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Quest Means Business
Chinese Smart Phones Become U.S. Poker Chips; No More Business As Usual, Siemens' CEO Tells Us; There Will Be No New Deals With Iran; U.S. Supreme Court Has Cleared A Way For Americans To Bet On Sports; TMZ Is Reporting That Ms. Markle's Father Who Was Going To Be Walking Her Down The Aisle Will No Longer Be Attending Saturday's Ceremony; The Markets In The United States Finished Higher Today; A Report In "The New York Times" Says Dozens Of People Have Suffered Carbon Monoxide Poisoning Related To Keyless Ignitions In Cars; At Least 55 Palestinians Killed Along Gaza-Israel Border; Melania Trump Undergoes Kidney Surgery at Walter Reed Medical Center; Indonesian Suicide Bombers Target Police Station; A Judicial Source in France Says Paris Attacker Was On Police Watch List; Superman Actress Margot Kidder Dies at 69; Italy's Populist Parties Seek to Form Coalition; Energy, Financial Stocks Weigh on European Markets; British Cabinet Deeply Split Over Brexit Customs Deal; British Breweries Prepare for Royal Wedding; Bitcoin Bull Predicts Price to Hit $250,000. Aired: 4-5p ET
Aired May 14, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN HOST: Closing bell ringing on Wall Street. Dow Jones Industrials is up just a smidge, and gave back quite a lot of the gains of
the day, but still positive as all the major markets, and surged through the business.
Oh, a happy gavel. Trading is over. It's Monday, it's the 14th of May.
Tonight, Chinese smart phones become U.S. poker chips. ZTE, a percentage of the world's biggest trade cost. No more business as usual, Siemens' CEO
tells us, there will be no new deals Iran.
And place your bets now, the U.S. Supreme Court has cleared a way for Americans to bet on sports. I bet you thought, they already could.
I am Richard Quest, all this week, live in London, where of course, I mean, business.
Good evening, we will bring you the day's business news in just a moment, breaking news that we think you'll want to know at the start of a week that
will see the Royal Wedding between Prince Harry and Meghan Markle on Saturday.
TMZ is reporting that Ms. Markle's father, her father who was going to be walking her down the aisle will no longer be attending Saturday's ceremony.
Thomas Markle is not going because of an unfolding scandal over photographs.
The deal that Mr. Markle made with a photo agency to take these pictures of him getting ready for the wedding. Now, they were supposed to be paparazzi
pictures. They were staged to make it look like they were taken from a distance.
These are the photos Mr. Markle said thought he would have deal with to help him recast his image. He was due to walk his daughter Meghan Markle
down the aisle on Saturday, at the couple's wedding in Windsor.
So, it seems clearly everybody is interested in the wedding. We certainly thought that was reason enough to tell you about it at the top of our
program tonight and our World Correspondent, Max Foster joins us on the line from Windsor.
Max, what do you know?
MAX FOSTER, CNN CORRESPONDENT: Well, in the last couple of minutes, we had a statement from Kensington Palace who weren't commenting earlier on, but
this is what they said. "This is a deeply personal moment for Ms. Markle in the days before her wedding. She and Prince Harry ask again for
understanding and respect to be extended to Ms. Markle in this difficult situation."
So, not addressing it directly, but clearly, accepting that the TMZ story is true, I think, Richard because after the TMZ story came out, we all went
to the palace with the same story asking them to confirm whether or not Mr. Markle would be coming to the wedding, and this is the response we got.
QUEST: All right, so the palace is sort of playing it a bit cool at the moment in terms of just actually saying one way or the other, but it does
raise the question, Max, who will walk Meghan Markle down the aisle because her stepbrother is not going, her stepsister is not, and now the father is
not. Will it be her mother, Doria Radlan that will do it.
FOSTER: Well, we wonder who the other options are. She doesn't have a maid of honor, she doesn't have a close relationship with any of the church
leaders involved, so we can only imagine that it would be her mother, which of course, again, as you can imagine, Richard would be quite an
extraordinary moment.
It doesn't just break any sort of royal protocol, but it breaks this sort of thing, the same traditional British weddings at all.
So, I think that that would be quite a remarkable moment, but I have to say, here in Windsor, since really it's just you know, some sadness on the
heart of Thomas Markle because of what he's been through. He's obviously been under a huge amount of media scrutiny. Who knows what they still want
with the paparazzi, but a huge amount of sympathy for him and a lot of pressure on him, and you know, the whole idea of coming to this wedding in
the first place would have been awful.
QUEST: Right, Max, this is a further reminder isn't it of the enormous pressures that everybody who touches the Royal Family in some shape or form
ends up with unusually in some shape or form, it ends up in national wailing and tears.
And yet this family has lived with it all their lives.
FOSTER: They have, and we saw a similar sort of adjustment to the Middleton family when Kate got involved in the family, of course, because
you know, whilst Kate has huge amount of support, Meghan Markle has a huge amount of support, it doesn't extend to other members of the family, and
they are under not the same amount of media pressure, but certainly, you know, unprecedented amount of media pressure for them.
And they don't have the same advice system around them, and the Palace can't actually go in and advice them because they are publicly funded and
then, their all responsibilities, effectively it's Meghan Markle and Harry advising those family members, and it's been incredibly difficult for them
when they are trying to organize a wedding.
We've heard the (inaudible) Middleton in the past...
[16:05:15]
FOSTER: ... for example talk about the huge amount of pressure his family has been under since Kate married into the family and they just don't get
the support, and it does show how much pressure there is on this huge media event, and someone like Thomas Markle is clearly, you know, he's not a
particularly sociable person from everything we understand. He just wanted to come over and hand his daughter over.
It appears he made a big mistake. He has said sorry for it. He has explained why he did it and now he is not going to take part in his
daughter's wedding and his daughter isn't going to have her father there, so you know, it's a horrible moment for the bride and father, I think.
QUEST: I think you make a very good point there, Max, in reminding as we sort of pour over the ramifications, but at the end of the day, this is a
family wedding, and the father of the bride will not be there.
Max Foster will be with us throughout the course of the week. Max, thank you.
And as we of course - it's one of the reasons I am here in London all this week. Monday, Tuesday, Wednesday, we are here in the studio. Thursday and
Friday, I will be out at Windsor at the broadcasting position there, but meanwhile, the events and all the various bits and bobs that go into all of
this.
Now, let's turn to our major - to our business agenda as we always do. A major U-turn as the U.S. and China prepare to trade negotiations. China's
government has welcomed that Presidnet Trump is to restart or at least try to restart ZTE's business.
The President was called to reverse penalties on ZTE at its defense of Chinese jobs have left many in the U.S. confused and angry.
Trade negotiations are due to start this week, and that's leading to answer the question whether the Trump administration is using the company and its
workers as bargaining chips. President Trump's commerce secretary says, the U.S. will explore additional remedies for ZTE. Wilbur Ross warns that
China needs the United States.
(START VIDEO CLIP)
WILBUR ROSS, COMMERCE SECRETARY: Given all of these factors, I hope that we can make a fair deal, but if it doesn't happen, a trade tit for tat will
not be economically life threatening to the United States.
(END VIDEO CLIP)
QUEST: Okay, the problem here is that's what the Trump administration is saying now. But compare it just to last year, when ZTE first pled guilty
to violating U.S. sanctions. It was the same Wilbur Ross that put the world on notice warning, "Those who flout our economic sanctions and export
controls, laws will not go unpunished. They will suffer the harshest of consequences."
China can't easily afford to let ZTE go down. It's a global corporate giant. This employs 75,000 people, that's as many as Cisco putting it into
perspective, offering to save it could help U.S. trade negotiators towards a more favorable deal. The source tells us it could be used against
tariffs removed on certain agricultural products.
The U.S. punished ZTE for violating sanctions on North Korea and Iran, not because of Chinese trade practices or accusations. In other words, ZTE's
devices are a security threat. Let's talk about this with Michael Hirson, served as the U.S. Treasury's Chief Representative to Beijing, now the Asia
Director for Eurasia Group.
So, hang on, this is weird. On the one hand, the commerce department imposes sanctions if you like, tariffs, whatever - it basically stops ZTE
from doing business and then on the other hand, President Trump says, "Oh, the commerce department got it wrong and they really should be allowed to."
MICHAEL HIRSON, FORMER U.S. TREASURY'S CHIEF REPRESENTATIVE TO BEIJING: That's right, this is quite unprecedented and I think it shows the
difference between how President Trump approaches these issues and how some of his advisers, in particular, the more hawkish advisers approach these
issues.
President Trump values his relationship with President Xi, and so when some of his advisers came in and said, "Look, ZTE was going to be a major blow
up for an issue," as you pointed out, it doesn't really give the U.S. anything on trade negotiations. I think that was a relatively easy call
for the President to make even though it blindsided a lot of his officials.
QUEST: But doesn't the President now realize that to go back and sort of say, "Let's revisit this, unless there is sizable change, leads other
companies saying, "Where do we stand?" The element of certainty of the rule of law no longer exists.
HIRSON: Well, I think that's right, and this will have kind of an ironic consequence in the sense that now, the knives are out. You've seen
President Trump's - some of his outside advisers who are hawkish on China and some of his internal advisers, clearly are not happy with this
decision.
What it means is, they are going to be that much tougher on the other actions that are coming before the United States on trade issues. Possibly
other export control violations, and even larger for Huawei is under investigation in the U.S. for similar...
[16:10:16]
HIRSON: ... violations of U.S. export controls, so this will mean that the U.S. is probably that much tougher on other actions that are coming in
coming weeks.
QUEST: Okay, now put this into perspective, this is what the President has just said. "ZTE, the large Chinese phone company buys a big percentage of
individual parts from U.S. companies. This is also reflector of the larger trade deal we are negotiating with China and my personal relationship with
President Xi.
But then, that begs the question like - it now begs the question, why then did they not do look for other remedies and come to other solutions or have
further negotiations before they made the announcement they made last month?
HIRSON: Well, there are diversion voices in the Trump administration on China and on trade, and it seems that the original decision on ZTE which
was taken last year actually did not have as much deliberation as you would expect. It didn't rise to the very senior levels. President Trump
probably wasn't consulted on that issue.
So, he comes in now, he values his relationship with President Xi, this was a relatively low cost gesture for him to make on an issue that he had been
consulted with.
QUEST: Good to see you, sir. Thank you. Let's continue to talk though on the issue of the U.S. policy and administration's policy when it comes to
trade.
Iran says there are 60 days to save the Iran deal. Iran's Foreign Ministers in Moscow trying to do just that. There are billions of dollars
worth of deals at stake with European companies. On Sunday, President Trump's national security adviser admitted, they may be at risk even if the
nuclear agreement survives.
(START VIDEO TAPE)
JAKE TAPPER, CNN ANCHOR: Is the United States going to sanction European companies that do business with Iran?
JOHN BOLTON, NATIONAL SECURITY ADVISER, WHITE HOUSE: I think the issue here is what the Europeans are going to do. If they are going to see that
it's not in their interest to stay in the deal, we're going to have to watch what the Iranians do. They'd love to stay in the deal. Why
shouldn't they? They've got everything they wanted from the Obama administration.
But, I think the Europeans will see that it's in their interest ultimately to come along with this.
TAPPER: With all due respect, I have been speaking to European diplomats and that's not the impression I get.
BOLTON: That's not the impression now.
TAPPER: They say they are going to stay in the deal.
BOLTON: And they may try to do so, in part, because I think despite the complete consistency of President Trump and his opposition of the deal,
oppose to it as candidate Trump, opposed to it as President-elect Trump, opposed to it as President Trump, many people including apparently, former
Secretary of State John Kerry, thought that we never would get out of it.
Now, I don't know how to explain why people could miss what the President was saying, so I think at the moment, there is some feeling in Europe that
they are really surprised we got out of it, really surprised that the re- imposition of strict sanctions, I think that will sink in and we'll see what happens then.
The President is very clear. He wants to discuss the larger threat posed by Iran around the region, and this is what he discussed with President
Macron, he has talked about it with Chancellor Merkel. He has talked about it with Prime Minister May, not just Iran's nuclear threat now, but threat
in the future. The ballistic missile programs and the instability that Iran is causing around the region.
TAPPER: But with all due respect, I didn't get an answer to the question. Is the U.S. going to impose sanctions on European companies that continue
to do business with Iran?
BOLTON: I think I did give the answer and the answer is, it is possible. It depends on the conduct of other governments.
(END VIDEO TAPE)
QUEST: So, Siemens isn't waiting to see if it is possible or to see if a deal survives. The German company has announced it is stopping all new
deals in Iran and the company's Chief Executive talked to John Defterios and explained how he interprets the U.S. decision to pull out of the
nuclear deal.
(START VIDEO TAPE)
JOE KAESER, CHIEF EXECUTIVE, SIEMENS: First or all, we need to clearly understand what exactly has the decision been, so what does it cover and
what does it not cover. So, as far as we see for now, is that, all ongoing orders which have been placed ahead of the time, you know, can still be
served, but there is no new orders which we can take.
So, obviously, I always made it clear that the policy of a political system and if that policy said this is what they are going to do, then that's
exactly what they are going to do. And then everything else, we need to take from there.
So, we don't have that big of a business in Iran. There is an ongoing service sort of business in maintaining the capacity, so we're not only
concerned about the impact of our company, I am just a bit more concerned that you know, the root cause of all of these actions are actually not
being solved.
Look at Syria, look at the destabilization of Libya, look at the north of Iraq, so that's actually the root cause. So much more concerned about the
root cause of those actions rather than the unilateral action itself.
JOHN DEFTERIOS, CNN CORRESPONDENT: But a fifth of your revenues come from the United States, so the reality is that the U.S. Treasury says, "This is
our plan of action for Iran." It would suggest that you have to respond to the call from the United States even if they break the multilateral
decision.
KAESER: You know, we are a global company. We have interests and values, and we need to balance both, and obviously, you know, being responsible for
387,000 people across the world also means that we need to carefully balance our interest with our opinions and values.
DEFTERIOS: Does Europe remain in this agreement in your view or can we get one voice out of Germany, France, UK, Brussels?
KAESER: To be very honest, the answer is I don't know because this is a question to the political leadership. Obviously, Europe should have a
common view about the politics especially on the economic interest because Europe has no one else. It's an export nation, so it depends on a sort of
a reliable way of doing business over time.
DEFTERIOS: If you take a step back, it's almost tragic because you have a market of 80 million consumers with 18% of the proven gas reserves, about
9% of proven oil reserves in Iran and they won't realize their potential that goes like this.
KAESER: It is what it is. There are always people who think it's a good idea and people who think it's not a good idea. I mean, the oil price is
going up, it also has a reason for you know, the instability that helps our customers elsewhere. So, there is always benefits and challenges and we
need to carefully play those challenges and obviously, also look for the opportunities.
(END VIDEOTAPE)
QUEST: Now, when we return, moving the goal post on gambling. The U.S. Supreme Court decision in New Jersey could pave the way for more stakes to
legalize betting on sports.
Now, it's a very straightforward simple operation, keyless ignitions, they were designed to be more convenient. The new report says people are
failing to turn them off, well the cars that is, and that has deadly consequences or could they?
Now, the U.S. is moving one step closer towards legalized gambling on sports. The country's Supreme Courts struck down a Federal law that barred
betting on games like football and basketball and endorsed a 2014 New Jersey ruling that allowed wagers at race tracks.
So, let's look at what we've got here. It paves the way for a massive way of legalized gambling in states and taxes on what is already a thriving
industry with Americans placing an estimated $150 billion in illegal wagers. That's the point here, illegal wagers every year.
[16:20:16]
QUEST: So, put into context, almost $5 billion was bet on this year's Super Bowl alone. Now, the American Gaming Association claims 97% is doing
this through illegal unlicensed bookies. It's an extraordinary situation when you think about it. Today's announcement is extremely good news for
foreign businesses who made good money because they are eager to tap into the lucrative U.S. gaming industry.
So, shares in gambling giants like Paddy Power were up 12%, Betstar and William Hill also saw a double digit gains of the day.
Michael McCann is a legal analyst and writer at "Sports Illustrated." He joins me to delve into this.
The fascinating part is most people in the rest of the world think of Atlantic City, think of Las Vegas which I know are grandfathered into the
old law, but they would never dream that national gambling on sports was illegal until now?
MICHAEL MCCANN, LEGAL ANALYST AND WRITER, SPORTS ILLUSTRATED: Yes, that's right. I think many people, especially because it's been available in some
states, horse, specifically that the possibility of states having legalized gambling has existed for some time, but now, it will be more widespread.
We will see how many states legalize horse betting. It will now be up to each of the 50 states. Some will legalize and some won't, some will do it
quickly, some will take time. Some will legalize it for certain sports, and not others. There's potentially going to be 50 different sets of
rules, but clearly, the net effect will be more availability of sports betting for consumers.
QUEST: So, where will people be placing all of these bets until now? And will these unlicensed bookies, as we might say suddenly become legit
gambling institutions?
MCCANN: Well, the betting has occurred in areas where it is legal, so in Las Vegas for instance, it is legal under the state law. One has to get a
license and assuming an operator has a license to offer sports betting wagers, it's been legal there, but generally speaking, elsewhere, it hasn't
been legal.
Going forward, as long as the individual states permit horse betting and create rules for giving licenses out and enforcing those licenses, yes,
there will be a new set of people, a new of set of businesses that casinos and other operators will get the right to offer sports betting.
In terms of the bookies who might have been doing it illegally, they aren't necessarily going to benefit here because in all likelihood, the recipients
of the licenses will be larger entities rather than individual parties.
So, they may be having...
(CROSSTALK)
QUEST: Are there larger entities? Are there larger domestic home grown entities ready to move in to these new markets or will it be a bonanza for
the William Hills, the Paddy Powers, the Bestars who are already very experienced in this sort of business.
MCCANN: Yes, it's a good question. I think the expectation was that the Supreme Court was going to do this ruling as it did, so there has been some
lead time for other businesses to prepare for this event, but you're right. The more established operators have an inherent advantage because they know
what they are doing and they know the basic - the aspects of it in terms of problems that can come up and just the day to day operations.
So, we will see. I think those who have experience have an inherent advantage, but this has been expected for some time.
QUEST: Now, finally and you may not know the answer to this, I am just punting my luck here to this, will it still be legal to bet on the outcome
of the Presidency of the United States? I seem to recall somewhere, I may be wrong but something in the back of my mind says, that it is illegal to
bet on the outcome of the U.S. Presidential election in America.
MCCANN: Yes, I think - in Las Vegas, I think you can bet on almost anything, so you know, this Supreme Court ruling won't affect any kind of
questions about political races and the like, but the Presidential election, and other elections, clearly do get some traction with betting.
I mean you know, you go to Vegas, and I don't know what you can't bet on.
QUEST: I am sure there is something, but we haven't discovered it yet. Thank you, sir. Good to see you. Appreciate it. Thank you.
MCCANN: Thank you.
QUEST: Now, the markets in the United States, they finished today higher. So, eight days in a row, if I am not mistaken, signs that tension may be
easing over China, but trade in the Dow, it's eighth day of gains.
This is interesting and it's important because it's the longest winning streak since September, and if you bear in mind the hiccup and indigestion
and discombobulation that the markets had pretty much throughout the course of the year so far.
There is an argument that would suggest that what we're seeing, not just in today of course, is sort of a settling down, post earnings moving forward.
Meanwhile, Tesla shares swung lower as Elon Musk announced...
[16:25:16]
QUEST: ... he would be overhauling the company's management structure. The shares already great pressure.
A report in the "New York Times" says dozens of people have suffered carbon monoxide poisoning related to keyless ignitions in cars. Now, since 2006,
at least 28 people have died, 45 have been injured after failing to shut off their engines. Majlie de Puy Kamp from CNN investigations co-wrote the
report, she is in New York, and the seriousness of this, the seriousness of this, if you like accident that happens as a result of ignition-less cars,
what can be done about it?
MAJLIE DE PUY KAMP, CNN INVESTIGATIVE REPORTER: Well, a lot can be done about it actually. It's a very stupid problem to have. A car already
knows if there is someone inside the vehicle, and it can tell if it is unnecessary for the car to be running.
So, these 28 deaths while, they may not be you know, super high in numbers, they are completely unnecessary and all it would really take is a software
update.
QUEST: Okay, what - if it's straightforward, is it your experience that the car companies are willing to make those changes, because as I look
around, I do believe that General Motors and others have made some changes to cars, if nobody is in the car or it's running without movement or things
like that.
DE PUY KAMP: Right, so in some models, some newer models, GM - you just mentioned them; Ford, they have created what's called an auto shutoff where
after 30 minutes of inactivity, the car shuts itself off automatically.
But other car companies haven't made those changes and more importantly, all the older models are still driving around without this amendment.
QUEST: So, in this - what happens in the case of this engines? You mean, you leave the car running in the garage, it fills up with poisonous gases.
I mean, how do these deaths actually happen?
DE PUY KAMP: Well, I imagine for example, an older driver who is used to, when you take the car, the key out of the car, the car is off. So, they
think they park their car in their garage which is attached to their home, and they take the key fob with them into their house and they go to bed and
forget about it.
And these cars are - they run so quietly now that you can't really hear whether they are on or off, and so then slowly, the garage will fill up
with carbon monoxide and they unfortunately die from carbon monoxide poisoning.
QUEST: Of course, you know, assuming, of course, I have got carbon monoxide detectors. I am assuming, the batteries are being replaced, which
all of us remember to replace the batteries in the fear of carbon monoxide - very interesting. Thank you very much, indeed for taking the time to
come in tonight to talk to us. But something I wouldn't have thought of, and you're right. An interesting issue that we're glad to report to our
viewers tonight. Thank you.
DE PUY KAMP: All right, thank you.
QUEST: As we continue QUEST MEANS BUSINESS it's taken a long time, but Italy is now nearing a new government and there are interesting
machinations of who might be getting into political bed with whom. But can a government like this survive or will Italians inevitably be back in the
boat?
It's QUEST MEANS BUSINESS.
[16:28:00] (COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest, there's a lot more QUEST MEANS BUSINESS in a moment, we'll bring you all sorts of stuff to think about Italy, we'll
talk about in a moment.
As we continue, this is CNN and on this network, the facts always come first. Palestinian officials say Israeli forces killed 55 Palestinians and
wounded thousands more as U.S. formally transferred its embassy from Tel Aviv to Jerusalem.
The contentious move happens on the 70th anniversary of Israel's formation. Israel says its troops were attacked by violent protesters, the White House
says Hamas is responsible. Turkey has now recalled its ambassadors from Washington and Jerusalem.
"TMZ" is reporting that Meghan Markle's father will no longer be attending her wedding on Saturday, the wedding to Prince Harry. The report says
Thomas Markle made the decision after it was revealed he'd worked with a photo agency to stage pictures of himself preparing for the wedding.
Statement from Kensington Palace says the couple asked for understanding and respect for Mr. Markle in what they described as it's difficult
situation. The first lady of the United States Melania Trump has been hospitalized with what the White House is calling a benign kidney
condition.
The first lady was in surgery this morning, the operation was successful and apparently no complications. Mrs. Trump will like to remain at the
Walter Reed Medical Center for the rest of the week.
A space of suicide bombings in Indonesia has continued on Monday -- and let me warn you, these images are disturbing. In this video, you see four
suicide bombers on two motorbikes, they approach and then detonate their explosives at the front entrance of a police station, ten people were
injured.
A judicial source in France says the man who stabbed five people in Paris on Saturday was on a police watch-list. He killed one person and wounded
four more before being shot dead by the police.
ISIS has claimed responsibility and called the attacker a soldier of the Islamic State. The actress Margot Kidder has died at her home in Montana.
Her manager says she died peacefully in her sleep.
She starred in Christopher Reeve in the original "Superman" film and in three sequels, playing the super heroes intrepid jealous girlfriend Lois
Lane. Margot Kidder was 69.
Italy's political deadlock could be set to end with a populist takeover. They have been months without a government and now two anti-establishment
center-right parties are close to forming a coalition.
It's a move that the markets once thought was the worst case scenario. So who is in this? The Five Star Movement and the league party are working
together to choose one mutually agreeable Prime Minister.
The Five Star leader Luigi Di Maio said they were closed to a historic agreement. Both parties made expensive campaign promises which will be
difficult to keep. For instance, a universal basic income, tax cuts and scrapping the popular pension reform.
It could all ramp up at least, already monstrously-sized deficits. Investors don't seem too worried, the MIP which does mostly a move to the
(INAUDIBLE) around 10 percent since the election. Which begs the question why?
The question for Francesco Guerrera; head of EMEA at Dow Jones Media Group. Why? Why is the -- why are the markets not perturbed by what was seen as
the worst case scenario?
FRANCESCO GUERRERA, HEAD OF EMEA, DOW JONES MEDIA GROUP: I think it's because they don't think any of those promise or all of those promise would
be actually be fulfilled by the two parties.
Let's think about this for a second. These two parties have never governed at the national level in Italy, they never govern together, they're having
trouble finding a Prime Minister that would work for them and for their Italian president which is a key figure in this.
And they will then have to implement all these reforms with Europe watching, the markets watching and their inability to actually get this
done.
QUEST: That's a recipe for chaos.
GUERRERA: Those recipe for chaos in Italy has been going on for some time, right? So Italy, let's remember is functioning very well in economically
and socially without the government for some time.
[16:35:00] And the issue is whether they can actually create a government that will do better than what we're seeing so far.
QUEST: They decided though quite clearly, Five Star decided there will not be a technocrat prime minister. So there's going to be a political policy-
led prime minister here.
GUERRERA: Well, we don't know it, that's what they're saying. In reality, they haven't named the prime minister, they don't --
QUEST: Well, it's going to be the leader short here, one of the two parties, who's finally going to have to say alright, you take it, now you
take it, then you take it -- oh, well, I'll take it.
GUERRERA: Even by Italian standards, that is unlikely. Actually, it's difficult for these two politicians who lead these two parties to become
prime minister. So they'll be looking for like another candidate will be agreeable.
In reality for the markets, the most important thing here is the name of the finance minister because that's the guarantor of some sort of stability
meantime --
QUEST: Particularly coming out of the existing finance minister who is enormously respected around the world and has done a superb job holding the
line for the economy.
GUERRERA: Yes, so that issue, there will be big shoes to fill in that kind of situation.
QUEST: Paola, yes.
GUERRERA: Well, Paola of course is not a candidate to stay --
QUEST: Absolutely --
GUERRERA: In this government, so we will lose something, Italy will lose something in this. And we'll have to see whether they will be able to
replace him with someone else. And the names that'll be made, actually quite are short.
QUEST: So where does these two parties stand on Europe? Bearing in mind the E.U. are extremely concerned obviously by the deteriorating situation
in the Italian economy, the Italian banking system, Italian pension system.
Gentiloni(ph) was still dreadful and that concerned obviously about a third or right-wing movement within the union.
GUERRERA: So neither party likes Europe or the European Union and they have campaigned against European Union. It is very easy in Italy at the
moment for these two parties to score political points by just bashing Europe.
They however have not said that they will withdraw from the Eurozone, and it will be very difficult to withdraw from the Eurozone.
QUEST: No, but there could be --
GUERRERA: Has to be --
QUEST: They could cause a lot of trouble on the way.
GUERRERA: They could cause a lot of trouble, they could be difficult, they could --
QUEST: Right --
GUERRERA: Expanding of the axis, the German-Franco axis, but they won't be damaging to Europe.
QUEST: I've got to ask you, Silvio Berlusconi, the court has ruled that he is now eligible again to stand for parliament or to stand in electoral life
of Italy. Now, bearing in mind Mahathir Mohamad has just been elected Prime Minister of Malaysia at 92.
And Berlusconi is only 81. I mean, Berlusconi is looking at this and saying come on, the population of Malaysia wanted to be rescued by Mahathir
again, why will the Italians not want me back?
GUERRERA: Yes, I'm sure he thinks that. I'm sure he thinks something like that.
QUEST: You think I'm -- you think I am so far off the reservation.
GUERRERA: No, I think -- no, I think any way you pass, there's no reservation in Italy. So anything is possible in Italian politics. But
the one thing we do know is that the president does not want another election. They think -- he thinks it will be destabilizing for the system
and it probably will be.
So the whole political system will try to avoid an election at all cost. Now, if there's an election, it's very possible that Berlusconi will be one
of the candidates.
QUEST: And if he is, just for those of us who don't follow Italian politics as closely as yourself obviously. Does he still enjoy a level of
support that would make him a potential prime minister in the future.
GUERRERA: So to be a potential prime minister, we don't know whether the level of support he enjoys now will be enough to make him a prime minister
in the future.
QUEST: When the next election happens, I promise you, it'll -- you'll be here helping us some of the --
GUERRERA: Of course.
QUEST: Thank you very much indeed, yes. Italy's FTSE MIP index was one of the few European markets to end the day in positive territory, that's and
most ended slightly lower, energy and financials weigh the stocks down, oil retreated -- was retreating highs, not hugely, but it is -- retreat is seen
as being positive in this market.
Energy shares were with it. The British Prime Minister faces a crucial cabinet meeting on Tuesday, that's tomorrow, while that could potentially
change the face of Brexit. She's facing rebellion within her own party, that's nothing new over what sort of custom arrangements the U.K. should
have with the E.U. after it leaves the block.
Isa Soares now takes us through the options on the table and uses the appropriately European toy Lego.
(BEGIN VIDEOTAPE)
ISA SOARES, CNN INTERNATIONAL CORRESPONDENT (voice-over): There are three roads the U.K. could go down for its future cost in relationship with the
E.U.. First, it could stick with the path it's on and stay in the -- union.
This one means no hard borders with Ireland and no changes in tariffs the goods coming into the U.K. from outside the E.U. But it will mean the U.K.
is unable to strike with only trade deals with countries outside the European Union like the U.S., Middle East or Australia.
The second option, one that is favored by Theresa May is a customs partnership.
[16:40:00] Under this, the U.K. will set its own tariffs, and when goods arrive from outside the E.U., companies would have to pay whichever is the
highest tariff in U.K. or the E.U.
Then if goods ended up staying in U.K., companies can later reply for a refund of the difference. Now critics say the system will put a huge
burden on businesses and will keep Britain too close to the European Union.
So there's a third option favored by pro Brexit members of the U.K. government, and it's known as maximum facilitation. Under this
arrangement, the U.K. will set its own tariffs, but it would mean some kind of order would be needed between Ireland and Northern Ireland.
Proponents say this could be done in part by technology like number plate recognition cameras and it would mean the U.K. would be free to make its
own trade deals with other countries.
While a Brexit fast approaches on customs arrangement, this is a long road ahead.
(END VIDEOTAPE)
QUEST: And we will have more of QUEST MEANS BUSINESS from London in a moment.
(COMMERCIAL BREAK)
QUEST: Dirty clashes with a scene in Gaza as the U.S. open its new embassy in Jerusalem. Palestinian officials say more than 50 people are dead and
2,400 have been injured. Ian Lee is joining me live from Gaza.
Sort of an appalling toll that we're seeing this evening, and it raises the question in -- I mean, this was as a result of Israeli armed forces using
live ammunition?
IAN LEE, CNN CORRESPONDENT: That's right, Richard, and we could hear it all day as these protesters were surging towards the border fence. Their
goal is to cross over at -- they say to return the land they lost during the 1948 war. Many of these people are descendants of those refugees.
But they say they're adamant to cross over, and that's really where you see this contention because Israel says that they're not going to allow that to
happen. That that's a red line. Now, first, we saw tear gas being fired by the Israelis, but then when they moved closer, that's when they started
opening fire.
At one point, we heard heavy automatic fire in the northern parts of Gaza. And we also heard tanks in the southern part. The Israeli army saying they
are targeting Hamas positions. Also two airstrikes we witnessed, these were going after what Israel calls Hamas terrorist operations.
But when it comes to those who were killed, many of these people were people who were trying to get close to that border, and that's when Israeli
soldiers shot and killed them.
Also you point out that there was over 2,000 people who were injured and these hospitals were struggling to cope with the numbers. They didn't have
enough medicine, they had to reach out to the Egyptians who finally were able to bring in the medicine to help with that.
[16:45:00] But Richard, we need to also point out that this is just the first day, we're expecting this same level of violence tomorrow.
QUEST: Ian, the Israelis will say that the -- those heading towards the border with intent on violence and destruction and they were protecting
Israel and the border. Indeed, the prime minister said quite clearly that that is his duty and that is what he's there to do.
I understand it is very difficult to pass assessments on a complicated moving situation like this. But you were there, how did it seem?
LEE: You're right, it is very difficult, especially we were at one camp and there were multiple camps up and down that border with Gaza. So it
really is hard to tell what's going on at different places. We can only go by what we saw and what we saw were many of these protesters with sling
shots also burning tires to obscure the view of them moving forward.
We did hear from the Israeli military though saying that they foiled a number of attacks on the border, they said there were IEDs that were
thrown, although we can't verify that. And so it is going by what people are telling us and what we're able to gather.
You know, one thing though when we talk to protesters, they'll point out is, you have this huge death toll in Gaza, over a hundred people have been
killed since these protests began seven weeks ago. Thousands of people have been injured, and they say that only one Israeli soldier has been
injured, although the cause of that injury isn't known.
And so they say, you know, they say we are trying to be peaceful, Hamas, you know, is an organization that's viewed as a terrorist organization by
many in the west, they have said they want this to be a peaceful demonstration, they blame the blood on the United States for moving that
embassy.
But again, Richard, tomorrow, we're expecting thousands to go again to the border, again, another deadly day.
QUEST: You have a busy day ahead of you, Ian, I'll let you to get to your bed or not, maybe some later reporting duties, thank you.
The royal wedding five days away, now obviously, excitement is draining and so is the beer. We're going to go for a taste test of some real royal
ales.
(COMMERCIAL BREAK)
QUEST: Bit coin is up around 2 percent, you can see the numbers, it's up hundred and -- 8,856, it recovered after it fell below 9,000 at the
weekend. A venture capitalist Tim Draper has a bold prediction. He believes it will hit $250,000 in the next few years.
He owns millions of dollars worth -- when I spoke to him on the "QUEST EXPRESS", he seemed convinced bitcoin was the future.
(BEGIN VIDEO CLIP)
[16:50:00] TIM DRAPER, FOUNDER, DRAPER FISHER JURVETSON: I believe that bitcoin makes perfect sense that bitcoin will become a major global
currency moving forward. So we're really excited about what bitcoin can do for the unbanked, for stored value for all of the people who are stuck in -
- where there's bad government and --
QUEST: Right --
DRAPER: Bad currencies. This is a great opportunity for people.
QUEST: OK.
DRAPER: People really need to recognize that they need to take advantage of bitcoin now.
QUEST: It's fair to say that you are long on bitcoin, so you have a sudden interest. But that's what -- this without the -- was a need for --
DRAPER: Absolutely yes, and I hope to become longer.
QUEST: Right --
DRAPER: In fact, I'm hoping to move my fiat currency over to my bitcoin and other cryptocurrencies because they're just better currencies. They're
not tied to some political force. They're not subject to the whims of some bureaucrat or some government official.
They're open --
QUEST: On the one --
DRAPER: Global --
QUEST: Let me jump in here --
DRAPER: Decentralized and impression (ph) less --
QUEST: Let me jump in here --
DRAPER: Sorry --
QUEST: On the one -- on the one hand, you have the whole cryptocurrency as it relates to bitcoin, and then you also have the issue of blockchain where
there seems to be a greater acceptance of blockchain technology. In fact, the first financing for trade deal has just been done using blockchain
versus cryptocurrencies where there's still a great deal of skepticism.
DRAPER: Well, it's interesting, I mean, I think you've been listening to a lot of people speak who are bankers because I think the bankers are always
thinking yes, we can use blockchain technology to move fiat currency from country to country.
But eventually, yes, we're going to all be using crypto, it's going to be much easier. In fact, I think in five years, people will laugh at you if
you try to use fiat currency to buy a cup of coffee because it will be like, you know, trying to bring shells or gold to Starbucks and trying to
buy --
QUEST: Right --
DRAPER: A coffee. Because this is just a new -- it's a new currency, it's creating wealth throughout the world, it's allowing people who are unbanked
because banks are so heavily regulated, they can't take small accounts. And so those unbanked people can now be a part of the world's economy.
QUEST: Right --
DRAPER: And this is just -- it's a transformation, it's going to change everything --
QUEST: All right, Tim.
(END VIDEO CLIP)
QUEST: Bitcoin, now there are some essential elements to any royal wedding. A white dress of course, we will find out what Meghan Markle
looks like on Saturday. You want to be sharp, times are a little bit difficult at the moment in Britain, so a small bottle will do nicely.
We don't want to be over thinking the pudding just a little in general, all look beautifully lit up as well. And you also need businesses looking to
cash in and that includes the manufacturers of less traditional wedding beverage beer.
Anna Stewart has got a taste of the beer.
(BEGIN VIDEOTAPE)
ANNA STEWART, CNN JOURNALIST (voice-over): It's a pear ale fit for a prince and princess. The Windsor Knot of royal temple brew set away from
the castle. Yet, some barley grown at her majesty's farm with West Coast American hops.
UNIDENTIFIED MALE: And so we like to think that Windsor royal farm barley marrying West Coast U.S. hop. You know --
STEWART: Meghan marry --
UNIDENTIFIED MALE: Meghan marry, and it happens also to be a fantastic beer.
STEWART: The beer is new but the idea is not. The brewery actually calls it a different beer for the last royal wedding, also called the Windsor
Knot.
UNIDENTIFIED MALE: And this is the very last row we produced it, which can still make the pubs in time with a great day --
STEWART: Is this going to be ready for the day?
UNIDENTIFIED MALE: It absolutely --
STEWART: This is a last-minute brewing, let's have a smell.
UNIDENTIFIED MALE: This is -- this is going to be in (INAUDIBLE) for today. You can see it's finished from emptying now, but it smells of beer
and it looks like beer.
STEWART: This smells --
UNIDENTIFIED MALE: Looks good --
STEWART: Ready to me --
UNIDENTIFIED MALE: Lovely, great.
STEWART: And these three is ready, it brewed around 91,000 pines of special royal wedding beer, and while this isn't quite a royal carriage,
some of it is being delivered by Shire horse.
The horses also make a knot for couple's routes, Roger here is part American Clydesdale while Major is cold British Shire. Local police had
set one hundred thousand people to pour into Windsor's big event.
Yet, the pub masters suggest grabbing a pint before they run out. They also assure us, that won't happen. And the Americans have descended in
force, each news network taking over a different pub.
[16:55:00] The owner of this establishment says he's hosting Fox News and NBC, and isn't picky about which pint they prefer. Pubs around the U.K.
are allowed to stay open and stay serving an extra two hours this weekend.
The British Beer and Pub Association says the extension could generate an extra $13.5 million in sales. The George Inn sits in the shadow of the
castle across the River Thames. Tim Bolt (ph) is the manager.
So how busy are you going to be on Saturday?
UNIDENTIFIED MALE: Very busy, I think we're going to be pretty booked and completely full inside and outside before lunch time actually.
STEWART: And he expects they'll be raising their glasses deep into the night. Cheers!
UNIDENTIFIED MALE: Cheers.
STEWART: Anna Stewart, CNN, Wyndham (ph).
(END VIDEOTAPE)
QUEST: Good grief, Anna Stewart with a pint of beer? I thought her trip will be more a small pot and lemon or maybe a Chevy -- I have to do that.
Profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: With a sad and solitary reminder today of the grief that can befall those who come into contact with the British royal family. Thomas Markle
who made a silly mistake in staging some photographs now won't get the opportunity to walk his daughter down the aisle at this week's wedding.
It is a cruel price to pay. But anybody who's covered the royals know that the paparazzi who also cover them are mean and vicious and rarely take any
prisoners. They go full throttle and once they've got their prey, all bets off.
And then another example of that tonight. And that's QUEST MEANS BUSINESS for tonight, I'm Richard Quest in London, we'll be here all week as part of
CNN's royal wedding coverage. We hope you're here with us all week, too.
And as always, whatever you're up to in the hours ahead, I hope it's profitable. What a week ahead.
END
