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First Move with Julia Chatterley
Stoltenberg: NATO stands with Ukraine for as Long as it Takes; Stoltenberg: Hybrid and Cyber Attacks can Constitute an Armed Attack on NATO Ally; Spanish Government Touts Strength of Economy; Kwarteng to face Lawmakers in the House of Commons; Russia Launches more Missile Strikes across Ukraine; Israel, Lebanon Reach "Historic" Maritime Border Deal. Aired 9-10a ET
Aired October 11, 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)
RICHARD QUEST, CNN HOST, FIRST MOVE: Good day to you live from New York. I'm Richard Quest in for Julia Chatterley today. And welcome to "First
Move".
Russia is launching missile attacks for a second day across Ukraine. Its retaliation for Saturday's explosion and severely damaged its key Bridge to
Crimea. Ukrainian official said at least 19 people were killed in Monday's missile strikes.
President Zelenskyy will be speaking at an emergency G7 meeting taking place today, Tuesday. And in the next hour, we are expecting to hear from
the NATO Secretary General Jens Stoltenberg that is happening any minute as soon as he's speaking. We'll bring that to you live.
On the futures market, right now, Wall Street is slipped on Monday and the tech heavy NASDAQ closed at its lowest level since July, two years ago.
JPMorgan's Chief Executive Jamie Dimon now warns the U.S. is likely in his words to enter recession in the next six to nine months.
Lackluster is the best way to describe European markets even though the Bank of England has adjusted its emergency bond buying program in an effort
to calm the government bond market.
We expect to hear from the British Finance Minister Kwasi Kwarteng in about half an hour from now. And again when that happens, we will bring that to
you. We have a lot that we need to bring to your attention today.
First, the air raid sirens across Ukraine. Russia has launched a new round of missile strikes, and at least one person has died today in the Southern
City of Zaporizhzhia. The energy facilities were struck in the Western City of Lviv. It follows Monday strikes, which killed nearly 20 people and
wounded more than 100 in the capital Kyiv and other cities too. We are talking about now, as I promised at NATO.
JENS STOLTENBERG, NATO SECRETARY GENERAL: --the sabotage of the North Stream pipelines, and we will step up and sustain our support for Ukraine.
So that we can continue so they can continue to defend themselves and liberate territory from Russian occupation.
Ukraine has the momentum and continues to make significant gains while Russia is increasingly resorting to horrific and indiscriminate attacks on
civilians and critical infrastructure. President Putin is failing in Ukraine.
He is attempted annexations partial mobilization and reckless nuclear rhetoric represents the most significant escalation since the start of the
war. And they show that this war is not going as planned. NATO is not party to the conflict.
But our support is playing a key role allies remain united in their support for Ukraine's sovereignty and self-defense. Ukraine's Defense Minister
Alexei Reznikov will join us tomorrow. Both for the U.S. lead contact group for Ukraine and for dinner with NATO Ministers.
Together we will address Ukraine's urgent needs. I welcome the recent announcements by allies to provide more advanced Air Defense Systems and
other capabilities to Ukraine. And I look forward to further deliveries. Our message is clear.
NATO stands with Ukraine for as long as it takes. President Putin started this war; he must end it by withdrawing his forces from Ukraine. And
President Lukashenko should stop the complicity of Belarus in this illegal conflict.
On Thursday, I will chair a regular meeting of the nuclear planning group. The fundamental purpose of NATO's nuclear deterrent has always been to
preserve peace, prevent coercion, and deter aggression.
[09:05:00]
STOLTENBERG: Next week NATO will hold its long planned deterrence exercise, steadfast noon. This is routine training, which happens every year to keep
our return safe, secure and effective. President Putin's veiled nuclear threats are dangerous and irresponsible.
Russia knows that the nuclear war cannot be won and must never be fought. We are closely monitoring Russia's nuclear forces. We have not seen any
changes in Russia's posture, but we remain vigilant.
At the Madrid summit in June, NATO leaders decided a fundamental shift in our defense and deterrence to respond to the new security reality. We are
doubled the number of NATO battle groups in the east of the lines, they can be scaled up quickly to brigade size. We're also increasing the number of
our high readiness forces.
At this ministerial, we will take decisions to increase our stockpiles of munitions and equipment to speed up the delivery of capabilities. And to
use the NATO defense planning process to provide industry with the long term demand they need to boost production. We will also address the
protection of critical infrastructure.
NATO has been working on this for many years. And following the sabotage or the North Stream pipelines, we are further enhanced our vigilance across
all domains. We are doubled our presence in the Baltic and North seas to over 30 ships supported by maritime patrol aircraft, and undersea
capabilities.
These efforts are closely coordinated by NATO's Maritime Command. Allies are also increasing security around key installations and stepping up
intelligence and intelligence sharing. We will take further steps to strengthen our resilience and protect our critical infrastructure.
And the deliberate attack against, allies critical infrastructure would be met with united and determined response. Our final session will focus on
NATO's missions and operations from Kosovo to Iraq. We will be joined by EU High Representative Burrell.
Because NATO and the European Union face the same security challenges we have a difficult winter ahead. So it's even more important that North
America and Europe continue to stand united in support for Ukraine. And in defense of our people, and that I'm ready to take your questions.
UNIDENTIFIED FEMALE: We'll start at the very top with Deutsche Burley and beyond.
UNIDENTIFIED FEMALE: Thank you, Mr. Secretary General, you said that you will be making decisions at this meeting about how to increase national
stockpiles and keep your arsenals full while supplying more to Ukraine. But for example, with the air defense, the Air to Air Missile System that
Germany is sending that was something that that Germany was expecting to order for itself as Estonia has sent its entire shipment of Javelins to
Ukraine.
So are you worried that while allies are supplying Ukraine with everything they can they are leaving themselves unprotected at home? And what will be
your deliverables out of this meeting that will change that in terms of manufacturing processes and streamlining this? Thank you.
STOLTENBERG: So NATO allies have provided unprecedented support to Ukraine with the capabilities of weapons, ammunition, different types of military
support. And that is something of course, we welcome and we have encouraged this from NATO ever since the invasion started.
Actually, we did that before the invasion, we have to remember that NATO allies have broad support to Ukraine since 2014, including training tens of
thousands of Ukrainian officers, soldiers. Which are now playing a key role in the defense and aggression against Ukraine?
But after the invasion and allies stepped up and of course, very much of the support that data allies have provided the Javelins, the air defense
systems, the ammunition they have provided to Ukraine, that has been taken from existing stocks.
[09:10:00]
STOLTENBERG: So by during that they have reduced their stocks, but that has been the right thing to do. Because it is important for all of us that
Ukraine wins the battle, the war against the invading Russian forces because if Putin wins, that is not only a big defeat for Ukrainians, but it
will be defeat and dangerous for all of us, because it will make the world more dangerous. And it will make us more vulnerable for further Russian
aggression.
So that's the reason why we have used NATO stocks, stocks, NATO our countries to provide support to Ukraine. But of course, the longer this war
drags on, the more important is that we also then are able to replenish these stocks.
And that's exactly why we now are addressing how we can ramp up production so we can produce more both to replenish stocks, but also to continue to
support Ukraine. And I expect ministers to make decisions at the ministerial meeting, tomorrow and the day after tomorrow, on how to use the
NATO defense planning process.
To agree on the more ambitious targets on for instance, different capabilities including a look into the possibility of increasing the
targets the guidelines for stocks this will provide the industry with a long term demand, they need to invest in EU production capabilities.
Because they have been able to increase production partly by utilizing existing production capacity more but to really ramp up production, we need
to make new investments. Also expect them to agree on how we can further strengthen our interoperability, ensure that others can work together. And
also jointly purchase ammunition capabilities for to reduce stocks.
But also to actually ensure interoperability between allies and that the unique NATO defense planning process is I think, the best tool to ensure
that allies are coordinated and actually provide the long term demand messages to industry to ramp up production.
UNIDENTIFIED FEMALE: Lauren Cook from Associated Press. Just then, thanks.
LAUREN COOK, ASSOCIATED PRESS: Yes, Lauren Cook from the Associated Press has a question on infrastructure. Germany was how can I put it? Deutsche
Bahn had its communications cables severed over the weekend in Germany cut off transport in the north of the country. We've also seen the leaks to the
pipelines, obviously Nord Stream going to Germany.
At what point do these attacks? Sorry, do these incidents then become acts of war? And how does NATO respond to that, as a collective Alliance? You
said the Allies would respond by how you do that in this kind of instance, thank you.
STOLTENBERG: Last years, NATO has implemented the biggest transformational collective defense since the end of the Cold War. And part of that is to
take fully into account hybrid threats, the cyber threats and therefore also stated few years ago that hybrid and cyber-attacks can trigger Article
5.
I can constitute an armed attack against a NATO allies. And we have stepped up both our work on resilience, the protection of critical infrastructure;
we are conducting more exercises both on hybrid threats and cyber threats. And you're exchanging best practices and also agreed guidelines on the
protection of the critical infrastructure.
All of this is about protecting, for instance, under sea capabilities or undersea infrastructure, pipelines cables but also of course, energy grids,
energy production, and transportation infrastructure. Of course, I cannot comment on those specific incidents because they're ongoing investigations.
I think we need to await the outcome of this investigation before we make any final judgment. But in general, I can say that, of course, we are
closely monitoring every incident that may constitute a hybrid or cyber- attack against the NATO allies. And--
QUEST: Jens Stoltenberg there the Secretary General of NATO, giving up some a latest ahead of meeting leaders meeting to discuss the way forward.
[09:15:00]
QUEST: Salma is with me, Salma Abdelaziz I, as I recap what he said I think the key points besides this bit about hybrid and cyber-attacks can
constitute an armed attack but we know that has been the NATO position before. He says that they the allies will step up support to liberate, as
Ukraine liberates territory, and Ukraine has the momentum making significant gains and Putin is failing in Ukraine, what stood out from him?
SALMA ABDELAZIZ, CNN CORRESPONDENT: I think there are a couple of things. I think that as long as it takes line is always very important and very
significant. I think there's an understanding that President Putin, as you heard there is not changing course he's not backing down. He's going to
continue this conflict.
It is absolutely a matter of pride and dignity beyond of course, the tactical goals; he has to take Ukrainian sovereign territory. So that
reiterating that we are there for as long as it takes. And that discussion of air defense systems in particular, Richard, after the day that Ukraine
saw yesterday a barrage dozens of rockets, missiles and drone attacks all across the country.
Ukraine, of course, activating its air defense systems, but only able to take down over half of the projectiles but still, that means that some of
these missiles are landing in playgrounds in Kyiv, of course, so that we are iterating, that air defense systems are at the top of the list for
them. That's very important as well, Richard.
QUEST: And it is worth noting, isn't it Salma, he said that they're closely monitoring the Russian nuclear forces, but they see no evidence of any
movement on that.
ABDELAZIZ: Absolutely, and a reminder that there is going to be, of course, part of NATO's vision promise is nuclear deterrence. So a reminder that
there is next week these deterrence exercises reminder that these are weekly and scheduled and regular. And yes, of course, that all important
indication from intelligence officials that we've heard over and over again.
That while Moscow has threatened the use of nuclear weapons, there seems to be no signs that the Kremlin is actually preparing to do that. But when you
look at what happened yesterday, when you look at a President Putin, who is cornered, who is losing on the battleground, that's absolutely in the
forefront of everybody's minds that possibility of tactical nukes.
QUEST: Salma thank you, Salma Abdelaziz. "First Move" continues, The International Monetary Fund, the IMF meeting start this week. The global
recession is on the agenda. We have the latest from the World Economic Outlook. And the Spanish Economy Minister says they're well placed to do a
- to deal with a downturn. She'll be with me as well in "First Move".
(COMMERCIAL BREAK)
[09:20:00]
QUEST: The IMF slows forecast for Global Economic Growth for the second time in as long. The IMF now says the worst is yet to come. Rahel is with
me. Are they forecasting yet a global recession?
RAHEL SOLOMON, CNN CORRESPONDENT: Well, they're saying that the road ahead certainly looks challenging, Richard. And to add to what you said that not
only is the worst yet to come, according to the IMF. But that 2023 for many people around the world will feel like a recession, right.
So I just want to show you globally, so 2021 compared to the 6 percent global growth. That we saw, IMF expecting 2022 to remain at 3.2 percent by
2023, revising downward pressure to 2.7 percent and then I want to show you just the breakdown for the U.S. and the euro area.
So revising also lower the U.S.'s global growth or U.S. growth rather for 2022 and 2023 and we can pull up that full screen for you. But what you
have here, Richard is an acceptance that the road ahead does in fact look challenging. So for the U.S., for example, predicting growth for 2022, 1.6
percent.
But then look at 2023, 1 percent. Not so great for the euro area either and we can pull up those numbers for you as well. And inflation as you can see
her consumer prices 8.3 percent for the euro area.
But take a look Richard, here at 2023, the estimate 0.5 percent. So what you have is a darkening of the clouds. What you have here is an acceptance
that the road ahead will in fact look challenging, and for many around the world will feel like a recession.
QUEST: Rahel, thank you. We'll talk more on "Quest Means Business" about that and talking about "Quest Means Business". The IMF Chief Economist,
Pierre-Olivier Gourinchas is on the program. It's at 3 o'clock Eastern time, which is 8 London, 9 Central Europe, 10 Middle Eastern as you head in
that direction, you can work out the time yourself. It's 9:21, here in New York.
The Spanish government was defending the robustness of its economy. Despite the looming recession, Madrid has lowered its economic growth outlook for
next year to 2.1 from 2.7. The governor of the Bank of Spain is urging banks to prepare for uncertainty, arising energy prices and bottlenecks in
international trade.
Spain's First Deputy Prime Minister says employment and investment are now higher than before the pandemic and that helps strengthen the economy. The
minister is with me, the Deputy Prime Minister; she's in New York, meeting investors. And then I assume will be on the way too, as we all will be to
the IMF and World Bank meetings.
Nadia Calvino is Spain's First Deputy Prime Minister and Minister of Economy. Minister, as we look at the situation, are you now forecasting a
recession? Be it technical, or deep or short in Spain?
NADIA CALVINO, SPANISH FIRST DEPUTY PRIME MINISTER: Well, we're meeting. Hi, Hi, Richard, very nice to see you again. Well, we're meeting this
weekend in Washington in a very challenging and delicate context. At the international level, the global economy is slowing down, inflation is
rising in many countries, and interest rates are going up also on both sides of the Atlantic.
They're still bottlenecks in some supply chain. So it is a challenging context. And the developments in the coming months will largely depend on
what happens with the war.
What happens with energy prices, and in our case, what happens with the German economy? But in this challenging context, all institutions and
analysts foresee the Spanish economy to continue to grow in 2023. And that's due to the strengths and elements that bring resilience that you are
referring to.
QUEST: Now that's, I had to sort of refer to the fiasco in the U.K. over tax cuts. Now without getting into the sort of the awfulness of having the
reversal of policy per se on the principle that Liz Truss is talking about, which is one of growth.
She says there's a necessity for growth at a time of recession. Now we can argue about how you do it. But do you fundamentally agree with that
principle?
CALVINO: Of course, we need to continue to grow main growth and job creation is essential if we want to pursue a sustainable and responsible
fiscal policy that's what we're doing in Spain so since we had such a strong recovery in 2021 with 5.5 GDP growth percent.
And these year, also with around 4.4 percent foreseen growth for the whole of 2022. What we're doing is profiting from these growth and job creation
to continue to reduce our deficit and debt to GDP ratios and we are on track to meet our targets.
[09:25:00]
CALVINO: I think that governments right now need to be - are twice as prudent and responsible as in normal times as in the context of uncertainty
and volatility fiscal responsibility is of the essence.
QUEST: But isn't that the contradiction that we're in at the moment, the fiscal prudence that you talk about that counterbalanced by a slowdown
under a recession in some places that will require fiscal targeting of that? So, which is it to be, which is taking dominance and precedents at
the moment keeping growth moving, or fiscal prudence?
CALVINO: Well, I would actually and respectfully disagree with the notion that reducing taxes on the rich is actually supporting growth. What we have
seen through practical experience is that reducing taxes on the richest parts of our society, or the largest corporations only makes some parts of
our society is richer, but it makes inequalities grow, and it doesn't support growth.
So, you know, our approach is one where we are taking measures which are fiscally responsible. But trying also to support the most vulnerable parts
of our society and SMEs which are most directly impacted by the increasing costs derived by growing energy prices?
QUEST: If we were Spain along with I would say one or two other countries, which are expected to continue growing. But you are in danger of being tied
to the train, which where policy has to be made to the largest members and listeners. So for instance, the ECB is going to continue to raise rates,
and that's going to affect you in Spain. Because arguably, as you yourself said at the beginning, you have to keep an eye on the German economy.
CALVINO: Well, absolutely, right now, monetary policy has been driven by the top priority of fighting inflation. But the sources of inflation are
different on both sides of the Atlantic. So in the U.S., it is a demand driven inflation as well as the interest rate as the cost of energy going
up.
In the case of Europe, it is really an important inflation coming from the high energy prices plus the depreciation of the euro. That makes it
imperative for the ECB to raise interest rates so that we do not continue with the depreciation of the euro. But they need to really get it right so
that they do not endanger growth and job creation, which is essential, not only for prosperity, also for fiscal responsibility, as we were saying just
a moment ago.
QUEST: The three card trick can you balance and get it right - the nirvana of the soft landing? Finally, you're in New York, Spain has always been an
attractive place for investors. There's never been any shortage at one level of investors.
What are they looking at now for from you? What do investors tell you that? Yes, we like what you've done so far? We now want to see you do this.
CALVINO: Well, that's a very good question. I think that there are many elements that make Spain particularly attractive right now. It's not only
the talent; it's not only the strong growth that we're registering. It is also the dynamism of our climate transition, which makes it much more
efficient and green, you know, to establish an industry.
For example, in Spain, that is attracting a lot of investors not to speak about the digital infrastructures, which are also bringing in lots of
digital nomads another R&D, facilities to our country. So there are many elements that we're looking at right now, which makes pain particularly
attractive, not only but also in the area of audiovisual production. I will be meeting some large, producers here in New York precisely to see how to
support their investments in Spain.
QUEST: We're always grateful to talk to you. I'm grateful for your time this morning, Minister. Hopefully, I'll see you down in Washington, the IMF
and World Bank too. Thank you for joining us, thank you.
CALVINO: See you later.
QUEST: As we continue from Spain to the U.K., you heard what the Minister was talking about, basically disagreeing with the policies of the Truss
administration. But anyway, the chancellor is going to be before Parliament very shortly. He's going to explain and he'll answer questions and you'll
hear it here on "First Move".
[09:30:00]
QUEST: It is "First Move", and you are most welcome. And the market has now been open, barely a couple of minutes. Oh, well, it could have been worse.
Bearing in mind what we saw yesterday, but it's the sort of choppiness that's getting everybody a bit antsy at the moment.
And the market is contending with the IMF issuing a new warning about the global economy. The worst is yet to come. A thrown Jamie Dimon of JPMorgan
Chase, saying he sees a recession in the next six to nine months. It's hardly revolutionary what he said, but it's confirming what others have
believed.
And shares of American Airlines are moving higher. The company says Q3 is expected to top guidance. The stairs at 5 percent, Zoom is down after
Morgan Stanley downgraded our favorite pandemic communication tool along with teams and all the others and - the prices.
The Bank of England is warning the risk of a UK financial crisis most certainly hasn't gone away. The markets still real shock from the
government's commitment to slush taxes and raise borrowing but don't tell how they're going to do it all. The UK has backtracked on the tax cut for
high earners, the central bank still worried about soaring yields in bonds and the Chancellor is expected to speak about the economy in Parliament
later this week.
We have to face the IMF in Washington. The IMF, basically, I mean, I've seen IMF language before Clare Sebastian. They rarely sell a g7 nation.
You're wrong. And you really do need to do something about it and change policy, which of course the Chancellor did.
CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, the IMF was very strongly worded about the mini budget and the effect it had on the markets. And there are
warnings in today's report, Richard that the UK could face inflation that comes in above other g7 nations.
And about the continued market instability that we're seeing as a result of the mini budget, the hangover for that painful and long and it continues to
be felt you see that that as the chancellor is now set to face parliament for the first time since the mini budget.
The backdrop to that Richard is a two part two day intervention again by the Bank of England, even after they announced the -
QUEST: Clare, the Chancellor is speaking, let's have a listen from him.
KWASI KWARTENG, UK FINANCE MINISTER: --sized enterprises and I'm sure that many of his constituents will appreciate the strong measures that we
introduced.
UNIDENTIFIED MALE: (Inaudible)
KWARTENG: I was being slandered--
[09:35:00]
UNIDENTIFIED MALE: Mr. Speaker, I refer members to my entries in the register of interest. In welcoming the government's growth agenda,
notwithstanding the lack of reassurance to the markets, will the chancellor seriously considering, considering lowering taxation on smaller businesses
despite the package that's already been announced because they are the engine room of the economy.
They do employ most people in the private sector. And if cost savings are necessary, HS2 in the streamlining of a myriad of - could be the first
option.
UNIDENTIFIED MALE: (Inaudible)
KWARTENG: Tell my honorable friend that we're going to introduce the medium term fiscal plan in three weeks. But consider the measures we've already
introduced, National Insurance hikes have been reversed, corporation tax rise has been scrapped, and the annual investment allowance remains at a
million pounds. These are measures which small business is up and down the land have been very, very appreciative.
UNIDENTIFIED MALE: Thank you, Mr. Speaker. As my right Honorable friend will be aware small businesses are the backbone of our local economy. And
not no more than - and they have expanded from run a bakery to run a cafe and now a dessert bar.
So would my right Honorable friend please assure me that he will, this government will do all we can to help these businesses thrive?
KWARTENG: Absolutely right. And of course, in relation to the bakery that he mentioned Catling bakery, we've also supported them through an energy
package, 60 billion pounds for households and businesses for six months. And that's something that we absolutely felt necessary to do.
UNIDENTIFIED MALE: (Inaudible)
UNIDENTIFIED MALE: Thank you, Speaker. Welcome everyone to --. And I refer members and colleagues to my entry in the register of interest. Supporting
businesses will always be a key pillar for growing our economy and by association, our small and medium sized businesses, which there are many -
Lincoln and more across our county of Lincolnshire, they should be at the forefront of the government's growth agenda.
Devolved areas such as Teesside in the West Midlands have continually been successful in delivering for their areas. Greater Lincolnshire stands ready
right now for a maximum devolution deal. Therefore, will the Treasury support any such deal for greater Lincolnshire?
KWARTENG: One of my friends knows Mr. Speaker that devolution is at the heart of the government's plans to level up and strengthens communities.
And of course, in the leveling up white paper, the government has fully committed to offering a devolution deal to every area that wants one by
2030.
UNIDENTIFIED FEMALE: (Inaudible)
UNIDENTIFIED MALE: This is like; can I declare an interest to the chancellor? I've actually worked in small and medium business. I've
actually unlike many people on these benches, worked in manufacturing industry and the manufacturing SMEs in my constituency are absolutely up
against it in terms of the cost of energy. What is he going to do to relieve them right now?
KWARTENG: I think the honorable gentleman makes a very good point and represents his constituency ably. In respect of small businesses, we've
introduced a package -
QUEST: Clare Sebastian still with me. Clare, the Chancellor hasn't really being grilled on the fiasco; they're doing small and medium businesses. But
the reality is, I mean, the overhang from the Bank of England still remains. And the policy is still by no means certain.
SEBASTIAN: Yes, I thought it was interesting, Richard, that he's clearly trying to take the attention back now to what the government is doing at
the lower end of its tax cutting agenda. After of course, the debacle over that U-turn around the cut to the top rate tax, the 45 percent tax, he's
trying to make the point that they're supporting small businesses with their energy package for six months that there are cuts to things like
National Insurance and all of that trying to sort of deflect attention away from the criticism that they've faced over cutting taxes mainly for the
rich.
But there's the fact remains that whatever he says today, we don't know what is in his next budget yet. We still have fiscal and monetary policy
working at odds with each other. And we still don't know exactly how the government is going to pay for these tax cuts, Richard.
QUEST: --which is the crucial point. Clare Sebastian, thank you. On last night's Quest Means Business, I asked the former Liberal Democrat Leader
Vince Cable about the scale of the political damage that's been inflicted. So Vince was also the Business Secretary in the David Cameron coalition
government.
VINCE CABLE, FORMER BRITISH BUSINESS SECRETARY: There are two fundamental problems. I mean, one is political. The position of the government, the
Prime Minister is structurally weak. And then she was chosen by a minority of members of her own party, which is a microscopic fraction of the British
public.
She is supported by only a small minority of her own MPs. So her position is weak. And she's underlying the weakness by just choosing supporters
cronies - to be in her cabinet. So her political position is weak. And then in addition we've had this you know fundamental misjudgment about the
fiscal policy of borrowing for tax cuts which few people even sympathizers believe will have the effect of stimulating growth.
[09:40:00]
CABLE: And there's simply a problem showing that the numbers are down, so that the external impression and the internal impression are poor. They got
to work hard to improve it.
QUEST: So, on the fundamental thought that the prime minister expressed at her conference last week, this idea of we are going to do it differently,
we are going to go in a direction that some would say as contrarian, is there not a point that she could be right. And that expanding your way
through growth is an answer here.
CABLE: Well it's right that we should expand and achieve growth. But it's a platitude. The problem is, how do you achieve it and then in the short
term, we're heading to slower growth. In the medium term, Britain is going to have to increase its taxes because we have a very large deficit.
Public spending is under a great deal of pressure in terms of health, debt services going to rise. The one thing that she can't afford to do without
completely sacrificing credibility is axing public investment which was fundamental to the whole idea of leveling the underdeveloped bits of the
rich economy.
So yes, of course everybody wants to see more growth but not at the cost of destroying the environment widening inequalities problems of that kind.
QUEST: That is Vince Cable. This is "First Move".
(COMMERCIAL BREAK)
QUEST: Top story, Russia's war in Ukraine and a new round of attacks struck the country not as ferocious as with the ones we saw on Sunday. But at
least one person has died in the City of Zaporizhzhia. Energy facilities have been hit in the western city of Lviv.
Today the Russian Ministry of Defense has confirmed they are intentionally targeting these energy facilities, which is why it's appropriate this
morning, we're talking to Alexander Rodnyansky, an Advisor to the Ukrainian President who joins me from Kyiv in Ukraine.
[09:45:00]
QUEST: And we know where the rockets took place where the rocket attacks happened, that there was severe damage to the electric city grid, and there
is still not electricity, it has not been fully repaired. What can you tell me about the situation today?
ALEXANDER RODNYANSKY, ADVISER TO UKRAINIAN PRESIDENT ZELENSKYY: Yes, that's right. So Russia is continuing to launch rockets throughout the whole
country. They're not hitting as much Kyiv today; they hit Kyiv quite severely yesterday. Today, a lot of those rockets are actually shut down
where air defense, Kyiv is better protected than smaller cities.
So Lviv, for example, suffered some devastating attacks to which you were referring, I think. They destroyed a lot of the electricity infrastructure,
electricity stations, you know, there is a power outage in Lviv and there's little reception, even mobile reception right now. They're doing the same
in Dnipro; they're doing the same in Zaporizhzhia. So it's going on as we speak. And obviously, it's usual Russian terrorist tactics in this war.
QUEST: Right. But the problem for you is that it takes time to repair those facilities. And they can be damaged again and again and again, by Russian
missiles, and the Ukrainian people will suffer severely as a result.
RODNYANSKY: Absolutely. That's why our reconstruction recovery efforts cannot really begin until we finally reach an end to this war. In other
words, until we're victorious, fully victorious in the war effort, there is always going to be some uncertainty about the economic prospects precisely
because of what you described, how can you recover?
How can you rebuild an economy when it's constantly being bombarded? So that's where we're left with second best options, that is to reform,
strengthen our institutions, and make sure that we can still function decentralized in a decentralized way.
So that's what we're doing. But yes, obviously, the security threats are the primary objective, we need to make sure that we can secure the sky.
There are many countries that were hesitant so far to give us air defense systems. And hopefully, it's clear to everyone that that really makes a
difference. And we need the entire possible air defense in the world.
QUEST: Do you think you get, do you think the g7 when President Zelenskyy addresses the g7 and asks for enhanced sophisticated air defense
capability? So as you say, countries have been reluctant to do it. Are you prepared to guarantee that such missiles or such equipment wouldn't be used
offensively against Russia, per se, in Russian territory? But also do you think you'll get a better hearing?
RODNYANSKY: Well, air defense is just what it is air defense, right? It's, it's there to secure our skies. And if you looked at yesterday, Russia
launched about 100 missiles, and about 50 of those were actually shut down. But that still means that the other 50 actually reached their targets.
So it's, it's very porous, in terms of our defense, there's still a lot lacking from what we can do. And that's why we need this extra protection.
So it's not an offensive weapon by any means. The other weapons that we're asking for tanks, armored vehicles, other equipment that, of course, can be
used effectively, but listen, Ukraine has always been clear about what it wants, we want to liberate our territory, there is nothing else no other
objectives that we ever saw, sought or had in mind. So there is no risk whatsoever to other countries and even Russia.
QUEST: Sure. OK. The NATO Secretary General this morning, describing as Ukraine has the momentum, making significant gains and Putin is failing. He
also says that NATO and the other countries are not party to the war, but support playing a key role. There's a very fine line isn't there between
not being a party and supporting a key role?
RODNYANSKY: In some sense, there isn't some sense, there isn't. I mean, look, Ukraine, if we just look at the fact that Ukraine, Ukrainian people,
Ukrainian soldiers that are really doing the hard work, it's they're putting their life on the line and risking their blood. It's not the other
country.
So in that sense, it's not really being part of the war effort. Of course, on the other hand, we are getting equipment, we're getting support. But so
Russia, by the way, Russia is using Iranian drones. Does that make Iran party to the war? Does that make it a participant of the war probably not?
Russia is also using, you know, some shipments that they're getting from North Korea, apparently, maybe even from China. So you know these countries
are not really risking being party to the war. So I think the same comes for NATO.
QUEST: I know that Ukraine hasn't admitted publicly or otherwise, whether or not it was behind the Kerch Bridge explosion. But putting that to one
side, that's not the question, I'm asking. The question, was it worth it? If you now look at the ferocity of the attack, with the promise of more to
come, was that explosion on that single bridge worth the cost to Ukraine?
RODNYANSKY: Yes, and I'll just repeat, we haven't confirmed that we'll see Ukraine behind it, we really don't know who was behind it as well possible
as some Russian movement against the war effort. Russia's regime is about is starting to collapse we're seeing the first signs. So that might well be
what's behind it.
[09:50:00]
RODNYANSKY: Was it worth it? Look, I mean, from Ukraine's perspective, this is an illegal construction. And if there is a blatantly illegal
construction anywhere in your country, there is a possibility of taking it down. And that's how we view it.
It was constructed without any permission, by part by someone who invaded and annexed part of our territory, so one option to go about it is to take
it down. QUEST: Great for you joining us today. Thank you, sir. I appreciate your time. "First Move", as we continue, Israel and Lebanon, now
they're technically still at war, but they managed to reach this historic agreement over a disputed maritime border. Again, it's all about energy,
and how to share the spoils, in a moment.
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QUEST: Israel and Lebanon say they've at last reached an agreement on where the sea border between the two territories lies. It's a U.S. brokered deal.
The two countries Israel and Lebanon are technically at war. But this agreement will pave the way for the energy industry to exploit the oil and
deposits under the sea. Joining me CNN's Hadas Gold, she's in Jerusalem. It's a bonanza for both. The question is can they share it out?
HADAS GOLD, CNN CORRESPONDENT: Well, Richard, according to this agreement, it seems as though in the statements we're hearing from leaders from both
countries, as everybody unusually seems to be pretty satisfied and happy with the terms of the agreement.
It seems as though the potential for business from this gas rich area, especially as we're seeing Europe at dire need of gases replacement for
Russian gas. And the pressure from the international community is a pretty good motivator to come to some sort of agreement between these two
countries as that, as you noted, are technically still at war technically still sworn enemies.
I should note that this agreement is actually each country individually with the United States, not with one another. So I want to pull up a map so
we can understand what we're talking about what this dispute was about. This has been a long running, year's long dispute.
There have been lots of starts and stops to these negotiations. So you can see all those different lines are there different border claims from both
Israel and Lebanon. But essentially what this deal according to officials I've spoken to the deal will demarcate the maritime border essentially
along line 23 there.
And so as you can see, even though it crosses into one of those gas fields that - gas field, there has been an agreement where essentially the
company, the French company that will be exploiting that gas field for Lebanon will essentially buy out Israel's portion of that field.
And then Israel will have complete control of the - field, which is ready to go online essentially in a matter of days. Now, as I said, leaders from
both Israel and Lebanon have praised the steel and importantly for security matters for Israel. They're thinking about Hezbollah that Iranian backed
Lebanese Shia militia group that is very powerful in southern Lebanon. They have threatened the Israeli gas field if they came online before an
agreement was reached.
[09:55:00]
GOLD: And as far as we understand Hezbollah has said they will abide by the agreement as really officials heal this will keep the northern border calm.
And importantly, there's a lot of money here. There are some estimates of this entire area, the amount of gas there could be worth something like $3
billion, Richard.
QUEST: Hadas Gold in Jerusalem. Many, many thanks for that. That is "First Move" for this morning. The markets are open, they're doing business. I
will wrap up the day for you with Quest Means Business in a few hours from now. For the moment "Connect the World" with Becky Anderson is next. This
is CNN.
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