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Quest Means Business
Cypriot Parliament Rejects Bailout; Bailout Blame; Cyprus Crisis; Boeing's Budget Deal; Airbus Gets Lion's Share; Ryanair's Big Deal; Dollar Flat; UK Inflation Rises; Beer Tax Blues
Aired March 19, 2013 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: The bailout deal is dead after the Cypriot parliament reject the plan to tax the nation's savers.
The blame game begins. The European parliament's economic chief tonight points the finger at the Commission.
And also, anti-social networking. Facebook's Sheryl Sandberg tells women shouldn't have to be liked to lead.
I'm Richard Quest, we have an hour together, and I mean business.
Good evening. Hold onto your hats. In the last hour, the Cypriot parliament has rejected the bailout proposals for the country's banks. It was an overwhelming vote. MPs threw out the plan, which would have left small savers untouched, but taken 10 percent off larger deposits.
It's been a day of confusion, chaos, reversal, and now tonight, rejection. Our correspondent Jim Boulden joins us now from Nicosia outside the parliament. Jim, not a surprise. One wonders why they bothered putting it to the vote, since it was seemingly a foregone conclusion that it would be rejected. So, the only question for you tonight: what happens next?
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Exactly, Richard. We've known for several hours the vote would be no if the vote took place. It needed to take place, one parliamentarian told me, because the people needed to know how it was going to work out.
So, I'm now joined by one of those who voted no, Nicholas Papadopoulos, from the Democratic Party. First, sir, tell me why you voted no.
NICHOLAS PAPADOPOULOS, CYPRUS DEMOCRATIC PARTY: We said no to a haircut because we think it's inherently unfair that pensioners and people of low income should dip into their savings and pay for the mistakes of the banks, the mistakes of the government, and pay twice for the Greek haircut.
This is something that has not been imposed on any of the other countries that have bailouts from the European Union. And I believe that in the end, it's a request from us to destroy a banking sector bill which is a considerable part of our economy.
BOULDEN: So, what is plan B? Because we need to know -- the markets need to know tomorrow morning what the Cypriots are going to do now. What is the parliament, the government going to do?
PAPADOPOULOS: Well, I believe, and the suggestion of my party is that the banks should remain closed and we should seek immediate renegotiation with the European Union. My party believes in a strong eurozone.
And I was in government when we achieved entry into the eurozone. We fought for the euro. But unfortunately today, I do hope that some people are not trying to push this country out of the euro.
BOULDEN: So, you want the banks to remain closed past tomorrow, into Thursday, maybe for the rest of the week? You think that's something that has to happen?
PAPADOPOULOS: I think that they should remain closed until we have a resolution to this matter, otherwise it will be disastrous if they open under this kind of uncertainty.
BOULDEN: The ECB has said it may just stop funding one of your banks, and that would cause a collapse. That was one of the sort of threats we heard on Friday, come Saturday. They must change their position on that if that's the case, that you all have now voted no.
PAPADOPOULOS: Well, I do hope it doesn't come to that. I do hope that in order to conduct this euro negotiation under threats, I hope that they're going to treat us as co-partners of the European Union that have unfortunately reached this point because we attempted to assist another country of the eurozone.
BOLUDEN: Meaning Greece, of course.
PAPADOPOULOS: Of course, yes. The Greek haircut cost us 25 percent of our GDP. If they want to ignore this and pretend like it's all our fault, then I'm afraid that, as I said before, that some people in the European Union are striving to drive certain countries out of the eurozone.
BOULDEN: Can Russia be plan B? Does it have to be the eurozone?
PAPADOPOULOS: We don't want -- we really do not wish to lose Russia's support. It's a country that has supported us in the past, both economically and on a political level. And we are striving to get a very fair agreement, but it wouldn't lead to unnecessarily burden Russian businesses that are conducting business in Cyprus.
BOULDEN: Aren't you worried that Russian businesses and people might pull out there money even though you voted no?
PAPADOPOULOS: Yes, but that might still happen if we had voted yes, because the panic has set in, and there's great uncertainty regarding our banking system. Nobody can guarantee us that there's not going to be a second haircut, because if we proceed under this suggestion, then I'm afraid that we fear that we're going to have a deep recession. We're going to have a flight of capital.
It may well be that the banks will collapse anyway, so we're going to be at the same place where we are now, but with a much smaller banking sector and unable to pay our debts.
BOULDEN: Could plan B then be that the ECB, the eurozone, the IMF, the so-called Troika, come up with more money? Because they were only willing to give you $10 billion euros of the $17.5 billion euros that is necessary to recapitalize your banks. Do they need to put up more money?
PAPADOPOULOS: We don't think that the issue is more money. We believe that their calculations regarding the banks' requests for liquidity and for further capital have been extreme. And therefore, we believe that with much less money we can reach the stability of the system. It's because of their extreme requests that we find ourselves in this position.
BOUDLEN: So, you think there could be some time, it could be days before this renegotiation happens? Would there be another vote within a couple days? Is this firmly rejected now?
PAPADOPOULOS: I'm sure that parliament will in good faith come back and examine another proposal --
BOULDEN: OK.
PAPADOPOULOS: -- after a proper renegotiation. And that is our intent. I repeat, we do not wish to leave the euro, and I do hope it does not come to that.
BOULDEN: OK, Nicholas Papadopoulos, thank you very much, member of the Democratic Party, one of the 36 MPs who voted no here, Richard. Plan B is up in the air. We'll stay on this story tomorrow to find out exactly what it is the government plans to do, in fact what the eurozone plans to do, Richard.
QUEST: Jim Boulden, who is in Cyprus in Nicosia and will be back with us the moment there's more to report.
So, we need to work out where this leaves everyone. And to do that, we have to go back into the history of how we got here. The failed bailout plan enraged Cypriot savers, it rattled the global markets, and it roiled the Russians. It's a deal so unpopular that no one wants to admit that they're fingerprints are on it.
But fingerprints are all over Cyprus, the deal, and whose fingerprints they are we're going to show you. Start with the euro group. The euro group says it reaffirms the importance of fully guaranteeing deposits below 100,000. It only wants the big savers to pay. But the euro group also insists that the levy remains.
The IMF's managing director, Christine Lagarde, approves the goal of the plan and says Cyprus has the IMF's support in implementing it.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, MANAGING DIRECTOR, IMF: We are also, obviously, extremely supportive of the Cypriot authorities' intentions to introduce more progressive rates in the one-off levy or deposit share swap within the agreed financial envelope of 5.8 billion.
So overall, and with this particular emphasis that I've just put on the banking sector and the banks' restructuring, I believe that the agreed approach meets these objectives and the authorities will have our full support and cooperation to actually implement, because now is the time for the authorities to deliver on what they have committed.
(END VIDEO CLIP)
QUEST: That's Christine Lagarde. But the fingerprints of the ECB are also on it. Some say it was Mario Draghi who wanted the plan to go ahead. But they say now, backtracking, exact terms down to the Cypriot government.
So, what about the European Commission? "The Wall Street Journal" says the initial tax idea came from the vice president, Olli Rehn. It was first raised by the economics commissioner. In the end, though, Cyprus is the one who put the deal together, Cyprus with 36 no abstains -- 36 no votes, 19 abstains.
But the president of Cyprus describing what has taken place says "blackmail," and that's been very much a reference, of course, to the way which they believe. In other words, the fingerprints of all are on this particular plan.
Bob Parker's the senior advisor at Credit Suisse. He says that the big depositors, the Russians, will be and should be taking more of the hit for what's taken place.
(BEGIN VIDEOTAPE)
BOB PARKER, SENIOR ADVISOR, CREDIT SUISSE: If you look at Cyprus, there are a set of very special circumstances. First of all, the size of the banks relative to the size of the economy is very high, indeed.
Secondly, the size of foreign deposits relative to domestic deposits, Cypriot deposits, is also very high, indeed, and obviously amongst those foreign depositors, there is a very large Russian component, and there's been a lot of comment about actually the validity or the purity of that Russian money, which has been recycled through Cyprus.
I think another point is that obviously the Cypriot economy, to put it diplomatically, has been extremely stressed for many years. There have been year in, year out of economic mismanagement. So, you've had a very extreme situation.
QUEST: But if you're looking at a question of principle and precedent, nothing like this was done with Greece or Spain, with its bank cap -- recap -- or Portugal, or Ireland.
PARKER: That is true. In the case of the countries you mention, obviously equity shareholders lost money in the banks. Also, in certain cases, subordinated bondholders have lost money when banks have had to restructure.
(CROSSTALK)
QUEST: But they -- but those people bought into the bank --
PARKER: Correct.
QUEST: -- as an investment for the purpose of buying the bank.
PARKER: Correct.
QUEST: Bond -- depositors put their money in the bank because they're going to get it back.
PARKER: Yes. If you're looking for historic examples of where depositors have lost money, you have to actually look out -- at crises outside the eurozone. So, for example, Iceland. For example, Argentina in 2001, was a classic example where they had to close the banks and depositors lost money.
QUEST: So, where does this leave us tonight, do you think?
PARKER: Well, I think the key question is will the bailout be finally agreed? My view is, yes it will eventually. But I do think that the European Union and the Cypriots and also backed by the IMF, will basically allow the hit to be taken by the large depositors. The floor depositors, let's say under 100,000, I don't think they will take a hit.
QUEST: Does this restart the eurozone crisis just at a time when market -- equity markets were extremely bullish. I know your view about the year, how you believe equity's going to produce gains for the year. Does that view change?
PARKER: Well, I think the key question is, do we have contagion from Cyprus to Italy and Spain? And my answer to that is no. I think Cyprus is very much a special case. And if you ask the question, will there be runs on Italian banks or Spanish banks, I actually think not.
And I would emphasize the improvement that we are seeing in the case of Spain, of its competitiveness, its trade position, and also the much stronger fiscal position the budget position, in Italy. So, Cyprus only accounts for less than 0.2 percent of the eurozone economy.
Obviously, there is a lot of attention on this unprecedented hit to depositors, but will that be allowed to happen in other eurozone economies? I think the probability there is exceptionally low.
(END VIDEOTAPE)
QUEST: And in 15 minutes from now, you'll hear from the chairman of the European Parliament's economic committee, Sharon Bowles, who has some extremely strong views on where the blame for all of this properly lies.
In a moment, Boeing follows Airbus and wins a big order, and you'll hear from the plane buyer, Ryanair's Michael O'Leary from New York after the break. QUEST MEANS BUSINESS.
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QUEST: Boeing signed a multibillion-dollar deal with Ryanair to supply the Irish carrier with more 737 jets, all within 24 hours of a huge budget buy up over in Asia. Join me in the airport lounge, and you'll see what I mean.
Now, let's begin with today's deal. Ryanair is buying 175 737 NGs or Next Generations, 800s. The list price is more than $16 billion. It boosts Ryanair's fleet by to -- it will take it to about 400 planes and create 3,000 new jobs. Interestingly, Ryanair also said today that they would be planning on buying 737 MAXs if they can reach terms.
Now, it sounds impressive, and it certainly was for the US manufacturer, but the European plane maker, Airbus, saw a deal 24 hours ago from Lion Air of Indonesia. They're buying 234 aircraft. They'd be the A320 and the 321. The cost price is about $24 billion.
The interesting thing about these prices, of course, whether it's $24 billion or $16 billion, that is the list price. And when you're buying these sort of numbers of aircraft, I can tell you, you don't pay that sort of money.
A few moments ago, on the line from New York, Michael O'Leary, the chief exec of Ryanair joined me. Now, the list price is this, he's buying that many planes, I wanted to know how much was he paying for each plane.
(BEGIN VIDEOTAPE)
MICHAEL O'LEARY, CEO, RYANAIR: Too much, Richard. Boeing are a very big company, new management team, we've been negotiating with them now for about six months, and I think the official position is that the pricing is not dissimilar to the earlier 2005 order. But I think Boeing did a little bit better this time than we did.
QUEST: So, in 2009, you walked away from negotiations. What changed? I know you needed the planes for expansion, but what changed fundamentally?
O'LEARY: Well, there was a disagreement in 2009 between ourselves and Boeing. It's not that we walked away. We couldn't agree on the terms and conditions. They wanted to change the terms and conditions.
I think what's fundamentally changed is two things: one, there's a new management team in Boeing, it's run by the sales side, these are guys who want to do deals. I think it's very impressive that Boeing, at a time when they're dealing with 787 problems, they're still delivering record aircraft deliveries on a monthly basis and are still doing big aircraft deals, such as today's order.
And the second thing is, we need the aircraft. As more and more airlines across Europe are restructuring, Iberia and Italia SAS getting smaller, with more and more airports coming to Ryanair and saying please, we need you to grow here, we need more aircraft to accommodate what are incredible growth opportunities for Ryanair in Europe.
QUEST: You're -- the shift that's taking place in European aviation is a tremendous opportunity for you to grow. You're already --
O'LEARY: Sure.
QUEST: -- Europe's largest in terms of number of passengers. How big do you want to take the airline before it becomes unmanageable?
O'LEARY: Many would argue it became unmanageable a number of years ago. But I think -- we don't -- there's no point in looking to an end point like that, Richard.
I think what we clearly signaled with today's order, we can plot a graph to grow from about 80 million passengers to 100 million passengers annually over the next five years.
We've assembled a senior working group between Ryanair and Boeing to examine the MAX aircraft, and I would hope that by the end of this year, we'll be able to announce a MAX order that would take us to about 120 million passengers a year.
At that, we're still only less than 20 percent of the European short- haul market, and I think it's realistic to suggest that Ryanair should carry between 25 and 30 percent.
QUEST: Quickly, Michael, finally, Europe once again in crisis on the political front, Cyprus deal has been rejected by parliament, it looks as if the eurozone crisis isn't going away. This must be of concern to you because, obviously, if Europeans don't travel or at least confidence, that takes its toll.
O'LEARY: Although fundamentally, what happens in a downturn, an economic downturn, as we've demonstrated again and again through about four cycles, Richard, is people keep flying. They just get extremely price sensitive.
And that's been very good for the Ryanair business model. We grow stronger in a downturn than we do in a period of economic boon, and I think it's why there's so much demand around -- among the European airports for Ryanair's growth.
And that's why we're delighted with today's order that we've reached agreement with Boeing and that Boeing -- we're again investing in Boeing aircraft, Boeing jobs, and Boeing technology.
QUEST: Finally, time for you to go yet?
O'LEARY: Probably, yes. I'm nearing the -- getting ever closer to that retirement date.
(END VIDEOTAPE)
QUEST: I assure you, we'll have all retired before Michael O'Leary gives up that job. Now, a Currency Conundrum. A rare positive for the euro in Cyprus. In 2009, one of the island's euro coins was awarded an international prize for best trade coin. Was it the one -- the one cent, the one euro, or the two euros? We'll show you why and we'll explain who in a moment.
The rates: the dollar's flat against the pound, down against the yen, and up more than half a percent against the euro. Those are the rates --
(RINGS BELL)
QUEST: -- this is the break.
(COMMERCIAL BREAK)
QUEST: The night before the British chancellor unveils his budget, and some disappointing news for inflation, which has now hit a nine-month high in the United Kingdom. The consumer price index rose 2.8 percent in February. It's up from 2.7 percent, just a tad up, but the wrong direction, and officials are blaming rising petrol prices and energy costs.
The UK chancellor, the finance minister, if you like, George Osbourne, is under great pressure to give British drinkers a break and scrap what they call the automatic above inflation increase. It's known as the duty escalator. It goes up automatically, and it's raised the UK beer tax by 42 percent in the past five years. Most of it gets passed on in higher prices. Before he flew to Cyprus, Jim Boulden popped out for a pint.
(BEGIN VIDEOTAPE)
BOULDEN (voice-over): So, where else can you get a one-sided view on the price of a pint than in a room full of drinkers? Since 2008, duty on alcohol has risen automatically each year by 2 percent above inflation. Some argued it's more about changing behavior than revenue, but governments of all stripes rarely want to shut off the extra revenue.
MATTHEW SINCLAIR, TAXPAYERS' ALLIANCE: Furious criticism from the conservatives and liberal democrats over how this was destroying pubs, how it was a terrible imposition on the British drinker. Now they're in governments and they're continuing with the escalator.
BOULDEN: The automatic tax raises are set to continue until 2015 and could add another 15 pence to a pint that already could cost 4 pounds or $6 in high-end pubs. Campaigners say one third of the price of a British pint now goes to tax.
UNIDENTIFIED MALE: The cost of a pint is getting beyond -- it's becoming a luxury.
BOULDEN: And it's debatable if higher prices in the pub has actually led to less drinking.
BOULDEN (on camera): Do you drink less in the pub now because of the price? Honestly?
UNIDENTIFIED MALE: No.
BOULDEN: So, you're helping the tax man.
UNIDENTIFIED MALE: Well, I -- no, I can't help it, can I? Why should I drink less? I'm 71 years of age.
BOULDEN: And with inflation higher than expected here in the UK, that means that the price of a pint is going up even faster.
BOULDEN (voice-over): The pub was once the refuge for the working man.
UNIDENTIFIED MALE: That's 1.80, sir.
BOULDEN: Now, these men and women say they are paying more than their fair share.
Jim Boulden, CNN, London.
(END VIDEOTAPE)
QUEST: Now, we've much more to bring you this evening, especially now Cyprus and Cypriot lawmakers have binned the bailout. After the break, you'll hear from the chairman of the economics committee of the European parliament, who tells us there are options on the table and who she blames for what's taken place. QUEST MEANS BUSINESS.
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QUEST: Good evening.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in a moment. This is CNN, and on this network, the news always comes first.
Lawmakers in Cyprus have overwhelmingly rejected an unprecedented levy on private bank accounts, and in doing so, effectively scuttled the controversial EU bailout agreement for the country. The speaker of the Cypriot parliament had urged members to say no to what he called blackmail.
The Syrian government is accusing rebels of launching a chemical weapons attack that killed at least 25 people near Aleppo. It says this video is from the hospital where the wounded were taken. Rebels deny the attack and say the regime used chemical weapons to attack, and there was a separate town near Damascus.
A series of bombings and shootings have killed at least 53 people across Iraq. The attacks targeted mainly Shiite neighborhoods in Baghdad on the tenth anniversary of the US invasion. An Iraq expert says the escalating violence in the country reflects what's happening next door in Syria.
The papacy of Pope Francis is now officially underway. The pope was inaugurated during a mass at the Vatican. In his homily, he stressed the need to protect the poor, the weak, and the environment, and he added true power is in service.
The French president, Francois Hollande, has replaced his budget minister, Jerome Cahuzac following claims that the minister had a secret Swiss bank account, which he allegedly used to hide assets from the tax man. A prosecutor in Paris has opened a preliminary investigation into the allegations.
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(END VIDEO CLIP)
QUEST: You've just heard the failed bailout plan called blackmail. That was by the speaker of the Cyprus parliament. Our next guest calls what's taken place a breach of trust in Europe.
Sharon Bowles is the chair of Europe's Economic and Monetary Affairs Committee. And she says the plan was a collusion by the European Commission to bypass deposit guarantees. Not only that, she says, it throws a nasty hole into the single market.
(BEGIN VIDEO CLIP)
SHARON BOWLES, ECONOMIC & MONETARY AFFAIRS COMMITTEE: You must have no more, no less than 100,000 euros as their insured deposits. We did that in 2008 as the very first response to the crisis.
QUEST: Right, and those deposits are still insured to 100,000 if the bank was -- you know the sophistry of this argument better than I do. If the bank was to go belly up, then they would be reimbursed. Nobody's touched the insured. What's happened instead is the government's decided to pay a tax or a levy.
BOWLES: Indeed. I do understand the sophistry. But I'm saying that that's what breaks trust. It may not break the letter of the law. But I think it breaks the trust. And that is pretty fundamental.
QUEST: The problem here is this, isn't it, that once again the Eurozone seems to have snatched defeat from the jaws of victory.
BOWLES: And indeed. And the previous government, the finance minister was trying to do something, leveraging of the potential gas fines. So it's not as if these issues are new. It's not as if we didn't know that this was coming.
The minute that we did the haircuts on the Greek bonds, they knew the knock-on effect into the Cyprus banks, Cyprus asked for help at the time for it to be taken into account. And that was rejected.
And so it is absolutely, as you say, they've shot themselves in the foot again. But you know, I have to go on the record time after time after time, saying that. It seems to be that they have to make a mistake before they think again and find something else out.
Of course, everything is because of the German elections that are coming up in September. Everybody's saying, well, we can't say there's any more money on the table.
QUEST: Who do you blame for this fiasco, the Germans, the commission, the Cypriots? Who's to blame?
BOWLES: Ooh, they're all to blame in part. I mean, you can't say that the Cypriots are blameless in the way they built up their banking system and got themselves into some of this mess, even despite the fact that it was a Greek bond cut.
I do hold the commission responsible, I think, for engineering their way 'round the European directive, which -- and colluding in that. And I think that they are culpable because they are supposed to uphold the single market.
So, for me, they are the worst offenders in this. I think the Germans have to realize they cannot go on pretending to their electorate that the euro is going to survive without at some stage there having to be transfers. There are no transfers yet. It's all loans and they get paid interest on those loans that is more than the interest that they have to pay on their bonds.
QUEST: Are you worried tonight that we may be about to see the next leg down in the Eurozone crisis?
BOWLES: They haven't been looking at some of the other proposals that have been floating around in the ether since then. So I think that I don't think it's straight into a banking meltdown. I think it's let see what else there is.
(END VIDEO CLIP)
QUEST: That's the chairwoman of the Economics Committee of the European Parliament, Sharon Bowles, talking to me from Brussels.
The markets and how they traded, not terribly awful, except for Paris. That had its own problems obviously. There's a political problem in Paris and the CAC 40 was down sharply. And you can see it fell very much towards the end of the session.
Otherwise, looking at the FTSE and how that moved on the session, all -- that's your voting time. That's when things are starting to get nasty in Cyprus. One more, just to point -- to make the point, let's look at the DAX and we should hopefully see a similar sort of trade. There you go, once again you see the uncertainty coming into the market towards the end of the day.
The Cypriot Socialist Party MP, Nikos Nikolaides, says there no way he can accept the current bailout terms. He told Jim Boulden before the vote the E.U. should be thinking about the wider implications of its plan.
(BEGIN VIDEO CLIP)
NIKOS NIKOLAIDES, MP, CYPRIOT SOCIALIST PARTY: We expect that renegotiations should start. And of course,(inaudible) not willing to negotiate. Then we have to take other measures, which we cannot simply accept this agreement.
JIM BOULDEN, CNN CORRESPONDENT: But ECB says they could drain the funds; they could step off the money to one of your most crippled banks.
NIKOLAIDES: They should start thinking about the (inaudible) disagreement will do to the European (inaudible) system itself. It's not very easy to let the banks, a banking system of a member country go to pieces. They should try -- start thinking of how to protect the European banking system as a whole.
BOULDEN: No matter what comes out in the next couple of days, when the banks reopen, do you expect a lot of Cypriots, a lot of Britons, a lot of Russians to pull their money out of Cyprus?
NIKOLAIDES: We hope that by the time they are, the banks will open. This -- the ECB, the whole matter will be settled.
BOULDEN: Even if it's Thursday, Friday or next week?
NIKOLAIDES: We hope that it will be by the end of the week.
(END VIDEO CLIP)
QUEST: Jim Boulden there.
Now still to come on tonight's program, it's important for businesses to be transparent. Lululemon took it a little too far. The details of what went wrong in a moment.
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(BEGIN VIDEO CLIP)
QUEST (voice-over): The answer on the "Currency Conundrum," which Cypriot euro coin won an international prize for best trade (ph) coin in 2009?
The answer is C. The coin features a cruciform symbol from the Chalcolithic period. Easy for you to say. The judges said it had all- round appeal from a commercial and esthetic viewpoint. It doesn't make any difference if it was in a Cypriot bank, you would lose part of the money as a result of the deposit levy.
Anyway, there we are.
Shares in the sporting apparel maker Lululemon Athletica are down more than 5.5 percent. The shares may be down, and that's because the pants were down, too. The company's recalled a large batch of yoga pants that were more transparent than they intended. They left the bottom line exposed.
Maribel Aber is at -- is in New York for us this evening.
What happened?
MARIBEL ABER, CNN CORRESPONDENT: Well, Richard, you know what, this is definitely the type of problem you don't hear about very often.
The athletic apparel company said in a statement the ingredients, weight and longevity qualities of the pants, well, they remain the same but the coverage does not, resulting in a level of sheerness in some of our women's black Luon bottoms that falls short of our very high standards.
Now you know, we weren't able to get a pair of these, but you know, what Lululemon says, the recall amounts to almost a fifth of all women's pants sold in stores and will cause shortages. And you know, it's going to have a significant impact on financial results.
The company seems, you know, confused about how this whole things happened since Lululemon says it's been using the same supplier since 2004. Prior to the recall, the company was on track, though, for a more than 10 percent --
QUEST: All right, hang on.
(CROSSTALK)
QUEST: Hang on. So what you're telling me is that there were people walking around basically baring more than they intended to because the fabric was a bit thin?
ABER: The fabric was a bit sheer, I would -- I would say, and probably not the type of product that you want to be parading around sheerly in, Richard.
QUEST: Well, certainly not on QUEST MEANS BUSINESS. The dear viewer would be -- could be distressed indeed. People go crazy for these sort of pants. I prefer just a straightforward pair of sweatpants and tracksuit in the gym. But are you one of these people who go for these sort of other things?
ABER: Well, you know, I'm not so much personally a huge fan. But certainly Lululemon is one of those companies like, I don't know, like Burberry, you know. They've got a pretty, very loyal fan base, if you will.
I will say, Richard, about Lululemon, the retailer keeps these new colors and items on the short lifespan and that's really to get people to buy all these products at full price, because they don't keep very many of them in stock. In fact, their CEO said in "The Wall Street Journal" that really creates fanatical shoppers. So you know, cheap pants, not so cheap pants, are going for at $100.
QUEST: Cheap pants, you know what you get, you show more than you intend. Maribel, many thanks indeed. You notice we kept the camera well above the -- well, look, 10 iconic dresses owned by the late Diana, Princess of Wales, went under the hammer at auction in London. The outfits were worn by the princess at state occasions, royal visits and for portraits.
Among them, of course, was this midnight blue gown she wore whilst dancing with John Travolta. That was the famous dinner at the White House in 1985. Today, that dress sold for more than $362,000. The auctioneer carried (inaudible) was a British gentleman who bought it as a surprise to cheer up his wife.
Now if you're a lady out there, would you be -- would you be cheered up with $362,500 worth of Princess -- well, more to the point, would you wear it? @RichardQuest.
Also auctioned, this burgundy crushed velvet evening gown. I'm told - - well, you can see it's velvet and you can see it's crushed and that it is burgundy, $163,200. It was worn during a state visit to Australia and it fetched $163,000.
And that was also the winning bid for this black -- well, they tell me it is a black beaded evening gown. The princess wore this number for a "Vanity Fair" photo shoot by Mario Testino at Kensington Palace in 1997, $163,000.
Now Jenny Harrison at the World Weather Center, just on the off chance that I have $160,000 or so or $362,000, would you like one of these? Or would you prefer the -- or would you prefer the yoga pants?
JENNY HARRISON, CNN METEOROLOGIST: Hey, I've got a pair of yoga pants. Never did any yoga in them, but I wear them all the time. Not that (inaudible). No, I'll just have the money, Richard. You can buy me something else. I don't want this second-hand dress, thanks, even if it was (inaudible).
(LAUGHTER)
HARRISON: Even if it was the princess'.
QUEST: (Inaudible).
HARRISON: I know.
QUEST: Charming, right.
HARRISON: Yes, you need some nice weather, Richard, to wear a dress like that. You're not going to get it in the Northern Hemisphere. You know, of course, Wednesday is the first day of spring. The official start to spring in the Northern Hemisphere; in the Southern Hemisphere it will be the start of going into the winter months of fall.
But look at this, it's been a very unsettled picture, more snow as well. In fact, quite a bit of snow accumulating across northern sections of the U.K. Rain in the slightly milder air and then of course turning to snow quite widespread across Germany, but also across into Denmark.
But have a look at these pictures, in fact, from Poland, because the snow has been very far-reaching over the last few days. And we've seen some pretty hefty totals. And with the temperatures so very low, it means all this snow is turning to really hanging around. So it's just making things very miserable for people and sort of slowing down the traffic.
But it's a different story in Denmark. In fact, the winds have been so strong that for a time visibility was down to zero. So this did cause traffic accidents and of course many, many long delays when it comes to traveling. But you can see what people are dealing with on a daily basis. But have a look at the snow that actually came down, some pretty high totals.
And for Berlin and Germany, the snow depth now, 13 centimeters, which is one of the deepest depths they've had all winter. It was about the same back on the 12th of December 2012. So you get the general idea, very wintry end to winter.
This picture is, again, in Berlin, coming from Germany. And you can see this lady making her way across a fairly quiet street because it's so dangerous and all the cars are so slippery. Most of the cars are just parked up in (inaudible), very (inaudible) Fred Pleitgen.
And of course, he's out there in Berlin. So he was indeed asking when this is going to come to an end. Well, I have to say that there's more snow in the forecast into Berlin. We could pick up another few centimeters. It's widespread, very strong winds as well. That's going to be one of the major stories into the northwest in the next couple of days.
So this likely as well to delay some of the major locations. But you can see that next system as it heads in. It really does increase these winds. And look at the numbers. We actually have some sustained winds to look forward to the next couple of days at around 60, maybe 70 kph. So that, as I say, could cause some problems coming down with that snow, Richard.
Wind, snows, fog, it's all great stuff for the end of the winter as we head toward spring. Jenny Harrison with some cheerful stuff maybe tomorrow. We thank you for that.
Now coming up, in a moment, on QUEST MEANS BUSINESS:
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SHERYL SANDBERG, COO, FACEBOOK: Really, I love being a parent. I'm not ready for office.
(MUSIC PLAYING)
QUEST (voice-over): Sheryl Sandberg talks about Facebook, her own book and what comes next.
(COMMERCIAL BREAK)
QUEST: If you want to be the boss, don't be afraid to be bossy, is the view of Sheryl Sandberg. She's Facebook's chief operating officer. The new book she's written is "Lean In: The Manual for Women to Reach the Top."
She says women shouldn't have to be liked to succeed in an unequal world. She recognizes, though, to be liked is a good idea. She was talking to Soledad O'Brien.
(BEGIN VIDEO CLIP)
SANDBERG: Until literally a few years ago I never said the word woman in the workforce, right?
O'BRIEN (voice-over): But now with her new book, "Lean In," Facebook COO Sheryl Sandberg is not only talking and writing about women in the workforce, you could say she's preaching about it and the barriers that women face.
SANDBERG: Women are held back by lots of things. Women are held back by institutional barriers, lack of flexibility, terrible public policy -- our country trails most others -- sexism, discrimination. But we're also held back by things that exist within us. You know, we are taught as children that girls behave one way and boys behave another.
O'BRIEN: You talk a little bit about -- I think the word you use is relentlessly pleasant.
(CROSSTALK)
O'BRIEN: You should be relentlessly pleasant or delicately honest. Is that just another way of saying worry about your likability without saying likability?
SANDBERG: You know, I want the likability penalty to go away for women. I think the way it goes away is if you get more female leaders, because we assume men will lead and women will nurture, because it turns out 86 percent of the men are leading.
The leaders are men and women are nurturing. And so if we can change those numbers, we change it. And so I don't want to tell women to be relentlessly pleasant and I don't want to tell women you need to use "we" in a negotiation instead of "I."
O'BRIEN: You tell them that. That's exactly what you tell them to do.
SANDBERG: In the book I say I want to change all of this. We have to work together to change this. But if you're negotiating for a raise today, use "we," not "I, because it will work. It's practical. It's not advice I want to perpetuate in the workforce, which is why I wrote the book.
O'BRIEN: Right, but realistically, don't you have to have a -- I mean, I think you talk about it in the book, you give tips on how to have an engaging personality to realistically be successful. And I don't know that people give men tips on an engaging personality.
SANDBERG: Yes. The cards are stacked against women and I'm clear on that in the book. And what "Lean In" is trying to do is open people's eyes to the way cards are stacked.
If we stop calling our little girls bossy, if when we're about to say bossy, we say my daughter has executive leadership skills, we're going to stop telling women in the workforce that they are too aggressive when they do things that men do all the time.
It's not that every behavior a woman does is fine. And I'm not telling women to be like men. I'm telling us to evaluate what men and women do in the workforce and at home, without that gender bias.
O'BRIEN (voice-over): Sandberg says one of the reasons she wrote the book was to bring gender bias out of the shadows.
SANDBERG: Men get to be both successful and likable, powerful and likable. Women have to pick. We can change that if we change the numbers. We're holding people to stereotypes. If more women start leading, that will become part of our understanding of women.
I've said publicly I cry at work. It's not a best practice. I'm not like suggesting if you want to get promoted today, go sob to your boss, right. But it's happened to me, and I've admitted it publicly and I know that publicly because I know it's happening to other women, and I don't want them to spend the two weeks worrying about it that I did.
O'BRIEN: But the reality is that you'll probably be penalized. I mean you're not penalized because you're Sheryl Sandberg and you're crying on the shoulder of your boss, who you're close to, who said let me give you a hug.
(CROSSTALK)
SANDBERG: Except the women -- the women who came before me, they could never have said that. If you were the first woman in -- think about the way the women dressed in the 1970s in corporate America.
O'BRIEN: Oh, a fluffy bow.
SANDBERG: And look at what you and I are wearing, right? Things are changing. You are allowed to dress as a woman and be in the workforce now. That's because we're not first.
O'BRIEN (voice-over): We asked Sandberg about another famous female CEO, Yahoo!'s Marissa Meyer and her recent decision to end telecommuting, something many women to do to balance work and child care.
O'BRIEN: Is she helping or is she hurting the revolution?
SANDBERG: You know, I don't exactly know what's happened at Yahoo! I haven't seen statements from her. I don't think anyone quite knows.
I think she's proving the point that there are too few female leaders. Try to stereotype or extrapolate from a male leader to all men CEOs. Not possible. There are so many. So, men are allowed to be individuals. Women need that freedom to be individuals as well.
The L.A. stuff looks amazing.
UNIDENTIFIED MALE: I know.
O'BRIEN (voice-over): This week, Sandberg celebrates her five-year anniversary. With Facebook with the stock from last year's infamous IPO launch still not reaching the original price, she says there is still much work to do at the company. But she won't rule out that there may be a time when she leans back.
O'BRIEN: So what's your future look like? You dodge this question every time. You have been asked so many times and every time you dodge. So what do you think down the road? And when, when your children are preteen? What do you want to do?
SANDBERG: I really love my job. We're in the Facebook office. Look at this place. It doesn't get better.
O'BRIEN: So you're going to have to say, five years down the road, what are you doing?
SANDBERG: I don't -- I think I'll still be at Facebook. So my five- year anniversary at Facebook is next week. And Mark and I do long-run planning together.
O'BRIEN: Ten years down the road?
SANDBERG: Yes, I -- we'll see, right? But I really love my job and I really love being a parent.
O'BRIEN: Fifteen years down the road?
SANDBERG: I love being a parent. I'm not running for office. I don't know how many times to say that, but, no, look, I love my job.
I would like to always have the following: I would like to always make sure that I'm doing something I believe in.
I really believe in Facebook, I will work there if I believe in it, work here, here in the office, if I believe in it. I really believe in "Lean In." I'm passionate about doing this and I'm a really passionate mother. I love being with my kids. I don't do it all perfectly as a mother. I don't think we ever quite know what we're doing. I feel guilty sometimes, but I love my time with my children.
(END VIDEO CLIP)
QUEST: Sheryl Sandberg of Facebook talking to Soledad O'Brien, fascinating insight on both of those sessions of the interview into the working woman's life.
Now @RichardQuest, we've had an enormous amount on our program tonight. We've had, of course, the whole question of Cyprus. You've got Sheryl Sandberg's interview. And you've got see-through, transparent yoga pants.
I'm not sure there's a connection between any of it. But your views, your thoughts. And you and I can dialogue about that offline when we're off the program and I answer as many of your comments as I can. I'll have a "Profitable Moment" after the break.
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(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment": the sheer speed of reversal by Cyprus on the deposit levy shows just how misplaced was the idea in the first place, from plan to backtrack in 24 hours, staggering. In fact, the whole euro shambles raises serious questions about who was responsible for this fiasco and, importantly, are they still around and, if so, why?
Bob Parker of Credit Suisse argued tonight it was fair to tax large depositors and then agreed it was unconscionable to hit the small investors with the small savings. And now the plan in tatters, we will have to wait and see, is the ECB going to pull the plug on Cyprus' banks?
And how do you renegotiate out of the ashes of this mess? Because make no mistake, like Lululemon's yoga pants, tonight after that vote, there's a lot of people dangerously exposed in Cyprus, in Europe and in the global economy tonight.
And that's QUEST MEANS BUSINESS. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable.
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QUEST: Good evening. The headlines at the top of the hour: news coming into CNN. The Statue of Liberty will reopen to the public by July the 4th. That announcement came from the Secretary of the Interior Ken Salazar. The World Heritage site was damaged during superstorm Sandy and has been closed to the public ever since.
(BEGIN VIDEO CLIP)
QUEST (voice-over): Lawmakers in Cyprus have overwhelmingly rejected an unprecedented levy on private bank accounts. The speaker of the Cypriot parliament had urged members to say no to blackmail -- what he called blackmail. Speaking on QUEST MEANS BUSINESS, Democratic Party MP Nicolas Papadopoulos said he wants an immediate renegotiation of the deal.
A boat carrying 166 people from southeastern Nigeria has capsized about 40 nautical miles off the coast, according to Reuters. The agency says there are two known survivors. The boat departed from Friday from a remote town and was headed to Gabon.
The Syrian government is accusing rebels of launching a chemical weapons attack that killed at least 25 people near Aleppo. He says this video is from the hospital where the wounded were taken. Rebels denied the attack and said the regime used chemical weapons to attack a separate town near Damascus.
You are up to date --
(END VIDEO CLIP)
QUEST: -- with the news headlines. Now to New York and "AMANPOUR."
END
