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Connect the World

Connect the World Special: EuroZone Crisis

Aired October 18, 2012 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

BECKY ANDERSON, HOST: This hour on Connect the World...

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: The smell of tear gas is thick in the air. The police fire stun grenades, the huge, loud bangs, the protesters throwing rocks, anything, really, they can get their hands on at the (inaudible)...

(END VIDEO CLIP)

ANDERSON: Violence in Athens as thousands of protesters take a stand once again against more painful cuts.

ANNOUNCER: Love from CNN London, this is Connect the World with Becky Anderson.

ANDERSON: As Greeks say enough is enough, tonight a Connect the World special on the true cost of austerity in the EuroZone, just how much is too much? Tighten your seat belts, this is CNN.

Well, as EU leaders try to bring Europe's finances closer together, workers in Greece are back on the streets of Athens once again, furious over tough new cuts that they claim would tear their lives apart. Diana Magnay is in Athens for us tonight. And taxi drivers, doctors, teachers, air traffic controllers out on the streets across the country today. How would you describe the mood?

DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: Well, there were around 30,000 people in Fantagma Square (ph) earlier today, Becky, all out to demonstrate their hatred of these further cuts just as the government is negotiating more cuts with the troika to try and stave this country off from the imminent bankruptcy.

And you've seen these demonstrations before. I've been here before. There was not as much violence as we've seen in the past, but almost predictably, and this is one of 20 general strikes that have happened here in Greece since this debt crisis began, almost predictably it did descend into violence. Let's take a look.

(BEGIN VIDEOTAPE)

MAGNAY: Rocks, bottles hurled at police. The usual suspects amongst the crowds.

These are the guys who don't really like us filming all come prepared with their gas masks and their helmets like we have.

Because up close, you need them. It's the photographers who are right on the front lines.

UNIDENTIFIED MALE: OK, when you're ready.

MAGNAY: Always follows a similar sort of pattern. And it always seems to happen outside of the hotel where all the journalists are up in the street in front of the parliament. The smell of tear gas is thick in the air. The police fire stun grenades, these huge loud bangs, the protesters throwing rocks, anything really they can get their hands on at the (inaudible)...

UNIDENTIFIED MALE: (SPEAKING IN FOREIGN LANGUAGE)

MAGNAY: "When at night your brother commits suicide, then you'll remember me," this man yells at police.

He means the unemployment that has lead to so many suicides in this country, angry that the police protect politicians who have let this happen.

I haven't seen this before, and I've covered a lot of these demonstrations. Well, you just get a very dramatic push from one of the side streets and the protesters just marched at police without a care in the world. That's certainly how it looks. (inaudible) up toward the parliament.

But they're pushed back, wiping tear gas from their eyes. As the (inaudible) rest, the crowds disperse. But like the tear gas hanging in the air, the anger stays.

(END VIDEOTAPE)

MAGNAY: Anger against our own politicians, Becky, anger against leaders in Brussels, anger against this policy of austerity which they believe cannot be the answer. And you have people asking you on the streets, saying, you know, what is the solution, because this isn't. We have unemployment at 25 percent, youth unemployment at 55 percent. The economy keeps shrinking. This is the fifth year of recession. These endless cuts cannot be sustainable. They cannot put us on a pattern towards growth. They cannot give us a future.

And interestingly, the IMF's world economic outlook recently admitted as much. They said we miscalculated. We didn't realize that this amount of budget saving, this belt tightening would lead to the kind of recessions that it has in Greece and Spain. So some admission from officials that the feeling on the street is that austerity as such is unsustainable, Becky.

ANDERSON: Yep. All right, Di. Thank you for that. Diana Magnay is in Athens for you this evening.

Economists do tend to agree that spending cuts hurt growth. The question is by how much? When is austerity too much austerity? Well, it's a dilemma that even the IMF, as Di said, struggles to answer. She said just last week it admitted it got its sums wrong and now believes that the damage of rising taxes and a cut in spending causes to growth could be up to three times higher in some parts of Europe than previously thought.

Stephen Pope is with me this evening in the studio, a man whose experience in the world of finance stretches across three decades. You're with me throughout this next half hour. So let's just kick off with a question we're posing this half hour.

When is, or how much austerity becomes too much austerity? You're a man who has always said austerity is a way forward. Don't mess around with demand lead growth and stimulus. You must agree when you see those pictures out of Greece that there is a line in the sand we much draw?

STEPHEN POPE, MANAGING PARTNER, SPOTLIGHT IDEAS: There clearly is a level when any government that has been applying austerity sees a certain number of quarters where there is no improvement, in fact it's sinking into further rounds of depression now, that one has to start questioning is the policy correct?

But it's not just a question of are we not cutting enough, are we cutting too much or be spending more. It has to be framed into the entire context of how is our economy functioning? And some of these periphery economies that function within the rigidity of the euro are in a position where the current policy script is not working, because they have no way of making a sufficient devaluation on their economy.

ANDERSON: They were told to do this by the IMF and two other bodies. The IMF just last week saying it got its sums wrong, that's unacceptable isn't it?

POPE: Well, it's very disappointing to know that an august body such as the IMF would turn around and say, no, we've miscalculated. But economics is a social science, it's not a pure science. And it is open to correction and revision, although maybe not to that magnitude. But certainly I think that you can sense the anger of the people. One recognizes that. But it's not enough just to turn around and say, we need growth. Growth is an end game, it's not a policy. What we actually have to find out is what will be the correct policies to prescribe and then determine how are we going to pay for it, because somebody has to be accountable. Because at the end of the day it's all about the money.

ANDERSON: We are going to discuss that as we move through this next 20 or so minutes. To get a sense of just how bad things are in Greece I want you to hear from our senior international correspondent tonight Matthew Chance. Earlier this year he witnessed how the country's middle class is suffering when he visited a soup kitchen. Here are his reflections now on what he saw.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN INTERNATIONAL CORRESPONDENT: We visited the soup kitchen in central Athens we were confronted with I suppose the true human cost of the economic crisis in Europe. In this one corner of the Greek capital, there were hundreds and hundreds of people young and old, men and women, who had turned up to get a simple hot meal And I remember thinking what's strange about this is that they're mostly well dressed, middle class people - not homeless, not illegal immigrants, just ordinary Greeks who had no other option. And that was the moment for me that it really sunk in that this crisis was about much more than just debt.

You know, around the world many people see this Greek financial story as a debt problem. People focus on how many billions of euros the country owes to get itself out of debt, but from the point of view of the people on the street it looks very different. You're seeing here in this soup kitchen, people who just a year ago were ordinary European citizens -- they shopped at super markets, they had apartments, they had jobs. They've seen their standards of living drop off a precipice and that's the real Greek tragedy that's being played out in reality across this country.

It was pretty tense capturing the scene. People were ashamed to be photographed there. Some of them were very angry we're there at all. We were threatened at one point. But there was one many, I remember, who agreed to speak to us. His name was Andreas. He was a pensioner, but I remember he hadn't received a pension for months.

ANDREAS, PENSIONER: We're going to make sacrifices, but we're going to survive. We are going to survive, this is guaranteed, because we survive 5,000 years almost. And we're going to survive again. That's all.

CHANCE: The point he was making is that this is certainly a terrible trauma that it's going through, but it will come to an end, that's the hope of many Greek people. And my worry is that that won't be for a very, very long time.

(END VIDEOTAPE)

ANDERSON: Matthew Chance with his reflections.

Well, EU leaders as we speak are wrapping up supper in Brussels. Greece front and center, one assumes, is a big question out there, EuroZone does it stay in, does it get out. Do they drop the euro. What's the solution here? Policymakers and politicians haven't got it right and the people of Europe are suffering. So, wherever you are watching in the world tonight tweet me in 140 characters or less I want your solutions to avoid the great global stagnation @BeckyCNN. If you're not on Twitter, send me your thoughts Facebook.com/CNNConnect.

Stephen has tweeted his solution tonight. He says, "EZ," EuroeZone, "want to say the euro. If yes, there are four solutions. One, inflate. Two, stimulate. Three, bailout more. Four, agree on euro bounds or else five break up."

Did you cheat? Was that 140 character?

POPE: It is 140 characters. In fact, it's probably less.

ANDERSON: Stephen is with me. This is Connect the World.

POPE: Austerity in Twitter.

ANDERSON: Austerity in Twitter.

This is Connect the World. A special on the EuroZone crisis. It's 10:10 in Brussels. As I say, no word yet from EU leaders who are gathered there trying to come up with a solution to this crisis.

As they talk, coming up this show. We take a look at Spanish woes as families there battle to stay afloat amid growing unemployment.

(COMMERCIAL BREAK)

ANDERSON: Hello.

Thousands of Greeks protest cuts in Athens and austerity by even harder. We bring you a Connect the World special on the EuroZone.

Greece, of course, not alone in its misery. Rumors abound that Spain may ask for a full bailout just months after a banking rescue that the company - sorry, the country had hoped would save the economy. Unemployment has rocketed over the last two years.

There, have a look at this.

(BEGIN VIDEOTAPE)

AL GOODMAN, MADRID BUREAU CHIEF: I've been covering Spain's economic crisis for a few years. And since I live in Madrid, I can see the pain it's causing every day. Spanish friends tell me how they're affected by the government's austerity cuts and tax hikes to reduce the deficit. It means they're salaries have been cut, their vacation days reduced, their purchasing power in decline. But it's much worse for many who have lost their jobs in this country with more than 24 percent unemployment.

One man down on his luck is this construction worker who lost his job and now panhandles. Every morning when I drive my son to school, we pass by his corner where he sells packets of tissues. We did a story about him. And another driver told us he gives money to this man, Jose Antonio, because any Spaniard could end up like him.

Last June I met this man, Valentine Garcia, who lost his job as a waiter two years ago. Like a growing number of Spaniards, he gets a monthly food handout from the Red Cross. He agreed to talk to CNN only because he thought the exposure would help him reach a potential employer.

VALENTINE GARCIA, OUT OF WORK WAITER (through translator): I am willing to work at any hour. I have experience in working any shift. I am not asking much.

GOODMAN: But when we checked in with him again this month, he was still looking.

GARCIA (through translator): I don't know. I think it's gotten worse. To go around and see more stores, restaurants and businesses closed due to the situation in the country.

GOODMAN: The situation in Spain is what has sapped the optimism of many Spaniards. On the whole, they're seeing a lifestyle of abundance some began to take for granted slipping away.

Al Goodman, CNN, Madrid.

(END VIDEOTAPE)

ANDERSON: All right.

So you've been tweeting me what is the solution, then, to this European crisis. I've got Stephen Pope with me. He's given us his idea in 140 characters or less.

Dyke E Boo (ph), "@BeckyCNN, Bailout and break- up is your solution like here in New York ask those with the means to sacrifice a little. Pay more taxes, cut salaries, etc. from the polls. Can't ask the middle/poor - middle classes or the poor to do it all."

Another person saying, "allow Greece to break away from the EU and let Russian billionaires invest. Investment, not bailouts, will save Greece."

Coming in thick and fast here, one to you Stephen on your five points for a solution. One person tweeting here says, "it's going to take years to do that, Steve Pope."

POPE: It is going to take years. But this is the trouble, many of these people who you see protesting and in states of despair are paying the prices for the sins of former politicians who misled about the statistics, European bureaucrats who took the stats at face value without checking it properly. That's why Greece is now in such a state.

In Spain, there was too much allowance for the banking system to become politicized, so lending was made with a political agenda, not a commercial agenda. And suddenly, once all the cheap money has disappeared, those are the countries who are on the periphery find that they are up in a rock and a hard place situation.

ANDERSON: And that's what we're learning. There is no one size fits all.

POPE: No. And there is no one of those solutions that I put up there that can be taken in isolation. I think it has to be a blend of all of them if the leaders of the EuroZone are deadly serious about preserving this currency bloc.

ANDERSON: Talking about your tweet, of course. We're going to bring that back up when we come out of this short break.

You're watching a Connect the World special on the EuroZone. Coming up, the lessons that Japan might offer. That, after this.

(COMMERCIAL BREAK)

ANDERSON: Welcome back.

You're watching a Connect the World special on the EuroZone crisis. Live from London, I'm Becky Anderson for you.

A boom gone bust: high unemployment, higher debt, Japan knows all too well what Europe is currently facing. Consider these scenes from a report that CNN aired 10 years ago.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Osaka Castle is a near 500 year old reminder of Japan's might and prosperity. At its base, an equally powerful reminder of the country's current troubles. This is a tent city of Osaka's homeless living in the park that surrounds the Castle.

UNIDENTIFIED MALE (through translator): I don't have an address so people are reluctant to hire me. If I could work as a day laborer, that would be OK, but there are no jobs now.

(END VIDEOTAPE)

ANDERSON: 10 years ago. Well, some economists say that the hard lessons learned then can help Europe now while others warn the continent may be looking at even tougher road ahead.

Alex Zolbert reports.

(BEGIN VIDEOTAPE)

ALEX ZOLBERT, CNN INTERNATIONAL CORRESPONDENT: It was the boom time of the 1980s, a roaring Japanese economy, a soaring stock market and real estate prices run completely wild. According to some valuations, the grounds of the imperial palace, all 3.4 square kilometers, or 1.3 square miles of it, were worth more than the entire state of California. And when the bubble burst in the early 1990s, it left the country with what many refer to as the lost decades, years of slow growth, rising debt, and consumers who are afraid to spend.

The stock market, once nearing the 40,000 mark, still sits at less than one-fourth of that level. Economists here say European leaders need to take a close look.

RICHARD KOO, CHIEF ECONOMIST, NOMURA RESEARCH INSTITUTE: I hope they understand as quickly as possible that this is no ordinary recession, or it is always...

ZOLBERT: Economist Richard Koo knows Japan's story firsthand. And now he's making frequent trips to Europe to advise officials and business leaders. To keep money moving, to keep the gears of the economy churning in a rare situation like this he says governments must take the lead and keep spending.

KOO: What we learned from the Japanese experience is that if the private sector is no longer maximizing profits, but actually minimizing debt, in that situation if the government also tries to repair its balance sheets by reducing spending and raising taxes, then the whole thing will collapse.

ZOLBERT: Other economists point out that during most of the 1990s Japan was getting tailwinds from a surging global economy, something Europe is not getting today.

KOO: In Japan, the unemployment rate at the start of the malaise was only about 2.5 percent. It went up to 5 percent, right, but real threat of social unrest because people being out of work, being disenfranchised, we never had to worry about that here in Japan while in Europe those worries are very high.

ZOLBERT: Some here in Japan dispute the notion of a lost decade or lost decades, saying yes while growth slowed, unemployment remained low. The infrastructure is some of the best in the world. And with inflation kept in check, the Japanese people never lost their purchasing power.

KOO: Wages and employment continued to grow while prices actually fell very moderately, so in real terms Mr. and Mrs. Watanabe continue to be better off.

ZOLBERT: Do you think we're going to talking about the lost decade that Europe has had?

KOO: I'm afraid so. I mean, they have already gone so deeply into the hole they have to recognize that this is a different disease put in a different diagnosis, start taking different medicines.

ZOLBERT: Different medicines, but no simple cure.

KOO: There is no magic bullet, that's a definite lesson we got from Japan.

ZOLBERT: Alex Zolbert, CNN, Tokyo.

(END VIDEOTAPE)

ANDERSON: Stephen Pope is still with me, our markets guru. We've been talking about how much austerity is too much austerity. Stephen, just to underline how bad things are I want you and our viewers to take a look at the latest debt to GDP numbers for Greece, Spain and Italy. These are numbers between 2008 and 2012, that is the Greek number. And when we're looking at, what, a 50 percent rise in debt? We're trying to tell the Greeks that you've got to be austere, you've got to stop spending and that's what happened? You look at the numbers out of Spain and Italy, they're on the same trajectory.

Things are getting worse because the IMF and others imposed these austere measures, aren't they?

POPE: That's right. And I think what you're seeing there is that austerity was imposed upon Greece when the economy was already, shall we say tanking. And that meant GDP was falling. So trying to cut back on the levels means you're actually impairing any chance the GDP has to recover. So in a way GDP to debt, trying to chase a target is always chasing its tail and it's not going to be successful.

ANDERSON: If you were sitting around that supper table where the EU leaders are tonight, given what we've just seen out of Japan and reminded ourselves what happened with that loss or more, what would your message be tonight, because, you know, this one size fits all solution is giving the Greeks real hardship is just not working. What's your message?

POPE: Well, I think the situation with Japan is different, because they had their own currency. They could change the exchange rate to maintain an edge, a competitiveness. Greece, Spain, Portugal and so on have all been trying to dance to an exchange rate that suits the Germans. Now clearly this is not a possible way of continuing.

So if the Greeks and the good around that table, and why they're only meeting for supper, they should have been there all day for breakfast to get this going. Really, they should be addressing - if we really are serious about this, everybody: wealthy and poor, north and south, have to make certain sacrifices. And that means surrendering some sovereignty, going for fiscal union, going for political union. And it doesn't matter whether people's national pride is affronted, they have to give in if there's going to be a mutualization of debt and if there's going to be a massive infrastructure stimulus coming from the wealthy north nations.

So, there has to be quid pro quo on all sides rather than the north dictating to the south and the south backsliding all the time.

ANDERSON: There's a solution for you. We've been asking for solutions on Twitter, tonight, to this European crisis, and one who's just written to me 48 seconds ago, "Becky -- Germany, Holland, France, et cetera drop out of the euro, the pigs -- Portugal, Ireland, Italy, Greece, and Spain are left alone with the euro, they devalue it and grow from there on." I guess that is one solution.

And we've run out of time for you and I to talk for the time being. We'll be going on Twitter. Stephen, always a pleasure. Thank you very much, indeed. @BeckyCNN, keep your tweets coming in.

Coming up next on CONNECT THE WORLD, the latest world news headlines from CNN, including the latest on Google. What a day. Their shares suspended earlier on. It's been a nightmare. Coming up with CNN and Maggie Lake. There's a conference call, we're going to get you some analysis on Google after this.

(COMMERCIAL BREAK)

ANDERSON: A very warm welcome to our viewers across Europe and around the world. I'm Becky Anderson, these are the latest world news headlines from CNN.

A wild ride for Google's stock today after a printing mistake caused a panic sell-off. The tech giant's earnings report was accidentally released early during trading hours. The news was bad -- so bad, that trading Google shares had to be temporarily halted.

Let's bring back Maggie Lake in New York. And Maggie, as the conference call between Google and investors begins, just remind us what happened this afternoon.

MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: Well, basically, Becky, as everyone was waiting for that after the bell, sort of preparing themselves, it became apparent based on some of the movement in Google stock that this -- their third quarter earnings release was out accidentally early.

Google said it was the fault of RR Donnelley, their financial printer. Everyone's guessing, it's basically a fat finger on a button that let it go. We'll find out a little bit more detail. RR Donnelley not responding.

But not only was it a surprise and not only did it cause the stock to be halted until all investors could get the details, it was a draft version, and the news was bad, earnings and profits down.

I do want to get right to something else, though, because that conference call has begun. You can see this stock pretty much holding onto the bulk of those losses as it closed. It did resume trade in the last hour.

The conference call just beginning for investors, and right off the bat, Larry Page is on the call, that was one of the things people are really looking for. He was not on the earnings call last time, he has not been appearing very much in public, sparking, actually, some concerns about his health.

He is on this call. His voice is very hoarse, we still don't really know why. They're not giving a lot of details about that, but right away, first thing he said was, apologize for the scramble today, and then went on to say that he is pleased with the results. He feels like it was a strong quarter. You and I talked earlier about the fact that the company's going to want to put their spin on this.

ANDERSON: That's right. What will investors be asking at this point, because this is the opportunity for Larry Page to, for all intents and purposes, massage these numbers. Because on first take, they're horrible, these numbers, aren't they?

LAKE: They are. They're -- they missed not only on the earnings, but also on the revenue. And you know, Becky, people can sort of report low earnings or miss for different reasons. If it's because they're pouring money back into the company, investing for the future? Sometimes analysts don't mind that.

So, the explanations, the context does matter. The problem here is that at first blush looking at this, there's weakness in Motorola Mobility. OK, we knew about that, that was a loss-making unit. They've been up front about that, they've been trying to turn the business around, so that's not so much of a surprise.

What is a little bit more concerning seems to be that there appears to be deterioration in some of their core business, google.com, YouTube, the sort of core strengths for them, and that ad prices are lower. Again, people feeling like they've had to do with a shift from advertising from PC platforms to mobile platforms, not as lucrative, everyone's sort of catching up. It is a market that is in transition.

But what is Google saying about that? Are they going to give forecasts? This is company that doesn't like to give forward-looking guidance. Are they going to change and lay out a little bit more details on strategy and tell people what to expect through the end of this year heading into 2013. That's going to be really important.

Becky, the stocks up 30 percent in the third quarter. A lot of people in it, a lot of people play it, and they're going to want answers to this.

ANDERSON: All right, good stuff. Keep your eye on CNN Money, of course, viewers, as this conference call goes on. Maggie, I'll let you go and have a listen in and see what you can find out. Maggie Lake for you out of the CNN Money newsroom for you as Google investors listen in to what Mr. Larry Page, the CEO, has got to say about these numbers. They don't look good, as I say, in principle.

In other news today, protesters in the Greek capital Athens have clashed with police during a rally to demonstrate against tough new austerity measures. The violence broke out as workers began a 24-hour general strike, the second this month.

And talks are underway to end Latin America's longest-running insurgency. The Colombian government and leftist FARC rebels met face-to- face today in Norway. The government says there will be no cease-fire until a peace deal is finalized.

And a Bangladeshi man is in police custody in the United States for allegedly trying to bomb the Federal Reserve Bank of New York. Authorities say he tried to detonate what he thought was a huge bomb, but it was actually dummy explosives provided by undercover agents.

Well, horrific scenes in Syria today after fighter jets bombed a rebel-held town. It was part of a wave of violence that claimed at least 180 lives across the country, and it comes just before the UN's special envoy brings a cease-fire call to Damascus. Nick Paton Walsh has the details.

NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT: Becky, despite talk of diplomacy, violence continued unabated across Syria today. The capital Damascus skyline afflicted with a dark plume of smoke, apparently as an explosion tore through an intelligence headquarters from the loathed Palestinian branch, blamed for many abuses.

In Maaret al-Numan, a key town in the north of the country being fought over now bitterly as it controls a key road between the north and the capital, Damascus. An air strike landed in a multistory building. Gruesome scenes, there, as bodies pulled from the wreckage, at least 25 dead, according to activists, as the regime tries to pound successful rebels away from that vital town.

And also, harrowing video emerging from Idlib as well, as regime soldiers shot dead by the rebels find some of their survivors pinned down. The activist in these videos saying that they're trying to give this one injured Syrian soldier help, but can't reach him because the regime continue to fire. Impossible to confirm and ask what really happened there.

But these advances in the north of the country are making many think that perhaps the narrative of the Free Syrian Army, forever accused of chaos and dissent, may be changing, and we may be seeing, slowly, signs that they're getting stronger.

(BEGIN VIDEOTAPE)

WALSH (voice-over): A scene becoming more common in Syria --

(EXPLOSION)

(GUNFIRE)

WALSH: Rebels are assaulting the once-impenetrable walls of regime bases.

(GUNFIRE)

WALSH: Flourishes of rebel success in the past week that have kept coming, like this bid to cut off the main arterial road north, isolating the main cities of Idlib and Aleppo, leaving some observers asking whether the rebels are finding new ways to hit a weakened enemy harder and, perhaps, just maybe break a long stalemate.

JOSHUA LANDIS, SYRIA ANALYST: We've seen the Syrian opposition getting stronger and stronger. It is getting new techniques for taking down Syrian air power. What we have seen is type B insurrection, as they call it, which is hit and run strikes, terrorism, assassinations.

The Syrian Free Army or the militias have not yet been able to take on the Syrian Army head-to-head, but that day, I think, is coming closer all the time.

WALSH: A time, perhaps, heralded by these.

(MEN SHOUTING)

WALSH: Jets brought down, apparently, by rebel fire. Helicopters, too.

(GUNFIRE)

WALSH: This one over Idlib.

(GUNFIRE)

(MEN SHOUTING)

WALSH: Activists say their estimates show that over half the aircraft downed in this war were in the last month. This isn't just about rebel morale. Control of the skies is key to holding onto Syria itself.

It's unclear whether these are behind their new luck. Probably a Russian-made SA-7 surface-to-air missile. Rebels have long begged outsiders for these, but may have instead had more luck looting them from captured bases.

One commander in the besieged southern city of Homs envies rebel success in the north.

"In the North, Assad has his arms cut off," he says. "Idlib is mountainous with trees. Rebels can use anti-aircraft weapons with ease. They can hit tanks as the ground there is helpful to them."

(EXPLOSION)

WALSH: You can hear the bombardment behind him. The pressure's still on. But scenes of success, which used to be so rare and short-lived, are now more common. As are questions as to how long the regime's military supremacy will last.

(END VIDEOTAPE)

WALSH: Given the intensity of that sort of violence, Becky, you can imagine how difficult it is for diplomacy to take hold, but that is what UN-Arab League mediator Lakhdar Brahimi is trying to do. He's got about a week to secure this cease-fire between the regime and the rebels, recently receiving the backing of Iran for the idea of a four-day cease-fire during Eid al-Adha, a holiday.

But both sides want to see the other take the first step, and really, that level of mistrust is amplified when you imagine how lacking in coordination on the ground so many of these armed units are. Can, really, a cease-fire stick, Becky?

ANDERSON: Nick Paton Walsh. You're watching CONNECT THE WORLD. Back after this.

(COMMERCIAL BREAK)

ANDERSON: It's time for our Human to Hero series this week. Tonight, we're going to get behind the scenes with a Romanian singer as she makes her debut at the world-famous opera house in Milan. Have a look at this.

(BEGIN VIDEOTAPE)

ANITA HARTIG, OPERA SINGER (singing): Breathe, breathe, breathe, breathe. Breathe!

HARTIG (speaking): Tonight, I am making my debut at La Scala in the role Mimi from "La Boheme" from Puccini.

Opera was born here.

(OPERA MUSIC)

HARTIG: I know the role. I'm just building up the energy and focus. Focus, focus.

(OPERA MUSIC)

HARTIG: It took much more than a dream to bring me hear on this stage tonight.

(OPERA MUSIC)

HARTIG: I was 17 years old and a friend of mine told me that I should sing opera because I had an interesting voice. And she gave me as a present two CDs with Maria Callas, and I listened to them over and over again.

(OPERA MUSIC)

HARTIG: And I started to sing after her in high notes, and I heard the orchestra and the music and the emotions and the power.

(OPERA MUSIC)

HARTIG: Ioan Holender, the ex-director from Vienna State Opera, heard about me through a music critic. I was still a student. He wanted to hear my voice when he was visiting Romania again. And from that moment on, everything changed.

(OPERA MUSIC)

HARTIG: There are so many great Romanian singers, but in my little town, I was, I think, the first one. I developed my technique in about ten years. I had practiced three, four, five, six hours. It depends on the schedule.

I'm doing stretching exercises, and then build it up to some phrases, difficult phrases. It's like an athlete that is making his stretching.

(OPERA MUSIC)

HARTIG: Can you imagine how it is to not use any kind of microphone and to have the force and the power to make the voice sound through an orchestra of 80 people and try to focus in one point, but not point like pushing, like aaah, but --

(OPERA MUSIC)

UNIDENTIFIED MALE: The "au" in "andati" should be more like the "o" of Zorro.

HARTIG: So not too open.

UNIDENTIFIED MALE (singing): Sono andati --

HARTIG: Andati.

HARTIG (singing): Sono andati? Fingevo di dormire --

HARTIG (speaking): The technique, it is important, of course. It makes a difference, definitely. But there are lots of singers with good technique that don't take enough time, maybe, to develop also the other part of the sensitivity.

(OPERA MUSIC)

HARTIG: There has to be a really special bond between conductor, orchestra, and singer. If I am sensitive enough, I will take the sound he's creating with the orchestra and somehow try to put it into my voice, into my instrument. Always has to be this kind of energy exchange.

(OPERA MUSIC)

HARTIG: The challenge is to always work with new conductors, with new musicians, on a new repertoire and a new role in new theaters. I can't compare myself to all the great sopranos that sung this role, and not just sung, but felt it.

(OPERA MUSIC)

HARTIG: My responsibility is to be myself a hundred percent, meaning the words, and feeling the music and let the music go through me with orchestra together into the public.

(OPERA MUSIC)

(APPLAUSE)

(CROWD CHEERS)

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ANDERSON: While sponsors are trying to distance themselves from the disgraced cyclist Lance Armstrong, pressure also mounting on the International Cycling Union, now, to strip him of his -- what? -- seven Tour de France titles. Pedro is with us. I -- it doesn't actually surprise me. I'm surprised it's taken so long, perhaps.

PEDRO PINTO, CNN SPORTS CORRESPONDENT: Well, the thing is, Becky, that the International Cycling Union was given the report by the United States Anti-Doping Agency last week. They have 21 days to respond.

But pressure is growing on them to take a stand, because as you have been seeing, a lot of sponsors are dropping out, a lot of fans are kind of distancing themselves from Lance Armstrong, as well. So, why aren't cycling's officials responding?

So, a lot of pressure on Pat McQuaid, the president of that governing body. One of the sponsors wrote an open letter to the UCI earlier today saying either you need to take a stand or you need to resign to Pat McQuaid.

As far as the sponsorship angle is concerned, Lance has now lost a total of seven sponsors since the report came out. The latest big name to drop out was Anheuser-Busch, who's been with him for a long time, and we see here a list of those sponsors. Nike made the headlines on Wednesday, and we covered that story throughout the day on CNN.

And now, it's a case of, we've seen the sponsors are turning their backs on Lance. What about the fans? Well, some of them don't really know what to think. Obviously, there are some who still love him as an icon, and there are those who think what he's done is unacceptable.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think he's case is still a good case that he supported cancer and that kind of stuff. So I have no issue that he has maybe used something that he shouldn't have used.

UNIDENTIFIED MALE: I'd say he's a bit of farce, really, doesn't it? The tens or even hundreds of millions of pounds that were pledged to a charity headed by a cheat.

UNIDENTIFIED FEMALE: Lance Armstrong was obviously the head of it, but now, it has nothing to do with the charity on its own, and I think it's definitely a good cause, so I wouldn't not support it anymore.

(END VIDEO CLIP)

PINTO: And the issue is right now, Becky, that a lot of people still see Lance Armstrong as someone who's raised a lot of money for cancer research and this shouldn't change that. As far as him being a sporting icon and an idol, even though he maintains he's still innocent, I think a lot of people have kind of stopped believing in him.

ANDERSON: Yes, still more legs in this story, though. Taking flight in China. Apparently some sportsmen are. What's going on?

PINTO: Yes. Let's lighten the mood, let's show some spectacular video that we got in from China. And the question here has to be, "why?" Why would you do this? This is a flying competition, where people were jumping off the Tianmen Mountain, 1,400 meters high was the peak. And the objective was to reach the ground as fast as possible.

So, the winner did it in 23.4 seconds, which is the speed of about --

(LAUGHTER)

ANDERSON: Oh, my goodness!

PINTO: -- 60 meters per second. You remember Felix Baumgartner --

ANDERSON: Yes, of course.

PINTO: -- and what he did jumping off the edge of space. These guys may not have made it that far, but they kind of look like --

ANDERSON: Can you imagine if you'd been in that cable car and didn't know it was going on?

(LAUGHTER)

PINTO: Yes. Yes. You'd think maybe --

ANDERSON: My goodness!

PINTO: -- people had had enough of life. But this is absolutely incredible video. And whatever --

ANDERSON: Oh! He's not getting up from that.

PINTO: -- it takes to give you an adrenaline rush, I guess.

ANDERSON: I tell you what, let me give you an adrenaline rush that I --

PINTO: OK.

ANDERSON: I can beat that, tonight. A base jumper in Norway -- have a look at this -- had a very lucky escape today.

Surgeon Richard Henriksen was attempting to somersault into his jump when the bar gave way, sending him plummeting -- let me tell you -- over that 1200-meter drop. Can you believe it?

PINTO: That's ridiculous!

ANDERSON: Fortunately, let me tell you -- can you believe it? The father of five avoided hitting any rocks and managed to open his parachute just in time -- just in time to survive the fall. The video has since gone viral on the internet.

PINTO: That's --

ANDERSON: Why do they do it so close to the edge?

PINTO: Why would you have to do that spin before you jump off a mountain? What -- what's next?

ANDERSON: He was fine.

PINTO: Yes.

(LAUGHTER)

PINTO: Anyway -- that's why I believe in fate. Because sometimes --

(CROSSTALK)

ANDERSON: And all that --

PINTO: -- I think your number's just up --

ANDERSON: -- and all that comes with it.

PINTO: One guy survived this and others die falling off a bathtub. Come on. Right?

ANDERSON: Pedro, always a pleasure.

PINTO: All right.

ANDERSON: He's back in half an hour with "World Sport," of course. I'm Becky Anderson, that was CONNECT THE WORLD, thank you for watching. The world news headlines are up after this short break. Do not go away.

END