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Quest Means Business

Cautious Optimism on New Greek Plan; Trichet: "Trust Has Been Lacking"; Anti-Austerity Protesters Rally in Athens; Greek Lawmakers to Vote on Bailout Deal; Wild Week in World Markets; V for Verhofstadt. Aired 4-5p ET

Aired July 10, 2015 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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RICHARD QUEST, CNN HOST: The end of a torrid week of the world's stock markets, the Dow Jones finishes with a strong gain, up more than 200

points. The bell's ringing. Time for the gavel, a strong gavel to bring trading to a close on Friday, the 10th of July.

Tonight, the Greek parliament decides the country's new bailout plan goes to a final vote in Athens.

The battle lines are drawn in Brussels. European leaders are weighing in on the proposals.

And this is not the end of the market rally on hopes that a Grexit will be avoided.

I'm Richard Quest. It may be Friday and I'm still in Athens, but of course, I mean business.

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QUEST: Good evening. Tonight, Greece's prime minister's facing probably the most important challenge of his political career and one that could

well define his country's future.

The prime minister's attempting to sell his new bailout package to his Greek parliament and at the same time making it palatable to the European

paymasters. Some in Alexis Tsipras' own party have urged the government to tear up the bailout deal, drop out of the Eurozone. The finance minister,

Euclid Tsakalotos insisted many of the country's debt demands will be accepted.

(BEGIN VIDEO CLIP)

EUCLID TSAKALOTOS, GREEK FINANCE MINISTER (through translator): What we ask for, what we're doing today is to strengthen our negotiating position

so that we can get better terms in the agreement within the spirit of the text of political leaders.

(END VIDEO CLIP)

QUEST: Now the proposals that the Greek government sent to Brussels are virtually identical to those previously offered by the creditors and then

rejected by the Greek people in Sunday's referendum, 61 percent to 39 percent.

Even the date reforms are due to take into effect, July the 1st, this is the document and we have been very assiduous in going through the document

literally checking word for word to see what is the differences between the two.

So let me go through some of the changes between the plan that is now being put and the original.

(BEGIN VIDEO CLIP)

QUEST (voice-over): The luxury tax on big boats, recreational vehicles, will apply now to those longer than 5 meters instead of originally those of

10 meters.

The new measures include combating waste and fraud in public entities and state-owned enterprises.

There are more details on how Greece plans to tackle tax evasion.

(END VIDEO CLIP)

QUEST: Put simply, it would appear that these new proposals somehow in some very small way target richer people, the more affluent, arguably, the

elite.

Well, when these proposals arrived, the opinion amongst the creditors was broadly positive. (INAUDIBLE) German finance minister remain skeptical --

not a surprise there

The French President Francois Hollande, who was supportive of the Greek cause throughout and who sent experts to Greece to help them, described

them as "serious and credible."

Jeroen Dijsselbloem called the plan "extensive."

Slovakia's finance minister warned it's not clear whether the plan will be enough. As he said, the plan to challenge now is to turn a caterpillar

into a butterfly

A week ago on this program, Jean-Claude Trichet warned trust in negotiations was vanishing dramatically. Mr. Trichet, of course, is the

former president of the ECB and a key architect of the first bailout.

Jean-Claude Trichet joins me now from Paris.

Mr. Trichet, good evening once again, sir, very good to have your interpretation and guidance tonight.

We -- when we look at these proposals, do you believe they are sufficient to prevent Grexit and start negotiations?

JEAN-CLAUDE TRICHET, FORMER PRESIDENT, ECB: Well, first of all, I would say it's of course much, much better than the previous situation. That's

obvious.

But I would like to draw your attention to the anomaly of all these negotiations. Normally the various governments are getting a mandate to

negotiate. And when the negotiation is over, they get the approval from their own parliament. And it's true for the creditors as well as for the

debtor.

Here we are in a --

[16:05:00]

TRICHET: -- strange situation where each party presents a full-fledged plan but what counts is your code between the various parties concerned.

And what I see is the start of last-minute, very dramatic negotiation in order to check whether there is an accord or not.

But of course, it's very, very encouraging that we are now totally out the referendum posture.

QUEST: Is there a danger that the mistakes of the past are repeated in a wish to do a deal and get this thing done?

TRICHET: I think, again there is a clear win to have an agreement from the part of the Greek government now. And I think it's important. It's

important because it's goodwill. But you have to negotiate and you have to be sure that the final agreement would be approved by not only the

parliament in Athens but a number of parliaments in the other friendly countries of Europe.

And so that is something which should -- we should repeat and trust is of utmost importance at this stage, trust was dramatically lacking after six

months of happenings, six months of games of Chicken, six months of drama.

QUEST: But I think this, to some extent, putting in some ways the cart before the horse, all this talk about parliamentary approval to agree the

deal, surely the question is if they approve the deal, will the Greeks be able to live up to it?

Can they actually implement these terms and conditions?

TRICHET: I think you're absolutely right. This is where it's really the main issue. After so many changes of opinion, after so many posturing, the

problem is the problem of trust. The -- not only the European but also all the international community, the IMF and I would say all the shareholders

of the IMF, must have trust in the capacity of the government to deliver.

And of course it's extremely important that they change dramatically their posture; it's good. It's encouraging. But again, we must crystallize

trust and trust has been lacking during all those discussions.

QUEST: Finally, Mr. Trichet, from your soundings and from what you've heard, do you believe that trust is returning tonight?

TRICHET: I remain (ph) very prudent. I hope. I have to say -- and this is my personal bias -- I hope very much that a good plan, a good agreement

would be accepted by all and I hope very much that all will be done by the Greek government to reestablish trust. Because I think it's in the

interest of the Greek people; it is in the interest of the international community. It is, of course, in the interest of all, I would say,

Europeans also.

But again this does not mean that the plan could be a weak plan without being implemented because without that, we have no future.

QUEST: Right. Mr. Trichet, good to see you, sir. Thank you for joining us and giving us insights and helping us our way through this. We

appreciate it.

Now this time last week, Greeks filled the square behind me. They were rejecting the same proposals that's now going on before the parliament.

Today they returned. The crowds were much smaller. On Twitter, the Greeks were unhappy with the prime minister's U-turn. They're using the hashtag

#ExplainNoToTsipras.

Now joining me is Panos Polyzoidis, the current (INAUDIBLE) of SKAI TV.

You've helped us, sir, so much understand what's happening. Now help us again.

How's the parliament going to vote?

PANOS POLYZOIDIS, SKAI TV: I think the parliament -- first of all, the parliament is going to pass the bill because Tsipras will have the support

of euro position. But Tsipras has set another target for him. He threatened with election with a fresh general election.

Should the parliamentary parties of the coalition not support him sufficiently, that is half the votes plus 1, I think they're going to do

that as well. There's going to be a definite show of discord from the ultra-leftists.

[16:10:00]

POLYZOIDIS: But not to the extent of bringing the government down.

QUEST: OK. So get through parliament; but the Greek people, when they read this, surely, justifiably, they will say what was that referendum

about?

We said no to this very proposal.

POLYZOIDIS: No. The referendum was about Alexis Tsipras establishing his political hegemony in this country and he succeeded to do that. He got rid

of the opposition. The opposition is actually stunned by their defeat. And tonight, I think --

(CROSSTALK)

QUEST: It was a form of voter confidence for him to do whatever he thinks right.

POLYZOIDIS: Exactly. He got a "no" and he turned it into a "yes," if you may. And I think he's going to go ahead with (INAUDIBLE) will arise much

later when this program is -- begins to be implemented because the government will have difficulties implementing it. There is a basic

difference between what reforms mean within the government party here and in Brussels. And that is, in my view, not very easy to bridge at all.

QUEST: So I ask you the same question I asked Jean-Claude Trichet, the issue is not getting everybody to accept it; the issue is implementing it

next month, two months, three months, a year down the road.

Are we going to be back here again?

POLYZOIDIS: I can't exclude that. I think the government will not be very keen on implementing this. But they will try their best but they will have

popular discontent. There will be disillusionment. Tsipras has promised all things to all people and he can't do that.

QUEST: Sir, thank you for joining us on our balcony.

POLYZOIDIS: Well, you'll be coming back, I think.

QUEST: Always looking forward to a visit to Athens and to Greece. But next time, I won't ask -- essentially more than a balcony (INAUDIBLE)

square.

When we come back, China's government may have beaten back the bears. We're going to look at the volatile week for the world investors -- what a

week it has been. It's QUEST MEANS BUSINESS. And we are still in Athens.

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QUEST: Where some (INAUDIBLE) leaders were skeptical, European markets greeted the Greek reform plan with enthusiasm.

In Germany, France and Spain, stocks rose 3 percent on Friday whilst in London the FTSE finished 1.4 percent higher. And we've been tracking the

euro throughout the crisis. It rose very sharply against the dollar after the plan was submitted. It's back near where it was when the Greek prime

minister called the referendum two weeks ago.

Volatile markets have been taking investors on a wild ride this week. Chinese markets rallied for a second straight week, going against the bear

market tide that follows drastic interventions by Beijing. The Shanghai Composite closed up 4.5 percent, still -- it's still down 24 percent from

June high.

If you look at that overall, it's -- it is up on the day, down over the last couple of weeks but still up for the year.

[16:15:00]

QUEST: Make sense of that if you will.

Oil is set to keep falling according to the International Energy Agency. Its July report predicts that prices will decline well into 2016. The IEA

forecasts a slowdown in demand, even though production remains high. U.S. markets up for the second straight session. The Dow had it strongest

session of the week on Friday, recovering from Wednesday's rout when a software glitch halted trading for several hours.

The Dow was up 211 points, a 1.2 percent gain.

CNNMoney's Paul La Monica -- Paul, help me make sense of this chaotic week in the market.

PAUL LA MONICA, CNNMONEY DIGITAL CORRESPONDENT: It certainly has been chaotic, Richard. You missed the big day on Wednesday, when the New York

Stock Exchange obviously did have trading halted. I know you were reporting from Greece, as you have been all week.

Right now investors are hopeful that the worst may be over in China -- I think that's a big "if" -- and they're hopeful that we might get some

favorable resolution to the Greek debt crisis over the weekend. Again, I think investors may be taking some big leaps of faith here. It doesn't

seem as if chaos in China's stock market is over just. And as you've already pointed out, this Greek debt crisis, even if we wind up having a

deal agreed for a third bailout, that doesn't end things for good in a positive way.

QUEST: Right. Now all of this -- I'm going to throw one more little pebble into the ripples of the pool and that is the earnings seasons

because if the earnings season in the U.S. is not good or at least doesn't hit the market's expectations, where does that factor into these equity --

this equity volatility?

LA MONICA: That's a great question, I think. If earnings season disappoints, that might be what the cataclyst (sic) -- excuse me -- the

catalyst for that long-awaited correction. We're going to get some big reports next week, the big banks -- JPMorgan Chase, Bank of America, Wells

Fargo. You've got tech giants like Intel and Google, Johnson & Johnson, there are very big multinational companies reporting next week. They're

going to talk about the impact of what's going on in Europe and China, the stronger dollar and what's happening domestically here in the U.S., whether

or not demand is picking up or not.

QUEST: Paul La Monica in New York with around the world in the markets -- thank you, sir.

LA MONICA: Thank you. Have a great weekend.

QUEST: On the anger and -- I'll do, sir -- from the anger and acrimony of the Greek debt negotiations, there is one man who emerges as an unlikely

Internet sensation. I'll be speaking to the former Belgium prime minister, Guy Verhofstadt, about the Greek crisis and his newfound fame online.

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QUEST: One of the most surprising outcomes from this week's sorry saga, the European Union has gained a new cult hero. He's Guy Verhofstadt and

he's emerged as an enlightened Internet celebrity after delivering probably the most impassioned speech that the European parliament has seen for some

time.

"Politico" called him "a political rock star" in an article entitled --

[16:20:00]

QUEST: -- "V for Verhofstadt."

Before becoming an Internet celebrity, he began his week speaking to me on this program, where he called for action from the Greek government.

(BEGIN VIDEO CLIP)

GUY VERHOFSTADT, FORMER PRIME MINISTER OF BELGIUM: And what Greece needs is not cutting the wages of the people and the pensions of the people.

What Greece needs is to end the clientelist sick system (ph) that exists in the country, to end the corruption, to downsize the public sector. But to

open a number of markets who are not open, that is what we need. And I have my doubts if Mr. Tsipras was, in fact, the leader of a leftist

government, is capable to come forward with such in-depth reforms we desperately need.

(END VIDEO CLIP)

QUEST: Now Wednesday's speech was where things went viral. His 7-minute address directly to Alexis Tsipras has been viewed several million times on

a variety of platforms in all sorts of languages and it's been shared 85,000 times on Facebook.

(BEGIN VIDEO CLIP)

VERHOFSTADT: . not only we are sleepwalking, the last months, we are running to a Grexit, I have more the impression. But it is not you and it

is not we who ourselves pay the bill. It's going to be the ordinary Greek citizens who are going paying the bill. Eighty percent of your people want

to stay in Europe and in the Eurozone. So what you can now and show that you're a real leader and not a false prophet. Do it!

(END VIDEO CLIP)

QUEST: Mr. Verhofstadt is not taking his newfound fame lightly.

He tweeted, "If going viral leads to solutions, we should try it more often in Europe."

I'm joined delightedly by the man himself, Guy Verhofstadt, president of the Alliance of Liberals and Democrats for Europe and the former Belgian

prime minister.

Sir, it is always wonderful to have you on the program, but even you must have been surprised by the way in which your impassioned direct appeal to

Tsipras took everyone by storm.

VERHOFSTADT: I think it was the first time that a European parliament was discussing the matter. It was -- yes, it's even impossible to think that -

- I think even in the U.S. that you have a crisis in a big state of the U.S. and that for months and months and months there are meetings and

negotiations and debates behind closed doors between technicians and bureaucrats and that the parliament, that the European democracy was not

debating it.

And it was the first time that it happened on our request. And I think it was a very healthy thing, not only for the European democracy but also for

Mr. Tsipras himself.

QUEST: Is it your feeling that the proposals on the table tonight are good enough to continue negotiations? Or frankly, is it time to call a spade a

shovel and say it's time to divorce?

VERHOFSTADT: I think that a deal is going to be made tomorrow when there is the meeting of the Eurogroup, the ministers of finance of the Eurozone.

I'm pretty sure about that, that it is the outcome of the meeting tomorrow.

That said, there is a slight difference between this package and the previous package because, for the first time on a number of reforms, there

is more details. There are -- it is more precise. For example, on corruption, there is a whole list of measures to anti-corruption in Greece.

There is also a number of measures against the privileges of small islands and of the shipping building industry.

So I think there is quite -- on the other hand, Richard, it's also a huge difference because we are talking now about a third bailout package of $53

billion, what was not the case a few weeks ago.

QUEST: But I'm going to ask every guest on the program tonight this same question, which really comes down to, yes, you've got the reform package.

But do you have confidence that the Greek government can bring it into force? They can actually implement it?

Because this is not about promise. This is about execution.

VERHOFSTADT: There are still some doubts. And I'm pretty sure that tomorrow in the meeting of the Eurogroup, of the ministers of finance,

there are going to be a number of these ministers of finance who are going to raise this question.

And I think that the outcome shall be that there are going to be a number of additional guarantees asked by the other ministers to be sure that if

the Greek government is not implementing this, that, yes, the European Union can come in to impose and to be sure that these reforms are

implemented.

That said, Richard --

[16:25:00]

VERHOFSTADT: -- it's not only a question for Greece; there is also a big work to do by the European Union itself because we cannot afford ourselves

to have another Greek crisis within six months and another Portuguese crisis within one year and a Spanish crisis within three years.

We need to have a stable system in the currency union and we have also to manage in common our excessive debt in Europe.

QUEST: Guy Verhofstadt, we're just delighted that we've had the political rock star from the European parliament on our program twice in a week, sir.

Thank you very much. Have a good weekend.

VERHOFSTADT: A pleasure.

QUEST: My next guest weathered the storm of the Cypriot financial crisis back in 2012. He now -- his firm has once again been hit by economic

instability here in Greece.

Alexis Pantazis is the co-founder and executive director of Hellas Direct Insurance.

Can you see similarities, sir?

ALEXIS PANTAZIS, HELLAS DIRECT INSURANCE: Most definitely so, unfortunately. The banks, the bank holiday (INAUDIBLE) haircut will be

then coming in is something we've seen before. We've lived through the Cyprus crises. Two years later, Cyprus are the worst (INAUDIBLE).

QUEST: But Cyprus was a banking crisis. Cyprus wasn't a government crisis.

That's a big difference, isn't it?

Do you think that the same remedies will work here?

PANTAZIS: I think there's an additional damage which is very much an identity crisis in Greece right now. When you actually look at Cyprus at

the time, I think most people in Cyprus wanted most of the reforms that were being recommended; while in Greece, I think as the referendum last

week showed, the number of them didn't really want that.

QUEST: How are you managing to do business? I mean, let's face it, your entire business rests on the banking system.

PANTAZIS: Yes and no. I think our business is a direct-to-consumer model insurance company, very similar to GEICO in the U.S.

QUEST: So they pay online?

PANTAZIS: They pay online; they pay by card --

(CROSSTALK)

QUEST: -- can they remit -- can the bank remit the money across to you if they pay online?

PANTAZIS: Yes, that they do. They still do. I think the problem is if you're a local company that has big capital here, you have working capital

means; you have liquidity means. You have equity capital means and those kind of demands. In our case, our capital base is in London. Hence we

managed to survive the Cyprus crisis and the Greece crisis.

QUEST: Right. So you're doing what a lot of companies have done. You've known this is coming and you kept quite a bit offshore and you've kept

yourself ready for exactly this eventuality.

PANTAZIS: I think it's fair to say that. At the same time, we are financial institution. You mentioned we diversified. I think people

haven't really done their fiduciary duty or their duty towards policy holders.

QUEST: As you look at the situation tonight, it's an unfair question but I'm asking everybody --

(CROSSTALK)

QUEST: -- yes, please do.

Do you see Greece being able to implement these reforms that are being put forward?

It looks good; anti-corruption, anti-tax avoidance, all these things.

But do you see that they can do this?

PANTAZIS: I think right now there's not enough trust in the system, the political system or otherwise, to be able to look at ourselves in the eyes

and say that we can implement them. I think in due course if enough reform is being done and the mentality of the people, then I think some things

could be done.

QUEST: Do you have a boat or a yacht longer than 5 meters?

PANTAZIS: I'm an entrepreneur. There's not much of that going on.

(LAUGHTER)

QUEST: All right. I just wanted to make sure you weren't going to be paying more taxes --

(CROSSTALK)

QUEST: -- for your mega yacht.

PANTAZIS: No, definitely not.

QUEST: Are you sure there's no mega yacht?

PANTAZIS: Definitely not.

(LAUGHTER)

(CROSSTALK)

QUEST: Thank you.

Coming up, with Europe split over the Greek debt proposals, I'll be talking to the former prime minister of Italy, Mario Monti joins us to talk about

the weekend's critical negotiations. It's QUEST MEANS BUSINESS. If there's a view and it's important, you're going to hear it right here.

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RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Hello, I'm Richard Quest in Athens. There's more "Quest

Means Business" in a moment when the Nobel Prize-winning economist Robert Shiller tells me why Greek stocks are one of the best deals out there if

you've got the stomach for it.

And from shares to shoes, I visit the poet-turned sandalmaker who is cobbling together a living in the economic chaos. Before all that, this is

CNN and on this network the news always comes first.

Greece's Parliament will soon vote on whether to accept the government's new plan of economic reforms. It contains sweeping austerity measures

which Europe wants in exchange for a new bailout deal. If approved, the reforms will then be discussed by European leaders over the weekend. The

French President Francois Hollande said he was impressed by the proposals

(BEGIN VIDEOCLIP)

FRANCOIS HOLLANDE, FRENCH PRESIDENT VIA INTERPRETER: The Greeks have given their proposals. We were expecting them. The Greeks have shown their

determination to remain in the Eurozone. The program they are presenting is serious and credible and now they will submit it to the Parliament which

requires and demonstrates strength, commitment and indeed courage.

(END VIDEOCLIP)

QUEST: In Vienna, talks over Iran's nuclear program have extended through Monday. It's the third time the talks have been extended. The world

powers are trying to make a final deal. The Russian President Vladimir Putin says he hopes all sanctions against Iran are lifted so an agreement

can be reached.

The Confederate flag which flew on the grounds of the South Carolina state house has come down. The flag became a focal point of protest after the

racially-motivated church shooting that left nine people dead. The governor Nikki Haley signed the bill to have this one removed.

(BEGIN VIDEOCLIP)

NIKKI HALEY, GOVERNOR, SOUTH CAROLINA: This never should have been there and I think that even when it was on the grounds of the state house, it was

right in front and these grounds are a place that everybody should feel a part of. And these grounds are a place that should be - should belong to

the people of South Carolina. And what I realize now more than ever is people were driving by and they felt hurt and pain. No one should feel

pain.

You know, we can have our disagreements and we can have our policies back and forth, but no one should feel pain over something - not over a symbol.

(END VIDEOCLIP)

QUEST: The World Cup champion U.S. women's soccer team was honored with a classic tickertape parade in New York City. Thousands of people lined the

route. It was the first time a parade of one so-called Canyon of Heroes has been held for a women's sports team.

The Hollywood actor Omar Sharif has died. The Egyptian-born star died of a heart attack in Cairo. Omar Sharif is best known for his roles in

"Lawrence of Arabia" and "Dr. Zhivago." He was also a champion bridge player. Omar Sharif as 83 years old.

Investors in Greek debt seem much more optimistic about the country's future after the bailout plan was published. If you just look at the

market, you can start to see that the Greek borrowing costs, they came down dramatically. The ten-year bond fell by 5 whole percentage points.

Now bearing in mind they normally move just a little tittle here and there when you talk about bonds. You certainly don't expect to see them down 5

percent - much bigger than usual - an indication that another Greek default is now seen as less likely.

On the line now is the former prime minister of Italy, Mario Monti who joins me from Lazio in Italy. Mr. Monti, good evening to you, sir. Thank

you for joining us.

MARIO MONTI, FORMER ITALIAN PRIME MINISTER: Thank you, it's a pleasure.

[16:35:02] QUEST: Now do you believe - do you believe - that the proposals now on the table are sufficient to take Grexit off the table?

MONTI: I believe so. They seem to be more substantive, more satisfactory from the point of view of European rules and of the creditors than the

previous proposals, so there may be an element of paradox there because Mr. Tsipras no doubt has reinforced himself politically at home but also

because he irritated quite a bit his European partners, found them and he's expecting -

QUEST: Right.

MONTI: -- to find them not softer. So the final solution here may be tougher than had he not proposed the referendum to the Greek people.

QUEST: The - whatever happens, it's going to be very tough back in Greece and I wonder whether or not - whether or not - the Greek people and the

Greek government have the capacity for implementing these reforms.

MONTI: This is a very serious concern that I also have. The quality of the administration of course will need to be improved but I also believe

that the prime minster, Mr. Tsipras, if he's serious about implementing all these, will have to select also the appropriate ministers to lead this

process. Maybe there are even within Syriza -

QUEST: Right.

MONTI: -- because this will be a Syriza government - ministers more ready to -

QUEST: Right.

MONTI: -- make serious reforms than some of the current ones.

QUEST: The amount of money that we're talking about now - 53 billion euros - which comes - which a lot, I mean, at first 7 billion or so - is going to

go immediately to pay back existing debts. But the 53 on top of the 300 that's already there, if debt relief or some form of debt sustainability is

not part of this deal, then everybody is wasting their time. Would you agree?

MONTI: There will be I believe a better disposition by everybody to consider something on the debt - maybe longer deadlines, maybe a lower

interest rate, but some adjustment once the bulk of the rest of the more immediate and faster (ph) and needed reform will be agreed and in the

process of implementation.

Normally -

QUEST: Right.

MONTI: -- in such a major restructuring of the country, some alleviation of the debt comes towards the end, not at the beginning.

QUEST: Now, as a final question though and I say this with some sort of trepidation, I ask you this - but since we got to this point, would there

not have been a case for saying help Greece, give Greece aid but allow for a friendly divorce from the Eurozone? After all, Greece would still be in

the European Union with all the benefits that come with that.

MONTI: Yes. I'm not sure that (AUDIO GAP) in the (inaudible) between Greece and Europe will be very much willing to have this divorce, however

peaceful because of one constant feature of the Greek public opinion throughout this difficult time has been a very, very high degree of support

for Greek membership of the European Union - by the way much higher than it has been the case in Italy or France or Spain.

QUEST: Right.

MONTI: So as if there is a great willingness for them to stay onboard the Eurozone.

QUEST: Mario Monti, thank you, sir, for joining us. We appreciate it - joining us from Italy tonight. Now, as we showed you earlier, hopes for a

deal helped the euro make gains against the dollar. The Federal Reserve had Janet Yellen nudge the dollar back up by announcing she expects the

Feds will raise rates later this year. And she cautioned there are still factors of risk.

(BEGIN VIDEOCLIP)

[16:40:07] JANET YELLEN, FEDERAL RESERVE CHAIRWOMAN: As always however the economic outlook is uncertain, notably although the economic recovery in

the Euro area appears to have gained a firmer footing, the situation in Greek remains unresolved.

(END VIDEOCLIP)

QUEST: Janet Yellen. Now Robert Shiller's with me. He teaches at Yale University - winner of the 2013 Nobel Prize in economics. And Mr.

Schiller, -- Professor Schiller, -- when we look at the Greek situation, I read a comment from you saying that it might time to dabble in Greek stocks

if you've got the nerve.

ROBERT SHILLER, WINNER, 2013 NOBEL PRIZE IN ECONOMICS: Right. Yes, well I think Greece is a great country. The price is so incredibly cheap, based

on my CAP ratio which takes a ten-year average - the price (inaudible) ratio with ten-year average earnings on - in-- the denominator.

Greece is the cheapest thing you can find - the cheapest country in the world. (AUDIO GAP) recently was under 4, whereas here in the U.S. it's 26.

So, I mean, it can't be that bad - that's my impression. So that it's probably a good long-term investment.

QUEST: Long-term investment if you've got the stomach. But Professor Shiller, just when we factor in and we look at the week that we've had.

The Greek situation, we've got China's stock market which - who alone Lord knows what's happening there - and you've got the Fed. There's no question

these are unbelievably volatile times - dangerous times for investors. Would you agree?

SHILLER: Well, danger always brings opportunity too, so, you know, I think that this process will end with Greek - Greece - and looking stronger. One

thing that we see in the government's proposals is an affirmation of their readiness to reform labor markets.

That's a really important thing. And to deal with corruption which is what's been holding Greece back. If they really do these things, there's a

positive, very positive side to the proposals.

QUEST: I've asked every other quest on the program tonight and you've just made the point - if they do these things, do you think that there is the

willingness - do you think there's the capability to make those corruption - to make those tax avoidance, to make those labor reform changes? Or will

the money be paid over but the change will never arrive?

SHILLER: (LAUGHTER). Well I am not sure, but I think that this recession, it was a - it's more of a depression that we've seen in Greece - might

really qualify as what has been called the `cleansing recession' that some theorists talk about.

You really shake things up and then you can finally get reforms. And so the - you know - I know that the Greeks voted in referendum against this

proposal, but I think that in reality, they may be shaken enough by this and inspired to actually make a change. That's my feeling - I can't prove

it.

QUEST: Robert Shiller, thank you very much indeed for joining us, we appreciate it, sir, as always. Now when we come back, a bit of genuine

shoe leather reporting. I'm going to meet the poet sandalmaker of Athens and see life in his shoes -- next.

(COMMERCIAL BREAK)

QUEST: The crisis in Greece has left many small businesses struggling to stay afloat. I paid a visit to one that absolutely bucks the trend. At

Melissinos, they've been making sandals for nearly 90 years. Third generation of Melissinos - the Pantelis the Poet Sandalmaker of Athens.

(BEGIN VIDEOCLIP)

QUEST: This is the world of sandals and feet - all styles, all types. And in this world Melissinos rules as emperor. The family's been working and

turning the best Greek leather into quality footwear since 1920. Three generations - Gheorgios, then Stavros and now Pantelis the Poet. They've

created sandals to the stars.

PANTELIS MELISSINOS, THE POET SANDALMAKER OF ATHENS: I made for Sarah Jessica Parker, --

QUEST: Yes.

MELISSINOS: -- for the wife of the vice president of the United States, and recently for Kimora, a famous model.

QUEST: I have come to be fitted with my own bit of Greek tradition and my choice is as plentiful as the legends themselves. Who knew sandals could

be so difficult? Socrates, Plato, Hermes and more or perhaps something more modern.

MELISSINOS: The John Lennon style.

QUEST: The John Lennon. I settle on the "Theta." Worryingly, it's the warning sign of trouble and appropriately in business Greece is in crisis.

But here is the exception. The fame of Melissino has spread far - the shop is always crowded.

MELISSINOS: Business for us is good because we are making something that's handmade and people like - still like - handmade things.

QUEST: Even with such riches, life's getting more difficult. Leather, the basic raw material of its trade, is becoming harder to obtain.

And the lack of cash is spreading havoc in an economy that runs on notes and coins.

MELISSINOS: In hard times, an old-fashioned society like the Greek society needs to see something real in their hand. They need to see cash. This is

how they understand the concept of money. They don't want to know that they have whatever points in a bank account, you know? They want to see

real things, like you see that real tomato, you see a real watermelon, you have to see real money.

QUEST: Pantelis the Poet has been working on my Theta sandals for 20 minutes, hard work for a product that he still sells at only $38 a pair.

And when you ask him why he doesn't charge more, he just shrugs.

All in all, everything's snug. Perhaps the Greek government and the Eurozone could learn a thing or two from the Poet Sandalmaker - where

everything here seems to be a perfect fit.

(END VIDEOCLIP)

QUEST: Ha, look at those pair! Probably the best $38 you're ever going to spend in a place. I have to say I'm told they could be lasting years.

Beats a pair of good old brogues - that's the errand (ph) as well.

In a moment, you could soon be getting to know your fellow airline passengers a lot better - whether you like it or not. There's a new

seating plan and it literally puts you face to face in economy.

(COMMERCIAL BREAK)

[16:50:51] QUEST: The Greek people may soon get a little relief when it comes to an unexpected source. Ryanair's chief exec Michael O'Leary is in

talks with the Greek government about offering free domestic flights. Now Michael isn't often known as a soft touch, and in the past he hasn't shied

away from attacking Alexis Tsipras and his government. He once upon a time said, "The difficulty for the Greeks is that they've elected a bunch of

lunatics." Now though, Michael O'Leary says the company will slash fares to keep tourists visiting Greece during the crisis.

(BEGIN VIDEOCLIP)

MICHAEL O'LEARY, CEO, RYANAIR: We want to slash the fares on our domestic routes, and Ryanair is Greece's second largest airline to free for the next

two weeks. Unfortunately, we haven't been able to reach agreement though with the government and the airports on reducing their charges to zero.

So instead we've launched today a fare of 5 euros one way on all of our domestic flights what we serve. We operate about five domestic routes in

Greece. We're also slashing by 30 percent fairs on all of our international flights into Greece - because we think it's vital we keep

both the Greek people flying and keep visitors coming to Greece during this economic crisis.

(END VIDEOCLIP)

QUEST: Now that's what you call a policy designed to go right to the heart of the problem. Ryanair's chief exec on plans to slash airfares. Airlines

are always looking for ways to get more seats onto their planes -- Michael O'Leary more than most - and it means more money.

The latest proposal probably doesn't sit too well with passengers. The airline supplier Zodiac Seats France has come up with a plan to stagger

seats with passengers facing each other. It's supposed to offer more room although it could take away some of the privacy.

Now this is how it's going to work. You will have two economy seats facing one way, one facing the other. So there's always going to be (inaudible)

one, two, one, two and I'd be looking at you and these still be looking that way, and you get the idea.

Joining me now is Spud Hilton, the travel editor of the "San Francisco Chronicle." But when you heard about this two and one, what did you think?

SPUD HILTON, TRAVEL EDITOR, "SAN FRANCISCO CHRONICLE": Well, it's a nightmare, Richard. I don't know what else to say. About the only

innovation here is that it's a more effective delivery of the sneezing and coughing directly at you that's going to give you a cold by the time you

get off the plane.

Other than that, there's no upside to this. I mean, this is just ridiculous. The idea that -

QUEST: But hang on -

HILTON: -- you have people -- go ahead.

QUEST: -- I'm trying to work out - did - I couldn't work it out as I looked at it. Does it actually give you more room? Because in theory you

have got a little bit more knee space between everybody, or is it designed to ram more people in the plane?

HILTON: It's designed to ram more people onto planes. You have to understand that by putting foot to head - I totally get. We are shaped

smaller at the bottom, wider at the top. And because of that, putting us next to our neighbor's feet instead next to our neighbor's torso is going

to get you more space.

But all the illusions that you might have of the airlines and the people who design seats of thinking of us as anything but human cargo have to go

out the window with this. This is absolutely just the most efficient way to do it. I also think it's the most ridiculous way to do it. And I

really hope that they don't consider this.

QUEST: You know, I've seen many configs, and let's face it, in business class they've tried everything - toe to head, back to front, upside down.

They've tried everything. But there surely must be room to improve both the experience in economy and get more revenue.

I mean, I'm thinking of the cuddle class for example - the cuddle sofa class of Air New Zealand.

HILTON: Well the nice thing about doing those things in business class - the love seat, the S curve - you know - everything like that is that at the

end of the day you still have some privacy. You're not staring right at somebody, you're not - you're keeping up the same space. There's some

actual barrier there.

[16:55:02] I read a survey not too long ago that said 75 percent of people on planes don't really actually want to talk to the person who they're

sitting next to. Well, now you get to actually stare at two people that you're sitting with who you're not going to talk to for the entire five-

hour to 13-hour flight. It couldn't get more awkward than this.

QUEST: All right.

HILTON: Honestly, trying to get out of people - you know - trying to get people out of that plane in that configuration, I think that's where

they're going to run into real trouble.

QUEST: Spud, good to see you, sir, good to hear you. Thank you for joining us tonight -

HILTON: Thanks, Richard.

QUEST: -- from the West Coast. We will have a "Profitable Moment" after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's "Profitable Moment." Everybody says they want to keep Greece in the Eurozone, the Eurogroup and the Greek government both said

again and again. And so that's what this proposal that's now on the table is all about.

It makes the right noises, it has the right clauses and it certainly is thorough, concise, comprehensive, specific - whatever you want to use. But

it doesn't go to the heart of the issue. The heart is really whether if it is put into force, will it be implemented?

If we look at the last five years, I'm not sure we can have that much confidence on that score. The Greek people are about suffer the most

horrendous extra dose of austerity - there's no question about that whichever way this goes. And now we just have to hope that if the deal is

done, that the Greeks then get on with actually implementing the reforms and that another five years isn't put aside.

And that's "Quest Means Business" for this Friday night. I'm Richard Quest in Athens. Thank you for your company. And whatever you're up to in the

hours ahead, I hope it's profitable.

[17:00:02] Good night from Athens.

END