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Quest Means Business
Breaking News: Iraqi PM Nouri al-Maliki Steps Down; Crisis in Ukraine; Ukrainian Economy Struggles; Euro Area Growth Stalls; Crisis in Iraq
Aired August 14, 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)
RICHARD QUEST, HOST: The market is closing, it's up some 60-odd points towards the end of the trading day. They've moved the gavel, it's
on the other side. He still hits it three times. I don't know why they always hit three times. It is -- it's Thursday, it's August the 14th.
Tonight, breaking news, we'll start. Iraq's prime minister is stepping down. You're going to hear the details from Baghdad in a moment.
Also, a country on the brink of war. A currency on the verge of collapse. Tonight's Ukraine economy minister tells me what happens next.
And growth has broken down. Europe hits a second quarter slump.
I'm Richard Quest. We have a very busy hour together, and I mean business.
Good evening, we start with breaking news, though. Nouri al-Maliki, the former prime minister, has now stepped down as the country's leader,
making way for Prime Minister-Designate Haider al-Abadi to become the new PM. Iraqi state television has reported in an urgent banner on Thursday.
Nick Paton Walsh is in Baghdad and joins me now. The decision for al- Maliki to go now was a manifestation of the obvious and the reality.
NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: And days, really, of pressure and the political writing on the wall here. We know
little about the conditions around this key statement, but we know now that, according to a banner on state television, he has taken the decision
to step down from power in favor of Haider al-Abadi.
Days, now, he appeared to defiantly be holding out in the hope that somehow someone may come to his rescue, holed up in the green zone with a
lot of loyal firepower, yesterday making a defiant speech, asking the federal courts to rule on the constitutionality of the new president
nominating Haider al-Abadi as prime minister-designate.
Hours ago, there was said to be an urgent announcement coming from Haider al-Abadi on television. We haven't heard that yet -- sorry, from
Nouri al-Maliki on television, we haven't heard that yet, but we have seen this urgent banner on the bottom of the screen saying that yes, he has
taken the decision to step down in favor of Haider al-Abadi.
A sigh of relief, I think, here for many in the capital of Iraq, Baghdad. You just saw there a power cut, precarious life here, but now
potentially a moment of political healing, perhaps, between the sectarian divides of this country. Many have been waiting for this daily tension to
pass, Richard.
QUEST: OK, now that might solve -- or at least pour some oil on the troubled waters of the domestic politics, but a shift from al-Maliki to al-
Abadi, what does that do for the battle in the north?
WALSH: Very simply, in the eyes of those in the international community, particularly the Americans, who wanted to see, quote, "more
national unity" before they bolster any aid to the Iraqi government here, it perhaps provides a degree of a clean slate.
Now, Haider al-Abadi, in the eyes of many, certainly Barack Obama, speaking hours ago, is somebody who could potentially heal the sectarian
divide. Nouri al-Maliki, a Shia who many accuse of targeting Sunni politicians, marginalizing Sunni communities during his years in power.
Haider al-Abadi is from a similar stock, the same party. Spent some time in London during the Saddam years, but is clearly in the eyes of the
White House somebody they feel more comfortable with.
Still someone to be tested, actually, in the office of government. Still to have a resounding endorsement by Sunni politicians, although the
Sunni speaker of parliament did shake his hand after he was nominated, so there is a glimmer of light there. But he has a very difficult job.
But I think for those who were sitting here watching this political deadlock, really, paralyze the country, the fact that it's now lifted is a
real cause for some sense of jubilation, perhaps premature. Richard?
QUEST: Nick, thank you. The moment you hear from al-Maliki in his resignation speech, please come back to us. We'll need to talk about that
in more detail with you.
Our other big story tonight, Vladimir Putin says he wants to stop the blood flowing in eastern Ukraine, and the humanitarian situation on the
ground is worsening. City leaders in Donetsk say shelling has hit nearly all districts of the city on Thursday, 74 people have died, and more than
100 have been injured in fighting in the past three days as Ukrainian forces try to encircle the rebel forces.
The convoy that Russia says is carrying humanitarian supplies is still outside Ukrainian borders. The Ukrainian government says it, too, is
sending much-needed aid to eastern Ukraine. If we put this in economic situations, come and join me at the super screen, and you'll see just how
the Ukrainian hryvnia -- the dollar -- has fared against the dollar, and what a dramatic --
Now, it's very interesting. We had this stability late last year, obviously. But then as Crimea picks up the pace, it goes down. Little bit
of an uptick, then once again, let's get right in there and you'll see, this latest crisis is pulling the market well and truly down. That's the
way things are looking now.
So, joining me now is the economy minister, joining me now, the economy minister, Pavlo Sheremeta. Minister, we need to begin with this
issue of the -- aid convoy that is heading towards Ukraine. What is it that the government fundamentally fears is happening with this convoy?
PAVLO SHEREMETA, UKRAINIAN ECONOMY AND TRADE MINISTER: Well, the worry that the Ukrainian government has is that through that very border,
there are lots of Russian militants with Russian weaponry coming in, so the natural worry, what kind of that convoy is?
So, that is why the Ukrainian government says that it will receive the convoy on the Ukrainian territory only under the strict supervision of the
International Red Cross.
QUEST: Right. So, let's be blunt about this, Minister. You're fundamentally saying you fear these trucks are not carrying water, rice,
and goods, but some of those trucks could be carrying arms, bullets, missiles, whatever.
SHEREMETA: Well, we just knew that this is coming through. So, that's why we are naturally worried. But trusting the International Red
Cross and trusting the supervision of the International Red Cross, we believe that the Red Cross will supervise and ensure that it's truly
humanitarian aid.
QUEST: Right. And is it your belief and your understanding that Russia will allow the Red Cross to intercept or to take control of this
convoy once it reaches your borders that will enable it to go down to Donetsk and the affected area?
SHEREMETA: Well, this is our request, and we believe that it should be done according to the international law, and we believe that the
International Red Cross is the best organization best-suited for this operation.
QUEST: We need to talk now about the economy and how the economy is weathering --
SHEREMETA: Sure.
QUEST: -- because you're about to apply for and receive the second tranche of the IMF loan, the IMF standby agreements and loans. There is a
vast difference in the geopolitical system today than when that loan was negotiated and agreed. Are the economic fundamentals vastly different as
well?
SHEREMETA: Yes, that's true. We have a seriously different situation, and we appreciate the understanding of the international
financial organizations of the situation that Ukraine is really in.
QUEST: But how can you convince the IMF now that it's not pouring more good money down the drain by continuing with a program in a country
which -- where there is still such a civil war taking place?
SHEREMETA: Richard, I have to tell you that I disagree it's a civil war going on in Ukraine. I visited Donetsk in the spring. It was peaceful
and quiet city, which tells that the situation that we have at the moment, this war conflict, is instigated from abroad.
And that's why our request to Russia that the best humanitarian aid would be actually to stop the inflow of militants and weaponry. And it's -
- actually, it's quite good that international financial organization understands, too, that this is not a civil war. Ukraine is not at war with
itself, not at all.
QUEST: Right. So, finally, Minister, are you seeing any signs of external investment coming into the country? Are you -- in your private
conversations with bankers and with Western companies, are they saying, "Get your act together and we'll plow some money in and build a factory" or
whatever?
SHEREMETA: Thank you, Richard, for that question. I'm meeting with - - in my capacity, of course -- I'm meeting with investors very regularly. And I should say it's a big interest to Ukraine. I usually have the halls
full of investors.
They are worried, of course. And absolutely the three worries that they have are that, when you guys will take full control of your country?
Are you guys serious about the corruption in your country? And the third one, what are you doing to be solvent?
And actually, on all three fronts, the Ukrainian government is going forward to ensure that we have the full control of our territory, that we
are serious to fight corruption, and to deregulate the business, to make it simpler, to make it less expensive so that all the investors, Ukrainian and
foreign investors, can get a good profit operating in Ukraine.
QUEST: Minister, thank you for joining us. You and I will talk many more times as these investment decisions and --
SHEREMETA: Thank you very much.
QUEST: -- as it moves forward. The minister joining me, there, from as you can see, it's a very busy day today.
Now, the crisis in Ukraine has hit Europe's economy hard, and worse may be to come, because it's still extremely early days. Eurozone GDP
stalled in the second quarter, according to this. And it actually surprised analysts.
So, if you take a look at the various performance, eurozone economies are most definitely running at different speeds, you can see in the car.
(CAR ENGINE SOUND EFFECT)
QUEST: You've got Germany, which of course is the star performer. It's consistently -- it's ahead of the bad performer in Italy. We know
that Italy is in recession, they are near the back, but Germany's number was considerably lower than expected. It was expected to have a reduction
of 0.1 percent -- 0.1 tenth of a percent. It was actually 0.2 tenths of a percent.
Moving forward, you've got -- or backwards if you like, you've got -- so, we've got Italy in recession, Germany slowing down, and then you've got
France, which is just basically stagnant at the moment.
The reason for France's stagnation, of course, is manifold. Austerity, it's all to do with the questions of what's happening with the
reforms and whether those reforms have actually been stalled.
The Russian sanctions, of course, are what is really causing the biggest headache and could be coming right across the road in the middle of
it. An escalation could fall -- could push the team further back. Germany is Russia's biggest trading partner. You get the idea of the way things --
One good performer, Portugal is pulling out the surprising, beating Spain, near towards the front of the pack.
Elga Bartsch is Morgan Stanley's chief European economist. She's optimistic about the team's chances.
(BEGIN VIDEO CLIP)
ELGA BARTSCH, CHIEF EUROPEAN ECONOMIST, MORGAN STANLEY: I actually think this is more a case of recovery interrupted than recovery aborted.
There are a number of special factors that dented second quarter GDP.
And I do think that growth will resume in the third quarter, and in particular in Germany, where these technical factors were particularly
severe. The payback from the unusual warm winter weather, for instance, that really hit the construction industry in the second quarter.
(END VIDEO CLIP)
QUEST: Joining me now, James Shugg, senior economist at Westpac. You and I spoke about this. One reason I really wanted to talk to you --
JAMES SHUGG, SENIOR ECONOMIST, WESTPAC: Hi, Richard.
QUEST: -- tonight, because we spoke a couple of -- I think it was last week or the week before that -- and we put it into some sort of
context. But I read your article, and I read your comments today. You're not worried about Germany, you're worried about France.
SHUGG: That's right. Absolutely. Germany, as we just heard, had a small contraction because the economy was actually very strong in the first
quarter because of mild weather.
But the French issue -- look, the economy is, as you said, is stagnant. It's an uncompetitive economy, because markets haven't forced
them to put in place reforms, like we've seen in places like Spain and Portugal, or because they haven't had some inspired leadership to direct
the economy in that direction, France is just being left behind.
The boss of Peugeot a year or so ago said that their most efficient plant is now in Spain. Spain's the star performer. They've gone through a
real tough time over the past few years, but they're coming out at the end with a more refined, efficient economy. And that's what's been
demonstrated by the figures, which showed 0.6 percent growth in the latest quarter, 0.4 percent in the previous quarter.
QUEST: I look at the eurozone and the E28 and the E18 numbers, and we're not quite talking about the whole lot falling back into recession,
but when you talk about the inflation number, which we saw, which was down at 0.4 tenths of a percent, you've got deflation, which has de facto
arrived.
You've got some major economies slowing down. Or maybe, James, we are talking about the potential for it slipping back into recession.
SHUGG: Look, Richard, the issue of deflation is a really concerning one. I'm sure the ECB council are thinking about this all the time.
Already, 40 percent of the population of the eurozone are living on the cusp of or actually in deflation. We've got Spain, Portugal, Italy on
zero. Estonia on zero. Slovakia and Greece. That's 6 of the 18, a third of the countries.
And that's why we need to look at the very weak growth numbers as well. Even if it is just a pause in the recovery, the ECB is likely to
want to do more in terms of policy to prevent deflation from becoming entrenched --
QUEST: Right.
SHUGG: -- and to ensure that the recovery is only pausing and that we see a bit of an uptick. And that's why we think there'll be an asset
purchase plan announced by ECB chief Draghi, probably by October.
QUEST: Asset purchase, LTRO, or they've given it a new acronym, IFLLTRO or something, which is even longer range. Thank you, sir, nice to
have you on the program again. Good to see you.
SHUGG: Thanks, Richard.
QUEST: Now, when we come back, President Obama says the situation for refugees trapped on Mount Sinjar is greatly improved. You're going to hear
from Iraq after the break.
(COMMERCIAL BREAK)
QUEST: Refugees trapped on the Sinjar Mountain in Iraq are now leaving safely, according to Barack Obama. The US military reports there
are fewer Yazidis stranded than originally thought. A major evacuation mission has been put on hold. The president says US airstrikes have put
ISIS fighters back.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Because of these efforts, we do not expect there to be an additional operation to evacuate
people off the mountain, and it's unlikely that we're going to need to continue humanitarian air drops on the mountain. The majority of the
military personnel who conducted the assessment will be leaving Iraq in the coming days.
(END VIDEO CLIP)
QUEST: Anna Coren is in Peshkhabour in Iraq, joins me now. Anna, good to see you. The situation -- the president seems to suggest -- well,
not seems to, he does suggest -- that the crisis may be over, or at least is not as bad as we'd have thought.
ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Well, Richard, from what we know, there are still thousands of people trapped on Mount Sinjar.
That's from local officials, that's from our reporting teams up here in Kurdistan.
So, while the situation may not be as dire, may not be the 20,000 to 40,000 that everyone initially thought, we still understand that there are
thousands of Yazidis who are on the mountain, whether they're the elderly, the sick, the young. And they still need safe passage.
So, the United States, as we have heard from President Obama, they are not going to intervene, they will not be taking part in airlifts that
everyone was gearing up for yesterday. But that will mean that the Kurdish forces, the Iraqi army will still have to get those people off the
mountain.
We spent the day, Richard, at a refugee camp very close to the Syrian border, where thousands of those Yazidis and other people from religious
minorities have ended up. That is now their indefinite home. And this place is a dust bowl in the plains of Kurdistan.
The United Nations, UNHCR, is struggling to keep up with the demand of these refugees crossing the border. We know that up to 70,000 have come
across that one border crossing in the last four days, let alone the 400,000 who have fled from Sinjar, that particular town that the ISIS
militants had descended upon, threatening genocide.
So, this is where these people are ending up. UNHCR is saying that they were not prepared, no one anticipated the exodus of people, which is
why the United Nations has issued its highest level of emergency to deal with the humanitarian crisis. One spokesperson described it as
catastrophic, so --
(CROSSTALK)
QUEST: I'm going to jump in -- Anna Coren --
COREN: -- the problem --
QUEST: Anna Coren, I'm just going to leave you there, forgive me for jumping in, Anna Coren. I need to take you straight away to Baghdad.
NOURI AL-MALIKI, OUTGOING PRIME MINISTER OF IRAQ (through translator): -- and when you elected me, democratically, until we have achieved the
highest numbers and we have garnered the highest votes as a political bloc in an historic day, which will be a day that will be remembered in the
historic democracy in Iraq.
And your favor will be a debt on me, and I will not leave my duty. And despite all the wounds that I have endured, and I will continue to
endure, even there was no spot in my body to take any other wounds, this is not a favor from me upon anybody else's, but it is my responsibility and my
legitimate duty to defend this country and defend the people.
Brothers and sisters, when we formed the government in 2006, the fighting was continued in the streets of the capital, and Baghdad was
besieged and the roads were closed, and the institutions and the government institutions were closed, universities were empty, and there were no vital
activity in the country, whether cultural or otherwise in the country.
And we -- I have become the prime minister at that time. And the presence of more than 150,000 foreign troops on Iraq and the security file
was deteriorating in Iraq. And while we have a huge terrorism attack on Iraq and a political process that was befallen with other groups who were
following an exterior motives and following other countries and foreign countries.
And we have achieved a major accomplishment, as far as rebuilding and reconstructions and reconstruction of the country, agricultural, and the
national initiative for housing, which contributed -- all these initiatives have contributed to large extent in providing a major development for the
country.
In addition, have given a major licenses to develop the gas and oil fields and to continue forward to increase the output of the oil and gas
and increase the foreign investments in Iraq and also increase the salaries of the bureaucratic people of Iraq and the employees.
And the Iraqi people will always remember all these developments and we'll achieve in the punishment of the former regime personnel. Iraq, when
it was isolated from the world, when I was the prime minister of Iraq in 2006, have regained its role, regionally and internationally, and the major
embassies have returned to Baghdad.
When it was for 20 years absent of Iraq and did not return to Baghdad, only a few countries at that time, that have come back to Iraq, did not
come back to Iraq, which are historic enemies to Iraq.
The people of Iraq, Iraq has faced a new terrorism threat at the beginning of 2012 when the Arab region was living the beginning of the
sectarian wars, a war that has been managed by international and regional agencies and --
QUEST: Nouri al-Maliki with his resignation speech justifying his years in office. He came into -- became prime minister in 2006. He's
going through a litany, a long list of the things that he's done and the way in which he says life has improved. He's starting to get to the latest
terrorism activity. Nick Paton Walsh is in Baghdad and joins me now.
A certain amount of self-justification, obviously, for his administration, but what -- an administration that the West widely regards
as having failed.
WALSH: Absolutely. And you can hear, really, in that not apologetic, as you say, self-justificationary tone, presumably how he needs to remind
Iraqis of what he considers to be the positive parts of his legacy, talking about agriculture, housing initiatives, raising the salaries of bureaucrats
and giving out oil and gas licenses.
But one particular moment of self-pity, I think it's fair to say, where he referred to how there was no spot left on his body to endure other
wounds. He also referred to what he said was his responsibility to defend his country.
But really, this moment of stepping down has been the result of weeks of pressure, but more recently, the past few days, were there were very few
people you could still find internationally and here in Iraq who supported, still, his belief that he could retain that particular post.
Clearly something, Richard, has happened in the past 24, 48 hours to convince him that it's safe now for him to relinquish power. And no
suggestion, perhaps, of any continued explicit role in politics that I heard during that speech, but certainly a man who is trying to define his
historical legacy with this speech, perhaps still going on now.
But bizarre that one of the things he would say is how major embassies have returned to Baghdad. This is hardly a city that can be enormously
proud of its security. And frankly, most of the people you talk to here say it hasn't really been so bad for them.
They have a group more extreme than al Qaeda marching through the north of the country, finding communities receptive to them because of the
sectarian divisions that many say Nouri al-Maliki has done little other than furiously ferment since he had his grip on power here.
(CROSSTALK)
QUEST: But -- but --
WALSH: So, perhaps many in Iraq breathing a sigh of relief this has past, Richard.
QUEST: Let's just briefly talk about that. The new government comes in, 30 days to form a cabinet. What's priority number one for al-Abadi?
WALSH: Well, I think al-Abadi has to show some sense of unity. That's the toughest one, but that's a pretty big gateway to what is,
effectively, priority number one, and that's getting international help onboard and getting Iraqi security forces together to fight ISIS.
That's clearly the priority. Unless they regain territory or at least reverse the advance of that militant group in the north, who are capturing
Mosul, many other key cities now. And if they reverse that, the country will be in serious trouble, if you can still Iraq a country as it used to
be in the past.
But to get that international aid, as Barack Obama said hours ago, he has to convince Washington and others that he is able to bridge those
sectarian divides, Richard.
QUEST: Nick Paton Walsh bringing us up to date. And obviously, Nick, if you hear anything particularly important and interesting in the
remainder of al-Maliki's speech, come back to us and we'll take -- of course come to you immediately.
Still to come, QUEST MEANS BUSINESS, as I promised you in the beginning, it was going to be a busy hour together. And a busy hour,
indeed, it is. Mexico's most significant reform in decades will make a long-running energy monopoly. The chief exec next.
(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 will always
come first.
Nouri al-Maliki has stepped down as Iraq's prime minister, making way for Prime Minister Haider al-Abadi to become the new leader. These are
live pictures from Baghdad. He's still speaking to the Iraqi people in a televised address which has now been going for some ten to 15 minutes. A
convoy of 280 Russian trucks is headed towards Ukraine. It's changed course. Moscow insists the trucks are carrying humanitarian needs and aid.
Speaking to me on "Quest Means Business," Ukraine's economy minister said Ukraine will not accept the convoy without Red Cross supervision.
President Obama's also called for peace and calm on the streets of Ferguson in Missouri. There've been violent classes between police and
protesters there after the shooting on Saturday of an unarmed teenager by a police officer. The new five-day ceasefire between Israel and Hamas
appears to be holding for now d87espite some rocket fire from Gaza and Israeli airstrikes that happened. The latest truce was reached in direct
negotiations between the two sides brokered by the Egyptians are underway in Cairo.
The wife of Robin Williams says the actor was struggling with the early stages of Parkinson's disease when he died. The 63-year-old was
found dead on Monday. Investigators believe he committed suicide. His wife said his sobriety was intact. Williams had spent time in rehab coping
with an alcohol problem.
After 76 years of state monopoly, Mexico's throwing open its energy sector to outside investment. About time say some, not a moment too soon
say others, and a very bad idea say further more. The government hopes the changes will help revive the sluggish economy. It's not a total free-for-
all. The state-owned oil company Pemex holds onto more than 80 percent of the country's proven and probable oil reserves - 80 percent. It will also
hold rights to 1/5th of the potential oil reserves. Now, Mexico will award contracts to private companies starting next year. Pemex chief executive
Emilio Lozoya spoke exclusively to our Nick Parker and told him what he thinks about the changes.
(END VIDEOCLIP)
EMILIO LOZOYA, CEO, PEMEX: Of the prospective resources we have received indeed 67 percent of what we asked for, so that is plenty for the
next decades, and Pemex will also be able to bid in the round one, round two, round three where the government auctions acreage for exploration. We
will be able to pursue specifically in those rounds, and we will do so.
NICK PARKER, CONTRIBUTOR, CNN.COM INTERNATIONAL: So you weren't disappointed by that at this stage?
LOZOYA: I'm not. Pemex is very satisfied with the result of ground zero.
PARKER: Of the resources that were granted you, which areas do you think you'll bring in foreign and possibly private partners?
LOZOYA: We would first focus on the acreage that will give us quick production. Those are the so-called mature fields. Those are fields that
today they are producing, but with more investment and up-to-date technology, you can increase the production levels relatively quickly. It
means in one or two years. In - and - a second priority, we will also partner in mature fields offshore. The first ones were onshore and in the
offshore sector. And third, we will be also looking at partnerships in areas such as deep waters where we need to diversify our financial and
operational risk.
PARKER: It seems you haven't requested much in the way of fracking and shale gas. Why is that?
LOZOYA: Because Pemex is a company that, due to its size, needs to be focused on material projects - on large-scale products that give us 50,
100, 200, hundreds of thousands of barrels of production per day. If we focus our effort in very small projects that give 100 or 500 barrels per
day of production, we are not utilizing our resources -- human and financial.
PARKER: And in terms of partners - let's look at the deep waters for instance - would you care to name any names of prospective partners you
might be interested in?
LOZOYA: We'll create a competitive environment, therefore I cannot name players today. But what I can tell you is that we will be actively
looking for the right partner for the right opportunity, not just one player for all. I mean, obviously this depends on the difficulty of the
resource, the financial needs. But what I can tell you is we will be wanting to work with world-class players.
PARKER: Do you think Mexico's done enough to entice some of these foreign majors into the country? Do you think the reforms were liberal
enough? What are you hearing from the majors when you speak to them?
LOZOYA: My sense is that there's a lot of appetite. We have continuous discussions and conversations for future collaboration with
majors, but as well with medium-sized companies for smaller type of - or medium-sized - projects. What I believe is that we have a very competitive
industry law as a result of the energy reform.
PARKER: When you look at the role of partnerships and foreign investment, you know, Pemex has historically been seen by some as an opaque
organization, you know, sometimes corrupt in some cases. What steps are you doing to try and address those concerns?
LOZOYA: Well, one of the main elements of a reform is competition and transparency. Competition means that we will need to partner on projects.
This is a great benefit to our organization. To the extent that we can partner with a large private company, that company - our partner - will
make sure that we do not overpay for the services that we contract. They will make sure that we minimize costs and therefore maximize profit.
(END VIDEOCLIP)
QUEST: That's the chief exec of Pemex exclusively talking to Nick Parker. Coming up after the break, Road Rage, Uber and Lyft are accusing
each other of nasty tactics to get ahead, to get you into the back of their vehicle.
(COMMERCIAL BREAK)
QUEST: Now we all know Uber, the car scheme once (ph) you get the usual mobile phone. But it's been a rough week for Uber. Berlin has
banned the ride service because of safety concerns. The city has ruled Uber's unverified drivers and unlicensed vehicles do not meet regulations.
The company has drivers who have faced fines more than $26,000 for disobeying.
In New York, Uber faces accusations of foul play from a competitor. Lyft told CNNmoney Uber employees have ordered and canceled more than 5,000
Lyft rides. The bogus requests wastes (ph) resorters (ph) and clog availability. Uber's fought back saying Lyft has canceled nearly 13,000
Uber rides and claims Lyft investors have urged Uber to buy their company. CNN money tech correspondent Laurie Segall joins me now. What is - all
right - what's at the heart of this is basic raw competition. Some people don't like Uber because they say it's taken their business (inaudible)
protect it, but they say also - Uber says - they're just being healthy competitors.
LAURIE SEGALL, TECHNOLOGY CORRESPONDENT FOR CNNMONEY: Absolutely, and what you're beginning to see is these two companies in this industry are
going head-to-head. Now, Uber is a huge competitor, right. Uber's worth $18.2 billion, you've got Lyft valued at something like $700 million. But
right now is this very interesting time where both of these companies are up against government. You see what's happened in Berlin. This also
happened before in Hamburg. You see that all across Europe there were protests because of these entrenched industries.
QUEST: But consumers like Uber.
SEGALL: But that's the thing -
QUEST: That's the point.
SEGALL: -- and if you ask these founders - and I've asked both of these founders - and you ask them about this, they say at the end of the
day, our audience, the people that use us, are active on social media, they're using this. They will fight the fight for it.
QUEST: But here we have a situation where Uber is fighting regulators and traditional taxi companies - in London for example - and there was a -
but they're also fighting their competitor. So, mine enemy is not my friend.
SEGALL: Absolutely now. I mean, look, at some point you would think maybe these guys would get together and they would actually go and go up
against these huge, entrenched industries, but they are not . They are known - if you go to Silicon Valley, these companies are known not to like
one another, Richard. And what you're holding right now -
QUEST: Yes, I mean -
SEGALL: -- let me explain this. This is at the heart of this. OK, Uber likes to say we're this very competitive, we are going to completely
change the market. Lyft likes to say we're a community - they have a lighter sense. See that mustache you're holding up right there -
QUEST: The Zipcar mentality.
SEGALL: -- right, they put these on a car -
QUEST: Yes, but it doesn't, it doesn't hold for all cars.
SEGALL: -- they want you to - . At the end of the day, what's going to matter is how many users you are, if you're able to break down the
barriers, and this why you're seeing such fierce competition with one another.
QUEST: But, OK, you've got Uber, you've got Lyft, you've got Hailo in the U.K. - you've got all these competing companies. But there's a
revolution underway in terms of transportation, and maybe traditional structures do not allow easy access, if that makes sense. In other words,
we're watching it being a new industry being created before our eyes.
SEGALL: Well we absolutely are. And it's an interesting point to make because we're watching this industry happening and this is true
disruption. It's the same type of disruption that's happening with Airbnb. But if you look - and that's what's happening in the housing department -
but if you look, Airbnb doesn't have a thousand direct competitors. Uber, which is huge in the marketplace has Lyft, and they are willing to play
these tricks, they're willing - I've spoken to Travis before the CEO, and he says they are sometimes very enthusiastic about their business
practices.
QUEST: You keep this.
SEGALL: It's all yours. I'm giving it to you now. (LAUGHTER).
QUEST: Thank you. Now to the weather forecast. Jenny Harrison is at the World Weather Center. This might - this might catch on, Ms. Harrison.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: It's not even a starter there - it looks like a boat. Doesn't even look like a mustache.
Terrible. Yes, it's good to cover up more of your face. Well it's even better - that's better, thank you very much. Look, Europe, weather - rain,
hail. We've been talking about of course the rains in the U.S., well, I've also been talking about the fact we've seen a lot of rain in the - parts of
- Europe for the last, well, couple of weeks, even really the last month. More again in the last few hours across the central and eastern portions.
And in fact look at this - 143 millimeters on Thursday in Croatia and hail - very large and potentially damaging hail. Eight centimeters in diameter
in Russia, 6 centimeters in Ukraine. So, some very, very stormy conditions.
There's more rain on the way, some at times will be quite heavy - that area there pushing its way into central and eastern Poland. And also, you
know, it is the time one or two very light sort of sleet and snow flurries to the mountains. This has been pretty much the theme since the middle of
July - we've had warm, above-average temperatures and try across northern and eastern Europe.
And we've seen this very cool and very wet, unsettled pattern across those central areas. So it has given rise to this - all these areas in
green have seen as much as 50 millimeters or 2 inches of rain above the average. We've seen in some areas in the darker green up to 100
millimeters and some areas - central France and here across into the southeast - we've seen as much as 150 millimeters of rain above the
average. So it really has been very unsettled and very wet.
And guess what? There's more showers on the way. They are fairly scattered and light, but as I say, you could see it at the end of the
forecast - some heavy rain pushing its way through central and eastern areas of Poland. So, again, a few more warnings in place. We've seen that
hail in Ukraine, Russia is pushing up as you can see into Belarus and into the Baltic countries as well. That is where we could see again some more
large damaging hail and some very heavy amounts of rain.
Now, putting it a little bit different, luckily the rain not make it this far south into southern Italy or indeed Sicily. This, I want to show
you this all in its full glory. This picture was taken by a couple of the astronauts up there on the space station. You're looking at Mount Aetna
from space. Alexander Gerst was one of the astronauts, and in this one, this is taken by Reid Wiseman.
This is at night time and, again, you can see that little dot in the middle of the red circle. That is actually the lava that has been erupting
for the last several days. Here's a nice image of Mount Aetna. Of course it's been erupting for thousands of years, but this particular eruption
lately, there's quite a bit of ash of course being burned up there. But it's not enough or significant enough that they're having to evacuate any
of the mountain villages.
So, this is what it looks like by day and by night of course you can really see the larva. So it just at the moment is giving a spectacular
display. Hopefully that's all it will be. At last month, they did actually have to close some of the airspace because of obviously all of the
ash up there, but for now, things are still operating as normal. Now, temperature-wise when we get to Friday, we've got 28 Celsius in Rome, 32 in
Madrid and just 21 Celsius in Paris. So, again, remember it could be very unsettled.
This is a picture Thursday in Islip in New York. Look at how deep that water was. The good news here, Richard, all of that rain is cleared
out of the northeast and things are finally drying up. The sunshine has returned.
QUEST: Jenny Harrison, thank you. Now, to the height of August, time to kick away and get away from the stress of the office. In a moment,
dealing with the work e-mails piling up. One company has a particularly original suggestion. And while you're out of the office, --
(BEGIN VIDEOCLIP)
QUEST: -- find out why I'm getting drenched and why some of the biggest chief execs are doing the same.
(COMMERCIAL BREAK)
QUEST: It's that time of the year. It is August, it's vacation time in the northern hemisphere, and the work-life balance has never been
sharper in relief at this time of the year. It's the classic dilemma of all time. When we're on holiday, do we keep our eyes glued to the e-mail
on our smartphones or do we unwind and give our attention to families, friends and let the e-mail box fill up? Now, a very interesting
development has taken place over the last few days. Daimler -
(AUTOMATED VOICE -- "YOU'VE GOT MAIL")
QUEST: -- has come up with a solution for handling those e-mails. Again, you've got mail while on holiday. The answer for Daimler - send
them straight to the recycling bin. Employees can now switch on a version of out of office - `Mail on Holiday' which is absolutely fascinating
because what happens is with `Mail on Holiday,' they start back after the holidays with a clean desk because literally all the e-mails - there's no
traffic jam in the inbox, that's an emotional relief. Because the e-mails are sent straight back to the sender with an alternative person to deal
with telling you why that the person is on holiday. Jacqueline Whitmore is a business etiquette export joins me now from Nashville, Tennessee. We're
always glad to have your guidance, ma'am, to help us through these tricky moments in the office on etiquette. What do you make of the Daimler
suggestion to switch on your `out of office' and switch off all your e- mails?
JACQUELINE WHITMORE, AUTHOR, "POISED FOR SUCCESS": I love it, Richard, I think it's a great idea. I think every company should do it. I
think that we should start right now in the U.S. implementing the policy and do it well.
QUEST: What is good etiquette for e-mails at holiday time? Give me the top tip of dos and don'ts.
WHITMORE: You have to set your auto responder and let people know who to reach in your absence. That's first and foremost because it's very
frustrating for a client or customer to contact you and not get a response. So I would think that is the most important point. Also, check with your
supervisor, let that person know if you can't be reached, if you're going to be traveling internationally and the Internet body, let that person know
-
QUEST: Jacqueline, Jacqueline -
WHITMORE: -- so you won't get in trouble.
QUEST: -- ah, come on! This is all good great practice, but you know the real politic of the office. If you're not seen to be a team player, if
you're not seen to be available, if you're not seen to be answering e-mails on holiday - ooh - `That Quest, we know what he's like, ooh, bit of a
slacker.'
WHITMORE: Yes, and I'm on holiday this week and I'm checking my e- mail all the time, but I own my own business. But if you --
QUEST: You hypocrite!
WHITMORE: -- have a company that is telling you - I know, I know - but if I worked for a company that said I didn't have to check my e-mail, I
wouldn't check my e-mail. Wow, what a relief that would be.
QUEST: All right, now, what about this - so you're on holiday - again, I fully understand you own your own company - it's your profits,
you've got to make the money. But let's say I work for CNN, and frankly when I'm on holiday and I answer my mobile phone and it's a colleague who's
ringing me or it could be a contact or it could be a story or whatever. What do I say?
WHITMORE: What do you say to that person? I'm on holiday, or just don't answer your phone. That's the main rule. If you don't want to be
reached, don't answer your phone. Let it roll over to voicemail or send them somebody else who can take your calls. And I know you, Richard,
you've got people to take your calls.
QUEST: I have an entire army of them - not. A little tape recorder -
WHITMORE: Yes you do - I know.
QUEST: Right.
WHITMORE: I've been with you, I know.
QUEST: The truth of it is we are - finally on sort of a bigger issue here - we are no doubt facing a new environment. The rules of the road for
this digital age and communication are being written before our very eyes.
WHITMORE: Yes, and I don't think we should be afraid to say no, but also we need to be aware of our corporate boundaries, we need to be aware
of the rules and that's why I always suggest checking with the your team or your supervisor -
QUEST: Right.
WHITMORE: -- to make sure that someone is covering your job when you're off lying on the beach sipping a martini somewhere.
QUEST: Whew. I shall invite you along. Thank you very much. On holiday, on holiday -
WHITMORE: Thank you.
QUEST: -- she answers e-mails, she does interviews, but it's great to have her on the program and we're very glad that she does. Sometimes the
office can be ditched for a bit of fun at work. It's called the ice bucket challenge, and it's been sweeping across Facebook. Have a watch and you'll
see. It's bizarre. Users are filled with videos of friends dumping buckets of ice water on their heads and challenging others to do the same.
Get in there and you'll see what I'm talking about. It's all to do with raising awareness for ALS. Now, the Facebook chief exec Mark Zuckerberg
himself has taken the plunge.
(BEGIN VIDEOCLIP)
MARK ZUCKERBERG, CO-FOUNDER AND CEO, FACEBOOK: After I dump this bucket of ice on my head, I get to nominate three new people to challenge,
so I'm going to challenge Bill Gates, my partner at Facebook, Sheryl Sandberg, and Netflix's founder and CEO, Reed Hastings to do this within
the next 24 hours. You have 24 hours to do this or you have to donate $100. All right, here we go. That was really cold.
(END VIDEOCLIP)
QUEST: The Microsoft chief exec Satya Nadella has done the challenge. He nominated Jeff Bezos of Amazon and Larry Page of Google. I know only
too well from filming this on CNN "Business Traveller" for being drenched with water isn't as easy as it looks.
(SHOWS VIDEOCLIP OF QUEST BEING DRENCHED IN WATER)
QUEST: We had to do it again and again and again. A "Profitable Moment" next.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." In the old days, you went on holiday and you couldn't be reached. If you didn't have a land line, you
didn't have e-mail, there were no mobile phones. It was all very simple, you came back refreshed and you got on with the work that was on your desk.
Today that simply doesn't exist nor is it an option simply to say I'm on holiday, I'm not doing any work. Anybody with a job of any responsibility
realizes and recognizes the need to take a little bit of work with them. You have to be acrust (ph) to make sure the fires only smolder and don't
become vast conflagrations.
But here's the point - if you have a job of responsibility, it also is - requires - a discipline to know when to say `no.' When to actually say
`I'm not doing that. I'm only going to check e-mails half an hour in the evening and I'm not going to get involved.' What do I do? I set aside a
very fixed amount of time - I don't reply to all e-mails, I certainly don't get involved in long e-mail chains, and I use a little sequence RAU - read
and understood. Just send that back to half the people who write to you and they'll soon go away.
E-mails are the scourge of our time. What we have to practice is not becoming the victims of tyranny of urgency. And that's "Quest Means
Business" tonight. I'm Richard Quest (RINGS BELL) who doesn't do anything from what I've just said. Whatever you're up to in the hours ahead, I hope
it's profitable. I'll see you tomorrow.
END
