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Quest Means Business

Suarez Storm; Crisis at "The Sun"; Growth-Led Policies; Brussels Welcomes Greek Austerity Plan; Bailout Calendar; Greek Economy Plunged Much of Middle Class Into Poverty; European Stocks Up; Wall Street Rising; Greece's Path to Growth; Obama's Budget Proposal; Future Cities: Hong Kong Searches for More Space

Aired February 13, 2012 - 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 HOST: It is cut but certainly not yet dried. Brussels praises Greece's new austerity plan.

There's a case of new taxes, new tax relief. President Obama treads a budget tightrope.

And a shaken reputation. Liverpool gets a dressing down from its sponsor. The start of a new week. I'm Richard Quest, and I mean business.

Good evening. Tonight, the writing is firmly on the wall in Athens as the power over Greece's future shifts from Greece to Brussels and Berlin. Lawmakers in Athens have done their part. They passed the last round of budget cuts.

Now, it's up to the European Union, and particularly the eurozone, to decide whether it is enough. These are the sorts of messages that have been sprayed on the wall in Athens as violence continued.

Today in Brussels, they welcomed the plan that had been voted on.

(BEGIN VIDEO CLIP)

OLLI REHN, EU ECONOMIC AFFAIRS COMMISSIONER: As outlined by the euro group last week, this program will be supported by unparalleled financial assistance from Greece's partners, which is a concrete expression of their continued solidarity and genuine concern.

The European Commission remains strongly committed to reinforce the assistance to the Greek administration on the ground to achieve these objectives as a course to return to sustainable growth and employment.

(END VIDEO CLIP)

QUEST: Olli Rehn speaking in Brussels. The Greek parliament's acceptance of the austerity plan is one more step, but it's by no means the only. I think as they used to say, it is necessary, but it is not sufficient towards a second bailout and putting the fate -- the stability back into the Greek economy.

Join me over at the super screen, and you'll see exactly what has to be done. This is the map as it looks so far. On the 15th of the month, the euro group will be meeting, and what the euro group is insisting on is a commitment to implement the terms and details of extra $430 million in savings.

So, there's still some way to go before the euro group and the eurozone will sign off and agree to that which has been suggested or has been passed in Athens.

As for on the 17th, you have the deadline for the private sector involvement. The finance minister of Greece, Venizelos, says on Friday the deadline for the private deal, and we now know that it is a 70 -- roughly 70 percent haircut for private sector investors.

But even then some people say that will only take the debt-to-GDP level down to 120 percent by 2020, and that might not be enough. So, that's what happens in February.

If we look at March, this is the big one. Look at that. In March, the big -- everything is being worked towards this: the $19 billion bond that becomes due. And everything is being designed so that is either rolled over or that new bonds are paid over instead, or they are exchanged.

What must not happen is there must not be a default, because then it becomes a disorderly default. There'll be another large payment due in May.

And finally, by the time we get to April, well, there's nothing hugely on the agenda at the moment in April, except elections. The Greek general elections, and what is crucial here is that the parties involved have all signed up to that deal which was agreed back here. The parties have all got to agree.

If they don't, and they don't sign up, or they try to backtrack, then, of course, everything falls apart.

In Greece tonight for us, Matthew Chance. Good evening, Matthew. Things must be a little bit quieter, but as they clean up from the day before, one wonders what happens next.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I was just listening to that list of hurdles you were just talking about that these, and they just still have to get over before Greece gets the bailout funds and is out of the clear, at least for the short term.

There's another one, as well, which is, of course, the bureaucracy in this country, the violence in this country, the anger and the frustration. We saw it on the streets of Athens last night.

It's going to be very difficult for any government here in Greece to implement the kind of swinging cuts that have been agreed in the parliament already.

Remember, Greeks are already sick to death of the idea of austerity. They've been enduring year up on year of recession. They've already seen their lifestyles very badly affected. And the idea that they're going to have to now be asked to endure more cuts is really unpalatable to them, Richard.

QUEST : But Matthew, as part of the deal for the general election, all the parties -- all the parties for that April election have to sign up and say that they will agree to the terms of the bailout package.

So, what is the -- what are ordinary people saying and feeling about the fact that they're going to go into an election with hardship and the hands of the government tied?

CHANCE: Well, they're very angry, indeed. Very frustrated. There's a whole category of people out there that believe austerity is not the right way forward for the country.

As I say, they're tired of it. It's already created a whole group of Greeks that have been plunged into poverty, both young and old, Richard.

(BEGIN VIDEOTAPE)

CHANCE (voice-over): At this soup kitchen in Athens, the growing ranks of Greece's new pull. Former office workers, shop keepers, pensioners, laid low by their country's economic despair, like Andreas, a retired merchant seaman who says he hasn't received his pension for five months and simply can't afford to feed himself.

ANDREAS, GREEK PENSIONER: This food is good food?

CHANCE (on camera): Yes.

ANDREAS: Fresh food, cooking. Indeed, help to a lot of poor people, including me.

CHANCE (voice-over): But many Greeks were angry at being seen here, or too ashamed to be identified on camera.

Seventy-two-year-old Alexander would only speak to us if we hid his face. He told me his family owned two clothes shops in Athens, but lost everything when the economic crisis hit. People no longer buy expensive designer fashions, he says.

Social workers say it's a familiar tale: recession and austerity, forcing thousands of once middle income Greeks into poverty.

CHANCE (on camera): Around the world, many people see this Greek financial story as a debt problem. People focus on how many billions of euros the country owes to get it self out of debt. But from the point of view of the people on the street, it looks very different.

You're seeing here, in this soup kitchen, people who just a year ago were ordinary European citizens. They shopped at supermarkets, they had apartments, they had jobs. They've seen their standards of living drop off a precipice, and that's the real Greek tragedy that's being played out in reality across this country.

CHANCE (voice-over): Yet, we also found a strong sense of resilience here.

UNIDENTIFIED MALE: Things, they're going to change. We're going to make sacrifices, but we're going to survive. We are going to survive, this is guaranteed, because we survive 5,000 years almost, and we're going to survive again. That's all.

CHANCE: It is the grim determination of Greece's new and desperate poor.

(END VIDEOTAPE)

QUEST: Matthew Chance, who is in Athens for us tonight. Traders there were delighted with the government's approval of the austerity measures. If you take a look, banking shares were much higher. EFG Eurobank, Hellenic, POSBank, and Piraeus Bank, each up more than 20 percent.

That sort of good cheer spilled across the rest of the markets, not usually -- excuse me. London was up, as was Frankfurt and Paris, but the best gains of the week -- of the day, sorry, I beg your pardon, were most definitely in Athens and the general market in Athens.

To the market in the United States at the moment.

(RINGS BELL)

QUEST: The Dow Jones Industrial is up 75, over half a percent, 12,876. And one stock to note: Apple passed $500 a share for the first time. That's the way the New York market is going.

We want to stay with Greece, though. The former Greek finance minister, Yannos Papantoniou, is the man who took Greece into the euro. Mr. Papantoniou joins me, now, live from Athens.

Is it going to be possible to enforce and implement this deal, not only now, but after an election in April?

YANNOS PAPANTONIOU, FORMER GREEK ECONOMY AND FINANCE MINISTER: It's a very, very big challenge, because it is a matter of fact from the last two years, Greece was not particularly successful promoting structural reforms. And it's the reason why we need now such a big, new bailout funds.

Now, we do hope that we shall do better, and the hope is based on the fact that the experience has suggested that Greece should promote much more radical structural reforms to the public and shore up. Privatizations, market liberalizations, closing down unnecessary public entities, sizing down the state, are most essential for getting the Greek economy to work again.

And on top of this, we should restore confidence, because the trust of foreigners, and particularly Europeans, in our capacity to overcome the crisis is being extinguished as a result of the failures of the previous government.

So, the new government must prove it can meet targets. It must be successful. And when success comes, then confidence will be restored. So --

QUEST: All right --

PAPANTONIOU: -- our part of the deal contains first promoting the reforms, second, proving our competence. But this is only part of the story, of course. It is --

QUEST: All right.

PAPANTONIOU: -- as you said, necessary but not sufficient for us to overcome the crisis.

(CROSSTALK)

QUEST: But --

PAPANTONIOU: We also need European support, and this is --

QUEST: Yes, but hang on, hang on, hang on. People talk about --

PAPANTONIOU: -- must be ways to contain --

QUEST: -- people talk about -- let me -- sorry, sorry. People talk about wanting to have growth policies. They want more growth, which would suggest lower taxes or reduced tax burden for companies. But ultimately, ultimately, whichever way we cut this, the Greek people are in for a very unpleasant time after this deal comes in.

PAPANTONIOU: They pay the price for past failures, Mr. Quest. This is the simple question. But the point is not to look back at history. The point is to look forward. And the only way to look forward is for us to work, all of us, to get the economy started again.

And for this, we need a more productive economy, we need more confidence, and we need more help from Europe, not in terms only of liquidity, but in terms of the investments. Europe definitely and desperately needs -- the south of Europe, not only Greece, but also Italy, Spain, Portugal, including Ireland -- needs a new new motivation from Europe to sustain the economic activity and improve infrastructure.

This is the real help the Germans and others can give, that just simple austerity and simply reforms do not suffice for getting us out of the crisis. We need also some support --

(CROSSTALK)

QUEST: All right.

PAPANTONIOU: -- in terms of investment so as to sustain economic activity and start reducing unemployment and relieving the enormous social pain --

QUEST: We need to leave --

PAPANTONIOU: -- these austerity programs have produced. So, we need a more balanced package than the present one.

QUEST: Thank you very much, Mr. Papantoniou, joining us from Athens tonight where, of course, we will talk again to him in the future as this moves further on.

Now, while Greece is cutting back, Barack Obama is urging big spending. After the break, the US president's budget and how -- not a lot of austerity coming from Mr. Obama.

(RINGS BELL)

QUEST: QUEST MEANS BUSINESS. Good evening.

(COMMERCIAL BREAK)

QUEST: President Obama has published his budget, and he's picked another fight with Republicans. He's forecasting a $901 billion deficit in 2013. That's, if it turns out to be that, 5.5 percent of GDP. And $1.5 trillion in new taxes. Now, the new taxes, of course, will be controversial with the Republicans.

He's also got the Buffet plan, the Buffet tax, which is the 30 percent tax on millionaires and infrastructure projects. The White House calls it a blueprint for how they can rebuild an economy where hard work and responsibility is rewarded.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And given where our deficit is, it's just a matter of math that folks like me are going to have to do a little bit more.

Because Americans understand, if I get a tax break I don't need and the country can't afford, then one of two things are going to happen. Either that means we have to add to our deficit, or it means you've got to pay for it.

We don't need the tax breaks. You need them.

(APPLAUSE)

OBAMA: You're the ones who's seen your wages stall.

(APPLAUSE)

OBAMA: You're the ones whose costs of everything from college to groceries has gone up. You're the ones who deserve a break.

(END VIDEO CLIP)

QUEST: President Obama. Maggie's in New York. Maggie, let's ignore for one moment the fact that the budget is going to be tinkered with, amended, and changed by the Republicans. They are not going to go for the new taxes.

MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: Yes, probably not. This very much feels like a movie we've seen over and over again, Richard, and this is an election year budget. Both of those camps are firmly established in their positions, the Republicans not in favor of taxes, and Obama pushing hard.

The problem is, it's hard for Republicans to sort of get up and campaign on being against taxes on the wealthy, especially when the middle class is hurting, and this is very much an election year campaign.

You mentioned, there are cuts in spending, discretionary budget. Those new taxes, though, really the centerpiece, those taxes on the wealthy.

But look at the other things Obama's proposing when you're talking about whether this is an austerity budget or an election year spending budget. Still talking about infrastructure spending, education spending, very key. Raise taxes on the wealthy, but payroll tax cut extension, you just heard him mention, for most middle class families.

And the other thing that's really bothering budget deficit hawks is the fact that there's very few entitlement reforms. They will argue if this was a serious budget and the president was showing leadership, you'd see more --

(CROSSTALK)

QUEST: OK --

LAKE: -- more on that, more on cuts to the reform -- to the entitlement reforms.

But there's an interesting economic prism to this, Richard, and I know you'll have a thought about this. So, politically, election year.

Economically, though, the president has a lot of cover, and there's a more rigorous debate about whether this is the right thing to do. A lot are against something that would be more austere, more cuts, more severe cuts, at a time when the recovery still looks tentative, Ben Bernanke among them, who's cautioning against something like that.

Yes, focus on the deficit long-term, but he is in favor, as are some other economists, of keeping things loose and stimulative in the near-term. Very different from the situation where you sit.

QUEST: Right -- right, but -- if you're going for a deficit -- I mean, let's forget the $900 billion. It's a big economy, so obviously, it's going to be a big deficit. But if it's only 5.5 percent of GDP and there is growth and there is the prospect of faster economic growth increasing tax revenues, then this budget might have legs, Maggie.

LAKE: That's right, and that's certainly what the White House is saying, but budget experts will tell you, Richard, yes it's only 5.5 percent, maybe, of GDP in those near-term numbers, but the ballooning costs of entitlements long-term cannot be sustained, and those numbers will rise rapidly.

They're hoping that once the election's over, that maybe these two parties will get serious about doing that, but a lot of people fear that you're going to have to see some market event to push them into it. They say that's not a sustainable path.

QUEST: They -- forget the market event. We saw that last year, it pushed them into a committee that did nothing. Maggie, you and I will argue -- but we never argue, Maggie, now, don't we?

LAKE: We certainly will.

QUEST: We will discuss and debate this in the months ahead. Many thanks, Maggie Lake, who is in New York.

And that's something that you and I can debate, the differences between the United States, with its budget plans, the austerity, the expansionary austerity, supposedly, in Europe, @RichardQuest is the Twitter address. I'll show you a little later on, and we can have a discussion on that point.

When we come back, we will turn our attention to the search for more space in Hong Kong. There's really only one direction to go, and you will see how they're going to make more space. QUEST MEANS BUSINESS, good evening.

(COMMERCIAL BREAK)

QUEST: In Hong Kong, the number of mainland Chinese mothers who are now giving birth have increased dramatically. Just look at the numbers and they will show the point. Now, for the -- from 709 people at the start of the millennium to 33,000 for the first 11 months of 2011.

Children born in Hong Kong receive automatic residency and they get 12 years free education. The effect is dramatic. It builds up pressure on hospitals and schools. And native Hong Kongers are worried that means they'll be squeezed out.

So, where are all these extra residents going to live? The government is being urged to do something, it's looking for direction and for extra space.

(BEGIN VIDEOTAPE)

QUEST: In the crowded alleyways and streets of Hong Kong, where everyone jostles for space, the increasing number of businesses from mainland China and overseas means that space is at an absolute premium, which is why the redevelopment of one of Hong Kong's most famous pieces of real estate is so important. I'm talking about Kai Tak.

QUEST (voice-over): The legendary landings at the old Kai Tak Airport delighted plane buffs and scared white-knuckled fliers. The planes, banking sharply over lone rise apartment blocks before touching down on runway 13. And whatever happened to this famous strip of land? Turns out, not much.

QUEST (on camera): Today, nearly 15 years after the airport closed, you can still see the center line and the remains of the lights. But Kai Tak is only now being developed, which is extraordinary in a city where land is at such a premium and where building takes place so quickly.

The development that's happening is at the other end of the runway.

QUEST (voice-over): Instead of planes, now they're preparing for some of the world's largest passenger ships.

QUEST (on camera): So, this is going to be the cruise terminal, is that right?

STEPHEN TANG, CIVIL ENGINEERING AND DEVELOMPENT DEPARTMENT: Yes. It's 800 meters long.

QUEST (voice-over): That's about half a mile. The cruise terminal is set to open in the middle of next year and is the first piece of this massive redevelopment project. Apartment blocks will follow, and a park, some shopping, and perhaps someday, a stadium.

QUEST (on camera): In a place like Hong Kong, where land is so valuable, why has it taken so long to get to this area?

TANG: A good question. A lot of people ask this question. They say, it has been standing there, idle, for so many years because it is for long- term development. This is a very precious piece of land in the middle -- in the center of the city, and there's the center of Victoria Harbor.

QUEST: How long do you think it will take before this whole thing will be finished?

TANG: For the public investment, public infrastructure, about 2021.

QUEST: 2021?

TANG: Yes, about ten years from now.

QUEST (voice-over): That's a long time, especially in a fast-paced city like this. Keep in mind, though, this is the site that's roughly eight times the size of London's Canary Wharf or New York's Battery Park.

While the work continues on Kai Tak, the government is looking to expand even more by reclaiming land with 25 proposed projects.

That's how Kai Tak came to be in the first place, a precious piece of manmade land, reclaimed from the Victoria Harbor. So is the current airport, built out from an existing island in the South China Sea. The tallest skyscrapers, they sit on reclaimed land, as well, as does the convention center. You get the idea.

About 5 percent of Hong Kong used to be part of the sea. It's hard to miss all the cranes these days.

QUEST (on camera): Reclaiming land is a way of life in Hong Kong. They've been doing it since the mid 19th century, when this was the original shoreline. Since then, look at how much has been taken back. All these buildings on reclaimed land. But we've got further to go.

This is amongst the newest reclaimed land in Hong Kong, and they're still going.

Here we are at the current water's edge. But how long will it remain so?

QUEST (voice-over): Even though people could use a bit of breathing room, it remains a contentious issue.

SAMANTHA LEE, WWF: The whole concept has a more strategic vision that they need to have a plan -- better planning of the land use. There's still plenty of land that you can use in the new territories, the rural area. I really hope that the government will just stop here and think twice before they really proceed to use reclamation to enhance the land supply in Hong Kong.

QUEST (on camera): It's certainly controversial. But as long as people want to live and work in the heart of Hong Kong, then once places like Kai Tak are fully developed, there's only one way this Future City can grow, and that's out into the sea.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest.

More QUEST MEANS BUSINESS in a moment.

This is CNN. And on this network, it's the news that always comes first.

Police in India and Georgia are trying to figure out who planted bombs at two Israeli embassy vehicles. This van in New Delhi blew up. It wounded at least four people. Explosives were also found on an Israeli car in Tbilisi in Georgia. No one there was hurt. Israel is blaming Iran for the attacks. Tehran is denying involvement.

As the battle continues in Syria, the top U.N. human rights official says crimes of humanity have likely been committed. The Arab League is calling for a joint peacekeeping mission with the U.N. in Syria. Syria's ambassador to the U.N. says his country must solve its own problems internally.

In Athens, dozens of buildings are in ruins after a weekend of violent street protests. After demonstrators clashed with police and lawmakers debated a new austerity package that wound up passing early on Monday morning. The plan is needed to secure further financial funds from the Eurozone.

A controversial Chinese factory is being inspected by an independent labor organization. Workers at Foxconn have complained of viciously strict work conditions. Now, the Fair Labour Organisation has started inspecting the factory, where electronic appliances from companies like Apple and Samsung are made. Apple joined up with the FLA last month.

Police in Los Angeles say Whitney Houston was found underwater and unconscious when discovered in a bathtub on Saturday. An official from the county coroner says the final cause of the singer's death is still open to debate. He downplayed suspicions that prescription medication played a major role. Miss. Houston's funeral will take place on Friday or Saturday. And as you can see, a press conference is being -- an impromptu briefing is being held at the moment in Los Angeles. And when we know more of what's being said at that, we will bring it to your attention.

Just when the news of the world scandal was starting to abate, Rupert Murdoch is again en route to London to confront a crisis. This time, it's a sister paper and Britain's biggest selling paper, "The Sun".

Five senior journalists have been arrested. There are allegations of improper payments to police and officials. A police officer and MOD employee -- that's Ministry of Defense and members of the armed forces, have also been detained.

News International is calling Murdoch's schedule, the chief exec, Tom Mockridge, in a memo, said today, "We are facing our greatest challenge. Move it on."

"I have had a personal assurance from Rupert Murdoch about his total commitment to continue to own and publish "The Sun,"" says Mr. Mockridge.

Meanwhile, British lawyer, Mark Lewis, who represents the alleged victims of phone hacking, is flying to the U.S. within weeks. Now there, there could be some serious issues of legal action against Rupert Murdoch, possibly using the Foreign Corrupt Practices Act.

The -- Rupert, no one will actually confirm this, but that seems to be the way this story may be going.

Our correspondent is Atika Shubert, who is following the story for us.

And she joins me now -- Atika, it's nasty.

ATIKA SHUBERT, CNN CORRESPONDENT: It is. Well, I mean, this is very serious for "The Sun," isn't it?

It's five of their senior people, not just anyone -- deputy editor, chief correspondent, chief foreign correspondent. And they are not taking this lying down.

This editorial today from "The Sun," you can see right there -- "This witch-hunt has put us behind ex-Soviet states on press freedom." That's the editorial from Trevor Kavanaugh.

So you've got some very --

QUEST: Hang on, hang on, hang on.

What is Kavanaugh saying, "The Sun" is not a swamp that needs draining, nor are these other News International titles.

And so he's complaining about what?

SHUBERT: He's complaining about what he feels is a politically motivated investigation into "The Sun." And he's also complaining that "Sun" journalists are being, he feels, thrown to the wolves to save the wider corporation.

Now --

QUEST: Thrown to the wolves by whom?

By "The Sun?"

By the committee at the new -- at News International that is looking into this and handing over?

It was the committee that handed over the e-mails --

SHUBERT: Right.

QUEST: -- that have provided the evidence for these arrests.

SHUBERT: Exactly. This is an internal investigation by News International. And they handed over thousands of e-mails.

QUEST: Millions.

SHUBERT: Millions, much more, exactly. And police are going through these e-mails, really taking their guide from News International. They're pointing them in the right -- in the direction.

So this is what's behind this investigation now.

Where is it going to go?

We don't know.

No charges yet. All we know is that it is about payments to public officials, both police, but we've also seen a Ministry of Defense official --

QUEST: All right --

SHUBERT: So there's a lot at stake.

QUEST: Any of the papers, anybody else involved that we know of at this point?

SHUBERT: So far, it's just "The Sun." But there's a lot of questions now about whether or not this goes much further. And of course, "The Sun" -- "Sun" journalists say what they're being accused of is just journalism, you know, paying -- going with sources to dinner, for drinks, occasionally paying for information. But they say this is --

QUEST: And they've all --

SHUBERT: Standard practice.

QUEST: -- and they've always been up front about that at "The Sun," haven't they?

They've always made it clear they pay.

SHUBERT: They have been. And this is why they feel that they are being sort of --

QUEST: Right.

SHUBERT: -- wrongly investigated at this point.

QUEST: Many thanks. Atika Shubert there.

Rupert Murdoch is one of our top Tweeters on tonight's program. And Murdoch has Tweeted, as part of the Top Tweets, not about his own misfortunes with "The Sun." He's Tweeting on the euro. "Euro could only work if the whole Eurozone becomes German, with ever increasing productivity. Surely impossible. May yet take years to bust."

I'm not quite sure why Mr. Murdoch suddenly feels so strongly to Tweet on the question of the euro.

The economist, Nouriel Roubini, who frequently Tweets on -- Tweets on the euro, and today is no exception, "Japan," -- he's referring to the latest GDP numbers from Japan, which showed that Japan is actually contracting. "Japan joins Eurozone and the U.K. in experiencing a contraction of GDP in Q4. Many advanced economies."

And we shall turn now to the singer, Tony Bennett, who has Tweeted on the sad story, the tragic story of Whitney Houston. "It is a tragedy. Whitney Houston was the greatest singer I've ever heard and she will be truly missed."

These are the Top Tweets that we have found. But, frankly, the toppest Tweet of them all is yours. And you can Tweet me @richardquest and we can have that dialogue, whether it's on the Eurozone or on austerity. We can talk more about that, just the two of us.

Now, it's an image problem that has run out of control. Luis Suarez and Liverpool have run out of good will and the sponsors are crying foul.

I'll have this story for you after the break.

QUEST MEANS BUSINESS.

Good evening.

(COMMERCIAL BREAK)

QUEST: A bit of news to bring you. Standard & Poor's, S&P, has downgraded the credit rating of 15 Spanish banks and will move the credit watch from 13 banks negative outlook to 11. That's normal once you've actually made the move on one, why don't you also clean up the rest?

Fitch ratings lowered the credit rating on Spain's four largest banks, including Santander earlier today. So down for all Spanish banks.

Standard Chartered has complained to Liverpool for what we've covered about Luis Suarez's actions before Saturday's game with Manchester United.

Now, the bank sponsors Liverpool's shirts. And now the club's owners have stepped in and forced the team to apologize.

Join me over in the library and you will see -- in the trophy room, maybe, since we're talking sports.

You know the story. It was the moment when Liverpool's image problem got out of control. Suarez refused to shake Patrice Evra's hand before the game. Suarez found to have been -- there's a lot of history in this -- racial abuse, a suspension in previous games.

Anyway, Liverpool always denied the allegations. The two clearly had a flackard (ph) and a contretemps on Saturday.

Now, even though apologies were made, Fenway Sports Group, American owners, Fenway Sports Group, have intervened. They say the negative response has reached the U.S. media. Fenway's head, John Henry, demanded an apology over the handshake. It follows Suarez and manager Kenny Dalglish, who defended him.

And that really seems to have been what this was all about. It was one thing for the failure of the handshake. But then when Dalglish defended it after the match, whilst Alex Ferguson was spitting feathers, well, you start to get the idea this was more than a tempest in a teapot.

The problems are not over. The sponsors have pressured. Standard Chartered said it's very disappointment. It made concerns known to Liverpool.

And if you think this is just all a bit of nonsense, bear in mind, Standard Chartereds pays $30 million -- look, there's the name on the t- shirt. And that the performance (INAUDIBLE) cost them $30 million to sponsor that. One sport executive said that the club, it all needed to be put into perspective.

(BEGIN VIDEO CLIP)

DREW BARRAND, ASSOCIATE DIRECTOR, PITCH PR: If you look back over what's happened over the course of the last month or so of activity, you know, clearly, it's not been the perfect scenario in terms of the way it's been handled.

But, actually, I think, you know, how they've reacted over the weekend, strongly, decisively, shows that maybe they have turned a corner on this and are trying to draw the line under it, which possibly should have been drawn weeks ago.

(END VIDEO TAPE)

QUEST: Alex -- Alex Thomas is with me.

What do we make of it?

ALEX THOMAS, CNN CORRESPONDENT: Trying to draw a line under it, but it looks like it could run them on.

The question is, has the Suarez apology come too late?

Remember, the racial abuse allegations were way back last October. A simple sorry then and none of this could have got on the other hand.

Now, as you say, strong rumors that it's got all the way back to the American owner, who said enough is enough. We've let you try to handle the matter, you haven't done it properly, we're going to intervene.

And for a sponsor to come out -- I mean think how difficult it was getting negative words from Tiger Woods' sponsors out and other sport controversies. For a sponsor to come out publicly and criticize the club shows how worried people around it are.

QUEST: So we've got not only the owners, we've also got the sponsors. But it's difficult to see where the pressure is coming from, who's -- I mean we probably will never know or we won't know for some time -- who's been put in pressure and how much pressure has been put on them.

THOMAS: Well, let's not forget that the owners, Fenway Sports Group, not only own Liverpool Football Club --

QUEST: Right.

THOMAS: -- but, of course, run the Boston Red Sox, a Major League baseball team. And we know the image of sport stateside, especially -- wholesome family fun.

QUEST: Which could hardly be further from the events that we saw on Saturday.

THOMAS: It doesn't gel with racism, does it?

So no wonder the pressure has come to bear now. Kenny Dalglish thought he was right --

QUEST: But yes --

THOMAS: -- standing by the pair initially, but now it's gone too far.

QUEST: Yes, but do you think -- this is -- we -- we are well and truly into the realms of speculation here.

(LAUGHTER)

QUEST: Do you think it was Fashion Fenway off their own bat that were horrified or it's only Fenway, once Standard gets involved and starting -- and the sponsor gets a bit uppity?

THOMAS: I think the sponsor saying something is the real key here, because if Fenway Sports Group were going to get involved with Liverpool's business -- their whole management ethos is, we appoint the right people and let them get on with the job. And that was conspicuously the way they handled it, as it's rumbled on, over the last few months.

Now, suddenly, Evra hasn't shaken the hand of the player he racially abused and was banned for eight matches for racially abusing and the -- these -- there were people in either camp and they firmly went against Liverpool Football Club and now action has been taken.

QUEST: It's -- it's interesting, isn't it?

I mean I'm not sure what to make when you finally see a sponsor having the gumption, some would think -- use another word -- to actually --

THOMAS: But is it for ethics or is it because they see their brand value falling through the floor?

QUEST: I don't know what you're suggesting. I don't know.

(LAUGHTER)

QUEST: Alex, many thanks.

The weather forecast in just a moment.

(COMMERCIAL BREAK)

QUEST: Time and again we have heard that one of the problems with the policies for Greece is that there's too much austerity. And the supposed solution for Greece, critics say, is growth-led policies. You heart them at the beginning of this very program. A former minister said there needed to be policies to get things moving.

It's the antidote to austerity and it's being pushed around the world.

Barack Obama specifically talked about it today.

When we talk about growth-led policies, what do we mean?

Emily Reuben explains.

(BEGIN VIDEOTAPE)

ARGYRIS DINOPOULOS, GREEK PARLIAMENT MEMBER: These measures don't help the Greek economy to get out of the recession, to go to the recovery and to the growth.

EMILY REUBEN, CNN CORRESPONDENT (voice-over): It's the only word to bring hope to the beleaguered nations of the Eurozone -- growth, the key to a brighter future.

But how can countries like Greece, like Ireland, bailed out by the international community and still burdened by huge deficits, really achieve it?

Last month, the World Bank, the IMF and the World Trade Organization called on European governments to stimulate growth. But their appeal lacked precise suggestions.

It said momentum could be regained by increasing spending on infrastructure. Labor market reforms can both raise employment levels and ease fiscal adjustment.

One solution, according to Brokers Nomura, is for countries to cut their minimum wage. It's one measure Greece agreed to this weekend.

PETER ATTARD MONTALTO, NOMURA: You can do pro-growth policies that are of minimal cost, things like shaf -- slashing the minimum wage, yes, reducing regulation and bureaucracy, things like that. And that's the standard sort of the measures that you see in Eastern European IMF packages right from the beginning of the crisis in 2008-2009, whereas they're only really coming up now in Greece, you know, a year or two years into it.

REUBEN: Changing tax regimes can also promote growth. In 2008, Hungary cut labor taxes for corporations, but hiked profit tax, keeping the tax burden the same but promoting employment growth.

Some say slashing wages can hurt consumption and, therefore, growth. And the Irish government has opted for encouraging investment. It says it starts up an R&D tax credit for attracting multinationals and bringing in jobs.

In its own report into the global economy, the World Bank urges countries to identify new drivers of growth.

The question is, where will they come from and will they come in time?

Emily Reuben, CNN, London.

(END VIDEO TAPE)

QUEST: Now, a heavy snowfall and bitter cold continues to cripple parts of Europe.

And Jennifer Delgado is at the World Weather Center.

Although, one has to say, with a -- a truly selfish view --

JENNIFER DELGADO, ATS METEOROLOGIST: Right.

QUEST: -- it's a bit warmer in London.

DELGADO: It is a bit warmer there. And do you know what, Richard, so many other places are going to be warming up, as well. You're not imagining things.

But, yes, it's still rather cold out there. And to give you an idea of how cold it's been, let's look at some of these temperatures we checked in this morning.

Monday morning, Moscow, one of the coldest temperatures, minus 32 degrees for Kiev; minus 24, Warsaw, minus 20. So while the temperatures are still being particularly cold in some parts, they are warming up.

About this time last week, London -- you were right at the freezing mark. Right now, you're at six degrees, three in Paris.

But over toward the east, as well as into parts of Central Europe, it's still very cold there. Minus 10 in Warsaw and minus 20 degrees in Moscow.

Now, what is it going to be like for Tuesday?

Well, I want to point out to you, we're starting to see some improvement. Vienna, one. Minus one for Bucharest. Minus 10, still really cold, through parts of Ukraine.

But let's go to some video. I want to show you how people are still suffering. This is actually coming out of Poland. You're looking at snowy conditions here. People walking to work. You are seeing some cars actually driving. And that's a sign that they're starting to get a handle on some of the snow out there.

But as I take you back over to our graphic, we still have more snow that's going to be coming down. We have two disturbances out there, one affecting parts of Romania, Ukraine. You'll see snow mounts right around 15 centimeters.

And then another system drops in from the north. And that is going to be producing some snow, heavy snow right along the Alps. We're talking snow through France, as well as into Poland, as well as into the northern parts of Scandinavia. You're going to be digging out about 25 centimeters of snowfall.

And we also want to update on the Danube River. And we've been talking about how, at some point, that 90 percent of that river was frozen over. And look at these temperatures here. It's still going to be cold. By the end of the week, we might see some signs of temperatures warming up a bit to start to get some of that movement back on to parts of the Danube River.

But let's go to another are coming out of Poland. They're also looking at the same thing, as well. And this is out of the Oder River. And you can see a ship trying to go through that.

But, Richard, the problem is, of course, this has a ripple effect on the economies, especially the Danube. That's the second largest river through parts of Europe. As I take you back over, that moves through 10 countries.

So, Richard, we really do need to see some of these temperatures warm back up to try to get things back in action right along the river. The economies are hurting.

QUEST: All right. Jennifer, we thank you for that.

And at the Weather Center.

Now, we're going to just turn our attention back to events that took place a short while ago in Los Angeles, where police held a news conference. I promised you I would bring you the details of what they said.

The police say that Whitney Houston was found underwater and she was unconscious when discovered in a bathtub on Saturday.

Here's what the spokesman said a short time ago.

(BEGIN VIDEO CLIP)

MARK ROSEN, BEVERLY HILLS POLICE DEPARTMENT SPOKESMAN: On Saturday, the 11th, at approximately 3:30 p.m., Miss. Houston was apparently discovered in her bathtub by a member of her personal staff. This was information that was relayed to the first responders that came onto the scene.

Prior to the fire department personnel and hotel security arriving on scene, Miss. Houston's body was pulled from the bathtub and when first responders arrived on scene, she was unconscious and unresponsive.

First aid and CPR measures were performed in an attempt to revive her. They were unsuccessful. And at approximately 3:55 p.m. on Saturday, Whitney Houston was pronounced dead at the Beverly Hilton Hotel.

QUEST: Now, the music industry mourned the loss of Miss. Houston at last night's Grammys. She died on Saturday afternoon. The body, of course, as you now know, found in the bathtub.

The rap star, LL Cool J, led the tributes with a prayer.

(BEGIN VIDEO CLIP, COURTESY THE RECORDING ACADEMY/CBS)

LL COOL J, RAPPER: We thank you for sharing our sister Whitney with us. Today, our thoughts are with her mother, her daughter and all of her loved ones. And although she is gone too soon, we remain truly blessed to have been touched by her beautiful spirit and to have her lasting legacy of music to cherish and share forever. Amen.

(END VIDEO CLIP)

QUEST: A prayer for Whitney Houston, who died yesterday.

We'll have a Profitable Moment after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's Profitable Moment -- what to do about Greece.

You heard on this program earlier a former finance minister say that the problems were decades-old and now had to be put right in a matter of months, years at the very most.

Well, Greece is no longer at the crossroads. It's being dragged kicking and screaming along the path of austerity. The country would surely love to be growing its way out of this crisis, but instead, we hear so often of the panacea of growth-led policies.

And to be sure, growth is an important weapon, but it can't be plucked from thin air. Somebody would have to pay for those growth-led policies. And the bankrupt nation is not in a position to do so, not, in any case, unless somebody was going to increase the debt or allowing the borrowings to grow.

The margins are slim and even tiny concessions could mean bondholders not getting paid.

So encouraged by cutting taxes only creates new holes and those holes have to be plugged elsewhere. The stimulus package would add to the deficit, looming like Mount Olympus.

Austerity is painful for all concerned. It is humiliating. And no one can say for sure that it is a definitive answer.

And that is QUEST MEANS BUSINESS for tonight.

I'm Richard Quest in London.

Whatever you're up to in the hours ahead, I hope it's profitable.

END