Return to Transcripts main page

Quest Means Business

Cyprus Crisis; The Russian View; Cyprus Deadline Looms; Uncertain Future; Bailout Tensions with Germany; Pound Up; Dire Predictions

Aired March 21, 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: Tonight, Cyprus unveils Plan B, and small savers are left alone.

There are just three days before the ECB cuts off the cash to Cyprus.

And the euro group is digging in. It's refusing to give ground.

I'm Richard Quest. It has been a busy day. And I mean business.

Good evening. Cyprus has just three days to save itself from economic catastrophe. Tonight, the reconstruction and restructuring of the country's banking system appears to have begun. At the same time, riot police have been deployed outside parliament, dealing with scuffles amongst the crowd.

And in the last few minutes, the Cypriot Central Bank announced plans to restructure Popular Bank, one of the country's main lenders, in order to save it from bankruptcy. A limit's been placed on the amount of cash each day that can be withdrawn from a bank at ATM machines. That's after the ECB warned it would cut the country's access to cheap euro loans, which are keeping the banks alive.

All the time, Europe has told lawmakers in Cyprus, come out with a bailout plan on Monday. The money dries up, the country's banks will fail without the cash. The latest idea is the so-called Investment Solidarity Fund, which may involve selling off state assets. Questionable, of course, whether it can raise the $7.5 billion needs.

We have comprehensive coverage, as you would expect on QUEST MEANS BUSINESS. We're looking at the crisis from every angle. We have Phil Black in Moscow, Jim Boulden is in Nicosia, and Fred Pleitgen's in Berlin. And Fred, we'll be with you in just a moment or two, so you stand by, please.

We need to begin with Jim in the middle, because Jim, you're at the epicenter. In the last half hour, we've heard the central bank say that it looks like there's going to be a good bank, bad bank set up. They say that Popular Bank will be reconstructed. What's the thrust of it all?

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Well, I think -- first, let's start by saying, Richard, this has been a day of rumors, and many of the rumors have been unfounded, so thank goodness we have a statement from the governor of the Bank of Cyprus. He has made several very important steps, he says, have been made today in the negotiations with the government.

The most important, I think, is he says that the deposits of everybody up to 100,000 euros will be completely secure. And those, of course, are the ones insured through Europe. And his point is that these people who have been taking to the streets should not worry that some of their money will be taken away from them up to 100,000 euros.

He says Popular Bank should be open on Tuesday if this all is agreed to, and people should be able to do normal banking again, even with those limits. And of course, there's also talk about -- he says it should be a strong enough agreement and that it should be able to satisfy the Troika, Richard.

QUEST: You see, the point is, it's got to raise this $5 billion, $6 billion. Everything we've seen before that will not reach that limit. The solidarity fund is basically selling bonds on the back of government assets. Can they do the numbers? We'll come to Phil in just a moment in Moscow to see what the Russians may contribute, but as seen from Nicosia, Jim, can they do the numbers?

BOULDEN: That's what we're going to ask the parliamentarians when they gather here at parliament later tonight and expected to vote on what has been agreed to today. The vote could be tonight, maybe tomorrow, but we do think it could be tonight. And what we need to ask them is how much is going to be in this fund? What is it worth.

That's what the Troika's been looking at. For days, the Troika -- IMF, ECB, eurozone -- had been here to go over the numbers with a fine- toothed comb and see whether or not it is enough. We can't say tonight it's enough. The central bank is really about making sure the banks are safe, and the central bank governor says they are --

QUEST: Phil --

BOULDEN: He is not talking about whether it's enough.

QUEST: Phil in Moscow. Talks took place between the Cypriot finance minister and the Russians. Amicable, friendly, whatever you want to call them. But where's the cash? Show me the money.

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Yes, indeed, Richard. A second full day of talks, still no result, not even any real update on just what the progress of these talks may be.

The Russian government says the Cypriots are trying to sell them state assets, the Cypriots say they are talking about banking and natural gas. Will all of this be enough to sway Russia? And even if it is, would the European Union accept such an offer of help from Russia?

I talked about all of this today with one of the most respected, most influential economic minds in this country, the former finance minister, Alexei Kudrin.

(BEGIN VIDEOTAPE)

BLACK (voice-over): Russia's president has angrily described the suggested levy on Cypriot bank deposits as unprofessional and dangerous.

Alexei Kudrin is close to Vladimir Putin. He was Russia's finance minister for 11 years, and he also believes the suggested levy was unfair. But he says it would have solved the problem quickly.

ALEXEI KUDRIN, FORMER RUSSIAN FINANCE MINISTER (through translator): I think it will be an acceptable decision for Cyprus. Of course, it carries a high risk for surrounding countries who believe that the same situation might be implemented, and they would lose trust in their banking system. Greece, Italy, Portugal, Spain. The trust would be lost. But in the case of Cyprus, this levy could have been the best option.

BLACK: Kudrin says Moscow is angry because it wasn't consulted. Russians are estimated to have parked more than 30 billion euros in Cypriot banks, and Kudrin says the EU is deliberately targeting those funds.

KUDRIN (through translator): They were guided by the machination that Russian deposits should be safe with the help of Russian money.

BLACK: The Cypriot finance minister has been shuttling between meetings around Moscow, hoping Russia will help plug the gap in the EU's rescue package. He says they're talking about banking and gas.

That fits speculation a Russian state bank might take over a cash- strapped Cypriot bank in return for Russian access to the island's gas reserves.

BLACK (on camera): If you were the finance minister, would you be -- would you say that Russia should buy a Cypriot bank?

KUDRIN (through translator): No. I wouldn't recommend to buy into the banks. At the moment, they're worth nothing.

BLACK (voice-over): Kudrin believes Russia should contribute in some way to bailing out Cyprus, but he says if the EU doesn't want Russia's help, it must shoulder the burden alone.

KUDRIN (through translator): If you don't solve this problem, it's going to become the Lehman Brothers of Europe.

BLACK: that would be bad for Europe and bad for Russia.

(END VIDEOTAPE)

BLACK: Richard, I asked Alexei Kudrin about those claims that much of the Russian money sitting in Cyprus is of dubious origins, or any of the other various euphemisms that have been thrown around --

QUEST: All right.

BLACK: -- in recent days. He said he didn't think that was fair, but he believes that much of that money that's sitting there won't be coming back to Russia. It's going to be going to other offshore, tax-friendly locations eventually, Richard.

QUEST: In a word, Phil, do you think Russia is still a player in this bailout, or are they just -- is it just politics?

BLACK: It seems like there's very little to no enthusiasm for any major offer to come from Russia to help out Cyprus at this stage, Richard.

QUEST: Need to go back to Nicosia to Jim Boulden. Finally, Jim, is there any feeling tonight of resolution, or is there just a feeling that the hole is getting deeper and there is no way out, particularly bearing in mind the ECB's warning?

BOULDEN: Yes, I think that's focused the mind, that ECB warning, and there was worries that one of the banks was going to shut today for good, and that's what saw people come to the streets. So, the unions were worried, employees were worried, and that's why they've been gathered here at parliament.

Do they feel there's resolution? Well, we have to see how the vote goes tonight. Then we have to see what the Troika has to say. People want their banks open, Richard. They want to be able to get there on Tuesday morning. That will be the test, acid test: can they get to their bank accounts on Tuesday morning?

QUEST: Jim Boulden in Nicosia, Phil Black is in Moscow. We will of course be in Berlin in just a moment for the German side of that story.

The euro group and other European countries have been downright harsh, some would say. Alex Stubb is the Finnish minister for European affairs and foreign trade. He's backing the line taken by the euro group saying that the bloc's taxpayers should not have to pay for someone else's mistakes. The minister told me the ECB's cutoff ultimatum is clear, the ball is in Cyprus's court.

(BEGIN VIDEOTAPE)

ALEX STUBB, FINNISH EUROPEAN AFFAIRS MINISTER: They simply need to come up with the money in order for them to get the total loan, which would then at the end of the day add up to approximately 17 billion with the loan being 10 billion. So, really, the ball is in the Cypriot court.

QUEST: You're playing with fire, here, minister, for a couple of billion euros.

STUBB: No, I think we're basically playing with trying to find a fair solution. We must remember that it's not the euro group or a country like Finland that stands the demander. We are there to help out, and this help is basically also on the backbone of, for instance, Finnish taxpayers.

QUEST: Countries like Finland and Germany are taking a far more robust and hard-nosed attitude than you have before. You've got to admit that.

STUBB: Well, I think the basic line is that we all need to find incentives to take care of our public finances, and we have shown, I think, in countries such as the Netherlands, Finland, and Germany that if you have fiscal discipline, if you have fiscal consolidation, if you go for austerity policies, you end up creating confidence in the economy, and that's what we want.

So, we want to be sure that nothing wrong takes place, and that's what we're hoping. And we're actually very hopeful that the Cypriots will find a solution.

QUEST: You know whose fingers are on this. Where does the blame lie for this idea, which universally has been condemned?

STUBB: Well, it is a decision of the euro group, and I personally was not involved in the euro group. And obviously, it has been a decision which does not seem to be working, but I hope that an alternative decision, a compromise, which has been reported coming out of Cyprus will take place, perhaps with votes even tonight.

I'm quite confident and carefully optimistic that we'll get a decision on this, if not today, perhaps during the weekend.

QUEST: In Cyprus, the banks are closed, there's rumors that one bank's going to be shut down. People haven't had access to money. This is hardly the -- this is hardly the image of a modern, first world, developed country union that the EU would like to portray, is it? It's a shambles.

STUBB: It's a young currency trying to find its bearings. And to be quite honest, I went through the history of currencies in Europe and not least, Finland, and I make the claim quite easily and comfortably that the euro is by far the most stable currency that we've had throughout our history.

QUEST: If Europe gets this wrong, if the eurozone, the euro group, what ever Europe we want to call it, gets this wrong, you are pushing Cyprus into the arms of Russia.

STUBB: I think it's an issue of money, and of course, this shows the interdependence that we have between, for instance, the European Union and Russia. Immediately, when there is Russian money involved, it is quite clear that the Russians will react in one way or another.

(END VIDEOTAPE)

QUEST: That's Alex Stubb, the Europe minister from Finland talking to me via Skype. In a moment, we'll look in Europe at the divisions. From Nicosia to Berlin, we'll show you where the cracks are showing in the wake of the ructions. QUEST MEANS BUSINESS.

(RINGS BELL)

(COMMERCIAL BREAK)

QUEST: Now, as we've been telling you, Cyprus must deliver a deal or risk going down. Three days to go until the ECB warnings, and there are options on the table. Join me in the olive grove, this time, the CNN super olive grove.

These are some of the options, because of course we're using the olive tree, which is the center point of the Cypriot flag. Now, you've seen the pictures of angry protest tonight in Cyprus. They blame Germany for putting their savings at risk.

Let's start first of all with one option, and this is the Russian Rescue option. Russia, of course, as you heard Phil Black talking, might want to or demand access to gas reserves. Russia, of course, might also want to buy one of the banks that are involved in all of this.

Then we have the Cyprus simply retreats, and this looks like the sort of things that's happening at the moment. Tax on accounts over 100,000, leaving ordinary depositors alone. Possibly this is exactly the nub of Plan B that's underway at the moment. If the bill has gone to parliament, as some suggest, it'll be interesting to see how that one comes out.

There is the option that the eurozone relents, using the ESM to recapitalize. Well, you already heard Alex Stubb saying this isn't going to happen. Germany's not going to allow it to happen. They say anyway using the ESM in these circumstances would be illegal.

And then finally, you have go right in there -- you don't need me to describe that anymore: disaster. Banks stay shut beyond Tuesday, bankruptcy and the worst scenario of all would be a euro exit, indeed.

So, those are the options. There are options on the table. Which one is likely to be? Much will depend, of course, on the German reaction. You heard Alex Stubb in Finland. We know the Netherlands feels equally strongly. But it's in Germany where, perhaps, there is the biggest rump and annoyance and anger and frustration. Fred Pleitgen is in Berlin.

So, is this just a case, Fred, where the Germans, because of their election in September for Chancellor Merkel, are basically saying no?

FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: Well, Richard, I don't think it's only because of the elections, but I do think that the Germans are, indeed, trying to make an example, and that example is that they are going to stay very tough on this issue.

One of the things that senior German government officials have been saying publicly, and also to me in private meetings as well, is that they believe that what the Cypriots are trying to do is they're trying to keep their, as the Germans believe, unsustainable banking sector upright.

They're trying to protect a lot of foreign money, Russian money, as we say, by having European taxpayers, of course especially German taxpayers, take on the burden for it, and that's something that the Germans say simply is not going to happen.

The sentence that you hear very, very often here out of Berlin these days is that this problem was created in Cyprus, and Cyprus is going to have to find a solution for it. That's what the Germans are saying.

And of course, in reality, what they're saying is that they want Cyprus to become more like Germany, which means a smaller banking sector and more industrial output to become more sustainable. That's what the Germans want. Of course, that is something that will take massive and very painful reforms to achieve, Richard.

QUEST: If Germany got the bad rap for Greece and possibly Portugal and Ireland, it is really being seen as the heavy-footed boot on the throat of the Cypriot economy. Will that give Mrs. Merkel and her party and her politicians one moment of loss of sleep?

(SILENCE)

QUEST: Well. We will wonder forevermore what Fred Pleitgen's answer was going to be at that crucial moment. And if we do find out, I'll let you know, because I suspect you're as interested as I am to know the question of Mrs. Merkel's boot on the Cypriot economy.

An e-petition to put the legendary code cracker Alan Turing on the next UK 10 pound note has closed with 27,000 signatures, well off 100,000 needed to force parliament to debate the move. Still, this is tonight's Currency Conundrum.

Which one of these famous Britons is on the list for the 10 pound note? David Beckham, David Bowie, or David Hockney? The answer later in the program.

Sterling's rising sharply against the dollar. It buys $1.52. The dollar's holding steady. These are the rates --

(RINGS BELL)

QUEST: -- this is the break.

(COMMERCIAL BREAK)

QUEST: Digby Jones can see the Cyprus dilemma both as a business leader and as a politician. Lord Digby Jones, as he is, is a neutral cross-bench peer in the House of Lords, and Lord Jones told me he's worried and, not surprisingly, has some dire predictions.

(BEGIN VIDEOTAPE)

DIGBY JONES, BRITISH BUSINESSMAN AND POLITICIAN: I'm sure somebody in their intellectual arrogance in either Brussels or Frankfurt turned around and said, well, it's only little Cyprus. And if it's Russian oligarch money, does it matter?

What they forgot was that if you've got your money invested in a bank or deposited in a bank in Spain or Italy or Portugal or Ireland, you're going to go, well, if they can do that, they'll do it again. And suddenly, you get runs on banks and loss of banking confidence in bigger economies. Suddenly, you're back where you used to be.

And I can't for the life of me understand why people who run the eurozone think they are immune from what you and I would just see as just ordinary emotion.

QUEST: How worried are you that what's happening in Cyprus could be the next down leg, here we go again? Because -- see, if you look at the chancellor's numbers, he's already cut half of -- growth by half, or the OBR cut growth by half. The Fed has also restricted its growth numbers. Wherever we look, there's the fragility --

JONES: Yes.

QUEST: -- in economics. The last thing we need is more petrol on flames.

JONES: And a banking crisis in the eurozone. It used to be 50 percent, it's now 40 percent of all that we sell overseas goes to the eurozone. It's only 40 percent now, thank heavens, but it's still 40 percent. And so, we want a prosperous eurozone. We don't want Schadenfreude of saying oh, tee hee hee, they're in trouble. We want them to succeed.

And how on Earth you can have Germany -- and especially Germany -- actually saying, I'll let the depositors in Cyprus swing? I have to say, they never thought it through, and it will mean you have a banking crisis in Spain and Italy.

Now, Germany will come to their help again, of course they will, at the end of the day, kicking and screaming, and suddenly people won't take risk, people won't invest, people won't create jobs and wealth, and therefore my companies in my country that exports there suddenly can't sell the stuff. The --

QUEST: Are you worried?

JONES: Yes. I am. I mean -- it's pointless, people saying, well, I'm not worried, we can go on. Where I'm pleased is that British manufacturing is alive and well, at the value added end, selling to America, selling to Russia, selling to China, India, Asia, Latin America fabulously. Some wonderful names, Jaguar, Landrover, Triumph, JCB, fabulous stuff.

And I'm very pleased that the Japanese still come and build their cars in Britain. So, manufacturing to places other than Europe doing well.

QUEST: Right.

JONES: But am I worried? Yes, of course I am.

(END VIDEOTAPE)

QUEST: Digby Jones, as you can gather, there, one of the leading industrials in the UK.

So, the end game has begun in Cyprus. Coming up next, the former head of the Cypriot Central Bank on what he believes is the slow death of the European project.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in just a moment. This is CNN, and on this network, the news always comes first.

Cyprus has announced plans to restructure one of its banks in an effort to stop an economic collapse. The ECB says the country has until Monday to agree bailout terms. If they don't, emergency funding will be cut off. Speaking on QUEST MEANS BUSINESS, the Finish minister for Europe says the ball is now in the Cypriot court.

A top Sunni cleric is reportedly among at least 15 people killed by a car bomb at a mosque in the Syrian capital. Mohammed al-Bouti preached support for the al-Assad regime. His death underscores the sectarian overtones that have developed in the Sunni-led rebellion.

Meanwhile, the Syrian president made a surprise appearance in Damascus yesterday. Bashar al-Assad visited a fine arts school with his wife, Asma, to honor the families of students who had been killed in the civil war. He sounded as resolute as ever, calling the conflict, in his words, a "struggle against ignorance."

Barack Obama is attending a state dinner in his honor at the residence of President Shimon Peres of Israel. Earlier, Mr. Obama told a crowd of university students to put themselves in the shoes of Palestinian children who, in his words, deserve to grow up in a state of their own. On Friday, the US president will travel to Jordan for talks with King Abdullah.

The jailed leader of Turkey's banned Kurdistan Workers Party is calling for a cease-fire. Abdullah Ocalan issued a letter from jail calling on his followers to lay down their arms. He had been in talks with the Turkish government for several months. A top Turk Kurdish rebel commander says the PKK's fighters will comply.

(MUSIC PLAYING)

(END VIDEO CLIP)

QUEST: "We are witnessing the slow death of the European Project." Those are the words of the former central bank governor of Cyprus. When I spoke to Athanasios Orphanides, he said it was events in Brussels and Frankfurt and Berlin that left his worried, not those in Nicosia.

(BEGIN VIDEO CLIP)

ATHANASIOS ORPHANIDES, FORMER GOVERNOR, CENTRAL BANK OF CYPRUS: This is a government that only took office three weeks ago. And what we observed last week was the welcome of the other leaders of the euro area, of the new president of the country.

So I'm not as much concerned about the Cypriot government. I am extremely concerned by the irrational decisions that were taken by the other governments of the euro area last weekend.

QUEST: But the Cypriot government's signed up to it. In fact, everybody perhaps foolishly signed up to it. Do you believe that was an accident waiting to happen?

ORPHANIDES: No, I believe that it was an error. But it was an error in response to a blackmail.

And what I find appalling -- and this is really telling about the slow death of the European Union Project that we are witnessing, unless this behavior changes, is that the Cypriot government was blackmailed by the governments of the other countries to essentially either impose an expropriation of property rights on depositors in Cyprus or have its banking system shut down on Tuesday morning.

This is how it had been reported in the press by the ECB.

QUEST: I was talking to the Europe minister of Finland earlier. He makes the point in our program tonight that the banking sector in Cyprus was too large, it was out of control, it needed to be -- it needed to be slimmed down and the depositors needed, in some shape or form, to take part.

ORPHANIDES: I think -- I think we should be frank with what happened here. It seems that we have had a situation where the domestic politics in Germany, the German election campaign that takes place in September, created an environment in which the German government could not support providing a loan to Cyprus under equal terms as it did, for example, Greece, to Portugal, to Ireland.

And instead, it had to have a commitment that the banking model of the island would have been destroyed in the term for this loan.

QUEST: Do you believe it is a real threat as we stand here now talking that Cyprus could be pushed out of the Eurozone?

ORPHANIDES: Oh, absolutely. Absolutely. The way in German government has been behaving and the way in which other governments in Europe have been trying to appease the German government, yes, this is -- this is a clear risk.

Again, let me repeat: I believe we are witnessing a slow death of the European Union Project. What has been done over the past week is (inaudible) terrible blow to the credibility of Europe and how European governments can work together.

(END VIDEO CLIP)

QUEST: Full ahead of the central bank of Cyprus forgone. He's saying believes in looking at the beginning and the end of the euro project.

To the market's open and doing business. Maybe we shouldn't have dinged quite so hard, down 57, the Dow just a nearly half of a percentage point. Technology stocks are weighing on the market. We're also lackluster earnings numbers from Oracle Group.

And I'm afraid it's not much better if we take a look at the euro losses, lower across the board, worse losses in Paris and in Zurich. It is the euro and/or weak manufacturing data out of Germany which took its toll, too.

So the economic news is poor. The markets are down. And Jenny Harrison has storm clouds on the horizon, too.

JENNY HARRISON, CNN METEOROLOGIST: I do, indeed, Richard. It's not a very good picture here at all, certainly going into the last day of the work week. Now remember, of course, this Thursday, the first in the Northern Hemisphere, the first full day of spring. Well, I warn you, that as we go into Friday and Saturday, it is going to feel anything like -- but like spring.

You can see we've got two main areas of dark, ominous looking cloud and both, really, are bringing with it the weather. So it's been coming in as rain across the far northwest into the U.K., turning to a bit of a sleet mix.

Germany has continued to see more in the way of snow. And this system will work its way further up into eastern Europe. So we're going to see more heavy snow across areas such as Ukraine pushing into western Russia and then a system in the northwest is just going to sit there off the south coast of Ireland.

So that also is going to bring the snow. How much snow? A lot of it, first of all, in Kiev, getting on for 30 centimeters in Lviv, maybe 43 centimeters of snow. As for the northwest, well, again, as I say, that system's going to sit there. So it'll produce a lot of moisture.

But because of these very, very cold easterly and southeasterly winds, it will turn it to snow and that nasty mix of the two across certain regions of England and across into northern Ireland. So look how much snow. So when these computer models actually forecasting 19 centimeters in Birmingham, 21 getting on four in Leeds, Belfast, 33.

Well, we have to bear in mind with these computer models is how they actually work. So they forecast the snow that's going to come down and they can obviously tell much is roughly going to come down every hour and how long it's going to come down for. So we could be seeing about 19 centimeters, 20, 21.

But you probably won't have that much actually accumulating on the ground. But the higher locations are going to see some very heavy amounts. The winds have also been on the increase, right now 50 kph in Plymouth. This is the forecast going forward. We're going to see some winds, sustained at over 60 kph.

That means gusts at around 75 or 80 with the rain and the snow, that snow in particular, it means we're looking at blizzard conditions. So it really is going to be a very unpleasant to the week and start to the weekend.

You can see where the snow is across the northwest and also across the east. It won't be particularly cold across the northwest, 6 in London. But it gets colder, really, once you head to the midlands and further north from that. So not a good travel day on Friday, Richard.

QUEST: Which, of course, is where I'm heading, north, going up to DiLallo (ph) in northern Finland.

HARRISON: You'll be fine there. It'll be cold; no real snow in the forecast. You'll be fine. You'll miss this.

QUEST: Time for the thermals.

HARRISON: Oh, yes, so definitely.

You leave my thermals alone.

Jenny Harrison at the World Weather Center.

Now when we come back, sound advice for the young female executive, marry somebody older who's got money. We'll talk about that with Felicia Taylor after the break.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

(BEGIN VIDEO CLIP)

QUEST (voice-over): The answer to tonight's "Currency Conundrum," which of these famous Britons are on a list of potential candidates for the next sterling 10-pound note? The answer, A, David Beckham. Other names on the list include The Beatles, the Princess of Wales -- the late Princess of Wales and Isaac Newton.

(END VIDEO CLIP)

QUEST: Now it sounds like good marriage is being touted as a woman's route to success. Remarks now said to be tongue-in-cheek made by a joke by Ursula Burns, the chief executive of Xerox. Sounds something like of Jane Erston (ph) -- Jane Austen, I should say, -- Erston (ph). Maybe I was shocked by it all. Felicia Taylor is in New York.

The gist of the comments, Felicia -- we haven't got long -- but the gist of the comments are, "Marry somebody older and who's well off and you'll be all right in your career."

FELICIA TAYLOR, CNN CORRESPONDENT: Now that's not really what she meant. She did say something about marrying somebody who was 20 years older; her husband is, indeed, and she met him at Xerox.

And he has been very supportive of her career. But that's not the point of her comments. She is very much in favor of empowering women. And actually Xerox has just come out with a statement saying, quote, "Her comments were made jokingly" -- hold on --

(CROSSTALK)

TAYLOR: -- (inaudible) mentor women. And because of where she comes from, this is a passion of hers. She was raised by a single woman in New York City. She started as an intern at Xerox.

QUEST: Go tell a good story, Ms. Taylor. Let's ask you about Jane Austen, "A lady's imagination is very rapid. It jumps from admiration to love, from love to matrimony in a moment." That's what this is all about.

TAYLOR: No, it's not. It is absolutely not about that. Welcome to the 21st century. Where are you still living, in the 18th century, 19th century? That is not what this is about.

QUEST: So --

TAYLOR: It's about having --

QUEST: -- so you --

TAYLOR: -- behind you. It can be a man; it can be a family member. It can be a child. It's about having supporters behind you.

QUEST: Right. All right. So Sheryl Sandberg of Facebook is wrong, when she says, "I tell young women the most important career choice you're going to make is who your life partner is."

TAYLOR: As I said, OK, a life partner can be a child; it can be a family member; it can be a man; it can be a woman. It doesn't matter. It doesn't necessarily mean it has to be a man who's 20 years older than you are. (Inaudible) marry a man 20 years older than me.

QUEST: Well, but that's a matter for your (inaudible). Maybe you just haven't found one yet.

Barbra Streisand says, "Why does a woman work 10 years to change a man's habits and then complain he's not the man she married?"

TAYLOR: Since when do you listen to Barbra Streisand?

QUEST: Good point.

Zsa Zsa Gabor: if we're talking marriage, there can be no better oracle than Zsa Zsa Gabor. Come on; even you have to take your hat off to Zsa Zsa.

TAYLOR: You're right.

"A man in love -- a man in love is incomplete until he is married. And then he's finished."

(LAUGHTER)

TAYLOR: OK. I have to agree with you about Zsa Zsa Gabor. There's no doubt -- I mean, the woman was married like eight, 10, 12, 15 times. She knows about marriage. And that's just about calling, you know, sealing the deal. That's all that is.

But what really Ursula Burns had to say is no guilt trips; express your opinion. Patience is a virtue and sometimes be selfish. And that has to come with your children. And you don't always have to end up at the soccer game.

It's about being more aggressive in the workplace.

QUEST: Felicia Taylor, we've accepted that you haven't got a husband who's 20 years older yet. Felicia Taylor, who is in New York tonight, there's too much there, just too much. I'm going to leave it exactly where it lies. But it is giving me thought for my "Profitable Moment."

All right. So Ursula Burns might have been -- and I think she was very much tongue-in-cheek in what she had to say. A jest, marrying a man 20 years her senior helped her succeed in her career. It's a great one- liner.

And the other day Sheryl Sandberg on this program was telling women to lean in. And what really I'm talking about tonight is how both have attracted huge outrage. Much of the froth and the venom has erupted along these lines: how dare they tell us what to do? Well, I say because each of these women has a story to tell and are successful in doing so.

They share their experience of getting to the top. It does us no harm to hear them out, whatever the gender. The point I'm making is this: get off giving them criticisms. They have a right to express their opinions, personal, political, and maybe not that popular.

Jane Austen once wrote with great irony, "A woman, especially if she has the misfortune of knowing anything, should conceal it as well as she can."

Maybe I'll try that in the newsroom, because that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

NINA DOS SANTOS, CNN HOST: Hello and welcome to MARKETPLACE EUROPE from snowy Moscow. I'm Nina dos Santos with an aviation-themed program. The airline industry has been buffeted by the Eurozone crisis, which has taken its toll on operating profits.

A wave of consolidation and cost (inaudible) programs have been accomplished by a series of high-profile airline failures. In this week's show, we look at the battle for the skies.

(BEGIN VIDEO CLIP)

(MUSIC PLAYING)

DOS SANTOS: (Inaudible) for Europe's airlines weighed down by regulation and airport operating costs. And I take to the air with the CEO of easyJet on the company's inaugural flight from London to Moscow.

CAROLYN MCCALL, CEO, EASYJET: We have very low overhead. We don't have (inaudible), you know, fancy buildings and office space and, you know, we just have a very lean organization. And we're very, very efficient. And it's kind of in our DNA.

(END VIDEO CLIP)

DOS SANTOS: Despite the crowds and queues at check-in, 2013 is expected to be another profitless year for Europe's airline industry. Isa Soares takes a look at the regulation and legislation that's making Europe less competitive.

(BEGIN VIDEO CLIP)

ISA SOARES, CNN CORRESPONDENT: The passengers were oblivious to us, the headwinds facing Europe's airline industry. We may not be able to feel it, but IATA, the airline association, says the industry is balancing on a knife edge (inaudible) the sturdiest of airlines feeling the turbulence.

According to the Association of European Airlines, the sector's expected to lose $1.7 billion this year across the Atlantic airlines are facing similar fuel costs. They're slightly more upbeat economic environment. In the U.S., they're expected to make $3.4 billion.

The International Air Transport Association say (inaudible) is down to sluggish growth and more importantly in new regulation and legislation.

TONY TYLER, CEO, IATA: The consumer rights legislation, both North America and Europe have consumer rights regulation. But the European one is extremely onerous. For example, delays. There can be delays absolutely outside the control of the airline.

But the airline still has to not only compensate the passenger but meet a whole lot of costs of those delays for passengers. As I say, this is even if it's completely beyond the control of the -- of the airline.

The other reason is that the costs are much higher in Europe in a whole range of different ways. Just take one example, air traffic control costs are roughly doubled in Europe. Well, they are in the United States.

SOARES: And the differences don't end there. Infrastructure is a key sticking point. Heathrow here in London, the third busiest airport in the world, has just two runways. Hartsfield-Jackson Airport in Atlanta, the busiest in the world, has five.

TYLER: It's well known that there's a -- there aren't enough runways in places. I mean, southeast of U.K. is one example.

There's not only that, but you've got a situation where Frankfurt, we built another runway but then immediately put on an overnight operating ban so that (inaudible) particularly is significantly affected. It makes it very difficult to do business there on the freight -- in the freight air cargo business. So the other big area, of course, of constraint is infrastructure.

In infrastructure terms is the sky itself and the air traffic management. Europe has a very fragmented air traffic management system and partly because of that fragmentation, a very, very expensive one.

SOARES: Across Europe, 48 percent of airports made a loss last year. Madrid and Barcelona airports are the highest increases in operating charges, up 50 percent. With that and high fuel prices, European carriers have been cutting costs where they can, through mergers, consolidation and restructuring.

TYLER: There's no doubt that European carriers, while they've made sterling efforts towards consolidating and getting rid of a lot of their legacy costs, there's been much more difficult in Europe than in the United States.

And the heavy hand of regulation or government, effective government supervision of -- even of private companies has been a -- has been a problem for the management of European carriers who have been trying to restructure their businesses and cut their costs. Just look at what's happening now in Spain with Iberia, for example. Very difficult for them to do the necessary restructuring.

SOARES: A painful way forward in prospect for airlines, staff and government alike.

(END VIDEO CLIP)

DOS SANTOS: Isa Soares there in London's Heathrow Airport.

Well, coming up, the CEO of easyjet's Carolyn McCall tells me why the company is now spreading its wings to Moscow. That's after the break.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

DOS SANTOS: Hello and welcome back to MARKETPLACE EUROPE from Moscow. Europe and Russia enjoy a strong business relationship. Europe is Russia's largest and most important trading partner. While on the other hand, Russia represents the third biggest location for European exports. Moscow is the latest destination for easyJet flights from London Gatwick.

(BEGIN VIDEO CLIP)

(MUSIC PLAYING)

DOS SANTOS (voice-over): The route came up for grabs after British Airways owner IAG was forced to sell its landing slots after taking over BMI, the previous operator of the route. Launched in 1995, the low-cost airline easyJet now operates more than 600 routes across 30 countries. But the fleet is over 200 aircraft, easyJet employs more than 8,000 people.

In 2012 it flew over 59 million passengers in post- and pretax profits of $470 million. This week, the company reached another landmark when its shares started trading on the FTSE 100 index.

(MUSIC PLAYING)

MCCALL: I think one of the reasons this route was so attractive to airlines, I mean, seven airlines competed for this route, is because it is a plentiful (ph) business route. And so I -- we would guess that about a third of our passengers will be business passengers. And as you know, easyJet now has one in five passengers traveling on business.

So it's very much like what we already do, but this is disproportionately high on business, a bit like our London Amsterdam or London (inaudible).

DOS SANTOS: This was a tough fight to get this route, though, wasn't it, when IAG, which is the parent company, British Airways, had to shed this slot because, of course, it took over BMI. And you had to fight Virgin nearly took you on to appeal. Tell me about the fight.

MCCALL: We were convinced that we had a good shot at this because we have a very credible positioning with business passengers, as I just said. And actually we are known to open up markets. All the other airlines were focused on Heathrow, rather than Gatwick.

And they were focused very much on the front cabin and the premium experience that was required. And our position was it's a 31/2-hours, 4- hour flight. You don't need to pay business class fares. You just need business sense.

DOS SANTOS: easyJet may be a so-called low-cost airline. But costs are so high just in this industry in general. How are you managing to negotiate that, particularly fuel costs and staff costs?

MCCALL: I would say our greatest challenge is cost because we have to retain our cost advantage. Our biggest cost after fuel is actually airports. And so there's a huge focus from us on making sure that we only pay an airport for what we use.

We don't need as much infrastructure as a lot of the other airlines need. You know we don't want (inaudible). We don't want to pay for fancy baggage belts. We want a very simple, efficient way of getting bags off the plane and into passengers' hands as quickly as possible.

DOS SANTOS: And then at the same time, what we've heard is all sorts of legislation and regulation being implemented to try and save (inaudible) passenger rights (ph). That could be quite costly for airlines like yours.

MCCALL: Well, look, during the volcano, which is when E.U. 261, which I think you're referring to, came into being, easyJet did not, in any way, try not to compensate passengers. Our aim was to get passengers back home as quickly as possible and also to compensate as quickly as possible. And in fact, we were commanded by the CAA, our regulator, for doing that job very, very well.

I think the difficulty about E.U. 261 is it makes the airline the insurer of last resort. And that is a very difficult thing for an airline to be.

DOS SANTOS: Let's talk about the legacy carriers, because one of those interesting things that's happened in the space that you operate in over the last five years is that some of the legacy carriers actually emulating your kind of business model with all sorts of ancillary charges bringing their costs down of tickets.

How is affecting companies like easyJet?

MCCALL: Well, the way we look at this is it's just competition, you know. We have the winning model. And I think they recognize that to an extent. And therefore they are taking quite a lot of tips out of what we do. I think it's very difficult for legacy carriers to compete with us on price, on VATs, because they don't have the cost structure that we have.

And that is from the ownership of the aircraft through to the airport that we -- the airports and how we work in the airports, through to the way we work as an -- we have very low overhead. We don't have kind of, you know, fancy buildings and office space and, you know, we just have a very lean organization and we're very, very efficient. And it's kind of in our DNA.

DOS SANTOS: Let's talk about you personally. You've been at the helm of the company for a number of years now. And you took on the reins of this company in the midst of shareholder fights, strikes, various challenges. How have you managed to turn easyJet around?

MCCALL: We're very, very clear that operational excellence is the bedrock of what we do. And that is what flipped three years ago. So, you know, we have industry leading punctuality now. And that takes a lot of rigor and discipline every minute of every day.

You get your people right. You get the right people into the right jobs, and you align them behind a very powerful cause. And you're very close strategy as to how you're going to deliver returns.

And then you have a strong network, which you continue to build. And Moscow's a good example of building that network. And you stick to that. Then, I think, you know, what you end up having is a -- is good results and a -- and a successful company, really.

(END VIDEO CLIP)

DOS SANTOS: Carolyn McCall there, the CEO of easyJet.

Well, that's it for this edition of MARKETPLACE EUROPE from Moscow. Join us again next week. But in the meantime, thanks for watching and goodbye.

(MUSIC PLAYING)

END