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Quest Means Business
Israel Rejects Cease-Fire; Palestinian Day of Rage; Fighting Continues; Airline Crash Sites; Search for Answers at MH17 Crash Site; Securing the Skies; Air Algerie Crash; Aviation Safety; Russian Rate Hike Surprise
Aired July 25, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
MAGGIE LAKE, HOST: US Stocks end the week on a negative note as earnings disappoint. It's Friday, the 25th of July.
No cease-fire yet. Israel rejects immediate plans for a truce.
No exclusion zone, and damage to evidence. We're on the scene of the MH17 crash site.
And a shock rate rise in Russia to cushion the economy from geopolitical shock.
I'm Maggie Lake, this is QUEST MEANS BUSINESS.
The US secretary of state, John Kerry, says there has been serious progress on a truce in Gaza, but so far, that truce has not yet come. The Israeli
intelligence minister told CNN that the cabinet unanimously rejected a cease-fire offer to end the current conflict. However, John Kerry said no
proposal was submitted for a vote, and called those reports "mischief."
Speaking under an hour ago, UN secretary-general Ban Ki-moon said he will continue to push for a resolution.
(BEGIN VIDEO CLIP)
BAN KI-MOON, SECRETARY-GENERAL OF THE UNITED NATIONS: Solutions must be based on three important issues. First, stop the fighting. We call for a
seven-day humanitarian cease-fire, extending over the Eid period, beginning with an extendable ten-hour pause.
Second, start talking. There is no military solution to addressing the grievances, and all parties must find a way to dialogue.
Third, tackle the root causes of the crisis. This effort -- peace effort, cannot be the same as it was the last two Gaza conflicts, where we reset
the clock and waited for the next one.
(END VIDEO CLIP)
LAKE: Palestinians in the West Bank are showing solidarity with the people of Gaza. Thousands, outraged over the Israeli offensive in the region,
turned out for some of the biggest protests in the West Bank in years. Clashes with Israeli riot police broke out in some areas. At least five
Palestinians were killed. Witnesses and Palestinian officials say one protester was shot dead by an Israeli settler.
Karl Penhaul is in Gaza City tonight with the very latest, and he joins me now, live. Karl, the negotiations to attempt a truce are underway, still
underway, and the death toll rises.
KARL PENHAUL, CNN INTERNATIONAL CORRESPONDENT: Well, that deal to try and get some kind of cease-fire, Maggie, seems like a really hard sell.
Israel, after all, the United States' most staunch ally in this region, and now Secretary of State John Kerry accusing his allies of effectively trying
to torpedo that deal. And that, we haven't even heard of Hamas's reaction to that yet.
But as you say, what does that mean on the ground? It means the war will go on. Tonight, more people will die. Those are likely to be civilians.
What it will also means as well is that tonight, tomorrow, like every other day, the hospitals here on the Gaza strip are now almost on the verge of
collapse, because they can no longer deal with so many wounded, so many dead. Let's take a look at a few hours in the life of a Gaza ER.
(BEGIN VIDEOTAPE)
PENHAUL (voice-over): Dead on arrival.
(MAN SHOUTING)
(WOMAN CRYING)
PENHAUL: The horror, civilians and medics at breaking point.
UNIDENTIFIED MALE: We feel exhausted, we feel anxious, we feel depressed.
(WOMAN SCREAMING)
PENHAUL: No time to rest, it's a scramble to rescue survivors. Surgeons told us not to film this casualty. A hint, perhaps, he was a militant
fighter. But most on the operating table at South Gaza's European Hospital are clearly non-combatants.
PENHAUL (on camera): The patient is a 23-year-old female, and they showed me on the x-rays, she has a basic fracture on her leg.
PENHAUL (voice-over): They say that was caused by a rocket blast. The surgeon's focus, the blink of a patient's eye, the beep of vital signs.
Dr. Hassan is sick of it. Sick, he tells me, of stitching bodies mutilated by shrapnel. Sick of war.
UNIDENTIFIED MALE: In the last 12 hours, we received 61 patients -- injured patients, so we don't have enough space available (inaudible) for
those patients. What about the (inaudible)?
PENHAUL: Down the hallway, surgeons patch up a toddler. They say the rest of his family is dead. Bone and brain surgeons do skin grafts. Fighting
rages close to the hospital, they just can't transfer him to a plastic surgeon. Medicine and supplies are running low.
UNIDENTIFIED MALE: If there are still one more week or more damage, we will reach to -- we don't have sutures or equipment enough for the injured.
PENHAUL: The fight for Gaza has become a dirty war. No sanctuary for the innocent.
UNIDENTIFIED MALE: The situation is very dangerous. No place in Gaza strip, not even one square meter is safe in Gaza strip.
PENHAUL: Dr. al-Masri (ph) is afraid he, like others, could be killed anytime, so he carries his ID everywhere.
PENHAUL (on camera): So, you're preparing for death as well?
UNIDENTIFIED MALE: Yes. We are preparing ourselves for death.
PENHAUL (voice-over): Men, dazed with amputated limbs. A child with head trauma, battling to get up. Many medics tell me only faith can keep them
on their feet.
UNIDENTIFIED MALE: God give our (inaudible) the power to work, even we work sometimes 20 hours continuous.
PENHAUL: But even the call of God drowned out by the agony.
(END VIDEOTAPE)
PENHAUL: And tonight, it is quite clearly that proposal for a cease-fire that is on the operating table. Secretary of State John Kerry has not
given up yet. He and Ban Ki-moon are still going to try and hash something out with the warring sides.
But tonight, it looks very much like Dr. al-Masri in that report said: there is not a square meter of the Gaza strip that is going to be safe,
especially now that Israel is threatening to step up its ground invasion of Gaza.
We don't know what that means. Is that a return to the 2008, 2009 scenario when boots on the ground -- Israeli boots on the ground came deep into
Gaza, with Hamas putting up the kind of fight that it is putting up? Then again, that will surely mean a lot more deaths. It's going to be a hard
night, it's going to be a hard few days to come, Maggie.
LAKE: Absolutely. And Karl, I've got to be honest with you, it's painful to watch that report that you just filed, although it does give us a very
vivid idea of what it's like there. And you mentioned in there. And you mentioned in there, no sanctuary for the innocent. I just want to return
to that.
We know that the people have got to try someplace safe, though, even though they know the situation has changed. What -- do you get the sense, what
are they doing? I know that they were going to the UN schools before. We know what happened this week. They are also full in that capacity. What
are people telling you that they are doing?
PENHAUL: That's absolutely right. There's more than 140,000, 150,000 Palestinians now displaced and staying in those UN shelters, schools set up
as shelters. We know that they are not safe because yesterday was not an isolated case.
We've seen over the past few days incidents of Hamas storing rockets in schools. We've seen other incidents of schools being hit by Israeli shells
in other parts of Gaza. We hear of families -- extended families taking in their relatives and their neighbors, but that's not safe, too.
Even one of the Palestinian guys who works for us, he says he has 30 members of his extended family in his house right now, and he said that
today, they've been pounding a house two doors down from him. That's not safe either.
The schools aren't safe. The borders are closed. Gaza people have nowhere to run to. So, that's why you see people like Dr. al-Masri. His solution:
carry his passport. He doesn't want to die the victim with no name. If he dies, he wants somebody to know what his name is, Maggie.
LAKE: And that is absolute chilling. Karl Penhaul, a very dangerous, fluid situation. Please do take care of yourself. Thank you, Karl, live
for us tonight from Gaza.
Coming up, the search for answers continues at the sites of two airline disasters. We will have the latest from Ukraine and Mali after the break.
(COMMERCIAL BREAK)
LAKE: We are getting new information from the sites of two airline disasters. In Ukraine, pro-Russian rebels say they are running short of
patience with investigators examining the wreckage of MH17.
A number of nations say a proper investigation still hasn't begun. The debris field remains open and unguarded eight days after the plane came
down. Global aviation officials have scheduled a meeting to evaluate the risks posed by conflict zones.
And from Mali, it has been confirmed that there are no survivors from Air Algerie Flight 5017. French forces have recovered one flight recorder from
the debris. The cause of the crash is still unclear.
First, we return to eastern Ukraine and the fields of debris from Flight MH17. Phil Black joined international observers as they search for
answers.
(BEGIN VIDEOTAPE)
PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT (voice-over): This is the biggest international presence seen at MH17's crash site. The Organization
for Security and Cooperation in Europe traveling with investigators and diplomats from Malaysia and Australia.
For the first time, the observer mission looked beyond the grassy fields and pushed into a dense forest. They found small, scattered pieces, and
this. So far, it's the largest single piece of MH17's fuselage to be discovered. Its impact was cushioned by the forest. Some of the windows
are still intact.
BLACK (on camera): According to the European monitors, the investigators from Australia and Malaysia are surprised by two things. Firstly, the
sheer size of the debris field and the fact that one week since the disaster, there is still no exclusion zone surrounding it.
BLACK (voice-over): And at this site, the observers and experts closely study the front end of the cockpit. This is where emergency workers caused
significant damage a few days ago, cutting into the wreckage with a high- powered saw. And it's also where the metal debris is marked by numerous puncture marks, possible signs of shrapnel damage from a mid-air explosion.
Apart from this small group moving in convoy across the crash zone and its sometimes unfriendly militant escort, there is no one examining or securing
evidence. This, the site of a major recent air disaster is quiet. It looks abandoned, and there is no ongoing operation to find victims' bodies
among surrounding fields and farmlands.
That's a concern, because the monitors have found yet more evidence the original search effort was less than thorough.
MICHAEL BOCIURKIW, SPOKESMAN, OSCE UKRAINE MISSION: And human remains. For the second day in a row, we did spot some human remains.
BLACK (on camera): Again today as well?
BOCIURKIW: Yes, we did, yes.
BLACK (voice-over): One week on, international experts are on the ground in small, but growing numbers. But the wreckage of MH17 is still not being
treated with the care it deserves. Phil Black, CNN, near Grabova, eastern Ukraine.
(END VIDEOTAPE)
LAKE: The fate of Flight MH17 has sparked cries for better regulation of international skies. The president and CEO of Dutch airline KLM told me
the rules need to be reevaluated. First he expressed how this tragedy has affected his country.
(BEGIN VIDEOTAPE)
CAMIEL EURLINGS, PRESIDENT AND CEO, KLM: Our country and the aviation industry is in deep, deep, deep pain. It has been one of the emotionally
most impactful weeks, and for aviation, it has been a black week.
What first of all needs to happen is that all the human bodies have to get back to the families of the deceased ones. I've been speaking to many
families. It is a crime against humanity that for days, this was not possible.
Finally, that while the research is on these spots, and when the bodies are returned to the families, please let the evidence that has been found, the
permanent, definite evidence what has happened here. All the people of the deceased ones, but also all of the industry is waiting to find out with
permanent proof, and certainly, let the guilty ones, let them by tried.
Having said that, of course, there is the other issue of the transport safety. The routes over the eastern Ukraine were cleared to fly, not just
by the Ukrainian air traffic control, but also by the worldwide organization of traffic control council and by the worldwide government
body of aviation, which is called ICAO. That is why the vast majority of companies were flying over eastern Ukraine, be it at very high flight
level.
And I think that now this atrocity has happened, this unbelievable -- nobody had believed that this would happen, I think it is very good that
the rules are reevaluated. And the question will be whether we have to raise the bar further flying above these kind of zones where terrorism and
uprisings are going on.
LAKE: Absolutely, and of course, as we speak about this, there is a situation playing out in Israel, as well, another conflict area with a lot
of, I think, confusion for the flying public about whether that is safe is not. KLM had decided to suspend flights to Israel. I understand that you
are going to resume them. What is behind the change, and what is the criteria you're looking at?
EURLINGS: First of all, you have the international rules, and Tel Aviv was still clear to fly. But we often raise the bar ourselves higher. If we
have any feeling something could be dangerous, we take maximum precautions for our passengers and for our cabin crew.
And that is why in the United States there was doubt, and United States carriers stopped flying to Tel Aviv. We followed that example. Now, given
the new information, also coming from the United States, amongst others, today we have decided to restart the rotations, the flights to Tel Aviv
starting tomorrow.
The basic point is, Tel Aviv shows that we are often more critical than the international rules. But having said that, I think the eastern Ukraine
gives a lot of reason to reevaluate those rules. Are the strict enough? Or should we, in these times of horrible terrorism, shoot to raise them to
a higher level?
LAKE: Camiel, does there need to be more uniformity among the airline industry? You can imagine, as a member of the flying public, one day we
say something's safe, one day we don't. We've seen three major disasters in one week.
Does there need to be one body that makes the decision? Or does there need to be more uniformity so passengers can feel that airlines are sharing all
of the information with each other, and that it is, indeed, safe to get on a flight?
EURLINGS: I think it is very important to have uniformity. But in essence, the current system provides uniformity, because a route is
declared safe or not safe to fly, and that is a guidance that is followed for everyone. Then, as an airline, you can make your own decisions, being
more critical.
So, in a way, there is conformity. I think the question is whether on this moment, when it's proven that even the most horrible rockets that can get
at very high flight level are being employed by insurgents, whether we should not raise the bar and be more critical than we were until the day of
today.
(END VIDEOTAPE)
LAKE: In Mali, French forces have secured the crash site of Air Algerie Flight 5017. The cause of the crash is unknown. French president Francois
Hollande said nothing had been ruled out on Friday. He described the wreckage of the jet as "disintegrated." Al Goodman spoke to a man who is
grieving the loss of his family.
(BEGIN VIDEOTAPE)
AL GOODMAN, CNN MADRID BUREAU CHIEF (voice-over): This is the wreckage of Air Algerie Flight 5017. Not much left. The passengers and crew from 15
different nations, none survived.
(MAN CRYING)
GOODMAN: This man, a nursing assistant in Canada, says he bought tickets for his wife and their two young sons to leave behind Burkina Faso and to
start a new life with him in Quebec.
MAMADOU ZOUNGRANA, LOST HIS FAMILY IN AIR ALGERIE CRASH (through translator): My wife said she'd prefer to come sooner. I didn't want to
change the flight. I said, "It will be OK." Maybe if I canceled, taken something sooner.
GOODMAN: It was an overnight flight from Burkina Faso to Algiers, but less than an hour into the journey, the pilot requested a route change due to
bad weather, authorities said. Contact was soon lost. Severe storms are common in the area.
French troops in the region, supporting the government of Mali's struggle against armed Islamist militants, recovered one of the aircraft's data
recorders and the remains of the passengers. Nearly half were French citizens.
FRANCOIS HOLLANDE, PRESIDENT OF FRANCE (through translator): What we already know is that the plane's debris is concentrated in a limited area.
But it is still too early to draw any conclusions. They will come in time. There are hypotheses, including weather conditions, but we are not putting
any of them aside, because we want to find out everything that happened.
GOODMAN: The French foreign and defense ministers offered additional details, but no conclusions. They said relatives of the French victims
would meet in Paris. The Algerian transportation minister said Mali would lead the crash investigation, with help from his country and France.
Interpol has also offered to help.
GOODMAN (on camera): And here in Madrid, shock and sadness at the Spanish charter company, Swift Air, which operated the MV83 aircraft for Air
Algerie. The flight crew, all Spanish. The pilots described as experienced.
Al Goodman, CNN, Madrid.
(END VIDEOTAPE)
LAKE: As a result of what happened to MH17, the aviation industry is planning to rethink its protocol when flying near conflict zones. ICAO and
IATA and several other global aviation bodies have called a meeting in Montreal next week.
David Soucie is CNN safety analyst and former safety inspector for the FAA, and he joins us now. David, thank you so much for being with us tonight.
DAVID SOUCIE, CNN SAFETY ANALYST: Pleasure.
LAKE: I think that Camiel Eurlings, the CEO, there, really summed it up. This is just a black week for aviation. It's been a terrible week of
tragedies.
SOUCIE: It really has.
LAKE: It's, I think, natural to expect these leaders to gather, the aviation community to gather to rethink things. Do we expect to see change
as a result of some of the events that have happened, especially when we're talking about those events -- the events in Ukraine and the situation
involving conflict zones?
SOUCIE: Yes. We absolutely will and have seen change already. I've been in the accident investigation business for 30 years, and during that time,
change waits until after the investigation before someone finally moves and does something on it.
We've seen it twice now. We saw it in Malaysia 370, because the black boxes and the underwater locator beacons, the number of hour -- days on the
batteries has changed. They did that on their own. There was no regulatory authority that said they had to do it. It's the community of
the aviation industry that's coming together.
This is also unique, because typically, the ICAO, the International Civil Aviation Organization of the United Nations, the aviation arm of that,
would wait and see. What is going to happen here? How is this going to work?
But what we see right now is the industry is pushing to say, we need to act now. This is too important. It has to be done right now. And I'm really,
really impressed with what the CEO of KLM had to say.
I think it's also encouraging to have him understand that it's not just about uniformity and conformity, because as he said, the aviation safety
system for a particular airline must be controlled under its umbrella.
LAKE: Right.
SOUCIE: The other umbrella is an oversight umbrella, and that oversight is responsible for exchanging information between those. So, it's an
important distinction to say uniformity and conformity, because all operators are not equal, and none of them fly to the same areas.
There's very important things that distinguish air carriers for how they do their safety systems. But the one common thread, which is deficient right
now, and this is what they're addressing, is the information sharing between the airlines.
LAKE: Information -- and that has been an issue, certainly. So, if this prods them into action, that will be a positive thing. Someone said
something very interesting, that the reality has completely changed. We now have a situation in the world where we have lethal weapons in the hands
--
SOUCIE: Right.
LAKE: -- of terrorist groups that are not necessarily controlled under any other nations. These are threats that no one could believe that plane was
shot down. Honestly, that was the gut reaction you were hearing from people. Is the industry equipped to deal with a risk like that?
SOUCIE: I think not.
LAKE: There's no formula, is there?
SOUCIE: I think not at this time. It's something that no one conceived of. There's a thing called command and control in the military, and it's
always been accepted around the world that if you're going to use these types of weapons, you have to have command and control.
It's not just an additional radar that would have identified that aircraft as what it was. The IFF, the Friend or Foe Network is that: a network.
It must be connected to the command and control of the country who has those weapons. It's very tightly regulated.
When those weapons escape, that's when we need to know about it. That's when we need to know what those capabilities are and how they've changed.
It's going to take an integration just similar to what we had after 9/11.
Before 9/11, our air traffic control system in the US did not communicate, necessarily, with the military radar control. Now, they sit side-by-side.
If there's something in the air, they know it. If we have something in the air, we know it. It's a very tight-knit system, and that's what we're
reaching for in this aviation industry now.
LAKE: At least that will come of these tragedies. David, thank you so much for being with us.
SOUCIE: Thank you.
LAKE: After months of hesitation, the EU is preparing sanctions against Russia. After the break, I'll tell you about the surprise move Russia is
making to protect itself.
(COMMERCIAL BREAK)
LAKE: As European leaders prepare to impose sanctions on Russia, the country's central bank is taking steps to shield the Russian economy. In a
surprise move, the central bank raised its key interest rate from 7.5 to 8 percent. The bank is trying to stop foreign investors from pulling their
money out of Russia and weakening the ruble, which would raise the price of imported goods.
It blames heightened geopolitical tension for raising the risk of high inflation. Friday's rate hike is the third in four months, and the bank
warns further hikes are possible. Russian stocks fell on the news. The MICEX ended the day down 1.5 percent. The ruble fell slightly against the
dollar. It is down 6 percent since the beginning of the year.
Joining me now, Adolfo Laurenti is Mesirow's financial chief international economist, and he joins me now. Adolfo, thank you very much for being with
us. We saw this move by the Russian central bank. Is it going to be enough? Is it going to change the mind of investors, or would you expect
those capital flows to continue to move out of Russia?
ADOLFO LAURENTI, CHIEF INTERNATIONAL ECONOMIST, MESIROW FINANCIAL: Absolutely not. I think the capital flows will continue out of Russia.
And it's not just a matter of capital flows. I think that many Western companies that were considering investment in Russia are much more
cautious.
In part, it's uncertainty about the sanctions, what exactly will be passed. But overall, this does not really seem to be the right environment to take
any chance with investment. We expect the Russian economy to continue to deteriorate. So, I think that no matter what, the Russian central bank is
going to do, it will be not enough to really avoid what it seems the natural consequence of the crisis.
LAKE: Are we talking about Russia back in recession? How serious could this get for Russia, and what is the timeline we should be watching?
LAURENTI: Well, the Russian economy has already been slowing down this year. The forecast before the crisis, before these past few weeks,
suggested that there might have been a chance for a rebound the next year.
Now, it seems that is very unlikely. It's unlikely because of the sanctions. It's unlikely because of the higher interest rate. It's very
unlikely because of the capital flows. So, I think the most reasonable scenario at this point is a continued deterioration of the Russian economy
through the rest of 2014 into 2015.
Probably by now, the Russian economy is already into a recession, and we expect that recession to exacerbate further. Of course, the major
categories under pressure will be consumption, and it will be investment.
Despite the efforts to limit the impact of sanctions, I think that unfortunately for Russian households and the Russian people, there will be
some price to pay because of the international economic pressure exerted on the country.
LAKE: And presumably, sanctions will come at a price for Europe as well. We saw confidence readings again in Germany take a hit. How vulnerable is
the European economy?
LAURENTI: Well, the clear transmission for the European economy is the natural gas market. Right now, there seems to be a buffer of sorts.
Stockpiles are relatively high. We know that the winter was relatively mild, and the summer has not been as hot. That means that less natural gas
is being consumed for to produce heating, and right now, to contribute to the production of air conditioning.
So, overall, Europe is not very vulnerable at this point because of the gas.. Of course, going forward, a lot depends on how these geopolitical
situations will play out, but also how the fall and the winter will be.
If we continue to be in these favorable weather conditions, I think that there will be less need for Russian gas. And so, chances are that Russia
will lose one of their major tools to make pressure on their European counterpart.
And in terms of oil price, right now, the price has been very well contained --
(AUDIO GAP)
LAKE: Oops, I think we may have lost Adolfo Laurenti, there, but thankfully, we had his wonderful insight, and we thank him for that.
Well, while some EU leaders have called for caution in sanctioning Russia, others, like Romania, have taken a tougher line. After the break, I'll ask
Romania's foreign minister if new sanctions go far enough.
(COMMERCIAL BREAK)
LAKE: Welcome back, I'm Maggie Lake. These are the main headlines. U.S. Secretary of State John Kerry says there is a framework for a ceasefire
between Israel and Hamas, but more needs to be done to make it happen. Earlier, the Israeli's secretary - security cabinet, rather - rejected a
proposed one-week humanitarian ceasefire. However, Kerry said no final proposal had actually been submitted. He said the vote was an example of
mischief. Palestinians in the West Bank are showing solidarity with the people of Gaza. Thousands turned out for some of the biggest protests in
the West Bank in years. Clashes with Israeli riot police broke out in some areas. At least five Palestinians were killed.
The Dutch government is pressing to send its own police and investigators to the crash site of Malaysia Airlines flight 17. Forty unarmed military
police are due to leave the Netherlands shortly to aid investigators in Ukraine. There are no survivors in the crash of an Air Algerie flight that
went down in Mali early Thursday. One hundred sixteen people were on board. France says its soldiers have secured the crash site. The French
president says one flight recorder has been found. The jet disappeared from radar after diverting its course because of bad weather.
European leaders have expressed anger and resolve over the MH-17 disaster, and now they have agreed on action. After months of hesitation, the E.U.
has announced new sanctions aimed at Russian individuals and groups fueling the crisis in Ukraine. Jim Boulden explains who's on the expanded
sanctions list.
(BEGIN VIDEOCLIP)
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Friday's decision by the European Union expands the number of Russians and Russian entities facing
sanctions to be more in line with those already blacklisted by the United States. It's taken Europe longer to go through the legal steps in Brussels
to expand the number of individuals to 87 while the number of entities rises to 20. The 15 people added Friday includes officials from the FSB,
the successor to the KGB. While the new 18 entities include the so-called Donetsk Peoples Republic which claims control over portions of Eastern
Ukraine.
The sanctions imposed include Visa bans, asset freezes and blocking access to E.U. financing for those that Brussels says quote, "actively support or
are benefitting from the Russian decision-makers for the annexation of Crimea or the destabilization of Eastern Ukraine." Now, of course this
comes just a week after the downing of MH17 over Ukraine. These E.U. sanctions do not yet include the so-called level three of broader economic
sanctions which would include controls on specific sectors of the Russian economy, especially in the finance arena.
There will be more meetings in Europe next week on more sweeping sector- wide sanctions. There's also likely to be a ban on future sales of military hardware to Russia and the possibility of widening the list of
individuals to include Russian President Vladimir Putin's inner circle. Jim Boulden, CNN London.
(END VIDEOCLIP)
LAKE: While many European leaders have been hesitant to sanction Russia, Romania has taken a tough line. Romania's president has called Russia `a
partner for terrorists' in Eastern Ukraine and accused E.U. leaders of putting economic interests ahead of regional security. Earlier I spoke
with Romania's foreign minister. I asked whether he felt that Europe lacked the will to stand up to Russia.
(BEGIN VIDEOCLIP)
TITUS CORLATEAN, ROMANIAN FOREIGN MINISTER: First of all, I'll tell you the fact that all the time Romania supported a very strong coordination of
the European Union with the United States. It's extremely important to have a common position, a firm attitude at the level of our Euro planting
(ph) community when dealing with the aggressive attitude of Russia in Ukraine.
Secondly, there is no surprise the fact that some of the E.U. member states had some specific attitudes which reflected their specific economic
interests, also in the domain of energy security which someone can understand. In the same time, the fact that last Tuesday we succeeded to
adopt a clear common position of the level of the European Union, adopting new targeted measures - sanctions - the fact that we are working now to
enlarge. And we have decided that - to enlarge the criteria for targeting those persons and entities that actively supported - gave clear support to
the Russian decision-makers that are responsible for the illegal annexation of Crimea or for the destabilization of Eastern Ukraine. I think this - it
is an important step forward.
LAKE: What would Romania like to see? What is the best outcome in terms of where these sanctions should go? How far do you think they should go?
CORLATEAN: I think the goal is not just adopting sanctions. The goal it's exactly to determine Russia to stop any support - political or military
support to the separatists. To support the internal inclusive political process - peace process - that President Poroshenko launched some weeks ago
and to accept that the respect of the very fundamental principles of international law, first of all, the territory integrity, the sovereignty
of a state - any state including Ukraine. This - those - all this must be respected including by Russia.
LAKE: As we are discussing this, we have also saw resignations in Ukraine. There will be new elections, all of this coming at a very important
juncture for the country. Was that part of the discussion today? And is there any reaction from Europe to the fact that there is a change in
leadership afoot there?
CORLATEAN: Well, as a refract, (ph) calling the area elections was part of the discussion that we had previously with the new Ukrainian leadership in
Kiev because organizing the presidential elections - that happened according to the democratic standards, and we welcomed very much the
election through this democratic process our new Ukrainian president.
(END VIDEOCLIP)
LAKE: Nigerians have lived through another week of violence and marked a sad milestone. More than 100 days since Boko Haram kidnapped more than 200
schoolgirls. Bobby Lawnick (ph), Nigeria's representative to the United Nations next.
(COMMERCIAL BREAK)
LAKE: At least 40 people were killed this week when two suicide blasts exploded in the north of Nigeria. The twin attacks targeted the former
military ruler of the country and a respected Muslim scholar and cleric. Neither one was harmed. The bombings occurred on the day which marked a
milestone of failure for the Nigerian government - 100 days since 200 girls were kidnapped from their school by terrorist group Boko Haram.
Since the kidnapping, the Nigerian authorities have seemingly been haunted by their inability to bring back their girls, and at least 11 parents of
the girls have died - seven in terror attacks and four from heart failure, high blood pressure and other illnesses. Joy Ogwu is the permanent
representative of Nigeria to the United Nations and she joins me now here in New York. Joy, thank you for - so much for - being with us. This is
clearly 100 days on, taking such a toll on this local community.
JOY OGWU, PERMANENT REPRESENTATIVE OF NIGERIA TO U.N.: Yes, Maggie, before I take that question, I would like to preface this conversation by letting
the world understand that terrorism is a global problem that requires global solutions. Indeed, it is a threat, not only to national but to
regional and international peace and security. That is where the U.N. is fully involved. And I think that this 100 days is not only a time for
reflection but I believe that we should use the momentum of this sympathy, not only for the children who the children who were captured, for their
parents - some have lost their lives. But we should use the momentum to go forward. As I told you earlier, it's a global problem. Many countries
have flinched (ph) to help Nigeria. Other countries are indeed in Nigeria helping to strategize, to find the best way of recovering these children
alive and intact instead of a military option. The strategy has widened to include negotiations, dialogue with these people. So I believe that it is
time to move forward, really, to find a solution to this problem. To find the girls first and foremost -
LAKE: Absolutely, I think that's what the world --
OGWU: -- the country is traumatized.
LAKE: -- I see and I think the world wants to see that many experts worry the longer this goes on, the less chance you will have of recovering these
girls for their family and Boko Haram seems to be operating at will. If there are negotiations going on, why are we seeing attacks and more people
die?
OGWU: Well, let me say that this is not the first time in history, in the history of hostage-taking or abduction or kidnapping, that people have been
kept for so long. It is traumatizing for all of us - not only for Nigerians but for all the citizens of the world. This is where you see the
manifestation of agony, keeping vigils and protests everywhere to see that these girls are released. They're pinned to the conscience of those who
are holding these young children against their will.
So I believe that it's time for us to get together in a concerted action in the U.N. I am Nigeria's representative to the United Nations and I
remember I made a statement the first time that there was this terror. The U.N. filled in and Abuja was born. I noted and I said it very
unequivocally that violence and suicide is not in the character of the Nigerian. This is an alien culture that is getting pervasive in our
system. It is an external influence and it is important to work concertedly with all nations to make sure that it is not implanted in our
culture.
We forbid suicide as a people. People who commit suicide are not given a decent burial. So what indoctrination is that, that persuades a young
person who (inaudible) the terrorists to strap himself and bomb people or to abduct children? This is an alien indoctrination. And part of the
strategy to deal with is to de-radicalize these people. They must be de- radicalized to become normal people again.
LAKE: Most certainly the challenge of our time. We thank you for coming in and talking to us about it and we continue to hold those girls and their
families in our thoughts. Thank you very much.
OGWU: Thank you very much, Maggie.
LAKE: Right now it is time to take a look at the global weather. Jenny Harrison is at the CNN International Weather Center. Hi there, Jenny.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Hey, Maggie, let's talk about the weekend and the heatwave of course that's continuing across
much of Europe. In fact, I say much of Europe, but it really is across the south, the northwest, the east as well. Little bit of a change in store
across the far northwest. This cloud that's coming in of course bringing one or two rain showers - some of them heavy at times. It'll cool things
down a little bit and also because of the heat -- all these sort of pop-up showers and thunderstorms they've been cropping up later on in the day,
particularly across there into Southern France.
Look at these high temperatures on Friday. In fact, even warmer in most cases than we saw on Thursday. Thirty-one Celsius in Lithuania, the
average is 20, 31 as well across into France and Paris, 30 Celsius in London. So, you get the general picture. And in fact, the next few days,
a few different cities here, but, again, holding steady at 29 in Helsinki, 31 in Moscow by Monday against an average of 23 and 31 as well in Warsaw on
Sunday and Monday - again, the average about 23 degrees Celsius.
Now, even, would you believe, up into the north of Scotland, Glasgow - 28 degrees Celsius. That was the high temperature this Friday. The average
is 19 for time of year. And even now coming up to 10 o'clock at night, it is 23 Celsius under good, clear skies. Unfortunately, doesn't look as if
those good, clear skies will continue for the Commonwealth Games. Remember we've got 71 countries and territories taking part. This is the rain
that's pushing in throughout the weekend. Up until now there's been a lot of indoor events - a lot of swimming, the table tennis, judo - those sort
of things.
So, not sure exactly what is taking place Saturday and Sunday, but at some point they'll be out there on the track. Let's hope there's not too much
taking place there. By Monday, it should be fine and dry again, and so far, of course this is only day two - Friday - of the Commonwealth Games,
there have been, last time I checked, 36 gold medals have been won so far. And those are just gold medals.
Now, as for the Tour de France, it is the last couple of days - Saturday and Sunday. On Saturday - this is stage 20 of 21, and it's the time
trials. So of course, not the usual distances, but even so, 54 kilometers and not bad weather. We've seen a lot of rain this year in the Tour de
France - some pretty heavy rain too at times. It's been a bit cooler as well, but 25/26 at finish. So, you get, again, the general idea there.
And it's pretty good because there's a lot of rain again around across much of Central Northern France and also stretching into the southeast. At
times, some heavier thunderstorms. Quite isolated but even so we've got a few warnings in place Friday continuing on into Saturday. You can see
little pockets of activity, particularly across into Northern and Central areas of Italy, and again the Southwest of France as you can see. But as I
say, we're actually heading just away from that (sunnyfer) Tour de France.
Temperatures on Saturday - 28 in London, so still above the average. Not as warm as it has been so that should come as a bit of relief. Thirty
Celsius though in Berlin and a very warm 37 in Madrid. Just a shade off 38 which is of course 100 degrees Fahrenheit. Maggie. Have a good weekend.
LAKE: All right, Jenny, same to you. Thank you so much. Amazon reported that their sales are booming, however it's still made a loss. Some
investors are getting impatient.
(COMMERCIAL BREAK)
LAKE: U.S. markets were down across the board Friday. Disappointing earnings from two heavy-hitters - Visa and Amazon dragged markets lower.
The Dow was off 3 quarters of a percent. The good news, Amazon sales were up more than 20 percent last quarter. The bad news, the company continues
to gamble on big investments and the company reported $126 million in losses. Amazon shares slumped nearly 10 percent. Visa gave back 3 and 1/2
percent this trading session after the credit card giant cut its revenue forecast for the year. It wasn't all doom and gloom on Wall Street.
Shares of Baidu bumped up over 10 percent, the Google of China saw a 34 percent rise in profits in the second quarter and said its investment in
mobile services was starting to pay off.
Now, activist investor Bill Ackman's threat to deliver a death blow to Herbalife hasn't quite worked out. If you take a look, shares initially
dipped when he issued the warning. Oh - do we have them? Issued the warning on - well, it's Friday. It'll come up. After a presentation on
Tuesday which he was meant to deliver the fatal blow, shares in Herbalife meanwhile spiked higher - not the effect he was looking for.
Ackman called the company a pyramid scheme, comparing their business to Enron, the mafia and other infamous organizations. He explained his reason
for going after Herbalife was personal and even became emotional. He had this message for Herbalife chief exec Michael Johnson.
(BEGIN VIDEOCLIP)
BILL ACKMAN: -- I then went to college. That was my grandfather's ambition. My father went to business school, OK. And I'm a huge
beneficiary, OK, of this country. OK? Michael Johnson is a predator, OK? This is a criminal enterprise, OK? I hope you're listening, Michael. And
it's time to shut the company down.
(END VIDEOCLIP)
LAKE: CNN Money's Cristina Alesci sat down with Bill Ackman and asked him to explain his argument against Herbalife practices.
(BEGIN VIDEOCLIP)
ACKMAN: The strategy he came up with is - they call - the bottom of the pyramid strategy. And was a strategy where they decided to target the
poorest people in the world. I mean, it sounds incredible but it's actually true. We presented a document which you can see on the web which
is an internal document of Herbalife where they made the case for pursuing this market. People who make $2 a day, $3 a day, $5 a day. And so you
have a company based in the United States that decided to target this population with a business opportunity which itself is a fraud. What we
showed is there's actually systematized training - what they call training - proved, supported by corporate headquarters. The most senior management
is aware of it, you have to register these clubs. You had up until very recently say it was a Club 100 club. Club 100 is one of these systemized
training programs. And they're sold as an education program. People get a university degree for finishing the program. But finishing the program
means you, your family members and your closest friends, your circle of influence as they call it have spent $3,000 over three months buying a very
large - you know, buying in effect 6/700 shakes. So it's a mini pyramid scheme within Herbalife.
CRISTINA ALESCI, BUSINESS NEWS CORRESPONDENT: One definitions of a pyramid scheme is of course you're selling a business opportunity and not a
product. But in these (mini/many) cases that you've identified, they are selling product too, right?
ACKMAN: Not really. Again, just like with Herbalife, they're selling a product. You know, when you pay $3,000 for the inventory, you're actually
buying products, but -
ALESCI: The (inaudible) are spending, $3, $4, $5 on a shake, right?
ACKMAN: -- you're not allowed to do any retail sales in the club. It's what they call a membership for $5. They have to buy a certain number of
shakes, they have to do training, they have to recruit people, they have to give testimonials. And all along the way, each day they're coming back
three times a week, four times a week - each day they come in, they buy the service and they recruit friends. They bring five friends with them the
next time who gets the service, and all those people added up get them ultimately to the $3,000 threshold. This creates the perception that
there's business that's happening.
ALESCI: I guess in the past, the company has been successful in distancing itself from any kind of activity that would be deemed being a pyramid
scheme.
ACKMAN: Successful depends on how you define it - short-term, long-term. I think ultimately that the company will be held to account for certainly
what the top distributors are doing. I mean, their two of the top distributors in the company are on the board, including - both of them run
or oversee nutrition clubs. So it's hard for the company to say they know nothing about it.
(END VIDEOCLIP)
LAKE: And we have breaking news coming in to CNN. A U.S. official has told both Reuters and AFP News services that Israel has agreed to a 12-hour
ceasefire in Gaza. The ceasefire is due to begin at 7 a.m. Saturday Gaza time - about seven hours from now. And we will be right back after the
break.
(COMMERCIAL BREAK)
LAKE: And finally tonight, we bid goodbye to Ace Greenberg, the former Bear Stearns chief exec helped build the company into an industry
powerhouse and stayed through its collapse. Greenberg started Bear Stearns as a clerk. In 2010 he told CNN he never missed a day of work after a bout
of colon cancer at the age of 31. This is "Quest Means" Business. I'm Maggie Lake in New York. Thanks for watching.
END
