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Quest Means Business

Britain Hits Back at French Slight on its Economy; Jeffrey Sachs: Germany Obsessed With Budget Deficits, The Perils of Office Gifting

Aired December 16, 2011 - 14:00   ET

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

RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Unacceptable. Britain hits back at a French slight on its economy.

Early deal for Zynga. Can they keep up the games?

And gift or gaff? Tonight we look at the perils of giving presents at the holiday season.

I'm Richard Quest. It's Friday, but I still I mean business.

Good evening.

First tonight, comprehensive solutions to save the Eurozone is, according to one ratings agency, beyond reach. Fitch agency says, as a result it has place France and six other European countries on a negative ratings watch. Spain, Italy, Ireland, Belgium, Slovenia, and Cypress are the other countries that are affected.

One bit of good news for France is that Fitch has affirmed its AAA status at least for now. They gave with one hand, they affirmed, and then they put it on negative watch, they took with the other. The European Council is hoping to bring its rescue plan into force faster than it usually would. Under draft proposal is the new rule changes would begin as soon as nine Eurozone countries have ratified the deal. Those who have ratified would be bound and would begin working under the new rules within weeks or even days.

The downgrade warnings have been on the mind of European investors all week. And today markets fell in the sessions. Largely responsible for what, of course, they see as being a deteriorating situation.

Thankfully, the losses were not severe. Banking stocks struggled after banks were downgraded by Fitch. Fitch did quite a lot today one way or another. European lenders like Barclays and Deutsche Bank, it says there are now fundamental risks in the global banking, trading environment, according to Fitch. And that helped push stocks lower. Each of the big four finished solidly lower for the week, as a whole.

Also slipping, the euro, the single currency is hovering around a buck, 30. Now at that level it is over $1.30 and that is considered to be significant because we were under $1.30 earlier in the week. But there is not question that at these rates and these levels, it is the lowest level since the beginning of this year.

What has been on everyone's mind during the course of Friday, France and Britain, and the war of words across the 32-mile English Channel. And how the two parties and two countries can stop the row from escalating any further. Britain's deputy prime minister has given the French PM a talking to after Francois Baroin suggested the U.K. would be a better candidate for a downgrade than France. The French finance minister and the bank of France governor joined in and not surprisingly, you can imagine, it has turned rather nasty. Join me and I'll show you the slug fest between France and Britain that we are now seeing at the moment.

Seconds away, round one. In the red, white and blue corner the U.K.'s Deputy Prime Nick Clegg has been telling the French prime minister that his comments were simply unacceptable. Remember that the PM said that the U.K. was in a worse economic shape than France. Now not only that, but the Bank of France Governor Noyer, Christian Noyer, agrees and has also joined in.

In the Le Blue, the blue corner, the French Finance Minister Francois Baroin, he has said, "We prefer being French rather than British". Now that is paraphrase. He is actually talking about the economy. He says the economic situation in Great Britain is very worrying, we prefer being French rather than British.

So, there you have the two sides. Now both sides are doing what they can to try and calm things down. The French government spokesman said that it was trying to calm matters and stressing the U.K. was an important strategic partner.

Plenty to talk, then, about. Joining me on the line, Christian Malard, joins from-

CHRISTIAN MALARD, JOURNALIST, TV3: Good evening, Richard.

QUEST: First of all, sir, good to have you with us. You heard me talk about the escalating war of words. Why are the French being so bellicose against the British at the moment?

Well, I'm not going to dramatize, Richard, the relationship. These bones of contention between France and Great Britain, between Nicolas Sarkozy and David Cameron right now. Because when you talk to the people, here even in the wake of Sarkozy they want to minimize these different approaches. Definitely, it is clear that Great Britain and France have so many interests in common (UNINTELLIGIBLE) matters. We have been hand in hand in Libya. And of course, concerning the Eurozone, of course, there is a difference. The French are very disappointed. They would like the Britons to have a more European approach, a more solidarity approach concerning the euro problems, to be (UNINTELLIGIBLE) by the 27.

At the same time I don't think we have to give too much of that importance about these bones of contention. We don't-

(CROSS TALK)

QUEST: Right, but let's just-if I go back to my super screen, we can show exactly the economic situation between the two. These are the areas, but it the French and the British economy. Now, Christian, if we take the deficit, actually, for 2012, the forecast deficit, Britain is clearly in a worse situation. It has 9.4 percent of GDP. So it is actually the French that actually win on that one. If we then look at debt, overall, I think with this one, we can say equal Stevens, they are roughly at about 84, 85 percent of GDP.

Moving on to growth, now here is interesting, again, I think with the growth numbers, once again, I think we can say, it is even Stevens, Christian. We have growth next year forecast at 0.3 of a percent in France, 0.5 of a percentage point in the U.K. And finally, inflation: Here there is no doubt, at all, it is the U.K. that looses, because U.K., inflation-those numbers are the wrong way around. The U.K. inflation is considerably higher, than it is going to be in France.

So, Christian, if we take overall the position of economics, and put this together, why then do you think the French have decided that now is the time to really try and ratchet up the pressure, again.

MALARD: Well, it is clear that we must admit President Sarkozy wants it this way. It is clear that the French are following the Germans. We always keep talking, and you know that, Richard. You have been to all these summits, you know that more than anybody.

The French keep saying that French, German, couple work together, must lead Europe, must give the example. And it is clear that I think we go the wrong way if we want to associate great return for all of that.

I'm sorry, I'm going to defend Great Britain. I think Great Britain has to be at the top of the level in Europe, even if you are one foot in, one foot out, we had that same kind of thing concerning France, concerning NATO in the past. So concerning the Eurozone, it is clear that Great Britain must be part of game they are playing right now. Which is very difficult and we know about that.

(CROSS TALK)

QUEST: Ah, ah, but-

MALARD: --history lesson. The French must not even listen (ph).

QUEST: Right, the French prime minister has given us-how much has Sarkozy, now really-In all of this, because next year-we've just been talking about how nine-under the deal that is being put forward, it seems as if nine Eurozone countries want this, and ratify it and it comes into affect. Will the French go along with that, do you think? Will they be pleased with that?

MALARD: No, no. Sarkozy officially, Sarkozy tells-and his people say, that there is still hope that there are not the negative ratings, you know that AAA, and so on, but at the same time, when you talk to the people around, in a very out directed (ph) way, everybody is going to get used to the idea that, of course, we would be down graded. And that France would be in the same position as many European countries, concerning the crisis. And we have no miracle. We have no solution. Neither Sarkozy, now his potential contenders, lie Messr. Orleon (ph). So, we have to be together.

And it is fear, that still, we are talking about not long time ago, together, Richard, that German is leading the way. The French are following, but it must not allow us to put all that is put attention on the way to Great Britain.

QUEST: There we'll leave it for a moment. Many thanks, Christian. Have a good weekend, we will talk more about this in the days and weeks ahead.

Now, perhaps sparing the embarrassment of all concerned. If you want to trace the history of dust ups between these two countries. You could go back as far as Azun Court, in 1414. But that might be a little bit unfortunate. More recently there have been problems. And Europe has been the sticking point. In 1967, Charles de Gaulle had one word when Britain tried to join the Common Market. He said, no, and he moved to veto its entry into that early incarnation. In 1984 Margaret Thatcher stood up to the French in asking for rebate from the European community. I want my money back, she famously said, demanding Britain's money back at Fontainebleau.

And Jacques Chirac was no fan of Tony Blair's (UNINTELLIGIBLE). The former French president convicted on corruption charges this week, told Mr. Blair he had been very rude when they argued over the common agricultural policy.

Their successors have been no more friendly. During the EU summit in October, Sarkozy told Cameron he lost a good opportunity to-"Shut up".

And today's prime minister has also joined the euro strangling match. Mario Monti took a veiled swipe at Germany and warned policymakers against short-term hunger (UNINTELLIGIBLE). His austerity plan was approved by the Lower House of parliament. And Monti says he'll now move on to growth- boosting measures. After the vote the lead parliamentarians took the opportunity to dress up as a factory worker, trying to drive home her point that working classes will be hurt most by austerity.

You are up to date on what is happening in Europe.

What on earth does it mean when the U.S. government shut down is put on hold? QUEST MEANS BUSINESS after the break.

(COMMERCIAL BREAK)

QUEST: A collective sigh of relief around the halls of Capitol Hill, in Washington. The threat of a federal government shut down has apparently been averted. The House approved the massive $1 trillion dollar spending bill this afternoon. It now goes to the Senate. Approval is considered certain.

Democratic and Republican leaders are still haggling over side issues. Those include whether or not to extend the payroll tax cuts. One person who disagrees with some of the proposed spending cuts.

Mr. Jeffrey Sachs, the director of the Earth Institute at Columbia University, the author of "The Price of Civilization" and one of the greatest names in economics. He believes U.S. spending cuts are asphyxiating many government programs; a move that is threatening America's global leadership position. We will be talking to Jeffrey Sachs in just a moment from now.

The debt crisis in Europe could be a potential job killer the United States. That is the opinion of William Dudley, president of the New York Federal Reserve. Now, he told Congress that a deterioration in the economic situation could reduce demand for U.S. products and threaten American jobs.

(BEGIN VIDEO CLIP)

WILLIAM DUDLEY, PRESIDENT, NEW YORK FEDERAL RESERVE: The European situation were to deteriorate further, financial markets would likely become more stressed. This could tighten the availability of credit to U.S. households and businesses. And this could damage the U.S. recovery and result in slower economic growth and slower job creation.

(END VIDEO CLIP)

QUEST: In that scenario we need to turn to Jeffery Sachs, in New York; who joins me now.

Jeffrey, first of all, a shutdown has been avoided. There is a $1 trillion spending, but you are highly critical, aren't you of the nature and where that spending is taking place. What is your fundamental problem with it?

JEFFREY SACHS, DIRECTOR, EARTH INSTITUTE, COLUMBIA UNIVERSITY: Richard, we have a mess on both side of the North Atlantic. It is just miserable governance in Europe. As you told so well just a moment ago, and in the United States, it's the same.

Basically, in the U.S. the rich continue to get their tax breaks. We're collecting only 15 percent of national income in federal taxes right now. They are slashing everything under the sun from education to science and technology to infrastructure. We are just eating away our future.

Yes, one could say that a budget has been balanced, the government is not going to shut down, it is just slowly being asphyxiated, as you mentioned, I have said. We are squeezing to the point where we are depriving our own future by failure of public investment.

QUEST: OK, but the-in politics at the moment, what seems to be, it is the art of the possible not the desirable. And it is the deal you can get done, not the deal you wish to get done. And we are certainly seeing that in Europe. Which are you more concerned about at the moment? Which side of the Atlantic?

SACHS: I think Europe could collapse earlier, but the U.S. is squandering an even greater prosperity that was within reach, but we are just giving it up. Europe has taken a very strange line. Of course, it is Germany dictating everything. But on the European side, it is Germany's obsession, actually, with budget deficits, when what Europe really needs is a fix to the banking sector and liquidity.

And we are not getting the solutions that could revive the European economy, from the banking and liquidity side you need recapitalization. You need the European Central Bank behaving properly, as a central bank. Neither of those is happening. Germany is completely fixated on budget deficits. On the U.S. side the fixation is up elsewhere.

QUEST: Right.

SACHS: It is fixation on keeping taxes low for the rich. That is all we have in our politics right now. Keep taxes low for rich, keep taxes low for the corporates, and the result is we are not collecting enough revenues to run a decent country anymore.

QUEST: So, let's stay with Europe and we'll come back to the U.S., finally, but let's just stay with Europe. The deal that was agreed last week, which is long and complicated, and may come in, in January-sometime in the early part of next year.

Do you fear, as we look to 2012, that the-as Fitch has said today-that this solution simply cannot be worked. It is an unworkable option that is being put on the table.

SACHS: I think as long as Europe is being run by a single country, Germany, and as long as Germany is fixated on what is not the problem, Germany's fixated on budget deficit and new treaties and all the rest.

Whereas Europe is experiencing a massive banking crisis, a crisis where the banks need a recapitalization. And where they lack liquidity, because the interbank lines have dried up. Unless that is faced as banking and financial crisis I don't see how all of this talk of long-term treaties and discipline and so forth is ever going to hit the mark.

And what I found shocking, as I watched closely in Europe, over the last few months, watching specifically at how the Greek crisis was being handled. Of course, it is not secret Germany calls all the shots. But not on a professional basis, as far as I can see, on whatever happens to come out of German domestic politics. And then everybody is supposed to run after that. Which is why I think that Prime Minister Cameron-

QUEST: All right.

SACHS: -was exactly right to say, wait a minute, we are not signing up to a treaty that doesn't even exist.

QUEST: We'll talk more about it in the future. We are out of time. Jeffrey, good to see you as always. Thank you for joining us from New York and giving us perspective and wisdom. Jeffrey Sachs, joining us from New York.

(DESK BELL CHIMES)

The markets and how they are trading? Well, do you need me to tell you much more than that? Let us not waste a second more. We are off 13 points on the Dow Jones industrials.

Coming up in a moment, your Christmas conundrum.

(BEGIN VIDEO CLIP)

QUEST (on camera): `Tis the season to be giving. The morality of giving gifts.

Can I give away all the rubbish on my desk, and say Happy Christmas?

(COMMERCIAL BREAK)

QUEST: It used to be such an easier and happier and-ah, simpler time when we used to give gifts in the old days. A time of mirth and merriment, there when you don't get the right Christmas present it can turn into a minefield. Whether or not it is to buy, what to buy, and how to buy, the Christmas dilemma, they simply pile up; a bit like the presents, as I've been finding out.

(BEGIN VIDEOTAPE)

QUEST (voice over): It is a scene you might dread. Return from lunch to find a colleague with the unexpected gift.

(On camera): Hello, Lisa, girl.

UNIDENTIFIED FEMALE: Oh, hi, Richard. Wait before you go, I have a gift for you.

QUEST: Oh.

UNIDENTIFIED FEMALE: You are such a lovely person, you are so nice to me, I bought you a gift.

QUEST: Oh, how unexpected!

UNIDENTIFIED FEMALE: Merry Christmas.

QUEST: Oh, how lovely, oh.

Tstatsumi (ph), anyone?

UNIDENTIFIED FEMALE: Oh, huh, thanks?

QUEST (voice over): Times are hard, and perhaps even this Christmas we all need to be Scrooge.

(On camera): At work the question is for whom do you buy presents? Take the newsroom. I've known some of these people for years. And the rest? Virtual complete strangers. Do I have to spend the same amount of money on each of them? And if I do spend different amounts and they find out, it will be a nightmare.

(voice over): Gift galore, and gift away, at Christmas time don't give too much away.

Earlier in the week, Annie, very kindly gave me this gift of little Christmas crackers. And Christmas is the season for giving, and since I've got plenty of this sort of stuff, can I now give it to somebody else?

What is the morality of re-gifting? Well, I suppose if I-now, oh. Happy Christmas!

(END VIDEOTAPE)

QUEST: So there is plenty of stuff to be given away. Joining me now is Wendy Walsh. She joins me from Los Angeles.

Let's go through the big dilemmas. First of all, re-gifting, the stuff you got, is that legitimate and can I do it?

WENDY WALSH, CO-HOST, "THE DOCTORS": Absolutely immoral. Shame on you. If you are going to re-gift, the thing to do is to turn it into charitable dollars. Give it to-if it is books, give it to the public library. If it is something you can put in a silent auction gift basket, for a school, or a charitable organization, or in a yard sale where the money goes to charity. That all makes sense.

QUEST: Ah!

WALSH: But if you are going to get like gratitude and love for something you didn't buy, that is immoral.

QUEST: You are just frightened you might get caught out and give it to the wrong person and the first person will find out.

(LAUGHTER)

WALSH: Maybe. Maybe, might get caught.

QUEST: So, re-gifting is a no, no. What about the unexpected gift. That is the one that really terrifies me. A colleague, who I don't know very well, gives me a gift. I don't have anything for them. I don't really want to spend a penny on them. What do I do?

WALSH: OK, well here is the important thing you should know. Remember, Richard, I'm America's relationship expert, and any relationship where you keep score and count, is doomed. The relationships that do best express a lot of gratitude to each other.

So if you get an unexpected gift you are not compelled to give another gift back, unless, you happen to have a bunch of oranges in your hand, like you did. Otherwise, what about a nice thank you note, saying how touched you were, and expressing your gratitude. That will go a long way to you having a good relationship with this person than scrambling to buy a gift at the last second.

QUEST: OK, truth be told, they'll know that they bought you something and you didn't buy them something.

WALSH: It doesn't have to be reciprocal. There are all kinds of gifts that create trust in a relationship. Maybe the next time around, when you are bringing coffee back for the whole office, you include this person when you wouldn't normally. Maybe you include them in more business affairs, that they might not have had access to before. There are ways to express your connection to somebody, if indeed, you want to.

QUEST: Finally, we do get stressed, terribly stressed, at this time of the year. With the gifts, who to give, how much to spend, and all these things. What would be your single most important piece of advice when giving a gift this year?

WALSH: Make sure you give a gift that has meaning to the person, not you. I find plenty of people buy gifts that they would like to have, but then they given them to somebody else because they feel, they might enjoy it. But try to understand some small thing, even about somebody and give them a gift that is appropriate.

Also, gift the people who serve you the most during the year. Whether it is doorman who got you taxis, or whether it is-of course, your boss. They serve you with paychecks. You have to serve them. But the people, who do little things for you.

And then if you have big offices to deal with, buy a big tray of baked goods. I was here at CNN yesterday with a big tray of baked goods that I bought at our school bake sale. So, I helped the school out buy buying it.

QUEST: Ah.

WALSH: That is the way to gift big groups.

QUEST: Wendy, wonderful to have you on the program. Now which shall I give her, the plate I received? The old mug? Or maybe the doll. Oh, there are plenty of gifts coming your way. Many thanks, Wendy for joining us from Los Angeles.

When we come back in just a moment, Zynga has bet the farm and has its online payoff.

The online gaming giant went public today. The IPO, the biggest since 2004. How did the share far? In a moment, QUEST MEANS BUSINESS, good evening

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest.

More QUEST MEANS BUSINESS in a moment.

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

Rights groups in Syria report large protests and more violence across the nation following Friday prayers. Activists say that 17 people were killed, nine of them in Homs. CNN cannot confirm independently reports from inside Syria.

There's been violence in Cairo at a protest after weeks of peaceful demonstrations. Journalist Ian Lee tells us he's seen Egyptian security forces on high buildings throwing Molotov cocktails and rocks at protesters below and that he's also witnessed them beating people that they are detaining.

European investigators say they've confiscated some of the most disturbing child pornography they've ever seen. It's from an online file sharing network that spans some two dozen European countries. Europol says more than 100 arrests have been made and many more are expected.

Customs agents at Moscow's main international airport are trying to solve a nuclear mystery after discovering 18 piece of radioactive metal inside a passenger's luggage. The baggage was headed for Tehran. Customs agents say the passenger boarded the plane. It's not clear where the passenger is right now.

Harvest time for Farmville. And it turns out there's a lot of money in virtual crops and cattle. Forget the real commodities, it's the Internet commodity that's actually the big stuff.

The parent company, Zynga, went public at $10 a share on Friday. It put a price tag of about $7 billion on the giant. The biggest Internet IPO since Google in 2004.

Oh, would we all wish we had got in on that IPO.

How are Zynga's shares faring today?

In the opening minutes, they shot up more than 10 percent -- that's a nice stage, that 10 percent, that's what you want, before plunging back down to $9.50. They're down to about $9.25. Not the pop that people had enjoyed or had hoped for.

Zynga's IPO is the latest in a line of tech companies that have gone public, as we will now show you. LinkedIn, the social networking site, is the standout performer at 47 percent since its launch. The price more than doubled on the debut, a really strong IPO, now 50 percent above its peak.

Move the deck. Groupon came in in November. Theirs up more than 15 percent swine the debut six weeks ago today.

Move the deck.

Pandora, since June, is up -- oh, it's down. I beg your pardon, down. That should be on the -- even I should be able to spot the red arrow. But there we are. It's been a long day.

Anyway, isdn more than one third since the flotation in June. The demand was great. Invent -- investors started to dump the shares. It's never turned a profit. It doesn't expect to make any money until at least 2012.

So to put all this in perspective, Karina Huber is at the New York Stock Exchange and joins me now.

When we look at what has happened, Zynga is up but it's now down.

So do we take this as a barometer of something wider or is this just Zynga's own problems?

KARINA HUBER, CNN CORRESPONDENT: Well, that, of course, is the million dollar question, Richard. And, actually, if you look at the share price right now, it is up by $0.35. But that's really nothing to get excited about when you look at how well a lot of the other tech IPOs did in their first day of trading.

What's a little surprising about this is that demand was seen to be quite robust for the company, particularly because they are profitable, one of the rare tech IPOs to actually bring in some money in 2010. They had revenue of -- I'm sorry -- profits of $90.6 million.

So perhaps what happened here is perhaps they priced it wrong and they should have maybe priced it at $9 a share, giving it a little bit more room to grow.

One of the concerns, though, among a lot of the analysts is where is the company going to go forward, because right now, they believe even though they have four of the five most popular games on Facebook, there is some concern that they could be losing market share on Facebook...

QUEST: Right.

HUBER: -- and that gaming on Facebook overall is not as attractive.

So it seems to be company-specific, but as you know, I mean we've seen some tech IPOs do really well, others not so well.

And some disconcerting statistics. According to Standard & Poor's Capital IQ, companies who see their prices go below the initial price on the first day of trading traditionally also move ground in the weeks following...

QUEST: All right...

HUBER: -- and lose about 52 percent of their value. So the statistics are not good there -- Richard.

QUEST: Now, today is that quadruple witching, when options, stocks, derivatives, they -- I mean they all -- look, is -- are these witching days still as important as they used to be when I was growing up?

HUBER: Well, I wasn't around when you were growing up, Richard...

(LAUGHTER)

HUBER: -- so I wouldn't know.

(LAUGHTER)

HUBER: No. Just be told -- I mean it is still seen to be as something that does sort of play heavily into the markets. We've traditionally seen that in the last hour of trading, so in about 24 minutes from now, we could see some big news as a lot of the investors try to sell things out as these options and futures contracts expire.

QUEST: Yes.

HUBER: So right now, we are in negative treaty for the Dow. The S&P 500 and the NASDAQ are still positive. But, of course, all of this could change in about 24 minutes from now. We'll see.

QUEST: Karina Huber, one less present to have to buy and gift this year on Christmas.

Many thanks, indeed, for joining us from New York.

Good to see you, Karina.

Wasn't around when I was growing up.

Right.

When we come back in just a moment, a check of the weather. I think I can give you the headlines from the weather. Wherever you are in Europe, it seems to be jolly miserable and I'm not sure it's going to get much better.

We'll have professional analysis in a moment.

(COMMERCIAL BREAK)

QUEST: Now, we really -- I've been making light, in some respects, and I certainly don't mean to, of the appalling weather that there is in Europe.

And Guillermo is at the World Weather Center.

Where -- what is it?

I mean it is just unusual that we're seeing such nasty storms?

It is December, so perhaps we should be expecting it.

GUILLERMO ARDUINO, ATS METEOROLOGIST: Yes. Yes. It is. It's going to happen again and again. So perhaps this time it's a little bit too long.

Have you seen any snow today in London?

QUEST: No. No.

ARDUINO: No?

QUEST: I -- I -- I am not going to -- I am not going to cover your embarrassment or mine on whether there is snow.

ARDUINO: Richard needs new glasses, ladies and gentlemen, because according to the reports, yes, it has snowed. So we have seen snow. And I'm going to tell you where. Luzon was reporting some snow flurries. As we said, it was not going to stay on the ground, like in Glasgow, seven centimeters. But the winds are easing in Britain. But everything is shifting to Germany now, OK?

Now, let's take some airports.

We may see some snow tomorrow in London again at Heathrow.

Paris with some delays, probably, in the afternoon. And then it's going to continue to be breezy.

I'm going to walk away for a minute. I'm going to show you, also, that we have several planes here operating. Let's take this one, American Airlines 155 from London to Boston. Then you see everything is operating apparently normally, so despite the winds, look at the volume. Look at all this here in -- in -- around London and also into the English Channel.

So we have so many planes. So despite the fact that the weather is pretty nasty, the situation continues to be OK for many. So we will continue to see takes -- takeoffs and landings normally. We'll see some more snow here in the north. A little bit of snow probably here, to the south of Great Britain, some more rain here and there. That's mostly what we're going to see, rain.

Now, let's move on to Germany. We're going to see lots of snow, Zurich, probably, in evening hours tomorrow, we may see some delays associated with the bad weather. And Rome with the wind.

So all these cities, I mean it's the entire continent, practically. So when we compare the Great Britain and France here, where we had very bad winds and bad storms, now, look at Germany with all that snow. Remember, people are driving through the Alps these days to go visit family or friends. And the higher you go, the more tech -- treacherous it becomes. So remember to be sensible and to -- to be responsible and drive carefully.

So some observations. A 10 meter wave we had here, according to a buoy in the Atlantic Ocean off the coast of Brittany -- Britannia. So it's actually quite bad.

And not the winds are going down a little bit. But look at when I move to Germany and we see those numbers now turning to double digits. So 35 kilometers per hour. Berlin with 39 kilometers per hour. These are winds. It's not temperature.

So it is going to continue to be quite busy and also treacherous.

Again, Germany, the Alpine Region, storms into Switzerland and into Greece and into Istanbul, Turkey, Bulgaria, Romania. I mean nobody is fine. We are going to see very bad conditions for the days to come -- Richard.

QUEST: All right. We -- we thank you, Guillermo. have a safe weekend and a good one.

ARDUINO: Thank you.

QUEST: And we'll show you -- come back to us unbesmirched on Monday.

ARDUINO: Yes.

QUEST: Now, before we have A Profitable Moment, on the question of re-gifting, @richardquest, of course, is where you can Tweet us.

Mir (ph) Tweets: "No shyness with tips here, garbage collectors, mailmen, newspaper delivery, they all leave envelopes for techs (ph) with deadlines of when they will pick them up."

Tonya (ph) says she does re-gift. The trick is, she says, is to write a sticky on the gift so you know not to give it back to the same person.

Alec Johnson: "Surely you should be gifting travel books and restaurant guides."

Kiki (ph) re-gifts all the time.

Finally, A Profitable Moment. These are times of crisis. Time is running out. Solutions may be beyond reach, says Fitch. I'm not talking about the Eurozone. The real crisis is there's only a few more days to buy gifts before Christmas is upon us, or Hanukah or any one of the other festivals you may be celebrating.

None of us ever get it quite right. You spend too much or you spend too little, too much to the wrong person.

Do you give to everyone in the Christmas spirit or be Scrooge and give to no one at all?

Well, I found my comprehensive solution. I'm cleaning out all the old rubbish that's been given to me or I've collected over the years, silly souvenirs, ridiculous relics, any old tosh that I can find. I'm going to put a bow around it, a bit of fancy paper and give it to somebody else to put under their Christmas tree. On Christmas morning, I simply put my feet up and imagine the look on people's faces when they see the rubbish I've handed out.

And that is QUEST MEANS BUSINESS for tonight.

I'm Richard Quest for QUEST MEANS BUSINESS.

Thank you for your time and your company.

Have a great weekend.

And whatever you're up, I hope it's profitable.

See you next week.

(COMMERCIAL BREAK)

ROBYN CURNOW, HOST: This is Durban.

I'm Robyn Curnow and you're watching MARKETPLACE AFRICA.

Well, this South African city is known for its beaches and its sunshine. In fact, surfers from all over the world come to this coastline to ride the warm waves of the Indian Ocean.

Well, this week, we're going to profile a local businessman. His nickname is "Spider" and he turned his passion for surfing into a global brand. In his own words, he tells us how he started off as a child carving surfboards in his mom's kitchen. He went on to build surfboards for world champions and such, as Sean Thompson.

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"SPIDER" MURPHY, SPIDER SURFBOARDS: You get a thrill when you are surfing. And then when you drop down and you turn that board and it accelerates and -- and you feel that glide and you go so fast and -- and you go wow, this is amazing and you ramp that waft wood (ph) and you feel - - you feel that acceleration again. That's what lots of people work for.

My grandfather bought me a little gunther board (ph), you know, a little wooden duffel (ph) board. He says, I'm going to take you down to -- down to South Beach and you can try this out. So I did and I thought, whoa, this felt nice.

At that time, we couldn't get boards for ourselves because we were only like kids. So I went in and I bought three bucks of styrene in those days, some epoxy and I got my mom's bread knife and I -- I glued this whole thing together and I cut it up with my momma's bread knife and a cheese grater and (INAUDIBLE) tools and I made my first real board.

Yes, over -- over the years, I -- I've built up a -- a good board. It started off very small and I can remember the guys doing like two or three boards a day. And now it's gone up to like 15 boards a day, it can go to 30 boards a day.

I had an opportunity to make Shaun Tomson a surfboard after hardly even knowing how to shape properly. You know, I was still learning the ropes. And, you know, he rode it and he loved it. And from there, we had such a good relationship.

SHAUN TOMSON, FORMER WORLD CHAMPION SURFER: He shaped me my first board in 1973, when I was in the army. The first board he shaped me, I rode in the Gundersen 500. I won it. I was 17.

Then I won it six times in a row on his board. I won the world title on his board. I won about 12 other events all over the world on his boards. MURPHY: You know, you get -- you get so high from that. And it's a -- it's an amazing feeling. It's like win -- it's like winning the world -- the world championships yourself.

Part of our success is, or especially with me, is I've always made sure that the customer gets the right board. So when I put my tools in my hand and I'm going to make a decision, what do I do, do I take it off or do I leave it on, do I make it wider, thicker or, you know, whatever, that decision is, if I'm really passionate about it, I'm going to give him the right thing that he wants.

You almost feel like an (INAUDIBLE) when you're shaping, because there's music going on and you almost like to dance with it, the flow of it.

I think my life has (INAUDIBLE) crossed me (INAUDIBLE). And I thought, well, you know, I spoke to them like 20 years ago. And I said, guys, you know what, we can supply the world because you are so strong and you're -- you're so good at your hands.

It's amazing how big the industry has grown, because if the guys are staying what they -- I mean I can remember us making our own board shorts (ph). They were in wet suits. So this whole industry has turned into a multi-billion industry, because it just supplies the needs of so many people.

When I got into my bay, I -- I try and make myself as comfortable as possible. If my shirt irritates me, I take it off. And -- and when I shave a board, I -- I have to keep my balance. So your body has got to react to your tools and guide that tool through -- through the cutting process.

It's one thing getting paid for something and the other thing is to have a happy customer. The reward is far greater than actually getting paid for it.

I do my passion and I get really high on it and, you know, the more I try, the higher the level that I get high on it and also the passion gets stronger and stronger. And I can do a lot of other things where I can make money but I -- I don't want to do that because the reward is so great in what I do.

(END VIDEO TAPE)

CURNOW: That was local legend, "Spider" Murphy.

Now, after the break, we're going to be talking power and how to harness South Africa's natural resources.

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CURNOW: We're here on one of Durban's beaches. And despite South Africa's renewable energy potential, with its strong waves, its sun and its winds, the country gets more than 80 percent of its electricity from burning coal.

Now for this week's FaceTime, I sat down with Brian Dames.

He's the CEO of Eskom, the country's power utility.

And I asked him how South Africa plans to meet its energy needs in the future.

(BEGIN VIDEOTAPE)

BRIAN DAMES, CEO, ESKOM: You know, it's about energy security, first and foremost, for us. It's about affordable energy. And it's about energy access. You would agree with me, without those three things, there is no economic growth, no poverty alleviation, no job creation in any of our economies.

And then, fourthly, it is about, as we do this, how can we do it in a cleaner manner and at the same time make sure we deal with the issues such as job creation?

Can we create green jobs?

So we're very clear as to where we're going to go and what the balance is. And that commitment is there. It is there to move toward a lower carbon footprint over time.

CURNOW: What percentage of your energy do you get from -- from coal, for example?

DAMES: It's more than 80 percent, about 86 percent of the energy. And it has put us in a position as a company and as a country to really fuel economic growth in South Africa. That's why this country has got the largest economy on the African continent. That's why we operate the world's -- one of the world's tenth largest power companies.

CURNOW: Eighty percent of all your energy comes from coal. That is dirty energy and -- and South Africa is the biggest producer of coal in the world.

I mean don't you find that's difficult in terms of charting a green future?

DAMES: No, it's not difficult. It is not difficult and we should be quite clear, because South Africa, as a nation, it's about 1.5 percent of global emissions. The continent's emissions is about 3 percent of global emissions. It's less than 200 times less than what -- what's in the US.

And what you're asking us to do is not do that, not have electricity, not have energy security and not have any (INAUDIBLE).

CURNOW: I think the reality is, is that Eskom relies heavily on coal. South Africa historically has relied heavily on coal to produce its -- its electricity.

Why do you seem a bit defensive about it?

DAMES: No, we're not defensive. Absolutely not. You know, coal has been used very successfully and will be used in the future in South Africa. It's a natural resource that we have. We've been very successful in the use of coal and growing one of the world's largest economies, in bringing electricity to the majority of South Africans which not -- would not have been -- we're absolutely not defensive about it.

CURNOW: But it is dirty energy and it is -- there is an excess of reliance on coal in this country.

DAMES: You see, but it's not a question of being defensive, it's a question about the ill-informed. And the first thing...

CURNOW: So where am I ill-informed?

DAMES: No.

CURNOW: I mean...

DAMES: Because you're...

CURNOW: (INAUDIBLE).

DAMES: -- because you -- you want us, as a country, to be cleaner and not have electricity and energy.

CURNOW: That's not what I'm saying.

DAMES: And -- and that is a problem.

CURNOW: It's a fact that -- that South Africa relies heavily on coal.

DAMES: It is a fact.

CURNOW: Yes.

DAMES: And successfully have done so and have successfully evolved an economy, the largest economy on the African continent. We said clearly, growth is important. We have said clearly that we're committed to a low carbon future, over time. So it's not growth at all costs. It is not growth at all costs.

South Africa has got a very clear path and strategy. And it's fully committed to deal with that. South Africa has made very clear commitments in terms of its CO2 emissions. South Africa has also made it very clear that it's a developing country and we must grow, that we must see the establishment of funding to make sure that it's available for us to do so. So we have a clear path.

As to how we make sure we grow and how we make sure we respond to the needs of the environment. And as a country and as a company, we're fully committed to that.

CURNOW: Nuclear is still a very big part of your plan.

DAMES: South Africa has produced a 20 year energy electricity plan. And that plan, indeed, has got an inclusion of nuclear. But that plan says of the additional capacity of the next 20 years, 42 percent of it will be renewables. Twenty-three percent of it will be nuclear, because would have a requirement for base load energy. We can't stall electricity. Nuclear, as a base load energy option, is an -- a viable option for this continent. And, again, coming back to my previous point, no one option, whether coal or renewables or hydro, will solve our energy problems in the future. We need a combination of all of it and including nuclear (INAUDIBLE).

(END VIDEO TAPE)

CURNOW: So how do you think South Africa should be powering itself?

Join the debate, join the discussion on our Facebook page, www.Facebook.com/CNNmarketplaceafrica.

A reminder, you can find us online at CNN.com/marketplaceafrica. You can also follow me on Twitter, robyncurnowcnn.

But for all of us here in Durban, have a great week.

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