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Quest Means Business
Anti-Austerity Clashes in Greece, Spain; Protests in Spain; Spanish Yields in Danger Zone; Europe in Crisis; Austerity Crisis in Greece; Mining Unrest Spreads; South African Politician Julius Malema Charged; Mexico Considers Deep Water Drilling; Euro Falling; Our Mobile Society: Ditching the Adapter; Thousands March Against Austerity in Madrid
Aired September 26, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, HOST: Discontent deepens. Protesters in Greece and Spain show their anger at yet more austerity.
The Bank of Spain warns of a deep recession, sending stock markets sharply lower.
And the Jaguar E-Type was the car of the 60s. Will the F-Type be the icon of this age? We'll unveil the new design in half an hour and bring you an interview with the chief executive.
I'm Max Foster. This is QUEST MEANS BUSINESS.
Tonight, as Greece and Spain plan deeper spending cuts, demonstrators say they can't take any more. In Athens, Molotov cocktails were thrown as thousands of workers walked off the job and onto the streets. Police responded with teargas.
The 24-hour walkout is the first general strike under the current coalition government, and protesters are raging against an extra $14.5 billion worth of spending cuts. Many say the cuts are already too deep and just aren't working.
In Spain, police have fired rubber bullets at these protesters in Bilbao. There have also been clashes in Madrid as police fought to prevent demonstrators from forming a human chain around the parliament.
The 2013 budget that is expected to be announced there tomorrow is set to include billions of dollars-worth of spending cuts to trim Spain's runaway budget deficit. Journalist Javier Ruiz joins us on the telephone, now, from Madrid. What can you tell us about how things are escalating or otherwise tonight?
JAVIER RUIZ, JOURNALIST (via telephone): Well, I'm standing outside the congress building, and thousands of people are gathered here again for a second night in a row after 35 people were arrested last night.
And they are throwing bottles and stones to the police as we speak. In fact, protesters are yelling, "Freedom for the detainees" while they surround the congress building. And the slogans being yelled here, "give us back democracy" and "the government is breaking the social pact."
Fourteen hundred policemen protected Congress and the demonstration is supposed to go on all night. All this happens, as you say, while the government is unveiling the new budget cuts for 2013. That will be done fully tomorrow.
What you can hear behind me are mostly youngsters, people under 35, whose unemployment rate here in Spain is 54 percent. And that can be noticed in the streets and be seen here in Madrid.
FOSTER: As far as the political reaction, is this budget going to carry on as planned or do politicians plan to adjust it in any way in light of these protests?
RUIZ: Well, the budget is being done. It's being terminated tonight, so the protests will not have much impact on the budget. But the truth us that this can put pressure on the government and that some measures to help especially the young population might be taken after this.
FOSTER: OK, Javier, thank you very much, indeed. Well, Spain's borrowing cost rose back into the danger zone today. Yields on 10-year bonds jumped above 6 percent, a level seen as unsustainable by many economists.
And Spain has resisted asking for a full-blown bailout, but if it can't fund itself on the open market, it won't have much choice, really. To add to the gloom, Spain's central bank warned today that GDP will contract at what it calls a "significant pace" in the third quarter.
Jim's with me. If you look at the market reaction, Jim, then investors and analysts clearly think there's a problem here.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: We were saying all through July and August that we've sort of forgotten about the euro crisis and at some point in September we would get back to it, and I think today and yesterday are the days where we're focusing again on Europe. And you saw it in the US markets as well.
But yes, if you look at the Spain IBEX down significantly today, and that had a lot to do with the Bank of Spain thing. This current quarter is going to be worse than anticipated, which means, of course, it makes it even harder to see Spain get out of recession, and it makes it even more likely, I think, to see that Spain will probably get itself a bailout sooner rather than later from the eurozone.
FOSTER: In terms of the market reaction, I presume the -- governments need to carry on as planned. The budget that's going to be presented tomorrow, for example, has to happen.
BOULDEN: Yes.
FOSTER: They can't react to the crowds, because the repercussions, from their perspective, will be even worse.
BOULDEN: Well that's the thing -- that's where you can differentiate with Spain and Greece. Because in Greece, we've seen this before. We have a coalition government who is trying to put together the next set of cuts, and it's unlikely they would go against that, because of course, they need to get the next bailout. So, Greece is a separate story.
In Spain, we don't see this kind of protest. But people have been telling me for months that it's building, it's building, it's building, and we're seeing this now on the streets. And we're seeing it reflected in the markets, we're seeing it reflected in the 10-year bond yields, we're seeing it reflected in the euro coming down a little bit.
So, the focus is back on here. But what would make it worse, of course, as you say, is if the Spanish government were to say, actually, we're not going to do these cuts. And then, of course, the markets would react negatively, as well.
FOSTER: You've reported a lot on Greece over the years. What are these scenes saying to you in Greece? Anything unusual? Is it reaching a crisis point, and how would you describe it?
BOULDEN: The only thing different is because it's a coalition government trying to put this together. Before there was -- there were protests when I was there. It was a dying government. This was the last legs of the government.
This is different. This is a coalition on the left and the right saying we're very, very serious about this. You still see a majority of people, when they're polled, say they want to stay in the euro. Well, we know the only way for them to stay in the euro is for them to continue this kind of austerity.
It's just that people want to see the end of the tunnel. And both Spain and Greece, the politicians are telling Brussels, we need a bit more breathing room. That's where the compromise is going to have to come from if there is going to be one.
It won't be these governments cutting less or showing the markets that they're not serious. It's will they be given more time? Which means, of course, in the end, they'll need more money. Greece would need another bailout.
FOSTER: Jim, thank you very much, indeed. Well, for many in Greece, austerity translates into outright poverty. In Athens, CNN's Matthew Chance met one family now unable to find work and dependent on charity to survive.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): They're a Greek family who've fallen through the cracks. In their run-down squat in central Athens, three generations of this country's new poor are crowded in. Not a regular job or a pension between them.
CHANCE (on camera): How much money do you get every month?
UNIDENTIFIED FEMALE: Every month?
CHANCE: Every month, all of you, how much do you get?
UNIDENTIFIED FEMALE: Two hundred euro.
CHANCE: Two hundred euros a month? And there are seven adults?
UNIDENTIFIED FEMALE: And babies. No --
CHANCE: And the babies.
UNIDENTIFIED: -- but for babies. It's very difficult.
CHANCE (voice-over): In the decrepit kitchen, she shows me how the cupboards and fridge are almost bare.
UNIDENTIFIED FEMALE: You see? Nothing to eat.
CHANCE: Until last year, she was a nurse, but the hospital closed, she told me. Then her husband died. Now, they're penniless, like their neighbors, and don't even qualify for state benefits.
CHANCE (on camera): Across Greece, families just like this one have been plunged into this dire poverty. Unemployment, food shortages, lack of medical care, have all combined to push the standard of living in this country off a precipice. And few here can really see any easy or quick way back.
CHANCE (voice-over): But there are some trying to help.
CHANCE (on camera): So, this is what you give family with a girl going to school?
RUBINI TSISAKI, FOUNDER, KIDS & FAMILIES: Two girls.
CHANCE: Two girls.
TSISAKI: Two girls?
CHANCE: Oh, great.
TSISAKI: This also.
CHANCE: These are really nice bags. They're going to feel good at school.
TSISAKI: That's what we need, and for the younger kids, if we give her a doll.
CHANCE: Right. And this is all to sort of lift people's spirits to make them feel a bit --
TSISAKI: To feel normal.
CHANCE: -- a bit more dignified.
TSISAKI: To feel that they have the right to live. What happened is that suddenly the middle class is disappearing, and we have only poor people and rich people. The rich became richer and the poor became a huge amount of people.
CHANCE (voice-over): So deliveries of free supplies like this one have become essential, not just for a few struggling families, but to keep Greece's entire middle class alive.
Matthew Chance, CNN, Athens.
(END VIDEOTAPE)
FOSTER: And you can read more about the crisis in Europe and Spain's slide towards a bailout online, cnn.com/business and you can leave your comments or questions on our QUEST MEANS BUSINESS Facebook page, or tweet to @questcnn.
Now, in just a moment, 35,000 mine workers down their tools in South Africa. It's been more than a week, and their employer is still waiting to hear exactly what they want.
(COMMERCIAL BREAK)
FOSTER: A surge of industrial action is rolling -- or roiling South Africa's mining sector after a six-week stoppage at a platinum producer, Lonmin. This time, workers at gold producer AngloGold Ashanti have staged a walkout.
AngloGold, the world's third-largest gold producer, says the illegal strike has forced it to halt operations nationwide. Nearly all of its 35,000 workers have downed tools at three sites, and the strikers' demands, however, are not yet known. Illegal strike action is also affecting two other major producers, Gold Fields and Amplats.
Now, one man accused of stirring unrest in South Africa's mines was in court today. Renegade politician Julius Malema is charged with money laundering. Malema, a former ANC youth leader, did not enter a plea and was freed on bail.
After the hearing, he addressed hundreds of supporters who had gathered outside to protest. He said South Africa's president had told authorities to just arrest him for anything. CNN's Nkepile Mabuse reports.
(BEGIN VIDEOTAPE)
NKEPILE MABUSE, CNN INTERNATIONAL CORRESPONDENT (voice-over): For a man accused of receiving half a million dollars in corruptly-acquired cash, South African politician Julius Malema was as cool as a cucumber in court. He even smiled when he was formally charged with money laundering.
The state claims that the former ANC party youth president has benefited from government contracts awarded to companies that he has shares in.
(PROTESTERS SINGING)
MABUSE: Outside court, hundreds of his supporters were less concerned about the seriousness of the allegations and more determined to defend Malema, who they say is being punished for criticizing President Jacob Zuma.
Malema was kicked out of the ANC for bringing the party into disrepute. Now, he's campaigning for Zuma to be removed as party and country president.
UNIDENTIFIED MALE: Well, (expletive deleted) you. I am more (expletive deleted), I am angry about you.
MABUSE: They believe the charges are trumped up. While South Africa's middle class cringe at his vulgar language and disrespectful demeanor, Malema strikes a chord with those who feel left out as inequality in the country widens.
JULIUS MALEMA, SOUTH AFRICAN POLITICIAN: I'm unshaken. I'm not intimidated by Lonmin. I'll continue with the strike for economic freedom.
(CROWD CHEERS)
MABUSE: And it's economic freedom these young South Africans are desperate for. Around half of the country's youth are unemployed, and many are willing to ignore questions around Malema's financial dealings and cling to the hope his words ignite.
Malema was released on bail after the state presented what appears to have been a rushed case against him. Malema's lawyers say they were only given details of the charges late the night before, despite investigators having had more than a year to prepare for this day.
Prosecutors were also unable to produce documents to prove their case, saying they will do so before Malema's next appearance on November 30th.
Police deny any political agenda, but Malema's recent comeback has left many skeptical. After being axed by the ruling party in April, he reestablished his public image during the recent spate of illegal strikes in the country.
Both Zuma and Malema have given their lives to the organization that helped end apartheid. Now, they both seem determined to fight to the bitter end to lead it.
Nkepile Mabuse, CNN, South Africa.
(END VIDEOTAPE)
FOSTER: Mexico is eying up untouched oil reserves lying some 3,000 meters under the sea. Current supplies, which lie closer to the surface, are dwindling, and the rigs are old and under-funded.
Now, Pemex, the state oil producer, is looking at using deep-water drilling to get at its remaining reserves. It's a high-stakes job, and progress is painfully slow. As CNN's Nick Parker reports, the days of so- called easy oil appear to be over.
(BEGIN VIDEOTAPE)
NICK PARKER, CNN INTERNATIONAL CORRESPONDENT (voice-over): This is the key to the future of Pemex and Mexico: drilling in depths of thousands of feet of water. Beneath a vast area of deep ocean in the Gulf of Mexico, Pemex estimates it has some 29 billion barrels of oil, crucial in halting its production decline.
In August, Mexican president Felipe Calderon showed off the first significant discovery of oil But there is nothing yet in production. Pemex has only three exploration rigs available to explore Mexico's side of the maritime border.
PARKER (on camera): This is the heart of any exploration rig: the drilling floor. This particular rig discovered a significant amount of gas a few months ago. And that means, they have to search the entire field to determine how big it is.
That means more drilling. And just to give you an idea of the painstaking process at stake, here, each well takes 100 days to drill.
PARKER (voice-over): And it's a high-stakes job. This rig, the Sentinario (ph), cost Pemex nearly half a million dollars a day to hire.
UNIDENTIFIED MALE: This is sixth generation -- drilling unit. This is the top of the drilling units around the world.
PAKER: GPS and thrusters are needed to keep the floating rig on a fixed point. But the costs are vital, as seismic reports can only take you so far.
CARLOS MORALES, HEAD OF PRODUCTION AND EXLPORATION, PEMEX: Before drilling, everything is speculation.
PARKER: Right now, Pemex's biggest oil field, discovered in the 1970s, is in 100 meters of water. This exploration rig is drilling down to depths of 2,200 meters. At these depths, oil can freeze as it leaves the sub soil, and equipment needs to withstand strong pressure and currents. It raises obvious safety issues in the wake of the Deepwater Horizon disaster.
MORALES: We are in tough environments, no doubt. They have to make you think, and the risks, we do have to evaluate worse scenarios before going into the decision of drilling a well. You have to design your well perfectly.
PARKER: Mexico's progress in the deep waters is far slower than its northern neighbor. Many blame Mexico's constitution, which prohibits Pemex from sharing oil with partners.
MORALES: The question is not if Pemex can make it or not, but how long do the Mexicans want to convert those resources to, let's say, to wellness of the people.
PARKER (on camera): So, if you allow private investment, the timeframe of developing these resources would be much shorter.
MORALES: No doubt. No doubt. Exploring 500,000 square kilometers is not something that you can do in a short timeframe.
PARKER (voice-over): With Mexico's president-elect Enrique Pena Nieto committed to reforming the energy sector, this may be the best opportunity for constitutional change. Nieto confidants tell CNN he will tackle the issue early in 2013, but it will be tough.
CARLOS RAMIREZ, EURASIA GROUP: Things in Pemex doesn't seem to be as dire as they were three or four years ago, right? This production stability and this research replacement and with oil prices where they are, basically, there doesn't seem to be a sense of urgency in the political elite.
PARKER: for now, the riches under the sea remain largely untapped.
Nick Parker, CNN, the Gulf of Mexico.
(END VIDEOTAPE)
FOSTER: Well, time for today's Currency Conundrum. In 2007, the first $1 million coin was created. Our question to you, which country minted it? Was it A Canada, B Vietnam, or C Zimbabwe? I will have the answer for you later in the show.
The euro's falling against the dollar this session. Right now, a euro buys just over $1.28 and a half. That's down by around a third of one percent. Sterling is showing similar losses. The dollar is fat against the Japanese yen.
(COMMERCIAL BREAK)
FOSTER: Now, this week on QUEST MEANS BUSINESS, we're focusing on mobile phones and everything that goes with them. O2 and HTC say we don't need any more of these, this tangled mess. I'm sure you've got them tucked away in your drawer at home as well.
The network operator and mobile phone maker says we've got too many redundant chargers lying around, and they're not going to add to them. When HTC releases a new flagship phone, it won't come with a charger. O2's chief executive, Ronan Dunne, told me what they will provide.
(BEGIN VIDEOTAPE)
RONAN DUNNE, CEO, O2: So, we think there's probably 100 million chargers in the UK alone that go unused, and we think probably 70 percent of people already have a charger that allows them to put a USB cable in.
FOSTER: You want them to use those that they've got at home already.
DUNNE: Exactly. So, we'll give them with -- when they upgrade the phone or buy a new phone, the cable will be in the box, and all we're saying is, use the plug you have already at home and let's not add to the 100 million mountain.
FOSTER: What's your guess at how many of these there are around the world, then, if you're just doing research in one country?
DUNNE: We've got to say that there's more than a billion unused chargers out there, so there's a huge opportunity. And it's not just the manufacturer and then the recycling of the chargers, but also we can reduce packaging and packaging waste, and we can reduce transportation costs, and that's got to be good for consumers at the end of the day.
FOSTER: What about the commercial value to excluding them from the box because you're selling less in the package?
DUNNE: So, the cost of the actual plug is probably about one percent of the cost of a current SmartPhone, so --
FOSTER: You're not gaining much.
DUNNE: -- it's incidental. No. And if somebody needs a plug, we'll sell it to them at cost. And so, we'll make no profit. But it does mean that we can reduce the carbon footprint and the impact on the environment of not just the business that we run, but also help our customers to do the same.
FOSTER: One of the reasons so many people have got so many chargers at home is because there are so many different types of charger, aren't there? I know you're a big advocate for the universal charger, every phone having the same charger. Why is there no progress there? There is some progress, I know, but why is there not more progress?
DUNNE: Well, there actually has been a lot of progress. So, the first thing is the cable and the plug have been separated out. But the vast majority of phones now use a standard connection, which is USB at one end, micro USB at the other end. So, we have made a lot of progress.
And even phones that don't comply with that, such as the new iPhone, you can still take the cable from that and plug it into one of your existing plugs.
FOSTER: Can you explain the logic as to why a company would rather keep their own type of charger?
DUNNE: Well, I think there's two things. You want to make sure it's an energy-efficient charger. When it comes to the cable, different services used for data transfer and other things, some manufacturers feel that they needed a slightly different cable. But when it comes to the plug, we all have the same plug sockets.
(END VIDEOTAPE)
FOSTER: True enough. Let's take you to Spain, Madrid in particular, because protests are really heating up there. Let's take a look at some live pictures coming into us.
Tomorrow, they're unveiling this budget. A lot of anger about the budget. And anger not just pointed towards the government, but also the opposition parties. General anger towards the political elite there in Madrid.
And these demonstrators have been gathering in force today, and it's building and building, so we'll see how that goes. Currently peaceful, but Madrid a sea of demonstrators tonight, at least in this area.
You're watching QUEST MEANS BUSINESS. Next, we will peel back the covers to reveal Jaguar's newest release, the F-Type. Judge for yourself if it can live up to its predecessor, the iconic E-Type. That's in just a moment.
(COMMERCIAL BREAK)
FOSTER: Welcome back. I'm Max Foster. These are the main news headlines. There have been violent clashes between protesters and police in Athens. Some protesters threw petrol bombs. Police responded with tear gas. The Greek government is considering a new round of deep austerity cuts and many Greeks say they just can't take any more.
In Spain, we also have demonstrators as well. Live pictures coming into us as we speak around the political quarters. And the crowds are building all the time, currently peaceful. The government is set to present its budget for 2013 on Thursday and it's likely to include billions of dollars' worth of spending cuts.
Syrian rebels attack the regime's army headquarters in Damascus. The government says two suicide car bombs hit the office of the joint chiefs of staff, killing four guards. According to state media, this surveillance video shows one of the bombings; in the right-hand lane a white van slows down and then explodes.
Egypt's new president has addressed the United Nations General Assembly. Mohammed Morsi told delegates his country will honor signed agreements, including the Camp David Accords. He also addressed the worldwide uproar over an anti-Islam film, saying the film is unacceptable and requires a firm stand.
The ousted youth leader, South Africa's ruling parties appeared in court on money laundering charges. Julius Malema, who was freed on bail, he said the president told police to do anything to arrest him. The government says the charges are not politically motivated.
(MUSIC PLAYING)
FOSTER: Now the Paris Motor Show, more than 100 new models are set to make their debut in the coming days. Few, however, are quite as long awaited as this. Tonight, Jaguar is unveiling its spiritual successor to the legendary E-type model, which has been more than 50 years in the making. Decades of dreaming, years of design and engineering and months of suspense have all led to this.
Take a look at the story of a Jaguar F-type with some exclusive pictures of the car in action.
(BEGIN VIDEO CLIP)
(MUSIC PLAYING)
IAN CALLUM, DESIGN DIRECTOR, JAGUAR: I've never owned a car that I've worked on as a designer. But I'm going to buy one of these. And then I'm going to keep it.
ADRIAN HALLMARK, GLOBAL BRAND DIRECTOR, JAGUAR: Our job is to reignite the torch of sports car spirit in the company and pass it on.
IAN HOBAN, VEHICLE LINE DIRECTOR, JAGUAR: The car speaks for itself. It feels, it stands, it stops, it goes like a sports car. You sit in the car, start the engine, feel the controls around you, and then just drive away. The car feels part of you. It's an extension of you.
CALLUM: At the beginning of the design, you actually start with sketches. We actually start sketching with pencil and paper.
And from that point, that very spirited sketch turns to something digital, and then from the digital models we actually then recut a full- size clay model. A Jaguar must have beautiful lines, very simple lines, something that when you look at -- I'm not able to explain it, what it's about. You just need to look at it and understand it.
HOBAN: Every sports car must be steady performance. The F-type has three supercharged S cylinder (ph) engines. That's 2 3-liter engines and one 5-liter engine. To really deliver the raw performance, the stunning performance that underpins any sports car. The agility of the car, the precision, accuracy and responsiveness of the car to the driver inputs, to the steering input, to the throttle, transition shifts (ph) and brake.
Every sports car has to sound great (inaudible), the driver input into the car, and we've used active valve (ph) technology within the exhaust system to really make the most of what is already a very authentic sound quality of our V-6 and V-8 engines.
HALLMARK: The F-type is really important for the brand in volume terms. Sports cars are a really small segment, but the image that they generate for any company that is successful in that segment is out of proportion to the volume of cars. I think the biggest challenge with F- type was to know how to position it properly, because clearly, it is the most anticipated Jaguar.
CALLUM: We didn't want to go and redesign the E-type. That's now what we're trying to do. We're trying to create something that's a natural follow-through from that. I didn't feel pressure from the E-type. But it is -- it's like a little, you know, it's almost like this little character on my shoulder that says, you better do good. You'd better do good. They're watching you, you know.
(END VIDEO CLIP)
FOSTER: Well, the Jaguar E-type has undoubtedly left its mark, both on the designers of the F-type and on its potential buyers. This icon (inaudible) was once described by Enzo Ferrari as the most beautiful car ever built.
Now Jaguar is hoping the F-type will take that iconic legacy and bring it right up to date. And the company's reputation depends on it, actually. I asked Ralf Speth, CEO of Jaguar Land Rover, if they've managed it.
(BEGIN VIDEO CLIP)
RALF SPETH, CEO, JAGUAR LAND ROVER: The F-type is a sensational car. It's real British design, precise engineering and fine-tuned driveability, so you can steer the vehicle in an unbelievable way. Physics tell you with the wheels at the very corner, that this car is just a very, very interesting, high-performance sports car, a real driving machine.
FOSTER: The E-type was an iconic vehicle, wasn't it, the iconic vehicle of the '60s in many ways. Are you seeing the F-type in the same way?
SPETH: The E-type was and still is a very, very iconic car, and nobody can build such a car anymore. And the F-type nevertheless is -- does have the DNA of all the Jaguar sports cars, but also of the E-type. There's a spirit, sportiness, design, quintessential Britishness, it's also in the F-type.
FOSTER: It's a British brand, and it's got this great legacy, of course, as well. But where are people going to be buying it? I presume China, actually, right now, is going to be your big market?
SPETH: China is growing very, very strong. But our vehicles are in very high demand all around the world. Even Europe, we are growing and overall, year to date sales increased by more than 40 percent. And that means Jaguar Land Rover is really on a good (ph) and solid stage, and all the financial figures are solid.
FOSTER: And in terms of the wider market base, I know you've got a new Range Rover out as well. Where do you feel that the real growth is? Is it at this very high end of cars right now?
SPETH: At the moment, we see a firework of new products coming in the market, and everybody want to occupy every niche. We concentrate on the really important element. We're in the right segment, so with (ph) the new Range Rover (inaudible), lighter, stiffer, better to handle, will make its way and will be this -- the benchmark in the premium SUV segment.
FOSTER: They're cars with great British legacies, of course, great sense of history behind them. Why do people want to buy into that, when most of the customers are actually outside the U.K.?
SPETH: I guess now I'm really convinced this special Britishness, this quintessential Britishness, with this British design is so extraordinary so that we can really differentiate ourselves against all the competitors, and we really see a very special lifestyle and a very special behind -- demand behind our vehicles.
(END VIDEO CLIP)
FOSTER: Chief executive there, Jaguar Land Rover, speaking to me earlier.
Now the three-martini lunch is long gone. Is the power lunch to follow? (Inaudible) in the age of austerity. That's next on QUEST MEANS BUSINESS.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
FOSTER: Well, we continue back live to the U.N. General Assembly, European Council President Herman van Rompuy currently speaking.
HERMAN VAN ROMPUY, EUROPEAN COUNCIL PRESIDENT: -- that lay ahead would directly affect us as neighbors. Of course, expectations ran high. It was tempting to It was tempting to read the events in Tunis or Cairo as the opening pages of a fairytale.
But this is the book of history. It contains dark pages, too, some of them tragically being written at this very moment. And we are bound by a simple truth: achieving lasting change takes time.
New democratic institutions don't run smoothly by magic. Turning economies around or creating jobs for millions of young men and women doesn't happen at the wave of a wand. Deep tensions don't suddenly dissolve once a dictator has gone.
The long path of transition lies ahead. There will undoubtedly be disappointments along the way; there will be wrong turns, hurdles and setbacks. But I firmly believe that despite the difficulties, this journey is heading in the right direction. And there is no going back.
Whatever the future brings, the Arab Spring will remain a turning point. The movement is irreversible. Once the voices of the people have been set free -- an unforgettable experience for all those who were never heard before -- well, these voices cannot be silenced. It is each country's responsibility to chart its own course and to do justice to the aspirations of its people.
The European Union is committed to staying by their side every step along the way. We are in it for the long run. I want to reaffirm: we still believe in the message of the Arab Spring.
Europeans are well-placed to recognize that political change is not painless and does not happen overnight. We know about long transitions.
When European integration first started, within my lifetime, a majority of the countries that are now its members were not yet democracies. For us, a transition of such magnitude should not be judged by its speed but by its direction, and by progress achieved through countless steps forward.
FOSTER: Herman van Rompuy speaking at the UNGA, listening out for him, making some comments about the debt crisis, of course. We'll monitor that for you.
Now to our weekly "Business Traveller" segment, a power lunch, the power lunch, an important networking opportunity, or is it a waste of cash? The age of austerity has led to cost-cutting measures across the board, even the cheese board. Richard has been in New York to find out if the humble and not-so-humble business lunch will survive.
(BEGIN VIDEO CLIP)
RICHARD QUEST, CNN HOST (voice-over): The very name says it all: powerful people, major decisions, big expenses. Yet as the economy cratered, the landscape quickly changed, companies cut back on corporate cards. But according to the restaurant ratings guru Tim Zagat, lunch didn't languish for long.
TIM ZAGAT, CO-FOUNDER AND CEO, ZAGAT SURVEYS: I can give you 30 or 40 restaurants in New York, well, off the top of my head, where you will find full house and nobody's eating less than $100 for lunch. It's just that the average person is being told, go easy. Don't spend too much. Live within a budget.
QUEST (voice-over): But the top of the tree, the Four Seasons Restaurant, a true year-rounder.
ZAGAT: It's $100 for lunch, it's no big deal if you're trying to make a million-dollar deal. (Inaudible) is you're likely to be making a billion-dollar deal. Lunch there is like going through a bunch of front pages of "Time" magazine.
QUEST: If you're going to the Four Seasons, you're not worried about the (inaudible).
ZAGAT: If you have to think about the cost, you shouldn't be there.
QUEST (voice-over): I probably shouldn't be here, but I am anyway.
JULIAN NICCOLINI, CO-OWNER, FOUR SEASONS RESTAURANT: Power lunch, what's basically (inaudible) Four Seasons Restaurant, the 1980 (inaudible) and ever since then, we never stopped. When you take somebody out, you're entertaining them. This is about breaking bread. It's about, you know, enjoying life. It's not just spending money.
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QUEST (voice-over): Even at the tip of New York society, some diners are watching their wallets.
NICCOLINI: Absolutely. That's (inaudible) most difficult time. Even some of the richest one, you know, comes truffle season, they say, well, tell me, Julian, how much are the truffles today, you know. Before nobody asked that question. We are (inaudible) in the bar, in the grill area, for $35 for lunch time, which is a steal.
QUEST (voice-over): Affordable, fixed-price menus aim squarely at the business person and are now popping up across New York.
ZAGAT: There are about 350 restaurants that are doing prix fixe menus. They are among the best restaurants in the city.
QUEST (voice-over): You know it's a trend when Michelin-star restaurants like Jean-Georges are leading the way.
ZAGAT: But I ate there, more meals in the last five years than any other single restaurant.
ALEX WOLF, GEN. MANAGER, JEAN-GEORGES RESTAURANT: You have a $38 menu, so you have two courses off of a menu that will be considerably more at dinner. What it allows you to do is enjoy that luxury in a way that doesn't break the bank.
QUEST: And the business lunch is still thriving, would you say?
WOLF: Absolutely, if not more so than it ever has done.
QUEST (voice-over): According to American Express, individuals are spending less while corporate spending is the driver of growth.
QUEST: We now head for something more modern.
Downtown, driver.
ZAGAT: You want to see something that's interesting, have you ever been there?
QUEST: No.
ZAGAT: Let's get out for a second and let me show you.
An hour from now you will not be able to fit near the bar here.
I love the atmosphere. The food is really very good and downstairs they have these little private rooms, where anything goes. I didn't say that. I didn't say that. But do you want to see them?
QUEST: I don't think so.
ZAGAT: This is -- used to be the meat market of New York. And now it's the Meat Market of New York.
QUEST: The midtown restaurants are going for the established crowd. The downtown restaurants aim for the titans in T-shirts, The Standard Grill, where mains run from around $15. Your client's impressed you could get a table; your boss even more so.
MICHAEL BAILEY, F&B MANAGER, THE STANDARD GRILL: We definitely have a younger clientele here. We're very sexy and very fashionista and very cutting-edge. Some of your biggest deals are made in jeans and a T-shirt.
QUEST (voice-over): Be it suit or sandals, the power lunch as an institution remains. And that's because it's not about eating a meal, it's about making the right impression on the right person regardless of the cost.
ZAGAT: If you're meeting somebody who is the next big deal, forget about the price.
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FOSTER: (Inaudible) people worried about just getting their next lunch gathering in Madrid right now. A new budget is due to be announced for Spain tomorrow. It's very controversial. It will mean austerity and many of the people gathered there (inaudible) they can't afford it.
The anger at the government, the anger at the opposition, and they look like they're settling in for the night at the moment. Certainly, peaceful though right now. We'll monitor it for you.
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FOSTER (voice-over): Time for the answer to today's "Currency Conundrum," earlier we asked you which country first made a $1 million coin? The answer is A, Canada, and this is it. It weighs 100 kg and because it's made of pure gold, it's worth far more than its $1 million face value. So far, the mint has made five of them.
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FOSTER: None spent so far, as far as we know. Jenny Harrison monitoring the wildfires in Spain and some respite for firefighters, Jenny.
JENNY HARRISON, CNN METEOROLOGIST: Yes, and a better 24 hours (inaudible) finally (inaudible) able to get some of these fires under control. Just to remind you again what it was like Monday night in particular.
Remember (inaudible) had to be evacuated. The area we're talking about is to the northwest of Valencia, about 60 kilometers to the northwest. Most of those residents (inaudible) were allowed to go back to their homes. So it (inaudible) lot better now. They've got a lot of these small fires actually contained. But they were using at times over 600 firefighters or 25 aircraft and helicopters.
It's been such a dry summer and, in fact, there have been three times as much area burned this year as there was last year. This particular fire, 51/2 thousand hectares have actually been lost. But the weather did help. It actually kind of fueled the fires, really, on Sunday, because ahead of this front the winds did begin to pick up.
But since the front has gone through, there's been a little bit of rain, but also the winds, of course, have died down and it's also considerably cooler. But the situation with Spain, the entire country with regard to drought is really very dire one indeed. Most of the country is actually under some form of severe drought, to the center and to the east we've got this extreme drought.
And you can see everywhere is under some form of it. There is some more rain in the forecast. I'll come onto that. There is, of course, still plenty of rain to the north of there across the U.K., across France, into the low countries on towards Germany. But that low, you can just see the circulation there. It is actually working its way southward.
So pulling away from northern regions of the U.K., and then it kind of splits off into two systems. But it does weaken very gradually, pushing up into Scandinavia. But there's another one waiting in the wings, strong wind with this one as well, perhaps not quite as strong as the other system. And then you'll notice the southwest portion of Spain will be seeing some rain.
There's also some warnings in place. It could get heavy at times. And then the central Med, the northwest of Italy in particular, we could see some strong winds there. But the winds have been easing across the northwest as that low system pushes away.
That is the next big system, though, coming in as you can see. But it will be a better day generally on Thursday for traveling. There will be one or two delays, but nothing as lengthy as we have seen up until this point and as I say, Max, there's some good rain on its way through Spain, too, in the next day or so.
FOSTER: Good news, Jenny, thank you very much indeed. And hopefully better news on the markets tomorrow as well. We'll have an update of what happened here in Europe. It was pretty grim -- after the break.
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FOSTER: (Inaudible) the market numbers for you, a grim day in Europe. But this is what the Dow's doing, actually not too badly affected what -- with what went on earlier on, down 0.2 percent. So obviously wait and see what's going to happen in Spain and Greece.
But the BlackBerry maker Research in Motion was one bright spot. Its shares up by more than 6 percent, would you believe it, after (inaudible) gained nearly 2 million new subscribers.
That follows on from losses here in Europe, all the major indices closed in the red, dragged down by plunging banking shares, Deutsche Bank and Societe Generale each lost more than 6 percent. RBS fell 51/2 percent. In Spain, Bankia lost 5 percent and Madrid's IBEX index was Europe's worst performer, falling to a three-week low.
That is QUEST MEANS BUSINESS. Thank you so much for watching. I'm Max Foster in London. The news headlines are coming next.
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FOSTER: Live pictures from Madrid, protesters have turned out to vent their anger against the (inaudible). The government's set to present its budget for 2013 on Thursday, likely to include billions of dollars' worth of spending cuts. Spain's central bank today also warned the economy is in a deep recession.
There have been violent clashes between protesters and police in Athens. Some protesters threw petrol bombs. Police responded with tear gas. The Greek government is considering a new round of deep austerity cuts and many Greeks say they just can't take any more.
Syrian rebels attack the regime's army headquarters in Damascus. The government says two suicide car bombs hit the office of the joint chiefs of staff, killing four guards. According to state media, this surveillance video shows one of the bombings; in the right-hand lane a white van slows down and then explodes.
Egypt's new president has addressed the United Nations General Assembly. Mohammed Morsi told delegates his country will honor signed agreements, including the Camp David Accords. He also addressed the worldwide uproar over an anti-Islam film, saying the film is unacceptable and requires a firm stand.
Well, that is a look at some of the stories we are watching for you here on CNN. "AMANPOUR" is next.
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