Return to Transcripts main page
Quest Means Business
IMF Says Ebola Poses "Significant Risk" to Global Economy; Ebola Outbreak Hurting Flight Demand to Africa; CDC Issues Guidance to Air Travelers; Liberia May Prosecute US Ebola Patient; Dow Recovers After Early Losses; European Stocks Fall After ECB Meeting; Protests Outside ECB Meeting Grow Violent; ECB's $1.3 Trillion Stimulus Plan; Daimler's Plan to Rev Up Sales; World Bank Warns Ukraine Economy to Shrink 8 Percent; Tomorrow Transformed: Mass-Transit Model for America
Aired October 02, 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 markets close out a rocky session on Wall Street. It's Wednesday, October the 2nd.
Tonight, the aviation world responds to Ebola as airports set up screening. The Emirates chief executive says it's anyone's guess when
flights return to Guinea.
Protesters in Naples give the ECB a rough reception. Mario Draghi says, "I understand your anger."
And deadlock in Hong Kong. The region's chief executive says he's not going anywhere.
I'm Maggie Lake, this is QUEST MEANS BUSINESS.
Good evening. Tonight, the IMF warns Ebola could pose significant risk to the global economy. The IMF chief, Christine Lagarde, says the
recovery looks "brittle, uneven, and beset by risks." She's calling for policymakers to combat what she calls the "new mediocre," which is clouding
the future.
Speaking in Washington, Lagarde warned the IMF is about to cut its forecast for global growth. She said it's time to stop talking about Ebola
and take action.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: If it is not contained, if all the players that talk about it don't actually
do something about it to try to stop it, contain it, and help those three countries deal with it, it might develop into something that would be a
very serious concern and could cause significant risks.
(END VIDEO CLIP)
LAKE: More than 3300 people have died in the latest outbreak. The World Health Organization says more than 7,000 cases of the disease have
been identified. The vast majority of those in Sierra Leone, Guinea, and Liberia. Health systems in those countries are not equipped to deal with
the influx of patients. Victims are being turned away from overcrowded treatment centers.
At a conference held in the UK to try and raise money for the fight, Sierra Leone's high commissioner issued a plea for supplies of all kinds.
(BEGIN VIDEO CLIP)
EDWARD TURAY, SIERRA LEONE HIGH COMMISSIONER FOR UK: We need medicines, we need equipment, aprons, masks, and everything with it. We
need chlorine. We need everything. It is a global issue because people travel. Most have heard of what's happening in America. Ebola's flown
from Liberia to Dallas in Texas. That's the beginning.
(END VIDEO CLIP)
LAKE: Emirates chief executive says the outbreak is hurting demand for air travel between Asia and Africa. The airline has suspended flights
to Guinea. It's still flying to Ghana, the Ivory Coast, and Nigeria. Emirates CEO Tim Clark told our own John Defterios that he has no plans to
stop flying.
(BEGIN VIDEOTAPE)
TIM CLARK, PRESIDENT, EMIRATES AIRLINES: The way we deal with Ebola is that this is something that we must adjust. We've had to suspend our
Conakry operations because there was existential evidence that this was likely to cause issues with regard to passengers going in and out, so we
had to suspend it. But it is a suspension, not a cancellation.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: At this stage, you don't see a reason to suspend operations into other West African routes?
CLARK: I don't. I -- we are assessing this constantly.
DEFTERIOS: When would you bring back the Guinea flight? That would be kind of an indication we've gotten over the worst.
CLARK: I would suggest that when the World Health Organization is satisfied that this is under control. It hit Guinea quite badly, they got
it under control, then it flared up again. And then it started to appear in other African countries.
So clearly, the measures that they took at the time weren't sufficient to be able to contain it, and it has spread. But my own view is that as
soon as we get the green light from the World Health Organization, then hopefully we'll be able to restart.
DEFTERIOS: But are we seeing like a six-month window before we get clearance of any idea of whether it's under control or not --
(CROSSTALK)
CLARK: I don't know.
DEFTERIOS: Is that what we're looking at?
CLARK: It's got to be anybody's guess. All I know is that there is - - whereas there might have been a denial in the West that this was a big problem, now the West understands the nature of the problem, and they are
stepping up fairly rapidly as countries rather than volunteer agencies in America or Europe, whatever. Countries are actually saying we have to do
something about this.
DEFTERIOS: In fact, West Africa is a big growth story now. Does Ebola start to gut that growth story, in your view?
CLARK: No. Not in my view. We opened Abuja on the 4th of August, and that has been full since the day we started, and we have a daily
operation. So, demand from West Africa, the countries that we serve, remains very strong.
DEFTERIOS: We've often talked here in the UAE about the connection between Africa and Asia and using Dubai as a bridge between the two. Are
the Asians starting to slow down their visits to Africa with alarm?
CLARK: Certain segments of that demand are affected. But the business community is the business community. It takes a lot to arrest
what they do. So, even at times of adversity, both in economic trading conditions and some of the things you mentioned, like Ebola, we still push
on.
(END VIDEOTAPE)
LAKE: In the US, the CDC is ramping up efforts to alert air travelers about Ebola. Passengers arriving at US airports from countries affected by
Ebola are now being given these sheets, information sheets. There is a lot of information on here, but importantly, they point out what to do once
you're here.
And that is, travelers are warned to monitor their health for 21 days, that means taking their temperature every morning and at night. People
exposed to Ebola are urged to call a doctor even if they have no symptoms. And doctors are advised to isolate patients who show symptoms of the
disease.
These measures come as we learn more about the first patient to be diagnosed with Ebola in the US. Liberian officials say Thomas Eric Duncan
was screened for Ebola before boarding a flight to Brussels and showed no symptoms.
From Brussels, Duncan flew to Washington's Dulles Airport, where he transferred to a flight to Dallas. Liberian officials say they may
prosecute Duncan if they determined he lied during his health screening.
Our aviation and regulation correspondent Rene Marsh is at Washington Dulles and she joins us now. And Rene, I think this really highlights the
difficulty. Not only do passengers know what to do, we have to trust that they're telling the truth.
RENE MARSH, CNN AVIATION AND REGULATION CORRESPONDENT: Absolutely. And just to bring it back to this individual, he was actually screened
three times -- screened three times. And the officials did not see anything that would stop him from boarding that plane. The three times I'm
speaking about is before he departed Liberia.
As you mentioned, he ended up passing through Washington Dulles Airport. He had a layover here for three hours. We do know that there are
procedures in place at US airports for people who are coming in from these Ebola-impacted countries.
We are told that CBP customs officers are trained to look for specific symptoms related to Ebola. They're also trained to ask questions about
where they're coming from, how long they were there, what kind of contact they had. Also visually looking for any indication that this individual
may be sick.
Now, of course, these are not doctors, so these customs officers are not able to diagnose. But they are able to look for possible red flags,
and when they do see something, they do turn this individual over to CDC. And at airports like Dulles, here, the CDC has a presence. So, they have
their own office here.
You talked about those fliers, there, Maggie. We know that they started doing that yesterday, where they are physically putting -- at least
that's what we're told -- putting these fliers in the hands of passengers coming from these countries.
However, I just spent some time here at Dulles, and I spoke to a man who just flew in from West Africa, and I asked him if he received one of
those fliers. He did not. However, there was posting -- a posting on the wall here at Dulles, so he did get the information.
I asked him what kind of questions they asked. They asked where he was coming from. They also asked how much time he spent there. But they
didn't ask him about the kind of physical contact he may have had with individuals. He was specifically flying in from Nigeria.
So, that was just the situation for one flier. But again, customs and the CDC saying they are very confident in the system that they have set up
here in the US. Maggie?
LAKE: They do. And Rene, it's a system that's getting ramped up and everyone trained up to deal with this. Nigeria, of course, not one of the
most-affected areas. But still, this does raise questions. I'm wondering if you got a chance to talk to any passengers.
We don't know in this situation whether this man, the patient in Dallas, was telling the full truth or not. But part of the problem is,
people aren't necessarily exhibiting symptoms right away. They may not realize they're infected. Does it concern other passengers that they may
be in a layover in a lounge with someone who may have Ebola and doesn't even know it?
MARSH: Well, two points there. The first point is, you're absolutely right. Just like in this first case here in the US, individuals may not be
displaying symptoms as yet. We know the incubation period is anywhere from two days to 21 days.
And speaking with experts, infectious disease experts, therein lies the problem. You can have CBP trained to weed out these individuals, but
if they don't outwardly display any symptoms, the screening is useful, but it's not 100 percent fool-proof. And so, experts I spoke to say it's not
impossible that another person infected with Ebola can make it here to the United States.
As far as how passengers feel about this, I spoke to one passenger who said he was pretty informed about the issue and he brought up this point:
if someone isn't displaying symptoms, that means they're not contagious. And so he said this particular individual that his level of concern is
extremely low at this point. He had faith in the system that is set up here in the US.
LAKE: Well, that is encouraging. And Rene, the information seems to be the best defense, so at least the word is getting out, and that's
important. Rene Marsh for us, thank you so much.
Well, the Liberian president Ellen Johnson Sirleaf said she was saddened and very angry with the Ebola suffering for traveling to the US
with the virus.
Now, time to turn our attention to the markets. And US stocks powered back after early losses. The Dow ended the day down around just about 4
points. The recovery was led by smaller companies, the number for Americans filing for unemployment unexpectedly fell. That comes ahead of
the US jobs report due to be released Friday morning. We will be watching it closely.
Violence, water canon, and explosions. That's what surrounded Thursday's meeting of the European Central Bank in picturesque Naples. The
bank's president the people should b upset, just not with him. More after the break.
(COMMERCIAL BREAK)
LAKE: The European Central Bank says it's going on a $1.3 trillion asset buying spree, hoping to breathe life into the continent's ailing
economy. The view of investors is clear: that's not enough. It was all down arrows for the European markets Thursday. The London FTSE, Paris CAC,
and Xetra DAX all posted heavy losses.
Elsewhere in Europe, the slide was even worse. The exchange in Madrid was down over 3 percent, and investors in Milan sent Italy's main exchange
plunging closer to 4 percent. As you can see, some pretty ugly numbers.
Well, in Italy, tensions were running hot. Violent protests took place in Naples outside of the ECB meeting. Police suited up in riot gear
and turned water canons on some of the crowd. Some of the 4,000 campaigners carried anti-austerity banners.
Mario Draghi, the central bank's president, said he understood why people are angry, though he said that anger is misdirected.
(BEGIN VIDEO CLIP)
MARIO DRAGHI, PRESIDENT, EUROPEAN CENTRAL BANK: We understand the reasons and frankly have to do with what I said before, namely the weak
situation of this country, the weak economy and so on.
But what I find in need to be corrected is the perception that the ECB is somehow at the origin -- is guilty and is at the origin of this
situation
(END VIDEO CLIP)
LAKE: Randall Kroszner is professor at the University of Chicago Booth School of Business, and he joins us now from Chicago. Great to see
you tonight. Mario Draghi feeling and sounding a little bit defensive there. Did he do enough today? Investors seemed disappointed. Did he
need to go further?
RANDALL KROSZNER, PROFESSOR, UNIVERSITY OF CHICAGO BOOTH SCHOOL OF BUSINESS: Well, I think ultimately the ECB will need to go further, but
you have to remember that President Draghi has a board that he has to deal with at the ECB. So, there are very different views around that table.
But I think in order to be able to fight deflation in Europe, they're going to have to do a lot more than they're doing now.
LAKE: Randall, I'm glad you brought that up, the dreaded D word. It's something central bankers dread, it's very hard to rectify --
KROSZNER: Yes.
LAKE: Do you feel that there's a real threat that Europe is going to be gripped by deflation?
KROSZNER: Well, I think we've been seeing a slow decline in inflation, now getting down very, very close to zero and close to the
dangerous deflation zone. Something like this did happen in Japan, where it slowly went down -- inflation went down and then went into negative
territory.
I think Mario Draghi really wants to respond to that, but as I said, there are different views around the table. And it's also, I think, much
more of a challenge in Europe to do that than we're able to do in the US to defend against deflation.
LAKE: Absolutely. I want to talk about the US, but I just want to finish off with Europe. It's a difficult situation. Draghi has expressed
frustration. Everyone seems to acknowledge the ECB alone can't do this. Yes, maybe they should be doing more, maybe they're moving too slow, but
ultimately, the solution is going to have to lie with the politicians, isn't it?
KROSZNER: Ultimately, you need to have enough confidence for businesses to invest and to hire. And we don't have that confidence -- or
I think most Europeans don't have that confidence in their politicians, and so the central bank can do what's necessary to fight deflation.
But that's not enough to really get things going. You really need to -- you need to fight the deflation, that's necessary, but what's sufficient
is for the politicians to get their act together, have enough confidence for people to invest and hire.
LAKE: Randall, what does this mean for the global economy? How much of a problem is it? We see the US recovering, we've got a very important
jobs number tomorrow, but the recovery seems to really be flourishing if we look at some of the data here.
Can the US thrive without Europe moving along? And we also see signs of weakness in Asia. Christine Lagarde said she's worried about global
growth. Do you share that concern?
KROSZNER: So, I think there are real concerns about global growth, and I think there are some concerns in the US also. The unemployment rate
certainly has come down to 6.1 percent, which is good. But there are still a lot of people who have part-time jobs who would prefer full-time jobs.
There are a lot of people who've just dropped out of looking for a job and not part of the labor force.
So, we're still somewhat fragile here. We're looking better than most of our counterparts around the world, but I wouldn't want to open the
champagne bottles and celebrate quite yet.
LAKE: That's right, it's a relative game right now, isn't it? Randall Kroszner, always great to see you.
KROSZNER: Yes.
LAKE: Thank you so much for joining us.
KROSZNER: Bye-bye.
LAKE: Well, with the German economy slowing, Daimler's CEO Dieter Zetsche is hoping to generate some excitement at the Paris Auto Show for
his Mercedes-Benz brand. CNN's Jim Boulden caught up with him earlier and began by asking whether tepid growth in Europe is a major concern.
(BEGIN VIDEOTAPE)
DIETER ZETSCHE, CEO, DAIMLER: It's clear that we are not living on an island separated from the world. But still, even in Europe, where economy
is slow and slowing down a little bit more, the growth is slowing down, we have last month, for instance, a sales increase of about 16 percent. So,
we are doing really strong based on our great new product, which is very, very well-received in basically all markets.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Of course, China's always important, so I must ask you about China. I think Mercedes-Benz
obviously, China very important, you went in there very early. Are you seeing that as one of your main drivers for growth?
ZETSCHE: Definitely. The market altogether has -- continues to have strong growth potential. The premium market even more so. We have a gap
to our two main competitors, as we came later. And our challenge is to catch up, and that's exactly what we are doing.
BOULDEN: You've said that your sales in Russia are fine. Is that exactly what's happening now?
ZETSCHE: Well, the first six months in Russia, we had sales being up 20 percent over last year. In the last three months we were up like 3, 4
percent. So, we have not seen anything of the total market decline, which has been reported.
BOULDEN: So, what's fun this year? What are you seeing at the auto show? What's fun for 2014? What are your customers looking for?
ZETSCHE; Well, it's both ends. On the one hand, people continue to be emotional about cars. There's some great design, there are high
performance. At the same time, of course, there are environmental issues, continue to be important, electric cars, there are hybrid cars, low fuel
consumption.
We have the best of both worlds. For instance, our new S500 plug-in hybrid offers zero to a hundred in five seconds with a fuel consumption of
2.8 liters or 65 grams CO. This is unbelievable. This is the plug-in hybrid technology which makes that possible.
BOULDEN: I think we also see a lot of cars looking more sporty than they used to, even ones that maybe we would have of being sort of safe,
reliable, straightforward-looking cars are now becoming just a tad more sporty. So, clearly you see a market there.
ZETSCHE: Definitely. We think that this combination of the one hand emotions around the car, selling dreams, and on the other hand, very
rational arguments, safety, assistance systems which prevent accidents. This combination is very much satisfying our customers, and that's what
drives our momentum.
(END VIDEOTAPE)
LAKE: The World Bank says Ukraine is facing unprecedented challenges and risks. It's now predicting that the economy will decline by 8 percent
this year and by 1 percent next year. The World Bank country director for Ukraine joins me now live from Kiev. Our welcome to Qimiao Fan to QUEST
MEANS BUSINESS. Thank you so much for being with us.
A decline of 8 percent, that's a pretty staggering forecast. What is that going to mean to people living in Ukraine to the citizens there?
QIMIAO FAN, UKRAINE COUNTRY DIRECTOR, WORLD BANK: Clearly this is a very significant decline. And the main reason is really because of the
continued conflict in the east, which has disrupted seriously economic activities, particularly industry.
As you know, that region is the industrial base of the country, which accounts for about a quarter of the country's overall industrial output.
So, it is a very serious decline. Obviously, it will have some impact both on the budget as well as particularly on the living standards of various
people living in those areas as well as in the country.
LAKE: This is a difficult situation for any government to grapple with. This is a relatively new government. What can the World Bank do to
help the situation?
FAN: Well, we -- actually we are, as you know, the World Bank is one of the largest international of the partners here today supporting Ukraine.
We're doing a number of things. First of all, we're providing advice to the government on some of the tough structural reforms.
Second, we have committed to provide up to $3.5 billion this calendar year, which is a very significant amount. And I'm glad to say that in the
last few months alone, our board has already approved $2.5 billion.
Some of this money will go into the budget, which will help them in terms of the social spending. A significant part of the money will also
help to invest in basic public services, like water, waste water treatment, district heating, routes, and electricity. So these are obviously very
important. These are services that affect the lives of ordinary people.
And of course, we are continuing to develop our international finance corporation, which works directly with the private sector and our guarantee
agency, MIGA, to provide both direct lending to the private sector as well as guarantees for foreign investors who are investing in the country.
LAKE: Qimiao, let me ask you, you're forecasting an 8 percent decline. Right now, the weather is still relatively warm, Ukraine and
Russia are still locked in disagreements over energy. Energy is cut off. What happens to Ukraine's economy when the cold winter weather hits? How
worried are you about energy supplies?
FAN: Clearly, I think this is a concern of everybody. It is very important that a solution is found in the supply of gas. Where I think
they do have some significant gas in the ground storage area, which will provide some relief.
But it's also interesting to note that as the prices for gas and district heating increase, this will also help in some way to really
provide incentives for people to save more energy. As you know, Ukraine is actually one of the most energy-intensive countries in the world, both for
its industrial users as well as for residential users, particularly with residential users.
And if you'd been here, you would see that in the winter, while the apartments and houses are being heated, windows are also opened. So,
clearly with some increase in prices, there will be more savings. And the --
LAKE: Right.
FAN: -- other side, of course, is with industrial activity declining, there will also be some decline in the demand for energy.
LAKE: Right --
FAN: But it is an important concern for all facets, and it's important for them to try to resolve that issue.
LAKE: It certainly is, and a difficult transition. Qimiao Fan, Ukraine country director for World Bank, thank you so much for being with
us tonight.
Coming up, new solutions to get from A to B. Catching the train in the future can be as easy as tapping your smartphone. We'll explain after
the break.
(COMMERCIAL BREAK)
LAKE: By the end of today, more than 300,000 trips will have been made on the Tri-Met transit system in Portland, Oregon. US transportation
secretary Anthony Fox says the city is a model for the nation.
He was in Portland on Wednesday to view the latest addition to the transit system, a bridge spanning the Willamette River. Richard Quest got
there first and took a look around for this week's Tomorrow Transformed.
(BEGIN VIDEOTAPE)
RICHARD QUEST, CNN INTERNATIONAL (voice-over): A century ago, trolleys and trams ruled the roads. That is, until the almighty automobile
came along. Now, a younger generation of urban commuters are reversing course once again.
UNIDENTIFIED FEMALE: Most of my friends would -- have mostly done away with their cars, use public transportation. Kind of the new "it"
thing to do.
DAVE UNSWORTH, TRI-MET TRANSIT AGENCY: We look out in the future, we see a lot of people coming to our community. We've got to figure out how
to get them around.
QUEST: Dave Unsworth is director of project development for Tri-Met, Portland's transit agency. In a city known for its love of the
environment, transportation leaders have bet on light rail to reduce traffic congestion and air pollution. It brings a buzz and economic boost
that comes from urban density. All those people downtown.
UNSWORTH: We've got to do better about growing the place, making sure that we get the right uses in these places and serve them well with
transit.
QUEST: Tri-Met says it's spent $4 billion to build the rail, and it's paid off to the tune of $10 billion in new development around its stations.
Light rail is still seen by some as the Cinderella way of getting around town. As long as cars are faster, the majority of people will take
to their own wheels. See that bridge over there? About a year from now, the transportation planners hope it will change the equation.
QUEST (on camera): When it's ready, the Tilikum Crossing Bridge will be the first of its kind in the United States, off limits to private
automobiles. The bridge will gladly carry light rail trains, city buses, and there'll be plenty of room for bike lanes and pedestrians.
QUEST (voice-over): Cutting through rush hour is one thing. Many commuters still don't like to wait for the train or pull out their cards
every time they need to go somewhere. Now to counteract the hassle, Portland has partnered with a local startup, GlobeSherpa, creating a
commuter-friendly app for the smartphone.
TONY TOM, EXECUTIVE VICE PRESIDENT, GLOBESHERPA: I can validate my fare within 10 to 15 seconds, as opposed to having to get my credit card
out, put it in the machine, oh, put it in the machine one more time. OK, now, which buttons do I push again to make this work? That whole
experience is completely eradicated with the mobile app.
QUEST: The app allows riders to pay for rail and buses without having to buy multiple tickets. What this really shows is that when governments
think big, invest heavily for the future, and harness the power of technology, that when it comes to our journeys, tomorrow is transformed.
(END VIDEOTAPE)
LAKE: Still to come, the deadline pro-democracy protesters gave the city's chief executive to resign has passed. We'll have the latest from
Hong Kong right after this.
(COMMERCIAL BREAK)
LAKE: Welcome back, I'm Maggie Lake. This is CNN. Time for an update of the news headlines. The Parliament in Turkey has voted in favor
of military action against ISIS in Iraq and Syria. Turkish forces will join a growing international coalition against the terrorist group. Just
as militants have been encroaching on the doorstep of the country's southern border. The vote was not close - 298 members of Parliament were
in favor, just 98 opposed.
Meanwhile, Belgium has carried out its first military mission in the fight against ISIS. The Belgium Air Force flew its F-16s across Iraqi
territory for the first time. The U.S. ambassador to Belgium said the act demonstrates Belgium's commitment to an international response to a global
challenge.
The United States will send more troops to West Africa to fight Ebola - that's according to a U.S. military source. Meanwhile, Liberia's
president said she is angry and saddened by the case of a Liberian man diagnosed with Ebola in the United States.
(BEGIN VIDEOCLIP)
ELLEN JOHNSON SIRLEAF, LIBERIAN PRESIDENT: With the U.S. doing so much to help us fight Ebola, and again, one of our compatriots didn't take
to (ph) care and so he's gone there instead of, you know, -- in a way he put some Americans in a state of fear and put them at some risk, so I feel
very saddened by that and very angry with him to tell you the truth.
(END VIDEOCLIP)
LAKE: Fresh fighting has erupted between Ukrainian troops and pro- Russia rebels around Donetsk airport despite an official cease-fire. These are pictures of heavy black smoke from today's offensive. The rebels have
tried several times to take the airport which is northwest of the industrial hub of Donetsk.
Mexican special forces have made a critical arrest in the war on drugs. Hector Beltran Leyva was caught while dining at a restaurant in
Central Mexico. The arrest is the second high-profile capture in recent months, after the detention of the cartel boss known as El Chapo.
News just in to CNN - student protest leaders in Hong Kong say they will meet with the city's chief secretary. It comes after the city's chief
executive C.Y. Leung refused demands to step down. Police warned protesters that any violent attempt to occupy government buildings will
have serious consequences. Protesters promised to escalate their campaign of civil disobedience if Leung didn't resign by the dead time - deadline -
which had passed a few hours ago. Leung had said he still has important work to do.
(BEGIN VIDEOCLIP)
C.Y. LEUNG, HONG KONG CHIEF EXECUTIVE: I appeal and I've been appealing to protesters that we should all follow the Basic Law which was
promulgated from some years ago.
(END VIDEOCLIP)
LAKE: Senior international correspondent Ivan Watson has the very latest on the ground and, Ivan, it would appear that there is some movement
- a meeting between the protesters and officials. Is this going to be seen as a concession to the students?
IVAN WATSON, SENIOR INTERNATIONAL CORRESPONDENT: Well, yes in fact. Because a full week before this sit-in began - well it began Sunday night
here in Hong Kong - the students had launched their kind of protest/boycott, and they were demanding meetings with the Hong Kong
government - meetings and requests that were denied. So it has taken a week of student class boycotts and then five days of this sit-in in
downtown Hong Kong to finally get the Hong Kong authorities to do more than just call these people - basically their actions - illegal. Finally now,
after all of this, the Hong Kong government has announced that, yes, its number two official will sit down to talk with student leaders. So that is
a concession and it is somewhat remarkable that it has taken this much disruption for the Hong Kong authorities to finally sit down with these
students.
Now, the students have said they'll only sit down as long as there's - the meeting is focused on discussing the political system on the rules and
regulations for the 2017 projected election. Meanwhile, the Hong Kong chief executive - the number one official, C.Y. Leung, he has stuck to his
position that he will not resign. That's one of the demands that the students have had.
So, the impasse is still underway, but, yes, at least there's been some progress towards some kind of dialog between both camps here. Maggie.
LAKE: It's some progress, Ivan, but you're right - the main issues the two sides remain very far apart are the students still prepared to stay
there? Are they going to back away from that threat to occupy buildings? That seemed to be the escalation that many feared would result in conflict.
Now that there's that meeting, is that sort of off the table or moved back to the back burner for the moment until we see what happens?
WATSON: Well, you know, the students had issued this ultimatum and they wanted this deadline for the number one man in Hong Kong, C.Y. Leung
to step down as of a couple of hours ago. That deadline has come and gone. There are still, what we understand, several thousand students camped out
in front of the entrance to the chief executive's office. And that has been a tense area between the police and the students now for close to 24
hours. So, that is still a tense area and we're not sure what's going to happen there in the hours ahead. Friday is the first now working day since
two days of public holidays here. Life is supposed to try to get back to normal, we don't know what'll happen and we don't know what'll happen when
C.Y. Leung tries to - if he tries to - come to his office if there are all these students in the way. That's something we'll have to monitor closely.
LAKE: We certainly will. And, Ivan, we have to point out as you stand there - it's remarkable. We've seen you in so many protest settings,
this has to be the most orderly one so far that we've seen. Everyone's sleeping peacefully behind you. I've seen articles saying that they're the
most well-behaved protesters. We're going to see if this continues in the beginning of the thawing (ph) and a talk between the students and the
leaders that makes any progress. Ivan Watson for us in Hong Kong.
(END VIDEOCLIP)
LAKE: It's been an extraordinary scene all week. Well, in times of crisis, you don't have a lot of friends. Iceland's finance minister says
his country has learned a few lessons from the 2008 banking crisis. Our interview after the break.
(COMMERCIAL BREAK)
LAKE: Iceland's minister of finance says his country doesn't feel bitter towards Europe over the events of the 2008 financial crisis.
However, Icelanders haven't forgotten it. Richard sat down with Minister Bjarni Benediktsson and asked him what the future looks like for Iceland's
economy.
(BEGIN VIDEOCLIP)
BJARNI BENEDIKTSSON, MINISTER OF FINANCE AND ECONOMIC AFFAIRS, ICELAND: We have abundant resources in Iceland, and very strong human
capital, educational system is strong, we are very favorably located as you mentioned with regards to what is happening in the North Atlantic and on
the Arctic - in the Arctic area. I'd like to see us grow in new sectors on the export side, and having the high GDP per capita, we only need to make
sure we continue focusing on increased productivity -
RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Right.
BENEDIKTSSON: And I believe that we create for a - you know - very good living standards for a long future.
QUEST: Because that's core. You put your finger on it - a country with a very high living standard, a very high GDP per capita, but which has
an economy that one looks at and wonders how it's sustainable.
BENEDIKTSSON: At the moment, yes. But it's not a debt problem - it's not money owed by the Treasury or the government, it is private banks that
went under and what we're dealing with is a balance of payment problem. And that's fundamentally different from problems of many other countries in
dire at the moment.
QUEST: Is there still a bitterness at the way the Europeans handled the collapse of the banking sector and the economy?
BENEDIKTSSON: We believe we have that behind us. You know, it's not forgotten but we would like to move forward and, you know, make sure that
we create better living standards in Iceland for the future. This is something to remember and learn from. In times of difficulties, states
take care of their own interests, you don't have a lot of friends when you're in dire and that's exactly what happened in Iceland in the year of
2008. What I'd also like to remember from that time is the fact that having low public debt was a key factor in handling the situation, and
that's the reason, I believe, we have come so far. So that's something for us to learn towards the future - pay down debt, keep them low, because
another crisis will come someday.
(END VIDEOCLIP)
LAKE: Good advice. When Iceland volcanic eruptions are a fact of life, most recently a volcano - this one right here - Bardarbunga had the
whole of Europe fearing long travel delays and ash cloud warnings. One filmmaker took the opportunity to use drone technology and went where no
human can - close enough to stare into the eye of a volcano. Capturing this stunning footage was not easy. Ash blocked the remote control's radio
signal and the intense heat even melted the GoPro camera. I'd say it was worth it. Time to check on the world weather forecast, and for that Jenny
Harrison is at the CNN Weather Center.
Amazing pictures, aren't they, Jenny?
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Just stunning, Maggie, indeed. And of course as you said, you know, to use the drone -
brilliant idea, great use for a drone - but also it makes you realize of course why it is so dangerous for anybody to be at those - not even just
that boiling hot lava, but it's also the gases. And so we're still at the same level. This has been this way now of course for well over a month,
probably going on for two months. It was the middle of August when all this really began, so, yes, we're now into what the third month, I supposed
really, but escalating unrest is still what they have this technically sort of defined as in terms of the state. It could of course still erupt, they
say that is still very likely. There's still lots of seismic activity every single day. The strongest from earthquake this day was a 4.8
magnitude, and of course the gases, again, they're monitoring those very, very closely because the wind plays a big part of course in the direction
those gases are blowing. So, all in all, a still very dangerous situation. But amazing pictures, as you say, coming from that drone.
And meanwhile further to the south away from Iceland, across the northwest, we've got a front coming in. Heavy rain coming in with this
system to parts of the U.K. as we go through the weekend. And still some fairly heavy rain with this system working its way across the Central Med,
pushing towards the southeast. So, on this Thursday, it was the time for Italy to see some heavy amounts - 56 millimeters in Rome, 69 in Latina, but
the really heavy rain from there, as I say, working its way eastwards. They're pretty well scattered, these showers, but in amongst those
scattered showers, bit of some - one or two scattered thunderstorms as well, so the rain does come down obviously a little bit heavier. And still
more rain across the southwest as well. So, that is where the warnings are across southern portions of Portugal, northern portions of Africa. You can
see here as well the Central Mediterranean. So, we could still see more of the same.
Now, it's still pretty warm, still temperatures have been well above the average, certainly for this time of year. Paris 23 against an average
of 19, 22 you can see there in London, Berlin and also Brussels. However, it is set to change and it wouldn't last forever, and certainly Saturday
and Sunday things are going to be feeling quite a bit cooler. In fact in Paris - look at this - 24 on Saturday then Sunday 17. So you really will
feel the chill in the air and also into Amsterdam down to 16 by Sunday. But it stays nice and warm for the next few days in Munich. We've got good
temperatures here - dry and sunny for the last few days of Oktoberfest. There's the rain in the southeast there, but heavy line of rain pushing its
way across the northwest of Europe. And here are the temperatures elsewhere - 19 in Bucharest, 23 in Athens and 26 in Madrid.
Keeping an eye on the Central Plains, the Midwest we've got these thunderstorms been firing up as we've been going through Thursday. Warm
air in the east, and then some very, very chilly air pushing in behind this system. But the severe storms are certainly giving rise to some warnings.
This as you can see is just showing you that line of thunderstorms - very heavy at times. And this is the area we're expecting the severe storms
over the next few days. So be prepared for some travel delays certainly. Maggie.
LAKE: All right, good heads up. Thank you so much. Jenny Harrison for us. A single tweet that gives almost no real information - that was
all it took for Elon Musk to send Tesla's stock soaring. We'll explain after the break.
(COMMERCIAL BREAK)
LAKE: Tesla is teasing investors on Twitter. Elon Musk posted this tweet Wednesday night. It read, "About time to reveal the D and something
else" along with a picture of a garage door partially opened to reveal the hood of a car and the date, October 9th. That is a preview if I've ever
seen any. Well, the meaning behind this mysterious "D" is anyone's guess. It was enough to boost Tesla's shares by more than 4 and 1/2 percent on
Thursday although they have slipped a bit in the last month. Tesla is up 67 percent so far in 2014.
Well, electric cars will have to wait for at least one European automaker - the CEO of Seat says its company is still perfecting the
traditional engine and that's what his customers would prefer. Seat launched a new car - the Leon X-Perience at the Paris Motor Show Wednesday
night. Jim Boulden spoke to their chief exec and asked him to explain the strategy.
(BEGIN VIDEOCLIP)
JURGEN STACKMANN, CEO OF SEAT: The key to our success today and in the future is to shift the focus of the brand from being in an sort of
compact small car company around Ibiza to a much more balanced car brand with Ibiza still being an important part of that brand, but I see a bigger
shift into the Leon upper class segment and we are seeing some real great first results in the first three years after the start of that strategy.
We just - about to - almost complete the rollout of the entire Leon family with a Leon SC launch here at Paris. But we already now see that the new
Leon is a real big success in the European car industry. We had growth of more than 40 percent last year on the family and this year a growth of even
60 percent. And that shows that if we get in the right re- (ph)vehicle concept for the right marketplace with a great value proposition, we can
make real inroads into the industry - keep growing and shift the brand into a much more balanced portfolio, much more balanced business proposition.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Of course everyone's talking about hybrids, everyone's talking about electric cars. I know that
last year Seat had said that they were experimenting electric car. Tell me about your plans because it does take a lot of money, lot of investment in
order to do that.
STACKMANN: The true focus of Seat today is really on high-technology petrols, high-technology diesels and compressed natural gas. We believe
that combination customers do want from us today - that's the recipe that keeps us growing and that's exactly what our customers demand from us -
affordable cars with low - with excellent fuel economy, loss CO2 emissions. But actually affordable with full range in day-to-day's operations. The
reality of electric cars in Europe is still sort of - it is a niche. The light -- very few cars are actually registered fully being fully electric.
But it's pretty clear that in the light of more aggressive CO2 regulations in the future, a clear drive to reuse the improved fuel economy. Electric
concepts will be part of the future mobility mix. We will step in as Seat brand when the market is slightly more wide and visible for us, when there
is a wider acceptance in the range. Most of our car owners only own one car in the family and currently they're not really ready to take the
limiting range of electrical parts and plus the high price.
BOULDEN: Here we sit in Europe with worries again about the economy. Obviously Europe not growing at all. Are you concerned that this could hit
you just as you're bringing this brand back to life that we might see more pain in places like Germany which is such an important market for you?
STACKMANN: We do actually have I think a balanced view on Europe. The overall economy is in a pretty stable shape. I think there's no real
strong sign of a big growth, and there's no real strong sign of a future recession near term. We see the same system in the car market, and we have
a few markets growing - U.K., Germany, (inaudible) market - Spain actually shows some real improvements and more stability in markets like France and
Italy. So, in the near-term future or mid-term future, we do count on stability for Europe but not very much growth stability, and we have to
find our growth in revenues and actually insides within a given stable market environment.
(END VIDEOCLIP)
LAKE: Now it sounds like a sure-fire idea to make a lot of money - buy a car in the United States, ship it to a booming market like China and
pocket the difference in price. It's called car flipping and U.S. officials want it stopped.
(BEGIN VIDEOCLIP)
LAKE: They're fast, furious and in great demand in Beijing and beyond. Porsche, BMW, Land Rover and Mercedes Benz. Small-time exporters
are making big bucks shipping luxury vehicles to countries like China, the world's largest car market.
Male: Something that sells for $50,000/$60,000 in the U.S. can go for $150,000/$200,000 in China. People can buy these cars, send them over
there and still make a lot of money considering the risk that they go through in some of these cases.
LAKE: Risky business indeed. Carmakers believe quick turnaround sales of luxury vehicles is illegal. In a statement, BMW told CNN quote,
"The BMW-U.S. dealer agreement forbids the sale of vehicles to brokers or for export." Under pressure from carmakers, federal authorities have begun
cracking down, seizing assets and fining exporters. Attorney Ely Golden who represents clients that have had assets frozen says the Feds are
overstepping.
ELY GOLDIN, FOX ROTHSCHILD, L.L.P.: I don't think the government has any business telling private citizens what they can do with their property
after they buy it. There's no haggling or negotiation going on. They buy and expensive car and they want to ship it overseas. What right does the
government have to tell those people that you can't do that?
LAKE: To tighten the loopholes, luxury carmakers are pressuring dealers to carefully vet would-be buyers and in some cases penalizing
dealers.
GOLDIN: In many circumstances, dealerships now require buyers to sign what is called a `No Export Contract.' Essentially they say we don't want
you exporting the car.
LAKE: But dealers are in the business of selling cars, and it may be hard to stop exports entirely, especially with so many legal gray areas.
After all, if tourists can buy iPhones in the U.S. to sell back home, why not a car?
Male: They've had a lot of difficulty in prosecuting anyone and getting it to stop because there's just questions about what exactly is
going on that breaks any laws.
LAKE: A huge market - a big profit motive. With the growing thirst for luxury in China, this is one fight the Feds could be battling for some
time.
(END VIDEOCLIP)
LAKE: We'll check in on the market numbers when we come back.
(COMMERCIAL BREAK)
LAKE: Stock in Argentina have taken their second major tumble in consecutive days. Take a look at these numbers. The Merval fell by more
than 7 percent on Thursday. That is a reaction to the news we brought you last night that the country's central bank governor unexpectedly resigned.
We do need to put those numbers into context though. This is how shares have done over the past six months. Even with the huge losses of the past
two days, it is up more than 60 percent, making it one of the best performing markets in the world.
TESCO shares finished more than 1 percent lower in London. That's more bad news for Warren Buffett who today admitted he'd made quote "a huge
mistake" by investing in the British supermarket. Buffett bought the shares in the company back in 2006. Over the past years, the share price
has nearly halved, and it's been in trouble with regulators over problems with its accounts. You win some, you lose some. He wins more than he
loses though.
That's "Quest Means Business." I'm Maggie Lake. Thanks for watching. "Amanpour" is next.
END
