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Quest Means Business
EU Leaders Pick New President of European Commission; Interview with Economist Thomas Piketty
Aired June 27, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(CLOSING STOCK EXCHANGE BELL RINGS)
(APPLAUSE)
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: When all is said and done, let's see - will it be wimpy or will it be grand as they hit the - come on. Oh.
They clearly decided to go for high-fives rather than hitting the gavel. Just shows what happens on Friday, it's June the 27th. Tonight it's a bad
day for Europe, so says one leader. Anger from the United Kingdom as Europe picks its new chief to run the executive. Also, banned, fined and
now dropped by its sponsor. Triple 8 makes a triple whammy for Luis Suarez. And it's all part of the game. Tonight the man behind this
unlikely best seller. He answered his critics. You'll hear from Thomas Piketty on "Quest Means Business" and I'm Richard Quest at the top.
Good evening. Tonight E.U. leaders have made their choice for the next president of the European Commission by a vote and it was 26 to 2. They've
selected Jean-Claude Juncker. He's the man on the left. Of course Herman Van Rompuy's on the right. He's the - that's Angela Merkel on the left.
The former prime minister of Luxembourg is now the - going to be - the top man. In electing Juncker, leaders dealt a humiliating blow to the U.K.
Prime Minister David Cameron. Following the vote, Cameron said leaders had made a serious mistake and warned the vote made it more difficult for
Britain to stay in the European Union.
(BEGIN VIDEOCLIP)
DAVID CAMERON, U.K. PRIME MINISTER: This whole process has simply reinforced my conviction that Europe needs to change. That was a clear
message delivered by voters at the European elections. Europe has to change to succeed. And if you are deadly serious that you want change, as
I am, then you don't back down when a vote goes against you.
(END VIDEOCLIP)
QUEST: That's David Cameron. Cameron lost a vote. He only had Hungary with him in his corner. Incidentally, Hungary was the only other country
to support the United Kingdom on a treaty vote a couple of years ago. But, now of course, Jean-Claude Juncker has the job of putting together his
cabinet, the commissioners from the various countries who will form the executive body. E.U. leaders will regroup in July to choose the other key
posts. One likely pick - more than likely - just about a racing certainty is the former French economy minister, Pierre Moscovici.
Now, this word - clusterization. What does it mean? Moscovici, who's very, very likely to be the next E.U. economics commissioner - he believes
the structure of the commission needs and overhaul. And he proposes clusterization. I asked him about this and what the new commission
including himself would look like.
(BEGIN VIDEOCLIP)
PIERRE MOSCOVICI, FORMER FRENCH ECONOMY MINISTER: The main target of the next commission will be to deliver, especially on growth and employment,
because today, let's be frank, Europeans are disappointed by their own Europe. They want more, they want something different. And there needs to
be a kind of new deal with this commission and this new deal is growth and jobs.
(END VIDEOCLIP)
QUEST: Does that commission require more leadership or a different style of leadership? I know that you have made comments concerning the way
President Barroso was very personal and very individual and possibly very presidential in that style. Does that need to change?
MOSCOVICI: I think that Jean-Claude will try to organize better the commission with a few vice presidents, with large portfolios, powers of
coordination. Every member state has a commissioner. And all of them have a portfolio and we need to maybe work together on a kind of task force for
growth and jobs. That must be I think the new way to manage the commission and Jean-Claude Juncker with is his good experience, he can do that. I
think he would be somebody who organizes the work -
QUEST: Right.
MOSCOVICI: -- maybe better or differently that President Barroso.
QUEST: You used the phrase 'clusterization.' I'm not sure I understand what clusterization is, but hopefully you'll explain it to me.
MOSCOVICI: What do I mean? I mean that today you've got 28 commissioners and each of them works in his own portfolio. And you don't have people
working together. If you could build under the responsibility of a vice president clusters - meaning five or six commissioners working for example
on the industry, one on energy, one on transport, one on telecomm, one on digital - and that they put their energy together. That creates a cluster,
and this cluster gives a more efficient organization and also more efficient results to the commission. It has to be something flexible,
because each commissioner needs to be respected, you also need to have the clusters working all together under the responsibility of the president.
But it could look more like a true government, yes.
QUEST: Which commission portfolio would you like? Assuming I have the power, Mr. Moscovici, assuming it's Quest's commission, I can grant you the
portfolio of your wish. Which is it?
MOSCOVICI: I'm afraid it won't be the Quest Commission because it would be easier for me - it would be the Juncker Commission. The only thing I can
say is that I think that France, which is the second largest country in the European Union which is a founder of this union, which is a member of the
G7 which is the fifth economy in the world. France should have one of the vice presidencies and this could be in the economic field. Why? Because,
again, this is about growth and job and because we've got ideas in order to create growth and jobs and my main idea is we need more investment in the
future in Europe.
QUEST: Will you be the next economics commissioner of the E.U.?
MOSCOVICI: Hopefully, but it's not the time today.
(END VIDEOCLIP)
QUEST: You don't often get people admitting quite bluntly that they want a job in quite such a fashion. The next commission inherits an economy that
could be described as struggling, and that would be charitable. Unexpected falling consumer sentiment - a fall that was reported on Friday. E.U.
unemployment. Now the unemployment rate at a time when the U.S. is falling, even the U.K.'s falling. It's stubbornly stuck - 10.4 percent and
some countries like Spain and Italy are still well up in to the high teens if not the low 20s. Inflation has dropped. That is a plus and a minus
because now deflation is one of the issues. It's raising expectations for more action from the ECB. More, of course, having already taken the
unprecedented step to boost lending to business and to go to negative interest rates on bank deposits. Jim Boulden is with me now from London.
Jim, so, Juncker's got the job, but I question who does he now have to prove to whom that he's a reformer?
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Well he's never been seen as a reformer, has he, Richard? So that's interesting is will he try to
become the reformer that British Prime Minister David Cameron thinks that role should entail. He's the ultimate insider, he's a deal-maker, he's
somebody who is a federalist. He sees more power coming to Brussels. Especially after the economic crisis, he wants to see Brussels take more
power when you do see countries - not many - but you see the U.K. -
QUEST: Right.
BOULDEN: -- Hungary, others who think there should be less power. So he won't try to prove himself to David Cameron, let's be real. The two of
them, I can't see how they're going to work together after what's happened. But he will have to try to have a consensus dealing with a newly-empowered
European Parliament. How does the new President of the European Commission Juncker deal with a parliament of all of these sort of -
QUEST: OK, but here's the question - let me jump in here, Jim, because I sort of -
BOULDEN: Yes.
QUEST: -- broached this with Moscovici who was very diplomatic. But let's face it, the man's open to get the job as the - hopefully as a Europe - as
the economics commissioner. He probably will get it. But, listen, Barroso was very presidential. He was a man who - right a little yaeggy (ph) but
he did run the ship. He was the - a great showman, extravagant. Quite the opposite from the Luxembourg Mr. Juncker.
BOULDEN: Yes.
QUEST: So, does the new commission become more of the same and similar? A rather grubby, little backroom deal-making club.
BOULDEN: Well I'm not going to use the word 'grubby,' but he is a deal- maker, he is a backroom guy and that's what Juncker will be very good at doing. So the question is, what do other countries now say they want
because they supported Juncker? What does Germany get? What does France get? Or what doesn't the U.K. get because David Cameron didn't support
Juncker. But you got to remember the bottom line is the European commission president isn't actually that powerful, Richard. I find this
fascinating that David Cameron spent all his political energy voting against him -
QUEST: Good point.
BOULDEN: -- pushing against him when you have the parliament doing - having - so much more power and of course -
QUEST: Right.
BOULDEN: -- individual countries still retaining much power.
QUEST: In a word or sentence, the British likelihood of a referendum in 2017, both parties - labor and conservative -- will eventually go to the
polls promising a referendum. But do you think tonight a British out became just that insy-winsy-beany little bit more likely?
BOULDEN: Yes, it became more likely but just more likely. But, absolutely, David Cameron, if he becomes the next prime minister, there
will be a referendum in 2017 for whether the U.K. - or may not even be the U.K. - could just be Britain itself without Scotland voting to leave the
European Union.
QUEST: Jim Boulden who is in London for us tonight. Jim, good to see you. Have a good weekend, sir. Many thanks.
BOULDEN: Yes. Take care.
QUEST: Jim Boulden, interesting times and of course we will be looking to speak to Mr. Juncker at the first opportunity. Jose Manuel Barroso was
very kindly, of course coming on this program and speaking to us. Now, turning to the markets - the European Benchmark Index, and in its worst
week in two months. Most of the indices made gains on Friday. It was despite the disappointing data. The fall in Eurozone sentiment. You had
the Cacaron down but you did have a gain of course by the FTSE, the Dax and the Zurich SMI. Spanish inflation was flat, and the France GDP for 2014
too low to reduce unemployment. So, to the big board. Look at this - we had this hiccup somewhere around about lunchtime where the market fell
sharply. But it did sort of rally back up again - up 5 and 3/4 points by the closing bell. GoPro, which we talked about so much, it rose 30 percent
on its initial day, now up another 17 percent. So, GoPro has had a roaring start on the market. Nike was better than expected and boosted earnings.
It had 18 percent sales growth in Europe.
When we come back, "Quest Means Business" on a Friday. It's the dispute between the BNP Paribas and the U.S. Justice Department. It's strained
U.S./French relations and the French trade minister gives me her perspective after the break. "Quest Means Business."
(COMMERCIAL BREAK)
QUEST: Banque Nationale de Paris, the BNP Paribas has caved. According to "The New York Times," the bank will plead guilty and that's significant.
The charge is that it violated U.S. sanctions and it's to pay an $8.9 billion penalty. The case has put a serious strain on relations between
the U.S. and France. President Hollande recently wrote a letter to President Obama. He protested against what he called "the unfair penalty."
Earlier today, I was joined by the French trade minister and the tourism minister, and I asked her about this case. And, frankly, if these reports
are true, the Paribas' to pay billions, will the French once again complain?
(BEGIN VIDEOCLIP)
FLEUR PELLERIN, FRENCH TRADE AND TOURISM MINISTER: What is difficult in this situation, it's not between France and the United States. It's really
between Europe and the United States. There was a problem - a systemic risk because BNP is the first European Bank and something that might
endanger this bank might create a systemic risk in Europe, in the banking system -
QUEST: But they're not -
PELLERIN: -- in the European banking system. That was one problem. And the second problem is we had the feeling from the European point of view
that if we are to negotiate some an important treaty, we need to have conditions - political conditions that are not unilateral but really with
bilateral with reciprocity and we need to create a good climate for negotiations. And that's the point, nothing else.
QUEST: Let's talk about tourism. You're here in the United States, France is the country that receives more international tourists than anybody else.
It's slightly a misnomer because of the way borders work, so you have a lot more cross-border activity than many other countries. But what's your
priority?
PELLERIN: I think we've been in France maybe taking for granted the fact that we attract many tourists and maybe we don't need a clear strategy in
terms of tourism. Now, I think my priority is to make - to attract more, even more, tourism to France because in 2030, we will have one billion more
tourists in the whole world, so we need to attract more into France. That's my priority.
QUEST: That's right. Because the 83 million is an accident of statistics. It's people crossing the many -
PELLERIN: Not only, not only -
QUEST: Well - people crossing the boarders backwards and forwards.
PELLERIN: Not only, I -
QUEST: As opposed to full scale long, long haul tourism arriving on big jets.
PELLERIN: No, you're - where you're right is at - if you look at the expense, the average expense of tourists, we're the south country which is
a good position anyway, but we need to make more. And my priority is to work on hospitality - to make France a very hospitable country. People who
work in the area of tourism proud of themselves because maybe sometimes we have a feeling that the French people who work in the tourist/tourism
industry don't really like it or are maybe not so welcoming, so we need to work on that aspect. And then we need to have a better comprehension,
better analysis of what the tourists expect today. They want an experience, they want to cycle, they want to take a boat, they want to go
shopping, and we need to create, you know, the touristic offer that can answer these expectations.
QUEST: They want people to be nice to them. And the perception is so --
(CROSS TALK)
QUEST: Now, Minister, you know, you've heard the stereotypes.
PELLERIN: Yes, I've heard the stereotypes.
QUEST: You've heard the stereotype.
PELLERIN: Yes, I've heard the stereotypes. So we are definitely working on that because we're - I think probably it's because there was no real
policy for tourism and there is no real consideration maybe for these kind of jobs. And we need to give these people some self-esteem - people who
work in contact with the tourists - because they are the image of France. They need to understand that they are ambassadors of France.
(END VIDEOCLIP)
QUEST: One of the splendid ambassadors of the French tourism and trade minister. And we'll hear more from the minister next week on the progress
of the transatlantic trade talks. It's known as the TTIP. That'll be on Monday's program.
So the group stage of the World Cup is over from 16 teams we are now down to Footy - a Footy 32. When we come back, vexillologists of the world
unite. I will start to remove some of these flags. The question is - will I be removing the right ones and how will you know anyway?
(COMMERCIAL BREAK)
QUEST: Luis Suarez has lost his first sponsorship deal after he was thrown out of the World Cup for biting an opponent. The gambling website 888poker
has now dumped the Uruguayan striker in a statement it said, and was quite blunt about this. It said, "Regrettably following his actions during
Uruguay's World Cup match against Italy, 888poker has decided to terminate its relationship with Luis Suarez with immediate effect." Suarez still
returned home to a hero's welcome. Listen to this --
(BEGIN VIDEOCLIP)
(CROWD CHEERING)
(END VIDEOCLIP)
QUEST: Oh, that's the plane. Anyway, he returned home to a - when his plane landed in Montevideo, it comes after - there we are, that's showing
him now. It comes a day after FIFA banned him from nine international matches. Uruguay will continue without Suarez but 16 teams are going home,
their World Cup dreams cut short. So we need to update the business Footy 32, where the value of each team and the World Cup rises by $10 million -
you get $10 million for a goal, you lost $10 million if you concede a goal.
The group stage has ended, so now let's have a look and see exactly what we've got This is what it all looks like, and now in corporate-speak, we
need to delist certain countries. Here we go - (MAKES SOUNDS). That's the list that we have at the moment. Now, that's the delisting as we've done
here. Greece of course is the only team that's actually showing a deficit on its value. Greece is delisted, that's why he's still in the game. Its
base value is $89 million - that's and Lloyd's and CVR. They base it on the insurable value of the players - $89 million. Their gain/loss is $20
million. The reason is they scored two, they lost four, there at deficit of 20, so their actual net value is down. So we've got to say in economic-
speak an uncertain outlook. But that's what they all look like overall. So, let's do a bit of Vexillology here myself. Start to remove some flags.
Amanda Davies, do not even ask me which flag -
AMANDA DAVIES, CNN SPORTS CORRESPONDENT: (LAUGHTER).
QUEST: Here we go. That's gone, that's gone, they've gone - oh, hang on. Tell me while I'm taking the flags out, who plays next?
DAVIES: I think you can take the Bosnia one out, I can see that. I have to say, it's a good - it's a good education in flags, this World Cup. But,
no, Richard we are bereft today. I've got two blank screens in front of me with no football action - the first time in 16 days. We don't know what to
do with ourselves. But there isn't long to wait because a round of 16 does get underway on Saturday. And there's a cracker to kick it off which is
the host Brazil up against their South American rivals, Chile. And you sort of get the feeling here in Brazil that the home fans are starting to
get behind their team. They really impressed against Cameroon. There was a bit of trickery and fancy footwork from Neymar. So that one's going to
be pretty special. High hopes from Brazil that they will -
QUEST: Right.
DAVIES: -- make it through because they've got a fantastic record against Chile in recent time as well. And the cracker for me on Sunday is two
teams that had no build up at all for this tournament - the Netherlands against Mexico. You've got to get excited if only to see the Mexico boss
Miguel Herrera running up and down the touch line, hugging his players, every goal -
QUEST: Right - go ahead.
DAVIES: -- as if they'd won the World Cup and they both - go on.
QUEST: Yes, all right, so I've got rid of all the flags. We will do - well we're too late. You've got to name them all in 30 seconds. Well,
look - looking at the Quest Footy 32, purely on economic grounds, let's bring economics together with the football. According to this, the most
valuable team still remains to be Costa Rica. If you look at the number of goals, the value of the team, the intrinsic value. Is it likely that our
economic value will be reflected in the results? Because Brazil is only showing a gain of 6.6 percent in value.
DAVIES: I thought we did a deal yesterday that you would talk numbers and I'd talk football. But, no, Costa Rica has surprised a lot of people so
far in this tournament. They really have -
QUEST: Right.
DAVIES: -- come out of nowhere and they - you - would think we'll get through this next round. They're up against a country who've never made it
out of the group stages before in Greece. But they're very unlikely to go on and win this tournament. You have to say Brazil are a much better place
to maybe lift their sixth World Cup than Costa Rica, Richard.
QUEST: Amanda Davies, thank you very much indeed. We will give you your test later on the vexillologists as we start to remove flags -
DAVIES: (LAUGHTER).
QUEST: -- before the end of the - I still think - thanks, Amanda. I still think frankly when it comes to Vexillology and the Quest - the Quest Footy
32, if we could bring that back - I still think @richardquest the Quest Footy 32 will ultimately show exactly which team is going to win. It will
end up being valuation in the stock market. Coming up after the break, we'll turn our attention to serious matters. Well, I'm not saying that the
World Cup isn't serious, but you get my drift. Ukraine signs an historic deal with Europe. It's a dramatic shift away from Russia and it's after
the break. This is "Quest Means Business" on a Friday. Good evening to you.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more "Quest Means Business" in just a moment. This is CNN and on this network, the news always comes
first. Ukraine's president Petro Poroshenko has signed a landmark agreement in Brussels, forging closer trade and political ties with the
European Union. Late last year, the former president rejected the very same deal and that sparked the unrest which led to his ousting. Moscow
said it is closely watching the economic consequences of the agreement.
Armed U.S. drones are now flying over the skies of Bagdad. You see similar drones here in this file video. U.S. officials say their mission in Iraq
is to protect American military advisors, not to prepare for air strikes against Sunni militants.
There's outrage in Libya after a pro-democracy campaigner was murdered. Salwa Bugaighis was a high-profile lawyer and activist. She was shot in
the head on Wednesday after returning home from voting in the country's parliamentary elections.
One of Luis Suarez's corporate sponsors says it's ending their relationship. The gambling website, 888poker said it's because of the
footballers' actions in the Uruguay/Italy World Cup match on Tuesday when he bit an Italian player. A major deal with Adidas could also now be at
risk.
Bulgaria's Central Bank says the country's financial system is under attack. Investors have watched bank shares plunge and depositors are
rushing to withdraw their funds. The Central Bank has vowed to protect depositors' savings and threatened legal action against those spreading
rumors against the banking system.
Ukraine's President Petro Poroshenko is heralding a new era for his country. As we just told you, he signed an historic trade deal with the
European Union. Ukrainian exports for the E.U. expected to jump by a billion dollars a year. Now, Mr. Poroshenko signed the deal, and look at
the picture. He's using the very same pen that the former president Yanukovych had once intended to sign the deal with. And he said it was a
momentous day for his country.
(BEGIN VIDEOCLIP)
PETRO POROSHENKO, UKRAINIAN PRESIDENT: I think this is the most important day for Ukraine in history after Independence Day. I'm absolutely sure
that Ukrainian association agreement with the European Union is not just to finish our seven-year process, but the launch. The launch of the process
for modernization of my country, the launch of the process for the reform. Reform in fighting against corruption, reform in introducing rule of law,
reforming a creation, new investments (inaudible), reform in the providing in Ukraine freedom, democracy, security and peace.
(END VIDEOCLIP)
QUEST: Viktor Yanukovych's rejection of the deal sparked scenes like this in November of last year. It led to chaos and ultimately to the ouster of
the president. The deadly crisis cost Ukraine the region of Crimea and it's pushed the region to the brink of war and of course has about
destroyed relations between E.U., Russia and the United States. Violence in Eastern Ukraine has continued to flare in recent months. A ceasefire
agreement has helped quell the unrest. Europe's now waiting for the pro- Russian rebels to decide whether they'll extend the ceasefire in Ukraine. Leaders of the E.U. Summit set Monday as a deadline and they threatened
tougher sanctions to turn up the heat on Russia. But of course Russia's reaction is very different. CNN's Phil Black is in Moscow for us tonight.
(BEGIN VIDEOCLIP)
PHIL BLACK, MOSCOW-BASED NEWS CORRESPONDENT FOR CNN INTERNATIONAL: In signing an association agreement with the European Union, Ukraine has
formally removed itself from its historic role as a big and significant part of Russia's sphere of influence. The Kremlin's reaction - it is
Ukraine's sovereign right to do so - which is pretty restrained given Russia's strength of feeling about this agreement and everything it has
done to try and stop it from becoming a reality. But it reflects what has been a recent trend, especially over the last month. A considerable
softening in the language and attitude from Russia towards the situation - the ongoing crisis in Ukraine - including the removal of tens of thousands
of soldiers that had packed the Ukrainian border, the rescinding of Parliament's authority, authorizing the use of military action in Ukraine,
recognizing the Ukrainian president, backing the government's ceasefire and its peace plan.
Russia says it wants to end the bloodshed - play a role in ending that violence in Eastern Ukraine. But the view of Western nations is that
Russia must still do more to convince those separatists and pro-Russian fighters to lay down their arms and to stop fighters and weapons from
crossing the border from Russia into Ukraine. And Western countries say that is why the threat of sanctions still hangs over Russia. Now that
Ukraine has signed this association agreement, Russia says it is prepared to take measures. It is talking about trade protection measures because
the Russian theory is that Ukraine will not be flooded with cheaper Western goods and they could cross the border into Russia, damaging Russian
businesses as well.
What this means is still unclear. It could mean complete product bans, it could mean increased tariffs. But if applied, what it will mean for
Ukraine is that at the same time that it's getting greater access to the big European market, it will be losing access to its still important and
traditional market in Russia which will ensure further economic pain for Ukraine, at least in the short term. Phil Black, CNN Moscow.
(END VIDEOCLIP)
QUEST: In 1998, some people - and I have to confess I was one of them - needed a bit of convincing that this was art. We'll have a look. Today
Tracey Emin's "My Bed" which reflected a tumultuous time in her life, is up for sale. (RINGS BELL).
(COMMERCIAL BREAK)
QUEST: Just look at it - it's got it all, hasn't it? A messy bed, a duvet, cigarettes, food, pills and booze, assorted bedroom detritus and
it's all expected to fetch over $2 million when this is sold at auction next week. When Tracey Emin came up with "My Bed" in '98, Bill Clinton was
president, Google had only just been founded. Today, critics fear the bed will disappear within a foreign buyer, never to be seen again. What a loss
it would be not to have this in front of you every day. Max Foster went to meet the artist and talk about her work.
(BEGIN VIDEOCLIP)
TRACEY EMIN, ARTIST: The artworks "My Bed" was conceived and made in 1998, and I actually spent four days in bed asleep and not well, and feeling
terrible and actually quite broken-hearted. I didn't eat and I didn't drink anything. And then when I actually got up to go and get a glass of water
and stagger out to the kitchen, I then came and then just looked at this. And I thought, "Oh, my God, that's kind of disgusting. I could have died
in there." And I looked again, I thought "It's not disgusting, I didn't die, that bed kept me alive." And then suddenly I just had this sort of
like vision of taking it out of the bedroom space and putting it in the white gallery space or putting it in the gallery space, and it just
suddenly made sense. I said, wow, I just made - this is a fantastic artwork.
MAX FOSTER, CNN INTERNATIONAL ANCHOR AND CNN'S ROYAL CORRESPONDENT: Do you mind if I ask you why you were feeling the way you were at the time?
EMIN: I was brokenhearted. Everyone's felt brokenhearted. It's not new. It's an actual assessment of how I was at the time. So I can do a drawing
of myself, but instead of doing that, I have this. And 16 years later, it's still here, more iconic and stronger than ever.
FOSTER: Well the bits of this that you unpacked and - gave you a bit of a shudder?
EMIN: I fear as though - I feel it's like a ghost of the self. When I sat on that bed, I actually had like - it's almost - I actually have like a
shudder going past me. It really is like a piece of history, like a time capsule. And I think people identify with it because I think most people
have their own time capsules. If not in reality, then in their memory or in their minds. So I would like to be standing next to this in 50 years'
time. That's what I hope.
FOSTER: Well it's pretty much assured it's placed in art history - this piece. And partly, I'd say because it epitomizes that question of what is
art. Because when you produced this, they were saying it's not art.
EMIN: Yes.
FOSTER: They're still saying it.
EMIN: No they're not. No they're not.
FOSTER: Is it art?
EMIN: Of course it's art.
FOSTER: It's your art.
EMIN: There's not that. Any quiz show - which artist made "The Bed?" - Tracey Emin. Taxi drivers - 'oh, you're the artist that made "The Bed."'
It doesn't touch me that isn't art. 'So you are the artist that made "The Bed." Twenty years ago this wasn't art. Now it definitely is. It's
changed people's perceptions of art, and that's why it's a seminal piece of art, and that's why it's important.
FOSTER: How do you feel about the value? Obviously you don't set the values - that's created by demand.
EMIN: This is really interesting.
FOSTER: Is it uncomfortable for you that it's -
EMIN: Really uncomfortable for me.
FOSTER: You want it to go for a lot or don't - does it -
EMIN: I want it to go to a very good home. I'd love it to go to a museum. And I never find my own work back, but in this situation, if I could, I
would and then I would donate it to the Tape (ph) probably.
(END VIDEOCLIP)
QUEST: Wow. Brilliant interview by Max Foster listening to Tracey Emin. I never thought it was art, but just watching and then - but, Jenny
Harrison - just watching - you're looking skeptical, she's looking sour.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: (LAUGHTER).
FOSTER: She's got that sort of - look on her face.
HARRISON: No. Yes, I was actually just thinking there must be thousands of households with teenagers and mothers, you know, just desperate for the
teenager just to tidy up their rooms. They all look like that, so - yes, there's a lot of artwork like that, Richard in lots of homes around the
world.
QUEST: Right.
HARRISON: That's what I think.
QUEST: The weather forecast please, ma'am.
HARRISON: Yes, let's get on to that shall we? A well cut deck was Friday, a rest day, the first day of the tournament, so that does mean on Saturday
we're back to seeing some football again. And the weather should cooperate too. It hasn't been too good the last couple of days. We've had some
torrential rain, particularly in Recife - 108 millimeters. About a quarter of the average total for the month of June, it's the rainiest day so far in
Recife for this year of course when you say so far this year. But to the real rain in the next few hours, it's actually going to continue to be
across the southeast.
You can see that stream of cloud tied to a frontal system. It's moving very, very slowly, bringing more scattered showers, more of the same
further to the north as well. And you can see where the rain will be. So, not much of a let up really into the southeast. In fact, that's the one
place we've seen rain throughout the day - Porto Alegre elsewhere has been fine and dry. First match on Saturday - 27 Celsius. This is at 1 o'clock
local time from Belo Horizonte, and that of course is Brazil again to Chile. Very, very light winds. Humidity not too bad, but a very, very
warm temperature as we're playing football.
Rio de Janeiro is the second match of the day 5 p.m. local time, not quite as hot - 24 Celsius - but feeling quite humid, about 71 percent. Quite
cloudy with some sunshine - that game of course, Colombia against Uruguay.
Now, we've been pretty fortunate so far this week with the weather conditions in London for Wimbledon, particularly this Friday. Some very
heavy rain passing to the north and the east, and also some very heavy rain pushing through Belgium on into the Netherlands. But when it comes to the
next few days, maybe not quite as lucky in Wimbledon. Saturday could well bring more clouds, some rain. Sunday should be dry, a bit cloudy. Monday
a better day, fine and dry with some nice sunshine.
Now, talking of June, we're coming to the very last few days of course of this month. And the U.K. Met Office put out some data, and we've still got
a few days to go, but so far, the sixth warmest June ever on record. That is, since 1910, and you can see what the temperatures have been across
different regions in the U.K., and how much above average? So you can see there - 1.9 Celsius is above average in Scotland. So, really has been
very, very warm indeed. Will it continue? Well, there's some more rain on the way into western Europe. Pretty good across the central and eastern
areas, but that system coming in to the northwest - some very heavy rain at times, particularly heavy as it sweeps through southern France on towards
northern Italy too in the next couple of days. You can see it coming in there.
Fine and dry, as I say, across the east and the south. As for temperatures for the weekend, for the first day of your weekend - well, feeling pretty
good. We've got 19 Celsius in Brussels, 24 in Milan and 20 Celsius out there in Lisbon.
Now, elsewhere around the world for the weekend. In New York a very warm weekend. It should be dry - 28 degrees, Sao Paulo not far off. Buenos
Aires as well, temperatures in the mid-teens. And let's just have a quick look here -
QUEST: Ooooh, toasted.
HARRISON: Tel Aviv, Cairo and Riyadh - I know -
QUEST: Toasty.
HARRISON: -- and sunny, Richard. Really warm indeed - 44 Celsius, that's certainly too warm for me.
QUEST: Yes. Thank you. Jenny Harrison at the World Weather Center. Now this book warns the world's wealth inequality is on the rise. We'll be
talking to the author of the book that everybody's talking about, after the break.
(COMMERCIAL BREAK)
QUEST: "Capital in the Twenty-First Century" by Thomas Piketty. Now, to some it is all about wealth inequality. To others, it is perhaps the holy
grail, the book that everybody is talking about. Well the issue of wealth inequality is something we have discussed many times on this program. This
book has sold more than 650,000 copies. It's about to be printed in 30 languages. It is not an easy read - more than 500/600 pages. It had some
damning criticisms, especially by the "Financial Times" which accuses the author of using flawed statistics. In a wide-ranging interview, we were so
pleased Thomas Piketty joined us from Paris and he told me - well, he welcomed a bit of literary argy bargy.
(BEGIN VIDEOCLIP)
THOMAS PIKETTY, AUTHOR, "CAPITAL IN THE TWENTY-FIRST CENTURY": -- reason, you know I try to make it clear that this is of interest to everybody, not
just elite economists. It's also a political story, a future story, representations of inequality including literary representation play a big
role. And, yes, I'm very glad that, you know, an (unbirthed polar) seem to enjoy it. And, you know, even multi persons seem to be talking about it,
maybe some of - some of -- whom have not really your kind of book, but this is fine, you know, that's part of the game and I'm very happy with this
one.
QUEST: Are we reaching a level of rising inequality that alarm bells should be ringing?
PIKETTY: I think we have different situations in different countries. Now, in the United States, I think that, you know, indeed the rising
inequality of wealth the past three decades has been so enormous that I think it creates a, you know, a major disruption, you know, of, you know,
the ways of the political process itself is working. So, just to give an order (ph) of magnitude, you know, almost three chapters of aggregate gross
and primary income between 1980 and 2010 in the United States went to the top 10 percent, and most of it to the top 1 percent. So, if the gross
performance of the U.S. economy had been extremely good, you know, 4 or 5 percent a year, that maybe it would be acceptable. But with the
(inaudible) GDP growth of 1.5 percent a year, you know, it's three quarters of that goes to the top, then this is not a very good deal for the rest of
the population. And I think many people now agree that this has led (inaudible) to the stagnation of median income and the rise of (inaudible)
debt, but that's contributed also to make the financial system not fragile.
QUEST: If you're going to start reversing a trend of inequality, you either do it through regulation, you do it through government, you do it
through taxation, you do it through social stabilizers - all the usual techniques. Where do you believe the right way in your view is to begin?
PIKETTY: I think that there's all combination of policies that need to be put in place, so education, you know, investment in education certainly is
a primary force that can reduce inequality in the long run. And one problem that you have in the United States is that, you know, you have very
good top universities at the very top of the distribution you know, probably the best in the world. But your bottom part of the U.S.
educational system is not that good.
QUEST: Were you very annoyed or were you frustrated, were you angry or were you just bemused with the "Financial Times" attack on your work and
its underlying academic assumptions?
PIKETTY: You know, I have responded to their, you know, criticism point by point, and I think, you know, anybody looking at this will conclude that
they made a lot of noise out of nothing, but, you know, this is fine. This is part of the game. I put everything online, you know, including old
detailed (ph), data sources and formulas so that we can have a very open debate about this issue. So, you know, to me this is perfectly fine. If I
was to rewrite the book today, in fact probably the only change I would make is that I would show an even bigger increase in wealth inequality in
the United States, that's why -- what --
QUEST: Right.
PIKETTY: -- I actually show. And there was a recent study by Saez and Zucman which apparently the "FT" seems to ignore, which actually shows that
the increase in wealth concentration - you know - the (inaudible) has been even larger than what I report in my book.
QUEST: Right.
PIKETTY: So, but you know, there will be more data in the future, we are going to update imminently all existing series online that will be
available publically. And, you know, I welcome all those who want to contribute to this effort to promote more transparency in income and wealth
inequality.
(END VIDEOCLIP)
QUEST: Now, we asked Thomas Piketty who he was reading, and it's this book. It's "The Second Age (ph) Machine," how the digital age is
transforming every element of our lives, such as Googles, driverless cars, IBM's super computer called Watson. The chief exec - sorry, the co-author
- I don't suppose there's a chief exec for the book - of "The Second Machine Age" is Erik Brynjolfsson who joins me now from Massachusetts.
Erik, good to talk to you. I mean, when Thomas Piketty is reading and praising your book, you know you're on to something about a revolution
taking place in the way machines and man are interacting, aren't you?
ERIK BRYNJOLFSSON, AUTHOR, "THE SECOND MACHINE AGE": Absolutely. And I - that was very nice for him to say that. I've been a fan of his even before
he became an international sensation. So I'm glad he's interested in this issue and how it's changing the world.
QUEST: We have looked at this - I mean - just this week we have seen Androids wearables, we've seen Google - everybody's bringing out new
devices that push the boundaries. But I need to understand from you what are the caveats, the cautions, the concerns that as a society we need to
have for this?
BRYNJOLFSSON: Well, I want to underscore that this can and should be good news. But before I get to the cautions, I want to say that having machines
that can do all these wondrous things - increase our lifespans, drive our cars, solve medical problems - that can and should be good news. But
you're right, there're also some important caveats, and one of the most important ones is the one that Thomas Piketty has been emphasizing is that
this rising tide doesn't necessarily benefit everyone -
QUEST: Right.
BRYNJOLFSSON: -- evenly. There's no economic law that says everyone will share in the bounty. In fact, some people have been left behind, in some
cases, a majority of people. And one of the things we need to work on is how to maintain the bounty but also lead to shared prosperity.
QUEST: And that is so difficult, isn't it? That is in a nutshell what this book's really all about, because you can't hold back the tide, so you
had better work out a way to ride the waves.
BRYNJOLFSSON: That's exactly right. And so I there's a - this is the grand challenge that we face over the next ten years. We absolutely aren't
going to stop technology. We shouldn't try to stop technology. I'm disappointed with those who try to protect the past from the future. What
we need to do is embrace it -
QUEST: Right.
BRYNJOLFSSON: But do it in a way that also brings up the whole society.
QUEST: Do you think at the moment - at this moment, 2014 - we are winning or losing that battle of successfully managing this second machine age?
BRYNJOLFSSON: Well there's no question that half the population at least hasn't participated in it. That's been a big disappointment. Median
income in the United States is lower now than it was 15 or 20 years ago. The - most of the benefits have accrued to not even to just the top 1
percent, but even the top 100th of 1 percent has gotten the biggest gains. And I do think most of us want to live in a society -
QUEST: Right.
BRYNJOLFSSON: -- where all the benefits accrue to a very small group.
QUEST: So, if I ask you which machine, which gadget, which device do you believe you really want? Do you want the vacuum cleaner that'll think for
itself, do you want the driverless car? Which is the one that you think will be the one that you would like?
BRYNJOLFSSON: Well I'm very excited about some of the tools that use big data -
QUEST: Ah.
BRYNJOLFSSON: -- to improve diagnosis, cure cancer, to be able to extend our lifespans. And it's been just wondrous some of the breakthroughs we've
seen in using these machine learning and artificial intelligence techniques to push the boundaries of medical knowledge.
QUEST: Sir, brilliant to have you on the program. Please do come back again. We'd love to talk about these issues on "Quest Means Business." It
is (Erick verione) -
BRYNJOLFSSON: Thank you.
QUEST: -- to be in Watson on "The Second Machine Age." Now, this weekend's "Best of Quest." It has the choice cups from our nightly
conversations. You'll hear Jordan's finance minister pleading again for the international help in the region's refugee camp crisis. And a chef and
restaurateur Heston Blumenthal who's our guest in "Reading for Leading," sharing the books that change the way that he looks at food.
(BEGIN VIDEOCLIP)
HESTON BLUMENTHAL, CHEF: I read a book written by an American called Hal McGee on the science of cooking. Not food science, but why the eggs make
the souffles rise. Before that, I never questioned anything. After that, I questioned everything - that's my strap line (ph). And that really
opened my eyes to a new world of cooking.
(END VIDEOCLIP)
QUEST: A wonderful weekend digest, it's "The Best of Quest" it's at CNN, noon London and reported like a bad dose of something throughout the
weekend. We'll have a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
(BEGIN VIDEOCLIP)
LORD BROWNE, FORMER BP CHIEF EXECUTIVE: When I reflect on my career with BP, it is actually a deep sadness that I wasn't authentic, that I didn't
actually say or behave who I was, because I could've done so much more for people who were in the closet. Now's the time to make it up.
(END VIDEOCLIP)
QUEST: Tonight's "Profitable Moment." Lord Browne there talking to us about his decision to come as being gay. On last night's program, Lord
Browne talked about how coming out as a gay man is good for business. Well, at this time last night, I waffled on, and frankly I never said what
I wanted and should've said. Which just goes to show how still being gay is an issue. Tonight, I put that right. What I should've said last night
is that from experience, Lord Browne is absolutely right. If I remember back to when I wasn't open about my sexuality, I spent a great deal of time
worried about what would my family think? What would my friends, my colleagues think? And of course, what would you think? Would the fact
that I'm gay affect my credibility as a business journalist? Would you watch the program differently?
Well, thinking like this saps energy, it drains confidence, it takes a toll on productivity. It's exhausting. I realize that everyone has their own
road to travel in making this decision about when it's right to come out to gay. So, back to business. On this question of being openly gay, I know
that leadership from the very top in companies is essential. It creates the right, safe environment for employees to make the decision.
I know that role models play an important part too. Hence, my decision to revisit the subject tonight, and ultimately I know that when the truth's
finally out, as it always does, in my case the worst fears never materialized. All-in-all professionally, I know the work I do here every
day is better because I'm honest about who I am. And that's "Quest Means Business" for tonight and for this Friday. I'm Richard Quest in New York.
Whatever you're up to in the hours ahead, RINGS BELL), I hope it's profitable. We'll see each other on Monday.
END
