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First Move with Julia Chatterley
Jay Powell to Justify Low Rates While Upgrading Growth Forecasts; The E.U.'s Answer to Restoring Travel is Announced, Expedia's CEO talks on post pandemic vacationing. Aired 9-10a ET
Aired March 17, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:20]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley, this is FIRST MOVE and here is your need to know.
Fed's fine line. Jay Powell to justify low rates while upgrading growth forecasts.
Pandemic pass. The E.U.'s answer to restoring travel is announced.
And Expedia's expectations. The company's CEO on post pandemic vacationing.
It's Wednesday. Let's make a move.
A warm welcome to all our First Movers around the world, as always, and Happy St. Patrick's Day, too, to all who celebrate it. It also happens to
be Jay Powell's day for global investors, too. The question is, will they be celebrating or commiserating when the Federal Reserve Chair speaks
following the U.S. Central Bank's latest policy statement.
All eyes on the so called dot plot which forecasts when voting members think interest rates should rise. The message from the bond market has been
it should be sooner than 2024, which up to now seems to be the average Fed thinking.
Investors are continuing to predict stronger growth supported by stimulus and bold vaccine delivery and that's what's pushing the 10-year bond yields
higher around the world into fresh 13-month highs in the United States.
That, in turn, is pressuring the rate sensitive tech sector and it continues to do so.
Take a look at the NASDAQ futures. Little St. Patrick's Day green on the screen there premarket adding to the losses that we saw yesterday. The Dow
falling in fact for the first time in seven sessions.
The Fed anticipation also meant to have subdued Asia's session today as well on the eve of the first face-to-face U.S.-China talks of the Biden era
-- virtual, of course. Tough words already from U.S. officials over Beijing's behavior at home and abroad.
More on that in just a moment, but first, let's kick off our drivers with the Fed's fine line. Christine Romans joins me now.
A fine line, lots of bonds to bolster juggle, I think, not bonds. Christine Romans, great to have you with us. That was a Freudian slip there.
Higher growth, two plus million vaccines being delivered on a daily basis. Growth forecasts upgraded.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Yes.
CHATTERLEY: Does it justify zero rates and monster QE endlessly for the Fed for years?
ROMANS: This is a consequential meeting, the most consequential meeting I've seen in a couple of years really for this Fed, don't you think, for
this Fed Chief? He will have to be very careful and very and forthright with what he is saying here.
I think you're going to hear from him that he is still laser focused on the job situation. You've got growth forecast out there of six, seven, even
eight percent for the U.S. economy this year, not Fed growth forecast, but from private economists.
Yet, we have a jobs hole of 9.5 million jobs, and we've heard from the Fed Chief, we've also heard from the Treasury Secretary about these concerns
about permanent scarring in the labor market.
So, how will he weigh the damage that must be repaired with the risk of overheating? And I think what you'll hear is this is a Fed Chief who knows
that there is a hypothetical risk of inflation down the road, but there is a more real actually happening right now risk of people falling behind in
this labor market.
We know they have talked a lot about trying to repair that rift here. Still, this bond market wants to have a little taper tantrum, doesn't it?
It really wants to be worried about when all of these low rates and these huge bond purchases are going to end, and he'll have to be very diplomatic
in appeasing the taper tantrum bond folks, but also being very clear that we are still in the thick of a crisis here, don't you think?
CHATTERLEY: Yes. We have just shown the 10-year bond yield there at 1.67 this morning, too, so it is certainly testing the view, and I agree with
you, that Jay Powell will present today and that is we can afford to be patient. There is still a lot of work to be done.
The big risk perhaps here is that dot plot that I mentioned shows at least some of these voting members starting to say, look, we do think that these
rate rises have to happen perhaps into 2023, perhaps even as early as the front end of 2023 into 2022 and that will spook the market because it kind
of agrees with what the market is pushing for here as well.
ROMANS: You know, those rates are so low. I would caution everyone to remember, I mean, they are zero, right? I mean, will higher rates --
nudging up higher rates, is that something that's going to kill an economic recovery if you have a true economic recovery post this healthcare crisis
and you've got an administration that wants to tackle infrastructure, wants to tackle income inequality and wants to tackle getting money into hands
and pockets of low-income Americans with some real structural and legacy building kind of changes to the American economy?
I mean, is going up a little tiny bit from here a quarter earlier than they thought, is that enough to kill a bull market in stocks and spark a big
move in the bond market? I'm not sure. I am not sure.
This is the big question that people are going to be asking.
[09:05:21]
ROMANS: You know, and you go back to say, 2018, the last time we had, right, we had concerns about those higher interest rates. Weren't they
higher than they are here today anyway? And you still had an economy that went just fine until the COVID crisis, and you didn't have those higher
rates, signaling some big, you know, flash of inflation or anything by any stretch of the imagination.
CHATTERLEY: We want our cake and eat it. Investors want the cake and eat it. Bond yields have tripled, let's be clear in the last, what -- year and
a bit, but they're still at 1.67 percent, let's remember, it is one point - - I know.
ROMANS: It's the near term move, but it's also the level. That's the funny thing about markets and economics, right? You can focus on the near term
move and get really freaked out, but then you put it in some perspective and say, okay, come on, that's 1.73 percent historically, very low interest
rates here.
CHATTERLEY: Christine Romans, thank you for that. We are being be told to move on. I could talk to you for hours.
All right, the European Union, look, really I am moving on.
The European Union says it will issue COVID certificates to allow virus free passengers to travel. The digital green pass will allow tourists to
move across borders inside the E.U. without the need to quarantine and test.
Fred Pleitgen joins us now. Fred, it's expensive. Talk us through the exact details on this. What will this certificate contain?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, it's very important for the European Union. Of course, the free movement of people is
one of the cornerstones of the European Union. But then also, of course, looking forwards to the summer season, and many people finally wanting to
get on the road and travel again in Europe.
So this is certainly something that a lot of people here on the continent have been looking forward to, to hearing the details of how this is going
to be.
As you've mentioned, Julia, they call this a Green Certificate, and essentially, some people are saying it's something like a vaccination
passport so that people who have received vaccines against COVID-19 are going to have essentially a certificate with a QR code that then says if
authorities wants to know that they have indeed received a vaccine.
But it's not only people who have received a vaccine, who are going to be eligible for this, it's also going to people who have a very recent
negative PCR test, that is also something that we put into your vaccination passport.
But then also people -- this is quite important -- who have actually already had COVID-19, and therefore have antibodies and of course, also
have an antibody test.
So those are all the ways that people who can -- are eligible and can then get this Green Certificate to then be able to travel more freely around the
European Union.
There was a press conference, I actually think, it is still going on in the E.U. Commission with Ursula von der Leyen, the head of the E.U. Commission,
and she says she wants to have all of this ready by summer for the summer travel season.
And that, of course, is very important for many Europeans who want to travel. But of course, something that we've been talking about a lot. Also
the tourism industry here on the continent, which has really been suffering, some 30 million people were employed in that industry will also
want things to get back on track.
There is still a process, of course, within the European Union to make sure that this proposal that was introduced today that that is going to be
approved by the member states. There are a few differences, especially the ones that want tourism to come back as fast as possible. Countries like
Greece, Spain, and Portugal, they want to get this moving as soon as possible.
Whereas countries like Germany, they still have a few questions. Like, for instance, what about people who right now just can't get a vaccine yet?
Because of course, we've heard all about these bottlenecks -- and actually -- with the vaccine supply here in Europe? And then what about people who
don't want to get a vaccine? That's also something that the member states want to discuss as well, so that's coming up.
But right now, the target time to have it ready is the summer holidays, of course. Very important news for a lot of folks here on the continent --
Julia.
CHATTERLEY: Yes, absolutely, and then to your exact point, this is not trying to create a two-tier system of people with those who've had vaccines
and those that haven't because it's a comprehensive COVID certificate snapshot of where you are right now be it antibodies, testing or a vaccine.
Fred Pleitgen, thank you so much for that. And exactly, as Fred said, for more on the travel pass and what it means for countries reliant on tourism,
stay with FIRST MOVE because we'll be speaking to the Prime Minister of Greece later this hour. He was the one that pushed way back in January to
get this set up.
All right now to South Korea and U.S. Secretary of State Antony Blinken voicing strong criticism of China.
(BEGIN VIDEO CLIP)
ANTONY BLINKEN, U.S. SECRETARY OF STATE: China is using force and aggression to systematically erode autonomy in Hong Kong, undercut
democracy in Taiwan, abuse human rights in Xinjiang and Tibet, and assert maritime claims in the South China Sea that violate international law.
(END VIDEO CLIP)
[09:10:00]
CHATTERLEY: Ivan Watson joins us now live from Hong Kong. Ivan, setting a very stern and strong tone there, it seems with regard to China and of
course sanctioning 24 Chinese and Hong Kong officials for their behavior as relates to Hong Kong as they do it.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's right, and it's setting up this strange situation where we could have tit for tat
punishments coming between Beijing and Washington, as diplomats, including Antony Blinken from both countries are set to meet in just a day in Alaska,
with this kind of ratcheting up of tensions here around Hong Kong.
Now that Beijing, quite understandably, naturally rejecting the sanctions against these 24 individuals saying this is a grave mistake. This is an
example of the U.S. interfering in Hong Kong and China's internal affairs and vowing countermeasures, which we have not quite seen yet, so expect
that sometime in the coming days.
There are a whole host of areas that you heard Blinken mention that there are disagreements between Washington and Beijing. Despite that, you have
the Chinese Foreign Ministry saying that they hope that both sides can come meet each other halfway at this upcoming meeting in Alaska and try to put
U.S. and Chinese relations on a better track after the real disruption of ties in the final months of the Trump administration.
CHATTERLEY: You have maintained diplomatic relations here, despite their comments and the reactions. What specifically did the Foreign Minister have
to say, Ivan?
WATSON: Right. Well, there's actually a whole host of criticisms coming from Beijing towards the U.S. in response to these themes that that Antony
Blinken and the U.S. Secretary of Defense who has been traveling with him had been making kind of accusations against China.
And some of the harshest criticism we've heard coming from the Chinese Foreign Ministry have been directed against Japan because on the first stop
of his trip, Blinken issued a joint statement with his Japanese counterpart in Tokyo, and it really had a lot of criticism of China's human rights
record, about aggressive moves towards Taiwan, claims towards the South China Sea and contested islands in in the East Sea.
The Chinese Foreign Ministry actually called Japan and said it was behaving like a vassal state to the U.S. Take a listen to what else he had to say.
(BEGIN VIDEO CLIP)
ZHAO LIJIAN, CHINESE FOREIGN MINISTRY SPOKESMAN (through translator): We strongly urge the U.S. and Japan to immediately stop interfering in China's
internal affairs, immediately stop forming small cliques targeting China, and immediately stop harming the peace and stability of the region.
China will implement all necessary measures to resolutely safeguard its interests of sovereignty, security and development.
(END VIDEO CLIP)
WATSON: Biden is following through on his threat, Julia, that he was going to assemble U.S. allies to challenge China. He has done that with Japan, in
South Korea now and last week with a virtual summit of the heads of state of India, Australia and Japan.
So Beijing has a new, much more sophisticated challenge potentially to deal with.
CHATTERLEY: And reacting to it clearly. Ivan, great point. Thank you so much for joining us on the show today, as always with your context.
All right, let me bring you up to speed now with some of the other stories that making headlines around the world.
America is in mourning again after eight people were killed in shootings at three massage parlors in the metro area of Atlanta, Georgia on Tuesday. A
21-year-old man has been arrested. Police say he is believed to be responsible for all three attacks. They're still trying to establish a
motive.
"The Atlanta Journal Constitution" reports that six of the eight victims were Asian-American.
U.S. Intelligence believes that North Korea could be preparing its first weapons test since President Joe Biden took office. Regional experts say
some kind of provocation from Pyongyang would come as no surprise, but American officials are on alert with top members of the Biden
administration currently holding meetings in the region.
All right, still to come on FIRST MOVE, the E.U. plans to introduce COVID passports. I speak to the Greek Prime Minister about whether it's enough to
save the crucial summer season.
And what does the industry make of the travel pass idea? The Expedia CEO on whether it's good for business and why he is already confident about a post
pandemic travel boom. That's next. Stay with us.
(COMMERCIAL BREAK)
[09:17:36]
CHATTERLEY: Welcome back to FIRST MOVE live from New York where tech stocks are on track to open sharply lower this morning. No mystery why. It
all comes back perhaps to the bond market. Ten-year yields pushing higher once again today ahead of the latest Fed policy statement, and Jay Powell's
news conference.
Powell insisting in recent weeks that while the Fed is watching, it's not concerned by rising yields, seeing it as a positive reaction to higher
growth expectations.
Market needs to know though, if he is still Patient Powell and whether Fed officials see rates moving higher sooner than they'd initially expected.
Joining us now, Kate Moore, the Head of Thematic Strategy for the BlackRock Global Allocation team. Kate, fantastic to have you on the show.
Let's start with Jerome Powell and the Federal Reserve.
KATE MOORE, HEAD OF THEMATIC STRATEGY, BLACKROCK GLOBAL ALLOCATION TEAM: Yes. Great to be here.
CHATTERLEY: Great to have you. Do investors have anything to fear from the Fed in 2021, in your mind?
MOORE: I don't think there's anything to fear. I mean, Julia, we're in a great environment right now. It's so wonderful to be able to even say that
after 12 months of real significant challenge, where we're seeing the economy restart, corporate earnings continue to improve, even without like
a full restart in the economy.
And then of course, these waves of fiscal stimulus that are supporting consumers of all income cohorts, and I think really buoying confidence.
So we have a lot of tailwinds, I think to markets even as the Fed thinks about readjusting policy in a more normal environment towards the back half
of this year.
CHATTERLEY: So you're saying that stock markets can and will cope even if bond market yields push higher?
MOORE: Yes, I believe so. You know, one of the things that I watch a lot, Julia is how analysts are upgrading their expectations, both for earnings
growth and as well as for sales growth. And in both cases, we're seeing significant upward revisions across all sectors, not just in the U.S., but
globally.
I mean, this is a real sign that not just are we recovering from last year, but it's a recognition on the part of the analysts that companies were
incredibly resilient in some very challenging economic environment, and we've seen companies really think hard and long about how they control
their costs, what they do in terms of hiring and capital expenditure, and you know, really modify their business models to be resilient through all
parts of the business cycle.
I mean, there's a lot of fundamental things to be excited about at this point in time.
[09:20:03]
CHATTERLEY: I'm buying it. You used a crucial word there as well in the beginning and it wasn't recovery, it was restart. Just explain the
difference and what that means for your portfolio because we are seeing people getting back into cyclical stocks, like financials and energy. How
far are you pushing that cyclical trade?
MOORE: Yes, Julia, this is a different environment and a different cycle than we've ever had before, right? Because this was caused by a significant
health crisis, and you know, stop in overall activity as the world grappled with that.
I think when we talk about restart, we're really talking about a return to normal activity, not a repair that needs to be made, let's say to the
banking system or to consumer balance sheets. And so as a result, once people feel comfortable gathering in-person and returning to normal
activity, we're going to see a much sharper return to the pre-pandemic activity that we would have seen in a return to kind of a pre-recessionary
activity, but it was a traditional balance sheet or liquidity issue.
And, you know, we have like huge pent up demand, I think, across all consumer segments for consumption of services, and even the consumption of
goods, for businesses in terms of returning back to normal activity, and all of these engines are going to be firing concurrently over coming
quarters. So, I think there's a lot of reason to be kind of excited.
The one thing I would also note is that, you know, we are in a policy environment, both on the fiscal and monetary side that's incredibly
accommodative, just as this demand is picking up.
So we're going to see, I think, overshoot consensus growth expectations over coming quarters.
CHATTERLEY: And this is a crucial part of this, and we're sort of seeing that indigestion going on in the tech sector, and I mentioned it in the
introduction to you. Should this restart really be a problem for the tech sector and some of the sort of strongest pandemic winners?
Because yes, our behavior shifted, but we don't really know to what extent that shift is a permanent shift or whether we will retrace. Surely, it
shouldn't be such a huge problem for the tech sector. Is now the time to be to be taking profits?
MOORE: Yes, I mean, Julia, this is an important point. I think what we've seen over the last weeks, and indeed for a good portion of 2021 was a
rotation in terms of positioning.
You know, many folks and investors across all stripes and institutional and individual investors, you had not been aggressively owning cyclical parts
of the market.
I'm thinking about industrials and energy and banks, but as rates rose, you know, particularly over the last couple of weeks, there was a significant
rotation in people's portfolios. That doesn't mean the strong sustained earnings growth in the tech sector is going away. It was, you know, really
just sort of a resettling of positions.
I am really constructive on technology investing both within that sector and technology enabled companies across a variety of sectors, not just for
2021 and into 2022. I think many of these companies have their business models, and are accessing the types of demand and activity in a sustainable
way that will lead them to be the leaders for years to come.
So I'm looking at some of these opportunities of weakness, and have been adding a little bit, and nibbling a little bit more on my portfolio to my
high conviction names.
CHATTERLEY: What about things like software, which we've seen a dramatic acceleration? And I guess the other one, and we don't talk about this
enough on this show, and I will going forward is security -- cybersecurity in light of particularly the SolarWinds hack? I think it's something that
has been growing quite dramatically for the last 12 months, and I've been seeing indications that it will continue to accelerate.
How do you feel about this sector, specifically, Kate?
MOORE: Yes, security software is one of my highest conviction medium term calls. I've owned a lot of these stocks since the beginning of 2020, or I
would even say, towards the end of 2019, I've put this trade on.
And, you know, at first, it was just an increase spend as companies thought about security software and the potential for cyberattacks. And then, of
course, remote working.
BlackRock had, you know, 17,000 employees all working remotely throughout the course of 2020 and investment in software and systems that make that
work secure were incredibly important.
And then, of course, as Julia, you just mentioned, SolarWinds, we see a big attack on a number of different important government and non-governmental
institutions. And what we've heard from all Chief Investment Officers and Chief Technology Officers is that software spending in security is their
number one priority. So I see this as a very important secular theme.
And even when we see some weakness, as we were mentioning, as the sort of this rotation and indigestion from the rate side, I see this as an
opportunity to add to those names.
CHATTERLEY: Yes. Fits. Kate, brilliant to get your insights as always. Thank you so much for joining us on the show today.
Kate Moore, Head of Thematic Strategy for the BlackRock Global Allocation Team. Great to have you with us.
All right, stay with FIRST MOVE because we've got the Greek Prime Minister with us, next.
(COMMERCIAL BREAK)
[09:28:14]
CHATTERLEY: The E.U. announcing plans for a COVID passport or certification that will allow travel within the bloc. This certificate
would exempt its holders from restrictions such as quarantine when traveling and could be a lifeline for countries that are banking on tourism
coming back this summer.
One of those nations is Greece. One-fifth of the country's GDP comes from tourism.
And joining us now is Kyriakos Mitsotakis. He is the Prime Minister of Greece.
Prime Minister, wonderful to have you on the show. Thank you so much for joining us. You, if I remember correctly, was the first E.U. leader way
back in January to call for this kind of certification and if I remember correctly, too, you received some pushback from some of the largest nations
in the E.U. How do you feel about this proposal today?
KYRIAKOS MITSOTAKIS, GREEK PRIME MINISTER: That is correct, Julia, I was the first to raise the issue of a digital green certificate back in the
middle of January, when it was absolutely clear to me that at some point, you know come the spring or summer, Europeans will feel the real need to
travel and we need to make it easy for them to travel as possible.
At the time, there was some pushback indeed, but I'm very happy that today, the Commission officially adopted this idea and has put forward its
proposal for a digital green certificate, which will significantly facilitate travel, something which of course is very important for a
country such as Greece, which is very dependent on tourism.
What the digital green certificate is, is very simple. It's a simple digital proof either that you have been vaccinated or that you have a
negative test result or that you have recovered from a COVID.
With such a certificate, you will be allowed to enter a country such as Greece without any quarantines and without any additional testing at the
borders.
So as more people get vaccinated, I expect this digital green passport to become standard in travel. And I do expect that it will allow us to safely
open for the summer holidays.
We intend to start our summer season officially around May 15th, and as we expect, many more people within the E.U. to get vaccinated within the
second quarter. I also expect the travel during the summer to pick up significantly.
So yes, I'm very satisfied personally, that this proposal has been adopted by the Commission and has been in principle accepted by all the large E.U.
member states.
[09:30:39]
CHATTERLEY: How significantly, a bigger pie, you're expecting? And how will this facilitate? Because I know you've already had to take steps on
your own. You've signed an agreement with Israel already, one of the leaders of pushing out vaccines. You're also working on agreements, I
believe, with the U.K. and with Serbia who are also pushing ahead with vaccines.
These are fantastic steps, but should you really be having to do this alone, Prime Minister?
MITSOTAKIS: Most of our tourism comes within the E.U., so it is very, very important to ensure that for travelers within the E.U. that they will be
able to travel as easily as possible and without any additional restrictions.
Now, when it comes to travel from outside the E.U., of course, we're open to put in place a very, very similar arrangement. We are indeed, as you
pointed out, starting with Israel, because Israel has vaccinated more than 50 percent of its population and Greece is a very popular destination for
Israeli tourists.
So we essentially intend to replicate this arrangement with other countries that are not members of the E.U. and I expect this, Julia, be the standard
sort of tool that we will use in order to facilitate travel.
As you pointed out, we are very dependent on tourism. We did manage last year to open up safely. We received a fraction of the tourists that we
would normally receive, and we do expect a much better tourism season this year.
Apart from the digital green certificate, we will do everything within our power to make sure that visitors come to Greece in the most safe way. So we
have in place all the necessary protocols to ensure that they will get the full Greek experience without any real compromises, but always putting
their safety as our absolute priority.
If we did it last year, we will certainly do it much better this year now that we have all these additional tools at our disposal.
CHATTERLEY: And I know your own vaccination certification procedure as well is all digitized as well, because I've seen evidence of it.
Can you address one of the criticisms and the concerns, I think, for your own people, which is that as a result of the tourism that you saw last
year, you saw a second wave of infections and something that you'd managed to handle before that incredibly well. What's the risk that you see a
further surge in in COVID cases, even with the precautions that you're putting in place?
MITSOTAKIS: Look, all European countries have seen a second or third, some European countries are already in their fourth wave.
We are seeing a surge right now as we speak, which is the equivalent of the third wave that many European countries saw a couple of months ago.
But Julia, as more people get vaccinated, I expect that we will be able to cope with COVID much more effectively. We are proceeding I would almost say
ahead of schedule. We're one of the best countries within the E.U. when it comes to our vaccination pace.
And we know that once we reach the milestone, which we expect to reach by the end of April, which is that we will have vaccinated everyone above 60
with at least one shot and also everyone with serious underlying conditions. Once we reach that point, we take a lot of pressure from our
hospitals. So that is the point when we can anticipate a return to normal activities.
It's essentially what is happening in Israel today. COVID is still present, people still do get sick, but their healthcare system is able to cope with
it without any significant difficulty.
So this is where I think we will be in a couple of months, and this is, I think, how we will be able to deal with COVID at least for the next six to
12 months.
CHATTERLEY: They also managed to ensure supplies, which is something that the E.U. has clearly struggled with, even as you're ready and set up when
those supplies come in.
You've been using Pfizer, I believe and AstraZeneca's vaccine. And in light of some of the recent concerns, I saw that Greece didn't suspend the use of
AstraZeneca amid sort of confusing responses, I think from various different nations including the regulators in Europe. What's your view on
the handling of this?
MITSOTAKIS: Well, first of all, let me point out of course, Europe is probably a couple of months behind the U.S. and the U.K. in terms of its
vaccination pace. There were clear benefits in terms of purchasing vaccines at the European level, especially for medium sized countries such as
Greece.
But of course there were also delays that were, I think, openly acknowledged by the Commission.
[09:35:13]
MITSOTAKIS: Allow me to point out that at the level of the regulator, the European regulator, there is no confusion whatsoever. The E.M.A. has been
very, very clear in telling us that the benefits of the AstraZeneca vaccine clearly outweigh the potential costs, and that is why Greece was one of the
few countries that went against the trend, and we are currently continuing with our AstraZeneca vaccination program.
And we expect, you know, a decision by the E.M.A. to be taken tomorrow. If the E.M.A. tells us that we need to suspend the program, of course, we will
suspend it immediately. But frankly, Julia, I don't understand to the extent that all European countries have trusted the E.M.A. so far with
authorizing the AstraZeneca vaccine.
I don't understand why decisions have to be taken at the level of individual member states. Of course, every country is responsible for
dealing with this issue, in the way it sees most suitable, but we have aligned ourselves fully with E.M.A. recommendations, and until further
notice, we will continue with our AstraZeneca vaccination program.
CHATTERLEY: Forgive me and that was where I was meaning to talk about the confusion between the response from E.U. states, the various responses from
the E.U. states and obviously differing in that regard.
Prime Minister, I want to talk to you about Greece, because what I hear from friends and I've spent many periods of time in Greece myself is that,
you know, people are tired of a lockdown. They're tired of handling this virus and they look at the ICU capacity, the intensive care, and they're
wondering whether the strategy that you have right now is correct.
Can you just respond to the strategy that you have right now to contain the virus and the concern perhaps that going forward, the economy is going to
be a challenge, once again, given the struggles that Greece has faced in the past?
MITSOTAKIS: Julia, we need to be honest. Everyone is tired in terms of dealing with COVID, and what you see as COVID fatigue across Europe has
very -- has you know, common characteristics. We have essentially restricted economic activity for the past four to five weeks because we
anticipated, you know, a third wave, which is currently happening in Greece.
Had we not taken these measures, things would have been significantly worse. Of course, our hospital system is under stress, but we are still
able to deal with the problem. And I'm absolutely certain that had we not taken the steps that we did take a month ago, we would have faced a much
more severe crisis now.
And I do expect this wave to plateau within the next week or 10 days and then start coming down. You know, there's always a similar pattern. At the
same time, we need to be smart in terms of letting people become active again without compromising our main strategy in terms of containing the
virus.
So that's exactly the balance that we need to strike. How do we let people some degrees of freedom without compromising our overall strategy? This is
exactly what we're looking at and we expect to make announcements within the next 48 hours.
You know, at the same time, what I do need to point out is that we have significantly strengthened our national healthcare system. We've more than
doubled our ICU beds over the past year, which was a significant achievement for Greece.
And if you look at the overall statistics, the way we've dealt with the pandemic since the very beginning, Greece still ranks as one of the best
European countries in terms of deaths per million, which, unfortunately, is the most gruesome, that's the most indicative statistic in terms of how
well a country has dealt with a pandemic.
So we will deal with this third wave, I have no doubt about that. And as vaccinations will increase, we will be able to start resuming normal
economic activity and we will be open for the summer for people to come to Greece safely and enjoy the unique Greek summer in Greece as they have done
or as they expect to be doing especially in these times where people will feel the real need to travel and we want to make sure that if they choose
to travel, they come to Greece and Greece is our number one destination.
CHATTERLEY: Oh my goodness. Don't you worry about that. I was Googling this morning while I was preparing for the interview and just a dreaming,
quite frankly.
Very quickly, you are finding the balance I think in one specific place, which is the financial markets. I read this morning that you're set to
launch a 30-year bond issue where, given past history, this would be the first time I believe since 2008.
That is a marker of regaining financial market confidence and I have about a minute left to talk to you Prime Minister, but I did want to mention
this. Your comments on that. This is vitally important for the country, too.
[09:40:02]
MITSOTAKIS: Well, well thank you, Julia. We had spoken, you know, a couple of years ago. It would have been inconceivable for Greece to actually
launch a 30-year bond, but we did it this year. It was more than 10 times oversubscribed. I think we'll be raising around two and a half billion
euros with what we consider to be an attractive interest rate for a 30-year bond.
And I think it is a proof that Greece is back in the sense that we've left the financial crisis behind us for good. The future of the country is
extremely promising. I expect rapid growth once the pandemic is over.
A lot of investors are looking at Greece as an interesting -- very interesting and very appealing investment opportunity. And I think this 30-
year bond is just one additional step we take in the direction of leaving, you know, our legacy and our past of the past decade, behind us once and
for good.
CHATTERLEY: And fingers crossed for a strong and safe summer season, too.
Kyriakos Mitsotakis, the Prime Minister of Greece. Sir, thank you for joining us on the show today.
All right, coming up after the break, renewal of the world is coming says the CEO of Expedia who is predicting a roaring post pandemic travel boom
and he is next.
(COMMERCIAL BREAK)
CHATTERLEY: A reminder once again of today's big news: Europe's plans to boost travel by creating a kind of digital health credential certificate.
It's the topic of intense debate across the travel industry and one of the leading names in travel and one of the very first to enter the digital
space is Expedia.
It was once part of Microsoft way back in 1996 in dial up times. Well, today, it has over 20 brands encompassing hotels, vacation homes, car
rentals and cruises. It predicts vacation deprivation will soon be replaced by a travel boom.
Peter Kern is Expedia Group's CEO and he joins us now. We definitely have vacation deprivation, Peter. Great to have you on the show.
PETER KERN, CEO, EXPEDIA GROUP: Thanks so much for having me.
CHATTERLEY: Clearly, the international market and city breaks are a huge part of your business. What do you make of Europe's plans for this
certificate?
[09:45:02]
KERN: Yes, well, we'd certainly love to see the E.U. agree on a plan for that. I think pent up demand for travel obviously, is very high and
increasingly, we hope that between now and the summer, and we'll see more of the E.U. be vaccinated and tested. And I think people will be dying to
get out and your last guest, I'm sure, people would love to get to Greece as you said you would.
And, so you know, if the E.U. can come up with a plan that works for everybody, I think it would be a great relief for customers and travelers.
They would love to get out and go some places.
CHATTERLEY: I know, I'm allowed to go. I just can't get back into the country, which is the slight problem here.
To what extent is vaccine optimism driving the activity that you're seeing, Peter? Just give us a sense of what you're seeing. Obviously, some part of
this is the United States, but you are such a huge global business. Give us a sense of what you're seeing.
KERN: Yes, it's been very predictable. I think as people get vaccines or expect to get vaccines, they start thinking about their future travel very
quickly. And to the extent they have strong belief in it, they will book travel.
We are seeing already in many parts of the U.S. that the summer is all booked up practically in popular destinations, and that is clearly a
reflection of people's either -- people having gotten vaccines or people planning to get vaccines and I think the E.U. will be -- Europe will be
very similar to that.
The timeline hasn't quite been as fast and people's expectations may be dashed by certain news, et cetera, so it moves around, depending on
people's beliefs.
But as soon as they believe and are confident that they will have a vaccine, we will see travel bookings pick up and even as you mentioned, you
have trouble getting back into the country. When the U.K. brought out plans for their path with vaccines and with opening up, we saw bookings rise
immediately.
So you see it as soon as people have confidence that they can go someplace.
CHATTERLEY: That goes to your point about pent up demand being there. The moment the flexibility arrives, people will make use of it.
You also wrote an op-ed for "Fortune" Magazine sort of debunking some of the myths that city living is over and that people won't return to the
cities and things have now changed.
Just expand on your views on this. You believe history tells us that people will come back.
KERN: Yes, I think, you know, a pandemic like this seems to have pushed everybody to make a lot of predictions about the future being different
than we've ever known it, and I think, you know, the world has been through a lot of disasters, a lot of wars, a variety of things and cities.
And, you know, Rome has been through a couple thousand years of it and Rome is not going anywhere. And I think we'll all be going back to our favorite
city destinations. Lakes and mountains and beaches are great.
But there's a reason so many people went to Paris and Rome and Shanghai and New York and London, and I don't see that ending anytime soon.
So, I don't know about you, I'm sure we'd all love a beach vacation. But I'd love to get back to all of those places. And, I think the world will
come back.
So I think people have just been too keen to say the pandemic has changed everything and I think the pandemic has changed many things, but not the
desire to travel to great destinations around the globe.
CHATTERLEY: I can tell you, I've never been so excited at the prospect of getting on a plane in my life, quite frankly, never mind seeing the people
that I love.
KERN: Exactly.
CHATTERLEY: You know, it's challenging for a travel business, in a pandemic to see growth in any part of your business. But I saw some recent
comments that you made about Vrbo, which is the Airbnb competitor.
So people going and renting a home somewhere in an enclosed space effectively where they're protected. Do you think that strength that you're
seeing in that part of the business continues beyond the pandemic? Because it kind of ties to what you were saying about recovery and a return to
normality? Is that part of the business remain -- will remain key, do you think?
KERN: Yes, well, it's an important part of our business and it's been a great part of our business during COVID, as you say. People feel -- have
felt more comfortable renting a whole home for their family or even for their part of whatever they were in and being safe that way.
What it's done is given a lot more people the chance to try renting homes as a vacation alternative and I think they've had great experiences in
seeing what a great time they can have doing that.
So we believe that it is a step function in terms of people's experience with it and therefore, they will consider it more frequently as an option
for their travel.
But rest assured people will be going back to hotels and resorts I have zero doubt about that, and I think it will just, you know, between Airbnb
and Vrbo, we were seeing a growth in alternative accommodations around the world, vacation homes, et cetera, and I think this has just accelerated it
and put it on the radar for many more people than might not have otherwise thought about it.
CHATTERLEY: Yes, I definitely want a pool and someone else to save me from my cooking, quite frankly.
KERN: Yes, and someone to bring you a drink, the so important drinks.
[09:50:06]
CHATTERLEY: Absolutely. Peter Kern, the CEO of Expedia Group. Thank you for joining us on the show and come back soon, please, much to discuss as
always. Thank you.
All right, coming up, an electrifying announcement. How Volkswagen is moving its EV strategy into high gear? Our conversation with the CEO, next.
(COMMERCIAL BREAK)
CHATTERLEY: Take a look at this. Volkswagen start gaining around 20 percent since it has unveiled a plan to spend $55 billion on electric
vehicles, software development and hybrid power all by 2025. Projects include six factories -- giga factories in Europe and a massive expansion
of its charging network globally.
Volkswagen plans to have more than 38,000 charging points globally by 2025 that CEO, Herbert Diess told me, will be available for other EVs, too.
I started by asking him about the positive reaction from investors. Listen in.
(BEGIN VIDEOTAPE)
HERBERT DIESS, CEO AND CHAIRMAN, VOLKSWAGEN GROUP: I think it's a comprehensive plan where we show that we are strong in EVs and also the
first market reaction to our new EV product is very positive. We have good order bank.
So this is the point where we can demonstrate that our strategy is working and that seems to be that capital markets also share that view.
CHATTERLEY: There's clearly a lot of cheering going on today and investors like the plan that they're seeing, but what do you think's the biggest risk
to the rollout of this plan for Volkswagen?
DIESS: The biggest challenge for us for sure is really to get into software, deep into software, understanding the car as a device, a computer
device, which has to be updated by the week or even by the day. Through that device, you will get direct contact to the customer, which will be a
device which will be highly safety critical because at some stage it will drive autonomously.
Now and you will be or the company will be the driver of this device.
CHATTERLEY: Yes, and hiring the tech engineers.
DIESS: Attracting the right people is probably even not the biggest constraint. The biggest constraint is really integrating 15 to 20 different
cultures, companies, integrating new people from all over the world, giving an identity and then focusing on the delivery days and the launch dates.
CHATTERLEY: But you're smiling as you say it, so I know you're excited.
Final question, UBS put out a report saying actually next year, you could be matching the sales for Tesla. By 2025, you could be outstripping them by
several hundred thousand cars. Is today's announcement the beginning of Volkswagen disrupting the disrupter? And I mean disrupting Tesla.
DIESS: It's a big but and you know Tesla is not only about electric vehicles.
[09:55:08]
CHATTERLEY: No.
DIESS: Tesla is also very strong in software. They really run the car as a device. They are making good progress on the autonomous thing.
But, yes, we are probably now -- we are -- we are going to challenge Tesla.
(END VIDEOTAPE)
CHATTERLEY: That was a nice conversation.
All right, let's take a look at the market. Slow luck of the Irish for tech stocks this St. Patrick's Day. The NASDAQ opening lower by one percent as
you can see. This, as U.S. 10-year bond yields hit 13-month highs ahead of today's Federal Reserve's statement and of course, the presser, too. All
eyes on that.
Cyclicals like financials and energy as Kate Moore was discussing seeing early session gains. These are the stocks that will do well as economies
strengthen.
And that's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages later. Search for
@jchatterleyCNN.
In the meantime, stay safe. We'll see you tomorrow and "Connect the World" with Becky Anderson is next.
(COMMERCIAL BREAK)
[10:00:00]
END
