and it is not the first blatant lie. The regime has been denying almost all civilian casualties are its fault. It has used the same line before.
And as you very properly point out, Becky, what is probably true is that, technically, these are armed goons and thugs that have been hidden by the regime. They may even be security services in plain clothes.
But almost certainly, this is a -- this is a massacre that has been perpetrated, planned and carried out by the regime.
ANDERSON: Fareed, stick with me as I just get off you with some perspective on the news over the past 48 hours or so. Western powers, of course, trying to convince Russia to get off the fence about Syria or, at least, get out of the way.
Not only has Moscow blocked tougher of U.N. action but, remember, it's still selling weapons to the Syrian regime. Today, a top U.S. diplomat said this about the Russians
(BEGIN VIDEO CLIP)
HILLARY CLINTON, SECRETARY OF STATE, UNITED STATES: They are just vociferous in their claim that they are providing a stabilizing influence. I reject that. I think they are, in fact, propping up the regime at a time when we should be working on a political transition.
(END VIDEO CLIP)
ANDERSON: Alright, moving Fareed back in in just a moment. Russia says the West is pushing for regime change in Syria. Of course, Fareed, and it won't have any part of it. It says, it learned a bitter lesson from the result of the U.N. mandate in Libya.
But as Nic Robertson reports -- he is now there -- undoubtedly other considerations as well. Have a listen to this.
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Syria's biggest ally in the region is Russia. It doesn't actually have a border with Syria. But here's one of the important reasons why Russia backs Syria.
Look, the Mediterranean Sea right here. But when you go into the map of Syria, you can begin to understand why. Here's the port of Tartus. Now, this is the only port that the Russian navy has access to the Mediterranean Sea. It's the only port that it can use on the Mediterranean Sea.
Bashar al-Assad is hugely important for Russia for that reason. There are oil deals, gas deals, business deals, weapons deals with Syria that this is very important.
Now, why would Russia change its position in supporting Bashar al- Assad. International pressure. That international pressure is growing. We've seen the killings in Houla at the weekend. More than a hundred people killed, 49 of them children. The U.N. saying somewhat summary executions.
And in the last couple of days, U.N. observers in Deir Ezzor in the east, finding the bodies of 13 men, hands tied behind their backs, shot at close range, according to the U.N. U.N. is not able to bring an enforcer ceasefire but it's providing this independent witness accounts, observer accounts from the ground.
Now, the other factor that factors into Syria's allies in the region is its sectarian make-up. The opposition is in the majority. They are mostly Sunni, 74 percent. The President, Bashar al-Assad, Alawite, 16 percent, minority. Christians, mostly supporting the president, 10 percent, the minority.
So, when you look at the regional map, you can expect the sheer Muslims to be supporting the Alawite sect of Bashar al-Assad. And that is what's happening here.
Reports already that Iran is supplying weapons into Syria, Hezbollah, sheer also here in Lebanon, providing weapons into Syria. Now, they're not the only ones supplying weapons. Saudi Arabia and Qatar also now supplying weapons and communication equipment to the Sunni opposition.
This is a sectarian nature of the conflict and this is what's building to a very volatile situation in Syria. Nic Robertson, CNN London.
ANDERSON: And it's critically important that we understand the context of what's going on in Syria. After watching that report, you can understand why the warnings about the country are growing ever more dire.
Let's bring back Fareed Zakaria who is in New York. Fareed, in your latest column in "Time Magazine", you say, "Regime change is overdue," I quote, "but a slow squeeze is a smarter solution than war," by which -- and from that war here, I believe you mean military intervention by the international community. Just explain where you're going with that thought.
ZAKARIA: Well, let's take Nic Robertson's wonderful and very illuminating diagram. So, imagine you have this sectarian conflict where the Alawites and the Christians are largely supporting the regime and being funded by Iran, by Iraq, by Russia.
You have, on the other hand, the Saudis, the Qataris, to a certain extent, the Turks funding the Sunni opposition. If the West gets involved, particularly militarily, what it's going to do is to turn this regional conflict into a global one.
Because the Russians will get more involved, will probably get militarily involved as a counter to the West. And Syria will become a cockpit for these geo-political ambitions and will become a kind of grand playground for a proxy war.
Think back to Lebanon. Lebanon had a civil war like this in the 1970s and 80s. You ended up with almost 200 thousand people dead by some accounts, a million people displaced and a war that lasted a decade.
It is not fanciful to imagine that something like that could happen in Syria. So, if we intervene, what we're going to do is raise the stakes, turn this into an even more sectarian -- take a regional conflict and widen its scope.
And, on the other hand, we have a situation where the regime is running out of money. That's the card we should play.
ANDERSON: You say, at the back end of this incredibly illuminating columns and I was reading just earlier on it, "It would be morally far more satisfying to do something dramatic that would topple a sad tomorrow." But starving his regime might prove the more effective strategy."
By which, I'm assuming, you're talking here, are you then about more economic sanctions because, to date, at least, those appear to be working quickly enough. They are working on the grounds, there's no doubt about it, but not quickly enough.
ZAKARIA: I do think that they're working. Remember, Syria is unusual. It's not like Libya. It is not an oil-rich country. The regime needs cash. The way that the regime has been able to maintain the generals, the Sunni generals, the businessmen, the Christian community altogether, is it is dispensing patronage.
But it doesn't have a lot of cash. It doesn't have an unlimited supply. And it's going to run out if we can put in place crippling sanctions, particularly an energy embargo. And you're right, Becky, it's not working fast enough.
But let us remember, if we go down the military route and this conflict widens and expands and turns into, you know, this much broader one, the number of civilian casualties will dwarf what we are looking at now.
Remember, 150 to 200 thousand people died in the Lebanese Civil War. So, it's heartbreaking to watch these civilian casualties particularly the children. But, remember, if this war widens, this could be the tip of an iceberg.
ANDERSON: ---------- a week or so ago and other options surely must now be considered. Fareed, always a pleasure. Thank you very much indeed. Fareed Zakaria of GPS here on CNN International. Plenty is still more to come.
(BEGIN VIDEO CLIP)
Tonight, it's one of the most gruesome murder that Canada has ever seen. And, now, the accused killer is on the run. The very latest details on what is an international manhunt.
Celebrations in Gaza and Ramallah and key parties as of 91 martyrs are repatriated but would it be enough for you people.
And we take a look at a polish family business -- strumming your economic woes away. All that and much more when CONNECT THE WORLD continues. Do stay with us. Thirteen minutes past 9:00 in London.
(COMMERCIAL BREAK)
Still watching CNN. This is CONNECT THE WORLD with me, Becky Anderson. Welcome back.
Now, with fears, Greece is heading to the exit and with Spain's banking sector buckling under the strain, the head of the European Central Bank has called on the Eurozone's leaders to get their houses in order.
(BEGIN VIDEO CLIP)
Despite summit after summit, the debt crisis, as you know, is going from bad to worse. Well, to dispel the doubt, Mario Draghi says it's time for politicians to lay out their vision for the Euro, describing the current situation as, and I quote, "unsustainable".
MARIO DRAGHI, PRESIDENT, EUROPEAN CENTRAL BANK: That configuration that we had with us by and large for 10 years which was basically considered sustainable. I should say, I should add, in a, perhaps, myopic way is being shown now to be unsustainable unless further steps are being undertaken.
ANDERSON: Well, we've said it before more so. Again, markets face uncertainty. But it's interesting to see how these markets closed out today. Investors may be panicking but they're not necessarily reflected -- those panics not reflected in the market necessarily today."
FTSE about a fifth of 1 percent. Paris is up by only just -- you see that, the DAX off about a third of 1 percent and the Dow Industrials, closing out just from the past 25 minutes or so, down about a fifth of 1 percent.
But the underlying sense certainly in the markets is the sense of unease. A little later in the show, I'm going to show you with one of the world's biggest bond investors --
(END VIDEO CLIP)
-- why he believes that Europe's leaders really do need to get their houses in order and quickly. He said, "They're ill-prepared to deal with these results." So, that is coming up here on the show.
A look now though at some of the other stories tonight. CONNECT THE WORLD tonight. In Israeli government and Scandinavia, the remains of 91 Palestinians who died carrying out attacks against Israel.
(BEGIN VIDEO CLIP)
Repatriation of the bodies has long been a sense of an issue with Palestinians viewing the dead martyrs and, certainly, as martyrs. And many Israelis seeing them as terrorists.
Well, Israel said the move was intended as a humanitarian gesture to restart peace talks. One influential Palestinian praised it.
SAEB ERAKAT, FORMER PALESTINIAN NEGOTIATOR: That's indeed a humanitarian move. I hope the day will come when Israeli and Palestinian mothers will stop to go to the cemeteries to bury their children. I hope we can do what needs to be done in establishing a two-step solution.
I think, it's time for these bodies to go back to their beloved ones to be buried with honor. And it is indeed a humanitarian move and headed in the right direction.
(END VIDEO CLIP)
ANDERSON: Saeb Erakat speaking there. And there's been more drama in the John Edwards corruption trial in the States.
(BEGIN VIDEO CLIP)
The jurors who've been deliberating for nine days have come up with a verdict for just one of this six counts against the former U.S. presidential candidate. The judge told them they must continue to work towards verdict on all charges.
Now, a few short time ago, the judge received a new note from the jury. It's not clear what that is about. Edwards is on trial for allegedly violating federal campaigning laws including receiving illegal campaign contributions.
(END VIDEO CLIP)
Well, a gruesome murder case which started in Canada has now gone international.
(BEGIN VIDEO CLIP)
Interpol have issued an arrest warrant for Luka Rocco Magnotta who is suspected of having fled the country. He's wanted for allegedly killing and dismembering a man, filming the event and posting the video of it online.
But the murder was discovered after different body parts were sent to various addresses in Ottawa.
(END VIDEO CLIP)
GENEVIEVE BEAUCHEMIN, CHIEF, MONTREAL BUREAU, CTV: The hunt for the suspect has now gone international because what police are telling us here today is that they believe that there's some evidence that the suspect in this case would have fled the country.
There are some evidence that he may have headed to Europe. This is something that they're still working on confirming but they said, they're getting some information from the public since they went public yesterday, asking for help.
They're saying, if anyone sees this particular suspect, they have to call the police right away. They're really concerned about the situation, saying it's a priority case for them. But as I said, they're now looking around the world. He's on the Interpol Wanted list because, they say, they believe that he may have gone out.
We should say that this man has a very huge online presence. There's quite a few photos of him online. There's a lot of writings that he has done in the past. He's been linked to allegations of animal cruelty online.
And there is a blog that he wrote two years ago. It was entitled "How to Completely Disappear", "How to Escape and Completely Disappear." And so, police are looking at that as well, perhaps, getting some clues as to just how he may have disappeared, perhaps, after this murder.
ANDERSON: (Inaudible).
(BEGIN VIDEO CLIP)
Well, Egypt's notorious Emergency Law has now expired. The law gave police the extensive powers to arrest and detain a suspect. It was implemented by the former President Hosni Mubarak when he came to power in 1982.
It became a defining feature of his regime when the lifting the law was the key demand of pro-democracy groups involved in last year's Egyptian uprising.
(END VIDEO CLIP)
And the first privately-funded space capsule to dock at the International Space Station has safely returned to Earth.
(BEGIN VIDEO CLIP)
The SpaceX Dragon capsule splashed down in the Pacific six hours after leaving the ISS ending a historic journey. It was the first privately-made capsule to deliver cargo to the space station and marking ship with private companies financing space expeditions.
(END VIDEO CLIP)
Well, Englands are dealt a big blow ahead -- let me say that again --
(BEGIN VIDEO CLIP)
Englands are dealt a big blow ahead of the European championship. Details on that, coming up.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
You're watching CONNECT THE WORLD. Live from London, I'm Becky Anderson as we welcome back with the European championships for year 2012 set to begin next Friday.
(BEGIN VIDEO CLIP)
Englands were dealt a major blow when the veteran mid-fielder Frank Lampard was ruled out of the competition due to a thigh injury. It doesn't get much worse than this. We're tuning in to Mark McKay at CNN Center.
Mark, at one stage it seems, at least in the past 18 months, that Lampard's career was over in so far as England is concerned. And it's such a tremendous end to the season for Chelsea. He's back in the team, stalwart for the team. Big loss, right.
MARK MCKAY, CNN CORRESPONDENT: Yes and, you know, he wouldn't do the same. Listen, Euro 2012 could be the very last time that he plays for England considering he's going to be 34.
(BEGIN VIDEO CLIP)
But, yes, this was a tough blow certainly as he picks up that thigh injury Wednesday in training and, a day later, the scan showed that, indeed, he will not be fit to play in any of England's three matches coming up at Euro and, perhaps, beyond.
Yes, the veteran leadership -- you used the word correctly, Becky, "veteran". Here's what they're going to be missing -- 90 appearances in the national side, 23 goals scored. His career, internationally -- the curtain rose eight years ago at the European championship.
But, really, it's at the World Cup where Lampard received the most of his attention. In 2006, he worked every minute of every match.
At the World Cup in Germany, he didn't score a goal but four years later against Germany, in South Africa, of course, he famously celebrated a goal that never counted.
(END VIDEO CLIP)
MCKAY: Becky, England fans, they remember.
ANDERSON: Yes, we do. Alright, the other big news out of England is sort of a big partisan tonight. And on pending needs, at least, shall I say, just so it wouldn't get this time -- last time, we still don't have an accurate certainty but is Brendan Rodgers going to Liverpool. Is that a deal all but done at this point.
MCKAY: All but done and, yes, think about it, Becky.
(BEGIN VIDEO CLIP)
This is a club Liverpool that has a worldwide appeal. Certainly, you go any place in Asia, you're going to find the Liverpool kits and jerseys being worn by supporters there. It's all but done. Press conference is set for 10:00 a.m. at Anfield Friday morning.
Several hours of talks between his current side, Swansea City and Liverpool. They have agreed on compensation. In fact, that is on Swansea's website tonight, saying that three members of Rodgers' backroom staff will be joining him at Anfield.
A lot expected of this 39-year-old. As you know, Becky, one of the up and coming managers in the English game.
(END VIDEO CLIP)
Can he bring Liverpool back to prominence. We will see.
ANDERSON: Yes, a big, big, big team. Just one season but we do wish them the best. And I hope they do get another decent manager because they've had a really good couple of seasons.
That sends us to a bit of tennis. There's an official Marathon Man of the French Open -- an epic match. Tell us about it.
MCKAY: Yes, he loves playing these matches. Remember, Becky -- John Isner. He was involved in the longest match in Wimbledon back in 2010. Well, he was at it again. This time, not on grass but, instead, on the French clay.
(BEGIN VIDEO CLIP)
Can you believe it. It is the fourth longest match in Grand Slam history. But this time, John Isner ended up being on the losing end to Paul Henri-Mathieu after 5 hours and 41 minutes. Becky, I'll see you at the --
(END VIDEO CLIP)
ANDERSON: Let's stop you there. Good stuff. Thank you for that one. I'll join our colleague, Joe Johns, for some more developing news on the John Edwards case. Let's listen in.
(BEGIN VIDEOTAPE)
JOE JOHNS, CNN CORRESPONDENT: Count three in this six-count indictment. On the other charges, after a note and some long discussion, the judge has concluded and taken the jury's word for the fact that they're deadlocked on the other five issues in this indictment.
So, John Edwards is not guilty. That's where we stand right now, looking for a little bit more color in the courtroom, a long and short of it, after a long trial and huge expense by the federal government.
And, now, the ninth day of deliberation here in Greensborough, North Carolina, John Edwards found not guilty on one count. The jury deadlocked on the other five charges.
GLORIA BORGER, CNN ANCHOR: And, Joe, that count, count three was illegal campaign contributions from Bunny Mellon in the year of 2008 because she'd also given him some contributions in 2007.
JOHNS: That's right.
BORGER: So, does that tell us anything about the way this jury is thinking. Because, of course, Bunny Mellon has not testified herself.
JOHNS: Well, as my understanding is that the jury has -- the jury has been dismissed, so on these other counts, it sounds very much as though that they're deadlocked on it. And the judge has decided that they're not going to be able to reach a decision.
The question, of course, in my mind at this stage would be whether the United States government would want to re-try on those other charges that the jury was deadlocked on. The thinking here at the federal court has been that the federal government would be very unlikely to try to re-try because it's a very complicated case. And the facts and the law, blurry in many ways, so a jury coming back in this past year isn't all that surprising.
A lot of people predicted from the very start that this case against John Edwards was going nowhere. And that seems to be born out here.
BORGER: And let's bring in our Senior Legal Analyst, Jeff Toobin. We've just learned, Jeff, that the jury has been dismissed for the day.
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: No way. Not for the day. They're gone.
BORGER: Oh, dismissed. They're gone.
TOOBIN: This trial is over.
BORGER: This trial is over.
TOOBIN: Let's just clarify that with Joe but, I mean, that's my understanding. This trial is --
BORGER: OK. We now -- we now have the mistrial confirmed. We did not have that before, so let's just reset the table here. What we have is that he was acquitted. John Edwards was acquitted on count three and the rest of the trial, thrown away.
TOOBIN: There is no verdict on the other five. So, the question now is, "Will the Department of Justice decide to re-try him." Start this whole trial all over again on the five counts where there was a hung jury.
My strong sense says, the answer to that question is, "No." There is a new administration. This case begun under the George W. Bush administration. This was an enormously expensive where there is not a lot of jail time likely to be given in any case John Edwards is no longer an American political figure. I could find it inconceivable that this trial would re-tried.
So, to be clear, John Edwards won this trial and the Department of Justice lost this trial. It's not as clean as a straight-out acquittal but the happy team today is Abby Law and his defense team. And the unhappy team are the United States Attorney's Office in North Carolina who brought this case.
This was a win for John Edwards and there will be a lot of questions asked about why this case was brought at all.
BORGER: And let's bring Joe Johns back in and have some more from on-scene. Joe.
JOHNS: Yes, well, I mean, that's exactly right. And that's the end of it. This trial was -- it was kind of remarkable from the very start. Some people called it a political prosecution here just because he was a republican United States attorney if you buy that -- bringing these charges against John Edwards.
And a lot people said it was about sex and the fact that John Edwards cheated on his wife who was dying of cancer.
These are the kinds of arguments that sort of came up before the jury here. Abby Law who clearly has won probably one of the biggest cases in his career and in a career of big cases, argued to the jury that John Edwards committed many sins but no crimes.
And, apparently, the jury bought that on the one count that they could actually reach a verdict on. On the other five, a mistrial in some very difficult circumstances where, you know, the facts and the law are not clear.
So, I guess, what this tells you is it's a tough day for the United States government and the Justice Department. You know -- and maybe it's too early to start talking about this but the United States Justice Department has brought some other huge cases and had some real disasters.
The one that comes to mind immediately is the case of Senator Ted Stevens of Alaska. This was a conviction that they got that that had to be overturned, thrown out, because of multiple allegations of prosecutorial conduct.
Now, the Justice Department is really got to be sitting back, thinking, "Gosh, what do we got to do to get a big defendant locked up." Because it certainly didn't happen today.
BORGER: Jeff, I want to bring you in here because I know you're thinking that the government, probably, would not refile on this. What's the impact, in the long-term, on campaign finance law, if any. It's so complicated. It's so obtuse. And these cases, as we saw today, are very difficult to bring.
TOOBIN: And add to that, stew of complexity. And it's a moving target. This case involves --
(END VIDEOTAPE)
ANDERSON: You've been listening to our colleagues at CNN Domestic there with breaking news. A mistrial declared in the John Edwards trial.
A case that has cost the U.S. taxpayer millions of dollars. And, remember, this was a former presidential candidate. He's 58 years old. He was indicted by a federal grand jury last June on six felony charges as now known in the States.
And the case involving nearly a million dollars provided by two wealthy political donors --
(BEGIN VIDEO CLIP)
-- the late lawyer, Fred Baron, and the heiress, Rachel Bunny Mellon. You've been hearing my colleagues referring to Bunny Mellon, an heiress, Rachel Bunny Mellon. The charges were they helped him hide his pregnant mistress as he sought the White House in 2008 that released these funds.
He was charged that these funds were helping him hide his pregnant mistress since he sought the White House in 2008. He was found not guilty on just one of six counts. The others, thrown out.
This is quite a shock to the American watching public. They're expecting a substantive verdict from this either way. But it seems that's not the case. This is over.
The John Edwards trial is a mistrial and the count involves, as I said, by accepting illegal campaign contributions. Those were the charges. It's all over. The man is not guilty.
(END VIDEO CLIP)
With fears over its future, the Eurozone is witnessing a flight to safety. Investors, on edge, you know, fleeing to German Sovereign Burg (ph). Yes, I know and I drove there. So populated.
After the interest rate, you'll see, pushed down to zero percent based on the two-year paper. Yes, zero percent. That means that the creditors are happy to make no money at all rather than lose a lot on riskier investments.
It's a similar story in the U.S. and indeed in Britain where the cost of borrowing has hit record lows. Indeed, only that one set of paper in Britain making historic lows. It's sometime in '83, the last time we saw rates this low on some papers.
Where is the money moving away from. Well, take a look at the interest rates on 10-year Spanish sovereign bonds. Despite some respite today, over the past months, they've been creeping up to the danger level. That is seven percent above which the level is unsustainable.
That's the level at least most investors think is unsustainable. My next guest has described the recent events of the year as a heart attack waiting to happen. And we know (inaudible) in site. Mohamed El-Erian is the CEO of one of the world's biggest foreign investors, PIMCO. When he speaks, the world of business listen.
It was just in the past couple of months, we've been talking -- we've been talking about the Euros that are on intensive care for two years, is it. Maybe three at this point. Are we learning nothing at this point aside from investors looking for safe havens, out beating Germany, the U.S. and Britain guild to this point.
MOHAMED EL-ERIAN, CEO, PIMCO: Yes, not only, Becky, not learning very much. But, I think, people are losing confidence. You said it yourself. Now, investors are worried about the return of their money, not the return on their money. So, they're willing to accept zero percent on their holdings.
And, at the same time, depositors are worried so they're pulling their money out of banks in troubled countries. So, what you're seeing is a rejection -- an economic rejection, a financial rejection and a political rejection.
ANDERSON: If we have got the sense that things have taken a significance turn for the worse in the last week -- let's start with why that might be and what happens next. What happened in the past 72 hours to really give you the sense that this is getting worse or bad.
EL-RIAN: So, what happened are the two elements of the worst nightmare which is banking problems and policy mistakes. You never want these two things to happen together. The banks are like the oil in your car. If something goes wrong, the car stops functioning.
And what we've seen in Greece in terms of deposit outflows, in Spain in terms of a botched recapitalization of banking problems. And then we've seen policy mistakes. Either policymakers are asleep or they simply can't agree but they have added to the concerns.
So, these two things have come together and, I think, have taken us to an even worse stage in a crisis that, as you say, has been going on for three years now.
ANDERSON: Let's take a stroll on medium-term view and what happens next day. In the very short term, we're going to get results of a referendum on the Irish, for example, by late tomorrow around this time or earlier.
Does that have any significance at this point. Would that give me any sense of sure enough confidence at all, do you think.
EL-RIAN: Well, the market is expecting that the referendum will approve the fiscal compact. If that is not the case, then this would be a major shock. But what the market is also going to be looking at is, "What are Europeans leaders willing and able to do to stabilize the situation in the Spain."
So, a lot of news over the next few days and it's going to be critical news, Becky.
ANDERSON: Yes, the EU Summit coming up and Mario Draghi, the head of the CB, has already said, "Get your house in order." Euro leaders at this point -- we know, the officials have been worse than useless.
It's going to be said over the past two or three years -- are we in the position to -- with people, would you believe, can actually come up with a solution that's anything but unsustainable as like you said, for the Eurozone going forward.
EL-RIAN: We can say -- you know, Becky, if you ask what is the problem is people are trying to reconcile three different realities. One is national democracy. Europe doesn't operate as one country. Europe operates at 17 countries.
Second, mutualization. It was another way of saying Germany thinks for everybody else. And thirdly, conditionality. Germany is saying, "Wait a minute, I'm not just going to pay if there's no conditionality. That's what the ECB is saying.
So, Europe is having a tremendous difficulty reconciling these three things and, I'm afraid, they're pretty difficult to reconcile.
ANDERSON: Mohamed, always a pleasure. Mohamed El-Erian of PIMCO, a regular guest on the show. That makes sense, sorted out for us. I wish you could sort out the mess that was Europe at the moment.
Mohamed, thank you. At least, for your analyses, appreciate it. Mohamed El-Erian on CONNECT THE WORLD this evening.
Coming up after the break, a worrying prediction from Pakistan's former President.
(BEGIN VIDEO CLIP)
PERVEZ MUSHARRAF, FORMER PRESIDENT, PAKISTAN: Let us pray for political status quo. The country is headed to go to disaster.
ANDERSON: Pervez Musharraf tells me why he thinks it is time for him to return to Pakistani politics.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
Right, this is CONNECT THE WORLD. I'm Becky Anderson for you. The Pakistani Taliban have vowed that he called the doctor who helped the CIA track down Osama Bin Laden. Last week, Shakil Afridi was sentenced to 33 years in prison for alleged connections to a banned militant group.
Before court documents revealed the changes, it would have been thought the doctor was being prosecuted for spying in his own country when he carried out a fake immunization program in order to identify Bin Laden's family members.
Now, that sentence is being condemned by the United States as CNN's Reza Sayah reports now from Islamabad for you who saw just the latest in the series of events that are souring relations between the U.S. and Pakistan.
REZA SAYAH, CNN CORRESPONDENT: The symptoms of a bad marriage continue between Islamabad and Washington and that means, even the relatively small problems seem to be getting big, escalating, more difficult to solve.
(BEGIN VIDEO CLIP)
The latest dilemma is the 33-year sentence against Shakil Afridi, the who helped the CIA in the search for Osama Bin Laden. Washington says, "He's a good guy. Set him free." Pakistan says he is a spy who betrayed his country.
Earlier, we spoke to Afridi's brother who said he's innocent and Washington needs to help him.
JAMIL AFRIDI, SHAKIL AFRIDI'S BROTHER (through translator): These allegations are false. They're baseless. My brother didn't do anything against Pakistan. If he helped the U.S., it was for the benefit of Pakistan.
The American government should help us any way it can.
(END VIDEO CLIP)
SAYAH: Washington is not happy with Afridi's prison sentence. One U.S. lawmaker telling Pakistan this, "Set Afridi free. Otherwise, no more funds."
(BEGIN VIDEO CLIP)
REHMAN MALIK, INTERIOR MINISTER, PAKISTAN: This has been cut for many months. And it is your prerogative, you can cut it. But, I think, the U.S. authorities should not forget that we are suffering in this war and terror and we're suffering for the international community, too.
SAYAH: All of this, one of the many conflicts between Pakistan and the U.S. and their troubled relationship. Washington still refusing to apologize for the NATO air strike last year that killed 24 Pakistani soldiers.
(END VIDEO CLIP)
The U.S., still hammering away at Pakistan with those controversial drone strikes. Pakistan, in the meantime, still blocking the two NATO supply lines heading to Afghanistan and their (inaudible) this week canceling a trip to Washington.
These are two countries who, on paper, say they're partners but with all these conflicts, they certainly don't always act like partners. Reza Saya, CNN Islamabad.
ANDERSON: Well, four years after he stepped down, Pakistan's former President, Pervez at Musharraf says the country needs new leadership when I sat down with him early this week.
He's been living abroad since 2008 and face those charges related to the death of former Prime Minister Benazir Bhutto when and if he returns.
(BEGIN VIDEOTAPE)
MUSHARRAF: I'm afraid, the Pakistani judicial environment is not that above board. Therefore, one has to guard against judicial activism where justice is sometimes denied.
ANDERSON: So, you're not going back.
MUSHARRAF: I will go back but, like I said, there is a certain requirement of people being actively behind me. There are hearings going on. They reached a level where I feel comfortable with them.
ANDERSON: When will that be. MUSHARRAF: I'm sure, I'll go back before the next elections.
ANDERSON: You once told me that you are, at heart, a military man, not a diplomat or a politician. Why pursue a career once again in Pakistan.
MUSHARRAF: It is terrible failure, absolute collapse of governance. My life, personally, having been the man of Pakistan for almost 10 years, I know that Pakistan has the potential and the resources. That disappoints me.
For the sake of my own country, I personally feel, unless we break the political status quo, the country is headed for a disaster.
ANDERSON: Imran Khan has a groundswell of support at present. Isn't he the right man to run the country going forward. Why should it be you.
MUSHARRAF: He doesn't know governance. He has only played cricket. And, I think, running Pakistan is not running an 11-man cricket team.
ANDERSON: President Obama recently snubbed the President of Pakistan at a NATO summit last week and he only saw him in passing, voicing frustration with Islamabad.
It is very clear that the U.S. won't change and it won't change fast. If what Zardari is doing isn't working, what's your plan.
MUSHARRAF: We have to set the economy right. First of all, that is priority one. And also fight against terrorism and extremism. That is priority one alpha or priority two. And then look after other problems confronting Pakistan.
And in there, we certainly need international support.
ANDERSON: In an interview that I conducted recently with the Prime Minister of Pakistan, Mr. Gilani, he described the U.S. and Pakistan's relationship as having a trust deficit. Do you agree with that.
MUSHARRAF: Totally yes. Yes indeed.
ANDERSON: So, what do you do to narrow that trust deficits.
MUSHARRAF: Whatever are the irritants need to be discussed. Irritant number one is Osama Bin Laden. Why was he (inaudible) the body, their complexity or negligence. Irritant number two is Haqqani group. Is Pakistan supporting the Haqqani group. Is the government supporting --
ANDERSON: Are they.
MUSHARRAF: I don't think so. No, no they are not but they have a contact with them. Yes, yes certainly. There's a difference between supporting them and betting them to go and kill United States or coalition forces.
And the other is knowing what they are doing and being in contact with them.
ANDERSON: If you are running the country today, what is the first thing that you would do.
MUSHARRAF: On the domestic scene, set the economy right and fight terrorism and extremism. On the international side, yes, mend fences with the United States and improve our status. We're almost a pariah country internationally. We must improve that.
(END VIDEOTAPE)
ANDERSON: Pervez Musharraf, the former Pakistan Prime Minister speaking to me earlier this week. You're watching CONNECT THE WORLD. Live from London, when we come back -- heavy metal.
(BEGIN VIDEO CLIP)
May not be the first thing that comes to mind when you think of Poland but let me show why the country is playing a key note in at least one part of the musical arena. That's coming up after this.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
ANDERSON: Well, this week, we've got our eye on Poland. Ahead of the next week's Euro 2012 Competition as the country gears up to co-host a football extravaganza. We're going to take a look at some of the hidden gems that Poland has to offer.
We've been doing it all week. CNN's Jim Bolden has been to revisit a small family business making a lot of noise on the international stage.
(BEGIN VIDEOTAPE)
JIM BOULDEN, CNN CORRESPONDENT (voice-over): The city of Gdansk may be known for its ship-building but near the historic dockyard sits the tiny factory of Mayones Guitars.
For 30 years, this family and its small number of craftsmen have been hand making guitars and basses. But while on the shop floor, you can hear the gentle melodic tones of sanding and filing. These instruments are anything but subtle.
Guitars by Mayones are all about heavy metal. Helena and her two sons now run the company, started by her husband in 1982.
DAVID DZIEWULSKI, CO-OWNER, MAYONES GUITARS (through translator): There was no place in Poland which made electric guitars at the time. Sales would bring them from abroad or people will get them to Poland from the United States somehow.
To see a real Fender or a real electric guitar was really something very special.
BOULDEN: Now, add Mayones Guitars to that list. Thousands who have handled guitars and basses for heavy metal bands have been shaped here. Musicians like Anders Nystrom of Catatonia and Wes Borland of Limp Bizkit play and promote Mayones instruments.
DZIEWULSKI (through translator): We have a big demand in the market and my husband started making guitars with his friend. And then, it became a business. It was born out of absolute need.
Mayones says, its ability to customize instruments for musicians, many order multiple versions at the same time, is what helped the company become a key player in the niche market of heavy metal guitars.
UNIDENTIFIED MALE: There's list of options require big skills from our staff so that's why we, all the time, training them and putting a lot of attention for details and for making our products are best as possible.
BOULDEN: What also helps the guitars and basses stand out on the stage is the most important ingredient -- the wood, especially for Mayones' new model, its first ever double neck guitar coming out this year to celebrate its 30th anniversary.
UNIDENTIFIED MALE: And we use beautiful Canadian quilted maple.
BOULDEN: So, your wood would come from all over the world.
UNIDENTIFIED MALE: Yes, we use wood from Canada, from the U.S., from India, from even Australia and Africa.
BOULDEN: And polish wood is used in the next. But sourcing from all over the world is key to making world beating instruments. Something that made starting the company in Communist days particularly hard.
DZIEWULSKI (through translator): Selling the guitars was not a problem. It was difficult to get supplies, machines. We waited nearly a year for our first machine.
BOULDEN: Mayones may not be known even inside Poland, tough its guitars do adorn the walls in Warsaw's Hard Rock Cafe, it's certainly known in the hard rock world. That's why customers come here when they're touring in Gdansk.
(On camera): That allows musicians to come here to the factory and watch their guitars being handcrafted and make adjustments along the way. Jim Boulden, CNN Gdansk, Poland.
(END VIDEOTAPE)
ANDERSON: Right, and flags flying in the streets -- I should have waited. The flags are flying in the streets. The street parties are sold out. We are just one day away from the official Diamond Jubilee weekend here in Britain.
People around start gearing up to mark 60 years of the Queen Elizabeth II's reign.
(BEGIN VIDEO CLIP)
But, remember, this isn't just a rightward British affair. The Queen is Head of State in 16 of the 54 British Commonwealth countries. People around the world celebrating over the next few days and we, of course, will be there, bringing you extended coverage of the event.
And let me get you a little excited. Have a look at this. On Sunday, the third of June this weekend, over 1,000 boats will begin a journey from here by the sea bridge at 2:25 local time all the way up to 10:00 underneath all of these bridges.
Out towards what is that crowning glory. The one we never sold. The big one. Tower Bridge -- there will be a thousand boats, as I say, to celebrate the Diamond Jubilee, the formal river procession between 2:00 London Time and 6:00.
It's going to be exciting. We're on-hands -- street party. Richard will be on Tower Bridge with Piers Morgan and my colleague, Brit Boulden (ph) and Max Foster, of course, a Royal Correspondent with him as well in the same party in the crowd.
The weather is looking a bit iffy but we'll be there, umbrellas at the ready if needs be to cover this for you. I'm Becky Anderson here on Thursday. That will be coming up of course in the weekend. That was CONNECT THE WORLD. Thank you for watching.
All these headlines after this short break.
(COMMERCIAL BREAK)
The headlines this hour -- the corruption trial of former U.S. Presidential candidate, John Edwards, has come to a very abrupt end. The jury found Edwards not guilty on one count involving illegal campaign contributions. But said it was deadlocked on the other five as the judge declared a mistrial.
The Syrian government is denying all responsibility for the massacre in Houla. Today is now the finding of its own investigation. It blames the torture of 108 people last week on armed terrorist gangs. U.S. officials call the government report a blatant lie.
Israel has handed over the remains of 91 Palestinians killed while carrying out attacks on Israeli targets. Over the years now, Israel called to the confidence-building measure and put the peace process back on track.
Two Americans were killed -- sorry let me start that again -- two Americans who were kidnapped in Egypt have been released after less than 24 hours. The two tourists were abducted while they were driving near the Red Sea Resort of Dahab on Wednesday. A U.S. State Department spokesman said they were released unharmed.
And its splash landing has made space history in the Pacific Ocean. The SpaceX Dragon has safely returned to Earth after a mission to the International Space Station. It's the first time a private cargo craft has traveled to the Station and returned to Earth.
Those are the latest headlines from CNN, World's News Leader from (inaudible) a very good evening. "Amanpour" starts now.
END
