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First Move with Julia Chatterley
Russia's Gazprom to Reduce Gas Deliveries to Europe; New Hearing for WNBA Star Brittney Griner; U.N.: 50 Million People Inch Closer to Famine; Reports: Coinbase Facing Probe over Crypto Listings; Aschbacher: ExoMars was a Huge Investment by ESA; Tackling Corruption is Key Issue of Presidential Campaign. Aired 9-10a ET
Aired July 26, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome to "First Move", this Tuesday we're following two big drivers of global economic growth
energy and the consumer and I have to say I wish it were better news.
Take a listen to this Europe's energy ministers meeting in Brussels defective forced to agree an emergency gas conservation deal today just
hours after Russia announced gas flows through the simply just reopened Nord Stream I Pipeline will be cut once more that's going to take it from
40 percent capacity, down to just 20 percent and really fulfilling the energy sectors' worst fears.
Plus U.S. consumers running out of a different kind of gas the nation's biggest retailer in the United States Walmart cut its full year guidance
saying households are in a weakened state and a cutting back on non- essential spending.
And you can add to those consumer products giant Unilever saying it's been forced to hike prices by 11 percent due to what it calls an unprecedented
cost landscape. And other earnings news too, General Motors' shares in reverse after reporting a 40 percent drop in second quarter profits and
missing expectations due to yes you probably guessed it supply chain issues and weakness in their business in China.
Swiss banking giant meanwhile, UBS disappointing with their results too calling the latest quarter, one of the most challenging of the past 10
years the combination of all of this cautioned, as you would imagine, on stock market trading around the world.
Cautious central bankers too the big question is whether recession fears will demand a policy pivot from the likes of the Federal Reserve and a
change in the ECB's rate hike policy trajectory. The problem is of course, they have to raise rates to fight inflation. And that's the conundrum 10
years ago today.
The then Head of the European Central Bank Mario Draghi made a promise, if you remember it was to do whatever it takes to hold the EU together. We are
a decade to the day later new crisis, similar questions. Can the current crop of EU leaders hold together to combat the challenges precipitated by
the Ukraine war?
First up energy, EU countries have agreed a 15 percent voluntary reduction in the consumption of natural gas this winter. It comes as Ukrainian
President Volodymyr Zelenskyy warns that Vladimir Putin is using gas supplies as a weapon.
(BEGIN VIDEO CLIP)
VOLODYMYR ZELENSKYY, PRESIDENT OF UKRAINE: Even despite the concession regarding the Nord Stream turbine, Russia is not going to resume gas
supplies to European countries as it is contractually obligated to do. All this is done by Russia deliberately to make it as difficult as possible for
Europeans to prepare for winter. This is an overt gas war that Russia is waging against the United Europe. This is exactly how it should be
perceived.
(END VIDEO CLIP)
CHATTERLEY: Clare Sebastian joins us now. A gas war within a broader energy war Clare, as I mentioned, EU leaders effectively forced to agree a
conservation deal today, because they've heard now there's going to be far more capacity cuts for the Nord Stream I Pipeline, and it limits their
ability to build capacity ahead of the winter, which is the crucial challenge.
CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, the urgency of this Julia really stepped up in the past 24 hours when Russia announced that it was going to
cut the capacity of the Nord Stream I Pipeline from where it was at about 40 percent of its full potential down to about 20 percent. That will take
effect Wednesday morning, like forced to agree I think is the right phrase here.
We've seen this before in the case of the oil embargo. But in that case, it took two months, almost two months to push that deal through with
exceptions. In this case, they've done it in five days; it will be a voluntary cut of 15 percent in terms of gas demand between the beginning of
August and March of 2023 all countries have agreed to that.
Now if the EU triggers what's called a union alert in the case of a risk of severe shortages of gas in the winter, then there will be exceptions, not
all members will be subject to mandatory cuts of 15 percent that there are things like the Baltic States where the electricity grid isn't connected to
the broader EU grid Ireland, which is not connected to the broader EU pipeline system.
They will be exempted. They'll also be derogations where people can adapt the targets for example, if gas is a critical input for some industries, so
there suddenly are exceptions. It is diluted to some extent but they did get it through.
However, there are still major concerns that the variable here is the weather this winter; will it be a really cold winter and what impacts will
that have on their ability to build up their storage?
[09:05:00]
CHATTERLEY: And the summer of course and the use of air conditioning systems, which are burning through electricity use as well. But the point
you're making about the voluntary adherence to these capacity cuts is vitally important to just a balance.
Gazprom, of course, is saying that the latest crusty cuts are in order to repair a turbine, Western officials, and German economy minister saying
this is a quite fast. And obviously we heard from President Zelenskyy they're too where are they? Can you give us any sense on where they are on
building up capacity ahead of the winter, because this is going to precipitate whether or not cuts shortages are required?
SEBASTIAN: Yes, so the EU energy Commissioner today Kadri Simpson said that they're above 66 percent. When it comes to the gas storage facilities in
Europe, the target is 80 percent by November 1, so they're not too far off, but still some way to go.
Now with Nord Stream at 20 percent capacity, this does put them in a slightly more critical situation, I spoke to Wood Mackenzie and energy
consultancy, they say that at 20 percent, there is still a chance that Europe can build up its storage to about 75 to 80 percent going into the
winter, and that should in theory, leave them with about 20 percent left come March of 2023.
But of course, again, I'll say it again; it depends on how cold the winter is. And the other thing to bear in mind is if we ended up in a very tight
situation this winter that could feed into what happens next winter as well. So there are long term consequences here to consider.
CHATTERLEY: Yes, and consumers will be protected before industry I'm assuming to so it could have huge consequences for economic growth. Clare
Sebastian, thank you so much for that. Now, more Russia missile strikes on port infrastructure in Ukraine, this time in the Southern City of Mykolaiv.
And Odessa, once again under attack for the second time since Saturday but despite the new attacks, Turkey says the Joint Coordination Center for
Ukrainian grain exports will begin its work tomorrow.
Nic Robertson joins us now from Kyiv not only that there is the suggestion that perhaps caravans of ships carrying green could be even black sea
ports, I believe as early as tomorrow, what do we know?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, the Joint Coordination Center is going to oversee all of this. So it's sort of the
first step to making sure that the rest of the Union agreement can work. So we know from the Russia officials that they've sent their team to Istanbul
to be part of that center. We know from the Ukrainian officials we spoke to yesterday, they'd sent their team to be part of the center yesterday.
So once that is up and running, it seems that the sort of the oversight infrastructure to make sure that ships stick to the channels that they're
supposed to go on that they're inspections of those ships, and their cargoes can go ahead, that is in place.
It may be a little bit ambitious to think that ships can get away as early as tomorrow, because it seems that the sort of the Coordination Center is
really only going to be getting up and running tomorrow. That's the official line from the Turkish authorities.
But at the port level, the port that was struck today is that the sort of the port near Odessa that was struck is that - is not a sort of part of the
port infrastructure of Odessa that's used for shipping grain, it's more of a sort of a seaside town, just along the coast. But the concern there, of
course, is that these the missile strikes came in very close to the area where these ships would be transiting through along the Ukrainian
coastline, but out towards Turkey and out towards global markets.
So it really does, although not directly targeting a desert again, throw into question the safety of the ships carrying the grain McCaleb the
targeting of the port, they're much further north from Odessa and not one of the ports that is going to be used to export grain more of a sort of
shipbuilding port.
And that the strikes there probably more to do with Russia's potential advance on the southern front around there that seems to be what the
increase of strikes there but again, it all calls into question, just how safely this grain deal can be executed.
CHATTERLEY: Yes, it's deeply unnerving and it undermines confidence to which is perhaps the point. Nic, great to have you with us as always thank
you Nic Robertson there!
To the United States now and Walmart shares are set to tumble in early trade as it shocked profit warning ads to fears of a recession in the
United States. Walmart saying inflation where it can says customers are stretched and dialing back on all the essentials.
Rahel Solomon joins us now. Rahel, the two things in this for me, Walmart, of course, the biggest retailer in the United States was already saying
back in May that they had too much product. Now that cutting prices, but it's also the consumer behavior that's adapting to the point that we made
there, which is they're shifting to cheaper products and focusing on the essentials.
RAHEL SOLOMON, CNN CORRESPONDENT: Yes, and the problem is because consumers are spending more on fuel and on food. They're spending less on higher
margin categories like retail, right?
[09:10:00]
SOLOMON: So Walmart putting out this profit warning saying that look, it expects operating income to fall 13 to 14 percent in Q2 11 to 13 percent
for the fiscal full year profits also to fall 8 to 9 percent in Q2 and 11 to 13 percent in full year.
Look, the CEO Doug McMillon, saying that food and fuel inflation, these two things that we talk about a lot on the show Julia, have really shifted how
people are spending, right, so you are seeing more people spend on essentials on things that they absolutely need, which is a lower margin
business for Walmart.
And that leaves less discretionary income for categories, like retail, which is a higher margin business. But when we saw analysts also saying
it's not just those factors, it's also higher costs for Walmart. Neil Saunders pointing out look, all of this is allied with a higher cost of
doing business with transportation costs, labor costs and a whole host.
I think we can pull it up here of other overheads shooting up over the past 12 months. Walmart has not passed these costs on in full, which has an
impact on its profitability. Of course, Walmart, its whole brand Julia, is centered on being a low cost retailer, right?
So unlike perhaps some of its competitors, like Target, it can't really fully pass on those costs while maintaining that brand of being a low cost
retailer. That said to your point, Julia, Walmart is the largest U.S. retailer.
So what happens to Walmart certainly matters. And people start to wonder, will we see the same in terms of target in terms of Costco, in terms of
Macy's, a pure play retailer, and you can see those shares are down pre market on the back of this warning.
So it is yet another warning from a retailer about excess inventory. And this is perhaps the strongest warning in terms of consumer spending because
of high inflation and categories, like essentials like fuel and food.
CHATTERLEY: There are so many brilliant points in that. And you're absolutely right. It's the transport costs. It's because they're so huge
hiring people and the force pressure there have higher wages as well. It's all combined. And it gives you a really great sense of not just the sector,
but beyond Amazon on Thursday.
SOLOMON: Yes, no, I mean, it's a great point, right? I mean, who among us, which company among us is shielded from a higher operating costs right?
Labor costs, transportation costs, hiring costs, I mean, there are still 1.9 open jobs for every one person looking and so wage pressures for
companies.
So I would argue that there is perhaps not a company out there that is shielded from this sort of larger macro environment. But to your point,
we're going to be watching very closely to hear what Amazon says, especially on the heels of this warning from Walmart.
CHATTERLEY: Yes, a shudder from Investors even today, we shall see. Rahel, thank you great job Rahel Solomon there!
OK, let me bring you up to speed with some of the other headlines around the world in Russia at the trial of U.S. basketball star Brittney Griner is
considering the medicinal use of cannabis. The two time U.S. Olympic gold medalist has been held in Russia since February, on allegations of
attempted drug smuggling.
An expert says a sample of her hash oil requires further study. And there is no global standard on what constitutes medical cannabis Fred Pleitgen,
is on the story floor is separate. The problem for Brittney here is that Russia does have a firm stance on this, another nerve racking week for her.
We've got the defense lawyers continuing to present their case, and she's going to be cross examined, I believe, by the prosecution tomorrow.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, you're absolutely right Julia; she's going to take the stand tomorrow where she's
going to testify. Her lawyers have said and she can be cross examined, as well as though they have said that it is obviously up to her whether or not
she's actually going to answer any of those questions.
But we do expect her to be in that court and to then take the stand and possibly expect to hear from her as well. So that's how that trial is
progressing. But I think you're also absolutely right to point out that right now, we're in a really, really crucial phase for the defense. It's
currently the defense that's calling the witnesses and one of the things that deep did happen today is that the defense called an expert to talk
about the medicinal use of cannabis outside of Russia.
Obviously, there's no question right now that Brittney Griner is pleading guilty said that if she did have medicinal cannabis inside those
cartridges, vaping cartridges on her as she crossed into Sheremetyevo Airport outside of Moscow.
However, she is saying and her defense is saying that this was something that essentially happened by accident that in a rush, she packed her bags
that she flew to Moscow and obviously then had those cartridges on there, which are contraband inside Russia but which are prescribed to her in the
United States because of pain.
And essentially the expert witness said today that is something that does happen outside of Russia. And also said that quite frankly some of the
analysis that was done on the cartridges, he believes that additional analysis is still required to see how much THC cannabis was actually inside
of those cartridges. So we're sort of seeing the strategy of the defense come together. On the one hand, they're saying she's pleading guilty.
That's something that should be taken into account.
[09:15:00]
PLEITGEN: She is someone who has done a lot for basketball, not just internationally, but in Russia, as well as therefore someone who is of high
character and that essentially all this was an accident that happened that she did not mean any harm that as she crossed into Russia, whether or not
that's going to lead to any leniency from the court is obviously something that remains to be seen. We do know, from past cases that a lot of people
do get convicted in Russian courts. So it certainly is an uphill battle.
But if you speak to Brittney Griner's lawyers, they do believe that they possibly do have a case for a certain amount of leniency. But tomorrow,
Julia is going to be a big, big day for Brittney Griner. Rob is going to be watching very closely how all that unfolds.
CHATTERLEY: Yes, we will. Fred, thank you Fred Pleitgen there!
Now in just a few hours, Pope Francis is set to hold a mass in Edmonton, Canada after making a historic apology to indigenous people. On Monday, the
pontiff said he was deeply sorry for decades of abuse at residential schools run by the Catholic Church. Indigenous children in them were
separated from their families and thousands of thoughts who have died either from neglect or abuse.
And just into CNN, Russia has announced it will pull out of the International Space Station after 2024 and plans to form its own orbital
space station. The United States and Russia have collaborated on the space station for more than 20 years. We'll be speaking with the head of the
European Space Agency on the future of its partnership with Russia and more later on the show. In the meantime, straight ahead, not an overnight fix a
warning from a huge humanitarian aid group about the Ukrainian grain deal. That's next, stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move", the humanitarian aid group Mercy Corps welcoming their grain export deal between Russia and Ukraine is 50
million people around the world at the threat of famine edge ever closer.
The group says the Grain Deal will help ease some of the shortages but will not end the global food crisis. Mercy Corps has more than 5400 members
operating in over 40 countries including Ukraine, Yemen and Somalia distributing emergency cash, food, water and other essential supplies. And
joining us now is the CEO of Mercy Corps Tjada D'Oyen McKenna. Tjada, great to have you on the show!
[09:20:00]
CHATTERLEY: Your bigger point here is essential and we'll talk about it. But I just want to get your sense of this shorter term grain deal to get
grain out of Ukraine. You were cautiously welcoming it on Friday, then, of course, we've had the attacks. What do you make of the situation today?
TJADA D'OYEN MCKENNA, CEO OF MERCY CORPS: You know, the attacks prove just how fragile the steel has always been, and will continue to be, even if
Russia were to behave perfectly, we're still talking about collecting agricultural goods out of an active war zone, where people have been
displaced, where they're able to plant fewer things to begin with, because of shortages, where roads and even the ocean, their minds and knees.
So there really was never a guarantee that all of this food was going to make it out or even what conditions some of it isn't as it's been sitting
in silos. But this was a welcome first step. And we'll see but we were always very cautious about it.
CHATTERLEY: Yes, I think unfortunately, many people share your skepticism. Your bigger point here is this is not going to end or even significantly
alter the trajectory of the global food crisis as it stands today. It's far bigger than the 20 million tons that the international communities are
trying to extract from Ukraine.
And you recently spoke to U.S. Congress and I looked at your speech. And one of the lines that stood out to me immediately was food systems in many
of the countries in which you're working on are on the verge of collapse? Can you just explain from your experience of the teams that you have
working all around the world, what that looks like?
MCKENNA: So prior to the invasion, in Ukraine, we were already founding the alarms and mobilizing against a huge famine in the Horn of Africa right
now, and Somalia and Ethiopia in parts of Kenya, where they've had about four seasons of drought.
And this is all coming on the heels of a world that was already on its knees with COVID, right? So you were already working with populations that
had been suffering from supply shortages, just this the same ones that we've been struggling with, that had some employment had gone away during
the COVID virus with illness.
And you also still had several countries that were still in active conflict zones that are heavily dependent on food and food imports, including Yemen,
for example, Syria. And so what happened with Ukraine is that Ukraine was a breadbasket. And many of these countries like Yemen, and Syria, and many
African countries were already dependent on those imports. So losing a breadbasket on top of this was tough.
But what has been catastrophic has been the general war has not only decreased the food availability, but it's also increased, it's increased
the prices of food, fuel, fertilizer, all key inputs into the system, coming in the midst of all kinds of climate change disruptions. This is a
huge, large global issue that we need to be urgently addressed.
CHATTERLEY: I think the key point there, particularly for the Horn of Africa, was your point about climate change too. And they're suffering
extreme drought. So in addition to tackling COVID, the impact of rising fuel prices, grain prices as a result of the war in Ukraine, they were
already suffering extreme damage to the environment, and to the capable capabilities, yet results of climate change.
MCKENNA: Yes, and this is why it's really important for the world and particularly donor Global North countries, to continue to invest in these
countries to give them to continue to invest in their agricultural systems and their supply chains, and to invest in their resilience to the climate
crisis because this is not a one and done situation at all.
We have a series of these climate shocks coming impacting the most vulnerable people and if we don't work on their local agricultural systems,
and continue to ensure kind of free passage of goods around the world and free trade. We will just be doing this over and over again.
CHATTERLEY: And the challenge today, and I read in preparation for this interview that the global humanitarian and food security assistance funding
shortfall now in 2022, or maybe you can give me the latest figures now has increased by 50 percent. So can you quantify that for me?
What are we talking about and what's been little disgust but has been the different treatment of those that have had to flee Ukraine to surrounding
nations versus perhaps those that are fleeing other parts of the world? And I just wondered whether the dissimilar treatment that we're seeing for
those people also filters into what we're seeing for the ability to raise money for some of these challenges.
[09:25:00]
MCKENNA: Let me tell you what it means for a family because I think that really brings it home. So before and Yemen, we were partnering with the
World Food Program, and we were providing food baskets that could feed a family of four, with four items, you know, oil, wheat, grains, different
things to cook.
Now, that food basket that was once built for four, even though most families are larger than four, is now down to one item and can only feed
two people. So that is a mother, usually the mother though the woman of the household, making allocations of food that was once enough for trying two
adult now it's just enough for two and trying to dole it out amongst your family. So that's what this looks like.
And what this looks like for those fleeing because of their lack of ability to get basic things like food, is that they're, you know, they are
increasingly being pushed to the back of the line as Ukrainian state precedent.
And as they should I wish everyone got the same treatment that Ukrainians were getting, I want to make clear, there's no big grudging that treatment.
But unfortunately, we've also seen donors try to move money away from other conflicts in places like Myanmar and Venezuela to send more funds to
Ukraine.
And the reality is every place needs more simply moving things around on the chessboard right now. It only exacerbates the problem in these
countries. And ultimately, I do fear greater division between global north and global south countries over this.
CHATTERLEY: Yes, your point is so important. It's not that Ukrainian people any less important and their crisis is not to be underestimated. But the
problems elsewhere in the world didn't go away as a result. Tjada D'Oyen just very quickly, you have how do your team feel about that when they're
going to a family and giving them a lot less and knowing that it means that more of them are going to go hungry?
MCKENNA: It's very disheartening, and part of what we try to do when we work with communities, is we try to provide hope. And we really work with
the communities so that they can thrive in the midst of everything. And what is really especially upsetting is, you know, the disparate treatment
is on display around the world, right? And it's not, it's not lost on and my colleagues in the communities that we work with in the Middle East and
Africa. They recognized how Syrians retreated or how others and what's happening now.
And so I fear that not only are people suffering more, but now they can blame that a little bit on someone else. And it's terrifying, really and
unnecessary. And I wish that didn't happen. Some of our country programs also have to make do with less as resources are being taken away because of
dealing with things so we've dipped into our own reserves to pay more for fertilizer, and other supplies for communities that we work with. We've
dipped into those ourselves to still try to continue to alleviate the suffering during this time.
CHATTERLEY: All human life is equally precious and we have to act accordingly. Tjada, thank you for your time I just wanted to ensure that
are we was understand that these things are still happening? There are no easy solutions here. Tjada, thank you!
MCKENNA: Thank you so much.
CHATTERLEY: Tjada D'Oyen there, thank you, the CEO of Mercy Corps and thank you to you and your team as well for the work you're doing. We're back
after this stay with us.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to "First Move". At the IMF just announcing that it's once again slashing its global growth forecast due to what it calls a
"gloomy and more uncertain picture for global economies".
The IMF is now projecting a growth rate of 3.2 percent in 2022. That's almost half a percent lower than its previous outlook. It's also raising
its global inflation projections too.
U.S. stocks today, reflecting the more uncertain economic environment to a lower open across the board. Stocks pressured I think by Walmart's warning
on inflation, saying rising prices are hitting its customers in their wallet.
Walmart shares falling some 9 percent with other retail names lower in sympathy too, it's not all bad news. However, on the consumer front Coca
Cola is raising its profit guidance and consumers are so far willing to pay more.
McDonald's have a reporting weaker than expected revenues amid what it calls a challenging environment. And profits did however, top estimates.
And it's an ugly start for crypto exchange Coinbase as regulators reportedly investigate claims it's been allowing people to trade
unregistered securities.
The company's trading lower after the opening bell as you can see down almost 8 percent. Coinbase's Chief Legal Officer though pushing back
reports at the reported probe by the U.S. Securities and Exchange Commission saying, "We are confident that our rigorous diligence process a
process the SEC has already reviewed, keep securities off our platform.
Coinbase stock has lost almost three quarters of its value this year. Paul LA Monica joins me now. Paul, so Coinbase, responding to an alleged report
about something that's allegedly going on, which always amuses me.
But I think we have to talk about precisely what's going on and put it into English for our viewers. What's the concern about allowing retail consumers
to trade securities, things that are designated securities rather than digital assets?
PAUL R. LA MONICA, CNN REPORTER: Yes, that I think is the key question Julia. To be fair to Coinbase the laws surrounding the trading of digital
assets, coins and tokens are still very murky and Coinbase wants more legal clarity from the SEC and other regulators.
Now, the SEC, obviously, would argue that the rules that they have are being enforced by regulators and that Coinbase and other crypto exchanges
should only be listing certain assets like Bit coin, Aetherium, et cetera, and not some of these other tokens and digital assets.
So that's one problem. You also have an insider trading probe into Coinbase to a former Product Manager allegedly putting out some information to
people ahead of when Coinbase was going on.
[09:35:00]
MONICA: So that's clearly an issue as well. But I think Julia right now; the bigger problem is just that Bit coin prices have plummeted this year
along with other Cryptos.
And that's really hurting Coinbase just that Bit coin prices have plummeted this year along with other Cryptos. And that's really hurting Coinbase. You
know, as you noted, the stocks lost about three quarters of its value this year.
Robinhood has also been hit pretty hard because of the crypto meltdown and the stock meltdown, obviously, too.
CHATTERLEY: Yes, on a basic level, if something's designated as security, then it comes under the purview of the Securities and Exchange Commission.
And that has implications for how the exchange operates and how it's registered.
But also, a lot of the people within this industry, it's the whole point of having these digital assets is that they're not securities. And that
they're sort of decentralized from that in a way in a treated very differently to your point.
And I couldn't agree more poor, it's the sell off and the pain that retail consumers now are facing that's making all regulators around the world step
up and say, perhaps there needs to be more protections.
MONICA: Yes, this has been kind of the proverbial wild, Wild West of the market as of late. And I think that Investors who have been hurt by the
crypto crash are, you know, clamoring for more protection.
And whether or not that's going to come from the SEC from FINRA from other regulatory bodies, I think still remains to be seen. Gary Gensler has
obviously stepped up with the SEC, some people in crypto lamb would argue that maybe he's been too aggressive and needs to pull back.
But I think, really what we need Julia is just clear rules that everyone can follow. We don't have that yet.
CHATTERLEY: Yes. And that's what the industry is saying. We're following your guidelines. Give us the rules, and we'll follow them. But until we
don't, then it's open to interpretation with significant consequences. Paul, thank you.
MONICA: Thank you.
CHATTERLEY: Paul LA Monica! OK, still to come cutting ties in space as the war in Ukraine rages on. We speak to the Director of the European Space
Agency about its global partnerships and the future, next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". The Kremlin says the Russian Space Agency will pull out of the international space station after 2024
once it's met its current obligations and then plans to build its own space station.
[09:40:00]
CHATTERLEY: The U.S. and Russia have collaborated in the International Space Station for more than 20 years. And just a few days ago, the European
Space Agency said it was cutting ties with the Russian Space Agency on a mission to search for life on Mars.
The ExoMars rover was designed jointly by Russia's Ross cosmos and the ESA; it would have been Europe's first planetary rover. Joining us now is Josef
Aschbacher, Director General of the European Space Agency.
Josef, fantastic to have you on the show, once again, much to discuss, let's start with the Russian Space Agency's decision to pull back after
2024. Are you surprised by that decision?
JOSEF ASCHBACHER, DIRECTOR GENERAL, EUROPEAN SPACE AGENCY: Hello, Julia and to everyone. I'm not surprised, because we do hear this kind of news
regularly from Russia especially after the invasion of Ukraine. But if you very carefully listen to what was said he was saying that Russia will pull
out of the space station after 2024 after does 24 could in theory also be 2030.
So we do not know when Russia will really pull out. The other part of the news says that Russia will meet its obligations until 2024, which means at
least for the next two years and a half, there will be operation of the space station; I will say uninterrupted operation of the space station. So
this is good news.
But of course, we do not know what happens afterwards. And we will say wait and see how this develops.
CHATTERLEY: And I'm talking to a scientist though, when the precise definition of after 2024 matters and it truly does to your point.
Hypothetically speaking, though, should they choose to do that? And go it alone?
What impact would it have on Russia's space capabilities; because there are other partners that they could choose to work with that also have strategic
ambitions, China, for example, India, and other country?
ASCHBACHER: Yes. Now for sure China is probably the closest partner of Russia. And they're already working together. In fact, they have already
plans for what is called an international lunar Research Station, which would be the equivalent of the gateway, which NASA is putting together now
with, with ESA and some other partners.
So yes, Russia is certainly looking to the eastern part of the world in terms of putting its cooperation together. And also on our side, the
European Space Agency, as you said before, Julia, we have been cutting our ties on ExoMars.
And I can tell you; this was not an easy decision, because this was a huge investment. 15 years of time, huge amount of money, a lot of researchers
and engineers working on ExoMars for many years.
And we would have been ready this year to launch in fact in September, next in two months from now, but unfortunately, we cannot do that. So now we are
reassessing our cards.
So we are looking on how else we can go forward with ExoMars. But yes, the world, unfortunately, I should say is dividing again, is polarizing again,
which is something we are not very happy about in space, because for some things in space we need each other and simply space is a huge undertaking.
And it would always be much easier, much better if the major forces are working together.
CHATTERLEY: It's heartbreaking in many ways, because space exploration and cooperation always managed to transcend politics in the past and some
incredibly difficult periods in the past. Is NASA, ultimately, an option is the United Kingdom. And do you think there's a way back given, we're
talking decades of cooperation with Russia over this project?
ASCHBACHER: No, absolutely. I mean, the UK is a member of the European Space Agency, and those are very strong members. So with the UK, we are
working extremely well for actually, since the beginning of ESA, they're founding member of ESA.
But yes, with the United States, we are reinforcing our cooperation.
I have just had extremely good meetings with the Administrator of NASA Bill Nelson, who was here in Europe just a couple of weeks ago. He spoke to our
council of the ESA member states.
And we did discuss on how to move forward, we have plans after the ISS, as you know, the ISS in any case, will discontinue after 2030. We also have
plans towards the moon we have plans towards mars.
So yes, the most likely consequence of the war in Ukraine is that the European Space Agency will stronger even stronger even better work with
NASA, which we have done for many decades. But this partnership will certainly intensify.
CHATTERLEY: Very quickly, any sense of a date on that with ExoMars, I mean it was initially planned for 2020, obviously COVID got in the way then we
had a date put for September this year and now the latest uncertainty. Are we talking years is the cost going to be more, can you do it quicker than
that?
[09:45:00]
ASCHBACHER: Now we are certainly talking years, this is clear, because half of the mission was Russian bots; there was the lender, which was mostly
Russian. And yes, this has to be redeveloped and restarted.
So we have to start from scratch for some elements. Of course, the - mostly European with very few exceptions and there we continue, we are committed.
So we are right now assessing the consequences and how we can move forward.
We have worked very closely with NASA to help us in defining some of the elements they could eventually contribute. It's not yet decided how we move
forward with ExoMars.
But it is clear whether it's a European solution, or an American European solution, certainly will take a couple of years until we go there. Maybe
the good thing is that the science is still unique, because what we plan to do with this rover is to dig into the Mars surface, take a boat off the
Mars surface and search for life.
And this science will still be there because there will be no other drill that goes into the surface and therefore looks for life on Mars. So from
that point of view, yes, Mars is a couple of billion years old, we can probably wait another couple of years in order to discover whether that's
life or not.
CHATTERLEY: It was why it was so important. I was so fascinated by this. You know, I was recently looking at your publication of the exploration
roadmap for the European Space Agency's 2030 plus.
And it does point to greater independence in research and development, I think, for better or worse in many ways. But the element in the room that
we're not really talking about is the other player here, of course, which is the private sector.
And I just wondered what you make of the vast and swift development of private companies like SpaceX, Starlink, for example, as beneficial perhaps
to, to the wild as their technology is, it's an unregulated space and their development, particularly in low Earth orbit is dramatic. Should we be more
worried about what we're seeing there?
ASCHBACHER: You're absolutely right, Julia, that the development is extremely fast. And what we see through the commercial sector now you
mentioned SpaceX, but there are many other companies powered by venture capital money in Silicon Valley.
But also in Europe, we see more and more small and medium sized companies developing the space domain. So this commercialization is really taking off
is putting is really firing up this new space race, which we're seeing right now.
And that's huge. And that's great. And I think as a public entity, like the European Space Agency, also NASA, what we want to see is really this sector
to develop. And I have put an agenda in place a year ago when I became director general of ESA to really support this commercialization and make
sure that we do develop this sector, because that will drive and that will really fire up our space activities. And of course, you have in the U.S.
SpaceX, I really would hope that we get something similar, also build up in Europe. And this is one of the priorities which I have put in place for the
European Space Agency.
CHATTERLEY: Yes, because otherwise, it's going to be no room. There's going to be no room for private at European companies, and then British companies
and wherever else, because there's SpaceX in the U.S. will have taken all the available opportunity.
Josef, very quickly, I want to ask you about the James Webb Telescope, we have about a minute left. What was your reaction to seeing those images for
the first time?
ASCHBACHER: Oh, this was just amazing. I mean, if you just imagine for a moment that you almost go back to the, to the Big Bang, 300 billion years
after the Big Bang, this is amazing. And you see galaxies being formed.
I mean, this is for any scientist, for anyone, actually, for any citizen. It's just incredible what we have seen there. And I'm also very proud that
Europe is a very strong partner of the James Webb Space Telescope.
You will probably remember that we have launched it on Christmas Day, former French Guiana with an Ariane 5 rocket. And we are participating in
instrumented and in the science.
So really, this is a huge mission and will open a lot of new windows, and will give us a lot of new insights about our universe and our very origins
of humankind and our universe all together.
CHATTERLEY: Yes, it makes my eyes water and gives me a fog in my throat every time we see these pictures. I don't think it will get old. Josef,
great to chat to you, as always come back soon, please because as always, I've got millions more questions to ask you.
ASCHBACHER: Thank you.
CHATTERLEY: Josef Aschbacher there, Director General of the European Space Agency, sir, thank you. OK, stay with CNN. Coming up, the first Kenyan
presidential debates is about to take place. But what if only one candidate turns up? We're live in Nairobi, next.
(COMMERCIAL BREAK)
[09:50:00]
CHATTERLEY: Welcome back to "First Move". Kenya's presidential debate going ahead in the coming hours despite one of the - candidates saying he's
pulling out. Kenya's Opposition Leader Raila Odinga saying he would not share a stage with his rival William Ruto, currently the Deputy President.
Now despite these organizers still think Mr. Odinga could show up, if not, his opponent will get the full 90 minutes to himself. Larry Madowo speaks
to both presidential candidates in this report.
(BEGIN VIDEOTAPE)
RAILA ODINGA, KENYAN PRESIDENTIAL CANDIDATE: We will win these elections.
WILLIAM RUTO, KENYAN PRESIDENTIAL CANDIDATE: We're very confident we're going to win this election.
LARRY MADOWO, KENYAN JOURNALIST (voice over): The 55 year old Ruto call themselves hustler in chief, a populist appeal to Canada's largest voting
bloc, they use.
RUTO: Our plan in under the bottom up economic model is to focus on infrastructure that not only drives our economy, but intentionally
deliberately create jobs.
MADOWO (on camera): What is the difference between you as a candidate and your main opponents Raila Odinga who's one who you are allies before?
RUTO: I have a plan, he doesn't. When I listen to their campaign, they don't really have the detail on what they want to do is a good old man. But
I don't think today, he has the capacity to pull this country from where it is.
MADOWO (voice over): At 77, former Prime Minister Odinga is running for what he says is the fifth and last attempt to lead Kenya.
ODINGA: I'm younger than President Biden. I don't think that age has anything to do with it, I think is about the plan that somebody has for a
country.
MADOWO (on camera): If you were to win the presidency, what do you need to do fast to try and fix some of the many problems that Kenya faces?
ODINGA: We don't want to see as Sri Lankan syndrome, manifesting itself here in the country. So we have several options that we are going to look
at to keep the costs of essential goods down in order to ameliorate the suffering of our people.
MADOWO (voice over): Both sides have accused each other of corruption, and both claimed to have the solution.
RUTO: We ran the real high risk of running these countries using cartels and people who have not been elected, you know, people who will be in
shadows.
MADOWO (on camera): It's interesting. You mentioned cartels, because your main challenges accuse you of being corrupt that if you become president,
then this country will be even more corrupt than it is right now. What's your response to that?
RUTO: We are going to build the institutions to make sure that any corrupt person, including the President, can be prosecuted.
MADOWO (voice over): More than $16 million is stolen from the Kenyan government every day President Kenyatta claimed last year a staggering
figure for a poor nation
[09:55:00]
More than $16 million is stolen from the Kenyan government every day, President Kenyatta claimed last year a staggering figure for a poor nation.
ODINGA: What you call budgeted corruption? When we address this, what we are going to get a saving is going to be more than what you require to fund
the projects that we're talking about.
MADOWO (on camera): So your plan is to deal with corruption so that more money is available, but every government promises that but it just never
happens.
ODINGA: We're not going to make any compromises. And nobody is going to be indispensable, including myself, the fight against corruption.
(END VIDEOTAPE)
CHATTERLEY: And finally swimming in Israel's beautiful Mediterranean coast waters shouldn't be something to wobble over. However, take a look at this
a ghostly swarm of jellyfish, they've been clogging up fishing nets and desalination plants plus it's costing Israel some $10 million in lost
tourism revenue.
Now that is a sting in the tail. Exports point to the finger at climate change saying it's raising water temperatures and creating ideal conditions
for jellyfish to breed. Ouch. They are beautiful.
That's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages. You can search for
@jchatterleycnn. And in the meantime "Connect the World" with Becky Anderson is up next, and I'll see you tomorrow.
(COMMERCIAL BREAK)
END
