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Quest Means Business

UK Backs Out of Treaty Change Deal with EU; EuroZone Agrees In Principle to Fixes; Interview with David Lidington; A Look Back at 10 Days to Save the Euro; Africa's Green Fund; Interview with Trevor Manuel

Aired December 09, 2011 - 14:00   ET

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

RICHARD QUEST, HOST: Imagine it, 17 euro nations, 9 backers, and one man out.

(BEGIN VIDEO CLIP)

DAVID CAMERON, BRITISH PRIME MINISTER: We're never going to join the euro. We're never going to give up the sort of sovereignty that these country's are having to give up in order to enter a fiscal union.

(END VIDEO CLIP)

QUEST: On this program tonight, we'll be talking to Britain's Europe minister on why they are now in not so splendid isolation.

Compact, or simply complicated? The euro leaders struck a deal. The question is, will it do the trick?

And good cheer from the markets. What's happening in New York suggests smooth sailing ahead.

It may be Friday, the end of the week. I'm Richard Quest, and yes, I mean business.

Good evening from Brussels where the euro summit, the seventh or eighth depending on how you're counting, has come to an end. And Europe's leaders have agreed to historic changes to the EU rule book. At least they have done on principle. On this program tonight, we need to get into the devil and the detail.

There is only one nation, one country, that's standing in the way of full blown treaty change. And you'll know, of course, that that country is the United Kingdom. And the veto was wielded by its prime minister David Cameron.

All 17 EuroZone countries agreed to a stronger economic union. Nine of the 10 EU countries outside the zone will take the deal to their own parliaments. Britain walked away, saying that the deal when taken together, was not in its interests.

The German Chancellor Angela Merkel said it was a crucial step for the EuroZone's future.

(BEGIN VIDEO CLIP)

ANGELA MERKEL, GERMAN CHANCELLOR (through translator): We have taken a decision in favor of assuming -- of handing over greater responsibility to institutions of the European Union, the commission, the European court of justice. And two, expect greater commitments on the member states' part in the interest of the euro.

This is what we mean when we talk about a stability union and a fiscal union.

In times of crisis in the next six months or so we will meet regularly at least once a month to talk about the issues on our plate. I believe that much remains to be done in order to refocus on growth and employment.

(END VIDEO CLIP)

QUEST: Of course for fiscal union and a fiscal compact, much closer cooperation and tighter rules on things like deficits, automatic sanctions, and a barometer for how the EuroZone is performing.

There will be sanctions for those who step out of line.

In terms of putting out the current fire, the EU bailout fund will have its permanent successor with some 500 billion euros at it's disposal.

The EFSF will continue into next year.

Together, they represent $670 billion of firepower. The issue, of course, is whether that is the big bazooka.

The European commissioner president Jose Manuel Barroso says countries should carry out these measures with all due speed and thoroughness.

(BEGIN VIDEO CLIP)

JOSE MANUAL BARROSO, EUROPEAN COMMISSIONER PRESIDENT: Proper implementation is crucial to get us back on the growth specs (ph). And member states, I believe, need to do more to fully implement the country specific recommendations. We also have agreed to fast-track a program of measures to boost growth and jobs.

(END VIDEO CLIP)

QUEST: This wouldn't be a Euro summit if it wasn't complicated and messy. And that's exactly the way the arithmetic of tonight has worked out. 17 euros in, other countries also in, some countries are maybe, and one country definitely out: The United Kingdom of Great Britain and Northern Ireland.

David Cameron said he said had to reject the proposals for treaty change to protect the interests of his own country, especially that of financial services. It means the UK is well and truly outside all the parameters of the EuroZone and agreement.

Mr. Cameron was not at all unhappy at that position.

(BEGIN VIDEO CLIP)

DAVID CAMERON, BRITISH PRIME MINISTER: Why are we in the European Union? We're in it, because we're a trading nation and we need the single market because we want to have that market open for our goods, our services, our growth, our investment, our jobs. That's what, for us, Europe is all about. And that will continue.

But we had a choice, did we want to sign a new treaty with huge amounts of extra complexity and bureaucracy and all the rest of it that would go into our existing treaty? Did we want to do that without proper safeguards for Britain? If I couldn't get those safeguards I said I wouldn't sign that treaty. I didn't. So I didn't.

(END VIDEO CLIP)

QUEST: Though a few friends for the British prime minister, there were rumors at one point that Nicolas Sarkozy even didn't shake hands with him, but that's just a rumor, gossip, speculation. The French president Nicolas Sarkozy was quite firm. They had done what they needed to do.

(BEGIN VIDEO CLIP)

NICOLAS SARKOZY, PRESIDENT OF FRANCE (through translator): David Cameron (inaudible) which we all considered was unacceptable, namely that there be a protocol written into the treaty which enabled the UK to opt out of the a certain number of rules applying to financial services. We were not able to accept that because we consider quite the contrary.

(END VIDEO CLIP)

QUEST: Peter Spiegel, the Brussels bureau chief of the Financial Times is with me. He was with me last week -- or last night I should say. It does seem like a week, doesn't it?

Talk about -- need to lie down and have a strong drink.

Listen Peter, did this work out pretty much as you feared it was going to? And how bad is the damage?

PETER SPIEGEL, FINANCIAL TIMES: Well, I must say I don't think anyone expected it to come out this way. I mean, there's so many people here scratching their heads about why Cameron went to the mat on this. He comes home with maybe a political victory at home, because everyone likes to see the prime minister show it to the continental Europeans, but he got no concessions. He didn't get those concessions for the financial sector. So the fact that Merkel insisted on doing this, and then was forced to back down, and Cameron was forced to back down it's not...

QUEST: This was his only opportunity to get those concessions. He didn't get them, but you know as well as I do once the euro train leaves the station it's very hard to get something afterwards.

SPIEGEL: It's true, but the question is now that he is on the outside looking in, how can he have any influence on this process as it goes forward? If you really want -- he really wanted the financial services industry to be protected from advancement by the EuroZone on their turf. He's not in there anymore having that discussion. He can't participate in that conversation.

QUEST: So now we just need to get to the nitty-gritty. Firstly, in terms of firepower and solving the immediate crisis, does this do the trick?

SPIEGEL: Well, it's interesting. I think a lot of this treaty change debate has overshadowed what was really actually was quite a significant change in policy by the Germans. The Germans have -- are willing now to talk about increasing the size of the EuroZone's bailout fund, the ESM and the EFSF. And also there's this 200 billion euros going to the IMF, which we didn't know about going into this thing that gives -- that adds another sort of...

QUEST: Indeed it does.

SPIEGEL: I mean, if Italy goes down, no amount is enough. So that is -- but we want -- what they need to do is reassure the markets that they are taking it seriously. And that is going to be the question. And to be honest with you, there are a lot of people in this building who are very worried about that credibility issue, because they blew the treaty change thing.

QUEST: All right. And then on the wider question, can Britain cause trouble? Because at the end of the day they're saying they won't allow them to use the various mechanisms, the institutions, the council, the courts. They won't allow any of that. Is that the way this plays out?

SPIEGEL: I mean, that is what everyone is very worried about. I mean, if this whole process was about convincing the financial markets they have new rules that are going to be strictly enforced on fiscal rectitude and you don't have the EU institution -- these buildings we're sitting here in Brussels to enforce them what's the whole point of this treaty? And Britain can sit on its hands and say, no, these are institutions for all 27. It's -- you can't have two masters -- one for this 26 group and one for the 27 group. It can be a real problem for the EuroZone going forward.

QUEST: So a problem for the EuroZone, a problem for the markets, a deal that's been done that is at best complicated on stability, a deal that's being done that looks like it might fall apart. I mean, come on Peter, can we say it was a success?

SPIEGEL: I don't think we can say this is a success, absolutely not, but let's remember there were two capitals in Europe right now, the other one is Frankfurt. And the question is what does Mario Draghi, the head of the ECB, do after this?

QUEST: Does he, does, he, does?

SPIEGEL: Well, you know, he had a very bad week. You know, we thought he was going to declare this to be a great victory and pump money into the financial system through the ECB, then he came here a couple of days ago and said actually I don't know why everyone thinks that was the case and backed out of it. And then last night said the opposite. So it's been a strange week for Mario Draghi. We don't know the answer to that yet.

QUEST: We do know to say thank you very much for yourself for joining us and putting it into a great deal of perspective. Peter Spiegel of the Financial Times.

The EU summit deal seems to be just the remedy that Europe's markets have been looking for. All the major indexes made strong gains. Banking shares were the top performers. Barclays was up 5.4 percent. Even a downgrade by Moodys couldn't stop French bank (inaudible) from soaring. They each gained more than 4 percent.

Italy's Unicredit and (inaudible) up more than 7 percent.

The deal -- debt deal also helped calm the bond markets. Yields on 10-year notes fell in France, Spain and Italy. They rose marginally in Germany.

Now if we take a look at the European -- at the U.S. markets, the EU summit deal has certainly given U.S. stocks the sort of lift they wanted. It's up 173 points at the moment. It makes up most of -- about all of Thursday's loss. Some really impressive performance by big industrial shares. General Electric up around 4 percent. It says it will raise dividend. Bank of America is up around some 3 percent.

Now, put it into the perspective of the markets. We've just been talking to Peter Spiegel who has given us a political overview. We now know exactly the what is of the markets. And you've seen how Europe's markets, along with the U.S. markets, have traded.

But let's get the analysis from the market point of view. Mark Cliffe is the chief economist at ING. The deal will stick for now. The problems are still to come.

(BEGIN VIDEOTAPE)

MARK CLIFFE, ING CHIEF ECONOMIST: For the time being I think they've done just about enough to keep the markets calm, but I think there's an open question as to whether this will really be enough as we go through next year. There's a lot of funding to go on in the early part of next year which will really be problematic.

QUEST: They have refinanced or added money -- 200 billion -- to the EFSF through the IMF. They got the new stability mechanism. But it isn't all going to take place until the middle of next year and that, of course, becomes a real worry doesn't it?

CLIFFE: Well, that's right. That's why the beginning of next year is going to be especially challenging given that the European central bank is hardly expressing enthusiasm for stepping up to bridge the gap by increasing its own purchases of government bonds.

QUEST: If we take a look at the -- now the more difficult issue and the tricky future issue, will the markets be concerned that there is this breakdown now with the UK as being a club of one and the others moving forward on their fiscal compact?

CLIFFE: I don't think the markets are going to be particularly concerned about this to be honest. I think that's really more of a political issue. The UK, of course, isn't in the EuroZone in the first place. And I think really it's only a question of whether this makes it harder for the rest of the EuroZone to come to some kind of political agreement to actually cement the new fiscal compact.

QUEST: Are you happier that at least budget deficits are gone, surpluses are preferred, automatic fines are there, and there is greater intrusion into national economics?

CLIFFE: Well, the markets have certainly been looking for more discipline, because clearly that has been part of the problem. But it's only part of the problem.

The other side of the problem is where's the growth? Because these countries will not be able to repay their debt unless they can get their economies growing again. And right now there's nothing on the table from the politicians to indicate that growth is going to be picking up any time soon.

QUEST: Do you still want the ECB to be the big bazooka?

CLIFFE: Well, I think the markets, frankly, expect it to be the big bazooka, or at least the safety net, to use a different analogy. The problem right now is that yields in the government bond markets are very high for the peripheral governments. It's really putting a lot of pressure on them. And I think they would really want to see the ECB doing as much as it can to help hold down those yields to make it cheaper for these governments to borrow.

QUEST: The people may have spoken, but what on Earth will they say on the streets about what the politicians think? When we come back the poll that makes interesting hearing. And you realize the differences of opinion. Quest Means Business. We're live in Brussels. Good evening.

(COMMERCIAL BREAK)

QUEST: The politicians have spoken. And they are entrenching themselves closer together in their fiscal compact. But just as they are doing so, our exclusive survey shows many French and German people think they would have been better off not having joined the euro in the first place.

It's perhaps a remarkable results bearing in mind what's taking place from what the politicians believe the people actually want.

Becky Anderson at CNN London to bring us up to date.

Becky, are they out of touch with the people and the politicians?

BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: CNN poll carried out in assocation with the polling firm ComRes across seven EuroZone countries between December 5 and December 9 where they represent a sample of 200 people in each area.

Now question where put to citizens of Portugal, Ireland, Italy, Greece, and Spain as well as the core EuroZone countries of Germany and France. And the results, let me tell you, give a pretty clear indication of the mood across Europe.

Let me bring you some of those results. Asked if they felt it was a good decision for their country to join the euro, almost half of those polled, or 49 percent agreed it was, though 35 percent disagreed. We though also asked them this question, should you're country continue in the common currency indefinitely? Well, opinion on that was split. 56 percent of Italians felt they should do so versus 34 percent of those polled in France. Fascinating stuff.

We also asked them about creating a federation, something like that of the United States. Now the reception to that depends on who you ask. The majority of people in Spain and Italy said they would like to see that, two-thirds of those polled in both countries saw it as a good idea. But in Germany, and this is important, just 36 percent, or a third were in favor with 41 percent saying they would not like to see this happen. And Richard a rather surprising statistic given Angela Merkel's push towards greater fiscal integration, or fiscal union in Europe.

And finally out of those polled it was Germany who emerged as the nation with the most faith in the country's national politicians, 40 percent said that they were the best place to meet the economy whereas elsewhere there was much greater support for EU officials.

I've said it again, and I'll said it now -- I've said it before, and I'll say it again, I'm not sure I would trust any euro official at this rate -- or at this stage in the proceedings to run my bath. But apparently those we polled across Europe would.

So thumbs up to those euro officials who are working this story for us.

QUEST: All right.

Now, the question, of course, becomes why, Becky? And we know the answer to this when you look at the result of this poll. They don't ever ask the question of their people do you want a federal-state of Europe. We asked the question, but it's interesting to note is it not Becky Anderson that the politicians never actually asked that question.

ANDERSON: Yeah, there was no dialog, no democracy out here at present. There you go.

QUEST: Becky Anderson who will have Connect the World and a great deal more on the question of the poll and the European Union.

Let us enjoy and pause for a moment for some tweets from the top, the very top of Europe tonight. Laslo Andor, the EU commissioner for employment has tweeted -- here you go, this is an EU commissioner, "automatic sanctions are a joke. Fiscal union needs collective democratic decision making that can respond to challenges and manage aggregate demand." Which doesn't bode well, since the core of the plan is automatic sanctions.

Carl Bildt who I wonder how he has time to be the foreign minister of Sweden since he tweets so much. He's worried that Britain is starting to drift from Europe in a serious way to where in a strong alliance with Hungary, perhaps not baring in mind Hungary's prime minister seems to be quite keen on being on board.

And finally old tweeter, the economist Nouriel Roubini, "EZ come, EZ go."

If you want to follow my tweets as I travel the world and keep in touch and have a dialog you and me it's @RichardQuest. We'll be back with more Quest Means Business -- what a busy day at the euro summit in Brussels. More in a moment.

(COMMMERCIAL BREAK)

QUEST: So the EuroZone and its associates go their own way and Britain remains isolated.

The views now of Guy Verhofstadt, the leader of the alliance of liberals and Democrats in the European Parliament and the former prime minister of Belgium. Obviously he sees the EU treaty as being a great success as an intergovernmental agreement. However, he is seriously worried that the UK is now seriously isolated.

(BEGIN VIDEOTAPE)

GUY VERHOFSTADT, ALLIANCE OF LIBERALS AND DEMOCRATS: ...because it is a system if it based on the community matters, and if it is a system based on the powers of the European parliament it shall work. And what is more important, I think, is to understand and to say that maybe the fact only to tackle fiscal discipline is not enough, there are other things to do to tackle this crisis who have not been tackled today. You're about markets and hands off with European Central Bank, more firepower for the rescue funds, I think also an economic government for the EuroZone. (inaudible).

So I think the weak point of today is not this new treaty, the weak point is today the fact that not have been settled.

QUEST: How damaging is it that the UK has decided not to go along with this for whatever reason and therefore the basically split?

VERHOFSTADT: I think it's maybe damaging for Great Britain, because Great Britain has now put itself outside the club -- is his main, his most important trade partner. And I think it's always better to be inside a club and to decide with your most important trade partner then to be outside the club certainly because it's about economic governance.

QUEST: But you can understand, surely, why Mr. Cameron could not accept the financial tax since he is the prime minister of the country with the single largest financial market in Europe?

VERHOFSTADT: Ah, but at the same time you don't -- can't say yes to two requests -- Mr. Cameron had two requests. His first request was I want a guarantee for the single market. OK. Everybody agreed to give it to him. And then at the same time he asked for an exception for financial services. That's not coherent. And you don't -- you cannot ask for a guarantee for the single market and then to say, yeah, but for my little active -- important activity here I want an exception. That is not possible.

QUEST: So, can you confirm for us tonight a two speed Europe, a two- tier Europe? The ins and the outs?

VERHOFSTADT: Well, you can maybe see it as a two speed Europe. I see it more as 26 countries going further on the path of full European integration and I'm sure that within a few years maybe other British leaders shall think that their interest is again inside the club and not outside.

QUEST: Does this remind you of Thatcher's years?

VERHOFSTADT: A little bit, yes. But at the end it was Thatcher who was inside the club, not outside. You should be able to say that Cameron is tougher than Thatcher.

(END VIDEOTAPE)

QUEST: Guy Verhofstadt, the senior European politician and former prime minister of Belgium. We have much more to come Quest Means Business as we consider exactly what they decided, and more crucially was it enough. We're live in Brussels tonight. Good evening.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.

More of that in a moment.

This is CNN. And on this network, the news always comes first.

And we start, of course, with the news from Brussels, where Eurozone ministers and several other countries did agree to move forward with an intergovernmental agreement for closer fiscal union, what they call a fiscal compact. It will involve greater intrusion into nation's economies, automatic sanctions for reaching deficit limits and closer economic cooperation.

The United Kingdom, as its prime minister, David Cameron, vetoed a full scale treaty rewrite. The United Kingdom is now the only country on the outside.

We'll talk more about that in a moment.

For other news of the day, Becky Anderson is at CNN London.

BECKY ANDERSON, HOST, "CONNECT THE WORLD": Yes, I am, Richard.

Thank you for that.

And Syrians have taken to the streets again despite opposition warnings of an impending government assault. Now these pictures that you are seeing are said to be from the city of Homs, where at least 15 people were reported killed on Friday. Reports indicate another 15 deaths in other towns.

Now, activists have called for a nationwide dignity strike, as they call it, to pressure the regime through civil disobedience. And they hope that will start on Sunday.

Congo's election commission says incumbent Joseph Kabila has won a second term -- and by a wide margin. But the opposition calls the announced results totally unacceptable. And its leader has reportedly now declared himself to be the president.

In Calcutta in India, six hospital managers have been arrested in connection with a deadly fire that killed 88 people. They are accused of negligence. A government official says the majority of the bedridden patients at the Calcutta hospital were abandoned by most of the staff who were on duty, who simply fled the building.

Those are the other headlines this hour.

Back to Richard in Brussels for more QUEST MEANS BUSINESS -- Richard.

QUEST: David Cameron insists that the United Kingdom will still have influence at the European level despite the fact it is on the outside of this new agreement and is seen as being one of the troublemakers. The UK's Europe minister, David Lidington, joins me now from Westminster -- Minister, why did the U.K. feel that this was the moment to actually go for it, when clearly the other countries were going to go forward with or without you?

DAVID LIDINGTON, U.K. MINISTER FOR EUROPE: Well, we made clear -- the prime minister made clear at the summit that we want the Eurozone to find a way through its difficulties. And I think, you know, the -- the real test of the summit outcome is going to be whether the Eurozone countries, the 17, are able to satisfy the markets on what they do with things like the EFSF and the Greek write-down and -- and so on, the bank recapitalization.

But what the prime minister had to decide...

QUEST: Right.

LIDINGTON: -- was whether what was being offered, in terms of a treaty amendment to the Treaty of Lisbon, contained adequate safeguards for British interests in return for putting these new arrangements designed for the Eurozone within the overall structures of the European Union.

Now, we put forward what were very, you know, frankly, modest and straightforward proposals for safeguards.

QUEST: Right.

LIDINGTON: There were other countries who couldn't accept them. And the prime minister decided that, in that case, he couldn't agree to a treaty at the level of 27. And the others, if they wished to go ahead...

QUEST: OK.

LIDINGTON: -- with a separate intergovernmental agreement, they could -- they could do so.

QUEST: As this process moves forward, is the U.K. going to prevent them, using the Council, using the Commission, using the courts, all the things that would imply this governmental agreement is part of the European Union?

The prime minister seemed to suggest so last night.

LIDINGTON: Well, it's certainly the case that this intergovernmental agreement is not part of the European Union. The European Union continues to exist and nothing has been done or agreed that changes the framework of the treaties. They are there in every word and article, as they were the day before yesterday.

And we...

QUEST: Right.

LIDINGTON: -- we still have to see a lot of the detail of what the Eurozone countries are proposing, because that is still to be worked out.

QUEST: But if it goes the way they were talking today here, full steam ahead, are you going to litigate, if necessary, and do what you can to prevent them using the -- the -- the institutions of the Union?

LIDINGTON: Well, the institutions of the Union are there to serve the Union as a whole, all 27 members, and not to serve one or other bit of it.

QUEST: Finally, if we take Britain's role now, you know, you know as well as I do, that here in Brussels, people were talking about a loss of influence, they're laggards, they're once again back to the Thatcher years of no, no, no, standing on the outside.

Is this good for Britain?

LIDINGTON: I think that the prime minister took a decision on the basis of what was in the British interests. I think that's what the British people would want him to do.

But if you look elsewhere in those summit conclusions, Richard, you will find commitments to develop a single digital market, a single energy market, to cut red tape and regulation on small businesses throughout Europe, to focus on international trade. Those are all agenda items for Europe that, frankly, could have been scripted in London...

QUEST: All right.

LIDINGTON: -- and where Britain has played a leading role in helping shape European polity. And that, I believe, will continue.

QUEST: And, finally, Minister, I know no one ever likes to box themselves well and truly into a political corner, so never say never.

Is it still possible that at some stage, the U.K. will sign on board?

LIDINGTON: Well, sign on for the euro or -- or for this -- this pact?

I think -- I think the -- the -- the prime minister's statement...

QUEST: Good. Good point. For the pact.

LIDINGTON: For the pact. For the pact. Yes, but the euro would require a referendum if any future government proposed it.

The -- the pact, no. I think the -- unless the safeguards that the prime minister asked for, which, as I say, were modest and straightforward and were about not options for the U.K., but about protecting the integrity of the single market for every member of the European Union, then I don't think we could be part of it.

QUEST: Minister, many thanks, indeed...

LIDINGTON: Thank you.

QUEST: -- for clarifying my question and giving us an answer. Europe -- UK's Europe minister, David Lidington, joining me from there.

All week, we have been reminding you that Olli Rehn said there were 10 days to save the euro.

Did they do it?, after the break.

(COMMERCIAL BREAK)

QUEST: Every day for the past 10 days, we have reminded you that the European economics commissioner, Olli Rehn, on November the 30th, said there were 10 days to save the euro.

(BEGIN VIDEO CLIP)

OLLI REHN, EU ECONOMIC & MONETARY AFFAIRS COMMISSIONER: We are now entering the critical period of 10 days to complete and conclude the crisis response to all the European Union.

(END VIDEO CLIP)

QUEST: Now, somewhere here was our advent calendar, which we left overnight. Maybe it was the advent calendar or maybe it was the chocolate within it. Whatever it was, when we turned up this morning, it certainly wasn't here for us to show you tonight. So no advent calendar, but we have Santa Claus and a seasonal greetings of Jim Boulden, who is with us.

JIM BOULDEN, CNN CORRESPONDENT: So I got the last chocolate last night. That was it.

QUEST: You got it right out. Somebody here has got the last chocolate.

All right, let's remind ourselves exactly Jim, of -- of how it all went.

November the 30th, the central banks boosted liquidity. That was day one of the 10 days to save the euro.

BOULDEN: Markets loved it. It wasn't to help the politicians, but it was to help the banks. And the banks needed it.

QUEST: And on Thursday, December the 1st, fiscal union talks. That was the Merkel...

BOULDEN: Merkel, yes.

QUEST: -- Sarkozy love-in.

BOULDEN: Until then, we didn't have a term. Now we had a term, fiscal union.

QUEST: And, oh, we didn't have that until we had Markozy (INAUDIBLE).

(LAUGHTER)

QUEST: December the 2nd, that's a week ago, the best week of the markets. You loved that.

BOULDEN: Yes. Because I think the markets responded very positively to all the rumors about what was going to happen here.

QUEST: OK. On December the 5th, Italian austerity, tightening the belt of the Italians and there's probably more to come.

BOULDEN: Nobody believed the previous prime minister, so Monti was able to do things that the previous prime minister could not possibly do.

QUEST: And when the German finance minister said best encouragement to the downgrade of the Eurozone countries, he was just being tongue in cheek.

BOULDEN: Well, downgrades are less important right now, I think, because they're -- they're responding to what might happen in the future.

QUEST: December the 7th, Wednesday. Tim Geithner trusts the -- says it's going to work.

Has it worked?

BOULDEN: It was very important for Geithner to come here and make it very clear that the U.S. -- that this was it, as well, not just Olli Rehn, but Geithner saying this is the time.

QUEST: ECB unlimited cash, interest rate cut on December the 8th.

Another step in our critical 10.

BOULDEN: Yes. And not to help the politicians again, but to help the banks, because that's what the ECB can do.

QUEST: All right. Come back to me for December the 9th, the deal. ECB, who managed the bailout funds, $270 billion through the IMF and an intergovernmental treaty.

Was Ollie -- has Olli Rehn got his critical days of success?

BOULDEN: Yes, he has. Very simply put, they have saved the euro. They have got a deal. Now we have to see the details. But honestly, this is what many people were looking for...

QUEST: Oh.

BOULDEN: -- except for Britain pulling -- Britain not being part of it.

QUEST: So euro -- we don't know -- I mean the markets are up today.

BOULDEN: Yes.

QUEST: The Dow Jones Industrials, if we have a look, is up some 170 odd points...

BOULDEN: The banks are doing very well.

QUEST: -- or (INAUDIBLE). The banks are up very strongly, as well.

BOULDEN: Yes.

QUEST: So the markets like it. The question becomes whether -- 190 points for the Dow at the moment -- whether this evaporates, whether these gains evaporate as the detail gets put on and they realize it's not going to work as well as they thought.

BOULDEN: Remember, you don't actually need that money unless you have to bail out Italy. So what you needed was the confidence. So the idea was that they could have enough money to bring confidence back.

And so far this week, we have seen that confidence risk returning, not restored, but returning.

QUEST: And poor old Britain. The Europe minister says to me tonight that Britain is still playing a role, that -- that Britain had to do this.

BOULDEN: It was so fascinating this morning when you thought that there were other countries backing Britain. Very quickly, those other countries went right back on the board and said wait a minute, we don't want to be seen to be part of what Britain's doing.

QUEST: Hey, I just had a thought. We had the advent calendar between now and for -- for -- for this one. The next summit is in March.

BOULDEN: Right.

QUEST: It will be the Easter bunny. We'll put you here with an Easter England.

Jim Boulden...

BOULDEN: Next it will be Saint Patrick's Day, right?

QUEST: Saint Patrick's Day.

Many thanks, Jim Boulden.

And that concludes our coverage, 10 critical days to save Europe.

I'm Richard Quest at the Euro summit in Brussels thanking you for your time and your company. And saying that whatever your up to in the weekend ahead, I hope it's profitable.

I'll see you next week.

(COMMERCIAL BREAK)

ROBYN CURNOW, HOST: You're watching MARKETPLACE AFRICA.

I'm Robyn Curnow here at the U.N. Climate Change Conference in Durban.

Now, besides all the world leaders that are meeting over there, big business is also here. Governments have pledged to create $100 billion Green Climate Fund by 2020 to help vulnerable countries deal with rising temperatures.

But with the global financial crisis, more people are looking to the private sector than ever before.

(BEGIN VIDEOTAPE)

CURNOW (voice-over): For the first time, the Chinese government has brought CEOs from its energy companies to the climate change talks. China is the world's leader in renewable technology and they say they want to share their knowledge with Africa.

YUE TAN DAVID TANG, TIANJIN CLIMATE EXCHANGE: So we've come to Durban to tell people what we've done in China, as well as what we can do for our friends in other parts of the world, including Africa.

I would say for South Africa and Africa in general, there is a lot of opportunities in developing emissions reduction projects, including CDS projects. We know that China has been quite successful on this front and Africa might benefit from the Chinese experience.

CURNOW: And this is the Africa Pavilion, with its own makeshift hut and forest. Here, some of the continents companies have set up stands. One business that's unveiled a new product in Durban is Econet Solar.

Almost 650 million people in Africa have mobile phones, but not everyone has electricity. To stop people burning kerosene in their homes, which is dangerous and causes pollution, the company has created a way of using your mobile phone to access electricity through a solar panel.

A family buys credit on their phone, plugs it into this machine and it lights your home.

The company's CEO argues they are providing electricity to people and places where governments can't afford to reach.

STRIVE MASIYIA, CEO ECONET WIRELESS: One of the major challenges for African governments in providing electricity is the capital costs associated with the traditional model of providing electricity. You've got to build huge power stations. You've got to build electricity grids.

So even for a small country, this runs into hundreds of millions of dollars.

What we are doing now is using the balance sheets of cell phone companies to -- to -- to break down

The distribution of power.

(END VIDEO TAPE)

CURNOW: That's one business announcement that's been made here in Durban.

But on a bigger scale, there's been discussion on how to unleash the kind of capital that is needed to fund this Green Fund.

Now, Imtiaz Ahmad is a climate finance expert at Morgan Stanley. And I think it's a really important question.

What -- what does business want from the leaders? IMTIAZ AHMAD, MORGAN STANLEY: When a combination of policy certainty here in the host country. In addition to that, we need the public sector resources (INAUDIBLE) countries.

CURNOW: Do you think it can be done?

AHMAD: Absolutely, I think it can be done. It's a question of political will and policy certainty. And the sooner a decision can be made to take things forward, the sooner those of us in the finance and investing side can get on with matters.

CURNOW: It's been said over and over again, you know, the time is now, that the time is now to make those investments, isn't it, because essentially you need to build a wind farm of invest in -- in some sort of renewable technology now for it to sort of play out over the next few decades?

AHMAD: Well, absolutely. Whether it's here in South Africa, whether it's Kenya, elsewhere in Africa, whether it's Latin America, such as Brazil or Chile or India in Asia, countries in the developing world emerging markets are growing rapidly and they need energy. So the very first thing is a decision whereby they need to make decisions. And that may well mean they need to invest in thermal energy as a business as usual choice. however, if we want to incentivize greater investment and greater deployment in the clean tech space, in the clean energy space, then the politicians need to speed up the decisions.

CURNOW (voice-over): As protesters demand pledges of money from governments to fight climate change, we sit down with South Africa's former finance minister, one of the people tasked with creating the Green Climate Fund.

(COMMERCIAL BREAK)

CURNOW: This is the South African government department's exhibition here at COP 17. Now, many people argue that there needs to be greater cooperation between public and private sectors, particularly climate finance.

Well, our guest on FaceTime this week is Trevor Manuel.

He's a cabinet minster here in South Africa.

He's a former finance minister.

And when he's not busy with his day job, he's also helping to create the Green Climate Fund.

(BEGIN VIDEOTAPE)

TREVOR MANUEL, SOUTH AFRICAN MINISTER: In order to advance the balance in the world, the world needs a big fund. And that fund was set down in Copenhagen at $100 billion a year.

CURNOW: That's a staggering amount of money.

MANUEL: A staggering amount of money.

CURNOW: But, actually, that's the most amount of money that's ever been pledged, essentially, to -- to -- to one cause, isn't it?

MANUEL: In fact, it goes further. If one looks at the -- the decision in Copenhagen, it speaks of the transfer from the developed to the developing world. Now, this excludes developing countries. In fact, it's a big recognition of the fact that the emissions that are setting the greenhouse gases sitting in the atmosphere got there largely as a consequence of the development path of now the world's wealthiest countries and that there's a connective element inside this $100 billion a year by 2020.

And -- and if you pause for a moment and consider that the World Bank disperses above $14 billion a year, $100 billion, I mean just changes all of the elements of -- of distribution quite significantly.

And so it also requires a very different kind of organization to manage this -- this -- this fund.

CURNOW: Because, essentially, what we're looking at is a reworking, a re-shifting of the global financial system.

MANUEL: That...

CURNOW: Possibly.

MANUEL: There is a very important dimension of that shift. Not all of it will be direct development assistance. I think that there are a series of other elements in there, including certain taxes that will be raised on carbon, on bunker fuels for both maritime and -- and airlines and -- and a series of issues like that.

There's also a private sector window because bringing the private sector will mean that the fund can leverage offers. And it -- it's combining all of these issues in a way that's transparent and new because the words in the Copenhagen Accord are new and additional resources.

So it's not your current close. It's -- it has to be or comply with the criteria that are about both newness and additionality.

CURNOW: The reason I -- you know, I -- I'm fascinated by this, because it's not just about climate change and a little bundle of money to sort of help with adaptation or mitigation and sort of to silence the developing world and say, OK, well, you know, we -- we made the mistake, you know, here's some money to -- to sort of keep you guys quiet.

I mean this is so fundamentally different to the way things have gone before, because this fund, from what I understand, if you -- depending on what you get out of it -- it's focusing more on direct access in terms of the projects that the developing world wants. So there's not this top down approach. And I think that's what I mean when I'm saying a shift.

MANUEL: That -- that shift is -- is -- is self-evident. But I think that it's -- it's going to be necessary to define the criteria, because it can't be a (INAUDIBLE)...

CURNOW: So journalists like -- like me should stop getting so excited?

MANUEL: Well, it can't be everything to everybody.

CURNOW: So how do you raise $100 billion?

Managing it is one thing, raising it is...

MANUEL: Raising it is going to be tough. But, you know, on the one hand, the -- in -- in the report drawn up last year, there were things like carbon taxes, there were things like the bunker fuel taxes on both ships and -- and -- and airplanes.

But now, what has happened is that was -- there was agreement on that in broad terms. Manuel Barroso in -- in -- in the European Union or European Commission has actually unilaterally declared those as taxes, because the Europeans need a bailout.

Now, there needs to be a debate about that because you can't allow these measures that were carefully thought through to be taken away.

There was also a debate that we had in the course of last year, trying to answer the question, how do you raise $100 billion around tax and financial transactions?

We couldn't reach agreement on it in that report, but subsequently, the Bill Gates Foundation had prepared a report for the G20, tabled with the heads of state in Cannes a few months ago. And they demonstrated, from a small, on miniscule tax and financial transactions, we should be able to raise on the order of $50 billion a year.

It's a significant amount of money. I think when we add all of this up, what we have to agree is that it is clearly within the reach of decision-making.

(END VIDEO TAPE)

CURNOW: Trevor Manuel there.

Now, let's see what's trending in African business news this week.

(ON SCREEN)

Trending

Conflict Diamonds

Global warming has withdrawn from the Kimberly Process, protesting its decision to allow exports from Zimbabwe's controversial Marange diamond mine.

The diamond industry was established to stop the trade in conflict diamonds.

Islamic Bonds

South Africa is looking to diversify its investor base by offering Islamic bonds.

The national treasury has asked banks for proposals on how to issue the bond, known as a sukuk, which could be available in the next financial year if approved.

CURNOW: You can join the conversation on CNN's ecosphere. It basically collects all of your Tweets with a hash tag, COP 17, and then divides them all up depending on the subject matter. It's basically a very innovative way to get a real sense of the global conversation on climate change.

But for now, from me, Robyn Curnow, here in Durban, see you again next week.

END