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Quest Means Business

Europe's Borders Have Opened Further To Tourists Despite Fears Of The Spreading Virus; Arrests In Hong Kong On First Day Of National Security Law; W.H.O. Trying To Verify U.S. Bulk Purchase Of Remdesivir. Aired 3-4p ET

Aired July 01, 2020 - 15:00   ET

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

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: After that, Brooke Baldwin, who on Earth would ever think of going anywhere without one

of these? I thoroughly applaud what you've just said.

Now, we turn our attention to our business agenda. Stocks having difficulty this morning, struggling for direction on the first day of the second half

of the year.

You can see how the good gains of the morning evaporated, and we are down just nine points. There is lots of news behind the market. These are some

of the stories.

The summer starts right here. Europe's borders have opened further to tourists despite fears of the spreading virus.

W.H.O. is investigating why the United States is hoarding the seemingly major anti-retroviral treatment.

And Boeing shares are falling. It is accused of shielding flaws in the 737 MAX plane.

Live from New York, it is July 1st. We can sort of say summer is here, at least in the Northern Hemisphere. I'm Richard Quest in New York, and of

course, I mean business.

Hello, good evening to you. July 1st, and for many people, this is the official start of the summer. There was good news on that front as borders

came down in Europe. The Schengen zone pretty much reopened, and up to 14 other countries now would be able to travel to and from the European Union.

Non-essential travel was banned in mid-March. The original ban lasted or was meant to last just 30 days. We now know of course it lasted much

longer.

Today, it was a different kettle of fish.

In Athens, in Greece, where they have done such a stellar job in holding back the virus, the first international flights came in. The economy has

been devastated without tourism, trying to salvage a summer in Europe now with what they can.

Spain and Portugal have opened up their borders. Of course, large parts of Schengen have. Sweden is slightly different. The U.K. is having to do its

own bilateral travel corridors and some countries, well, some like the United States simply aren't welcome anywhere at the moment.

It is a milestone for the continent. The U.S. is not among them. This is Ryanair, Europe's biggest airline restored 40 percent of its flights.

Portugal and Spain reopened their borders, closed for three months.

Fred Pleitgen is in Brussels. There is no question, Fred, it was a tortuous process getting to this point with European countries. But they have done

it. Schengen has reopened, essentially, and there will be more countries added to the travel corridors.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, I think you are absolutely right, and that's one of the things, Richard, a lot of

European officials have been saying as well.

They do believe that they have achieved a lot since they've had to shut down in early and mid-March and they obviously don't want any of these

gains to be jeopardized.

For instance, as you've noted, by having travelers from the United States coming here to the continent. It was quite interesting because the Home

Affairs Commissioner for the European Union on CNN today said, look, he would love to have Americans coming back here.

Of course, Americans, by and large, very wealthy tourists. He said that right now, the continent is very much in an economic crisis. It needs every

euro, every dollar that it can get. But they simply believe that right now, with the Americans, the health risk is simply too great with the

coronavirus situation the way it is in the United States to allow Americans back in.

As you know, as we have been talking about, they have very strict criteria, the situation with the coronavirus in the countries of origin that people

come here to has to be either better or about the same as the average of the European Union.

For the U.S., that's not the case. But for some other countries, that is the case, and I think there are some really important countries that are

going to see folks coming back here to Europe, Canada, Australia, New Zealand, of course, and then though, the big question remains, Richard --

and I think this is something that we are going to be talking about a lot in the not too distant future, is how willing are people going to be to go

on long distance holidays for instance here to Europe?

QUEST: But, Fred, I remember sort of when just at the beginning of June, a European official says Europe can't wait to have a break. Now some will be

staycations, obviously, within Germany or France, great resorts that we have there.

That question of who will actually travel? My gut feeling says probably more than we think, but I have no evidence for that.

[15:05:15]

PLEITGEN: I think, Richard, I was actually one of the first people actually to go on airplanes again and travel again. And I think, it is

going to take some getting used to again by some travelers.

I will admit that the first time I got back on an airplane, it is a strange feeling. You know, when you have been trying to stay away from confined

spaces for an extended period of time, to then get back into that confined space of an airplane, and to get back on to a plane, but I also think that

you are absolutely right and we are hearing this from a lot of people in many European countries. They do want to have a summer vacation.

A lot of them have been holed in their home countries, a lot of them in their homes in fact for such a very long time. Many people do really want

to get out very badly.

QUEST: Now, realistically, Fred, from what you are hearing in Brussels, when is it -- I was going to say likely, but that's the wrong word. When is

it even possible do you think that the U.S. would be added to the list?

Because many European countries are desperate to get higher spending U.S. tourists back?

PLEITGEN: Yes, I think you're absolutely right. They certainly do, especially a lot of these countries with a lot of history, with a lot of

beautiful historic cities.

You look for instance like Rome can't wait to get Americans back. Florence can't wait to get Americans back. Paris, of course, one of the most favored

destination for American tourists as well.

The big problem right now though is the coronavirus situation. Now, the European Union is going to take a look at the list that it has put out and

they are going to reevaluate every two weeks.

Does anyone believe that America in two weeks' time is going to be looking much better as far as the coronavirus is concerned? We heard Dr. Anthony

Fauci for instance say yesterday, that it could go up to 100,000 cases per day. And the European Union does have these very strict guidelines where it

says, look, this is what the countries need to adhere to. This is what they need to achieve.

Now, of course, we know that in the end, every country can decide for themselves, but for most of these European countries, what we are hearing

here in Europe, the bottom line is they believe another lockdown would be a lot more costly than not having these tourists coming in right now,

Richard.

QUEST: Fred Pleitgen, who has done more travel than most over the course of this of virus. Thank you, Fred. Thank you.

Zurab Pololikashvili is the U.N. W.T.O. Secretary-General. He is, if you like, Mr. Global Tourism. He joins me now from Italy where on your first

person to person trip, you went to Italy, the worst affected arguably in Europe perhaps except for the United Kingdom.

What is the message do you think now countries are starting to reopen and travel is possible once more? What is happening?

ZURAB POLOLIKASHVILI, SECRETARY-GENERAL, UNITED NATIONS WORLD TOURISM ORGANIZATION: Hi, Richard. Good evening or good morning.

Our message is that first was affected is Italy. And first is Italy, the country, which will show how to restart tourism and how to come back to

normal life.

We came from Spain, from another affected country in Europe, but again, Europe will be the example for other community in all the world how to

restart and how to become to the normal life.

We saw -- and this was first trip after three months being at home, and we really saw that it is easy to travel. We can travel tomorrow, and I'm sure

that step by step, the borders will open.

We will trust more each other. We will be more responsible tourists, and it will decrease the risk that the pandemic will be coming back.

QUEST: Right. So what do you want from countries, because obviously there are Russia, the China, the U.S., and Brazil, which are still outliers. But

to get joined up travel, to get lots more travel, what would you like countries to do to coordinate?

POLOLIKASHVILI: First of all, I think that it is better -- and our accommodation is open borders. We issued particularly clear recommendations

for all member states and to have more control, control doesn't mean to have very strict and very difficult procedures. It has to open slowly.

But to become to normal life, step by step. It's possible. I'm sure. I'm very optimistic and very positive. I know that in the American continent

now, it is a very hard period. But Europe will be again the example of how to open, how the reopen and restart tourism. And I am sure that in the

upcoming two or three or four months, we will come back to normal.

Of course, it depends a lot on the pandemic, how it will elevate. But again, we are in Italy. The message is that Italy is open. Europe is open.

And let's see.

[15:10:10]

QUEST: I think -- if I am not mistaken you are in an exceptionally good vantage shot over there, of I think of St. Peter's Square in Rome, if I am

not mistaken where you are enjoying. And I am guessing also, since there aren't that many tourists around at the moment you probably pretty much --

yes, it does look definitely, well, it certainly looks like you've got the place to yourself.

The governments have done a lot, but there is much more to do. How much damage do you think there has been done to the tourism industry? Permanent

damage.

POLOLIKASHVILI: Talking about the numbers and financial damage, it was around $1.5 trillion speaking. Richard, you know as well that it is very

difficult to forecast what will be tomorrow, what are the figures?

Many people are asking what will be tomorrow. Tomorrow will be -- tomorrow depends a lot on how the pandemic will elevate, how fast the borders will

be open, how connectivity will be back again.

There are components that it is very difficult to say today, as it was very difficult to say two months ago, we had an interview, I remember very well

because we didn't know where we were sitting at home. But we are now in Italy, in the center of Rome.

People -- bars, restaurants are open. Shopping malls are open. Step by step, we are coming to normal life. Again, want to give some optimistic

messages to all the world to don't panic, to follow recommendations we gave to all countries, and to be more responsible.

QUEST: Right. A good message. A solid message of don't panic, follow recommendations, and a good time will be had by all. Zurab, have a good

time in Italy. Make sure you have a good drink and a nice Italian coffee for me.

Now, we move on. Hong Kong where the police wasted no time in cracking down on dissent, arresting nearly 400 protesters only hours, if that, after the

new sedition law imposed by Beijing came into play.

Thousands of people demonstrated against the law. It was drafted secretly and passed secretly in China. Teargas was used and water cannons were

employed to break up crowds.

The new law criminalizes secession and subversion against Beijing. Hong Kong government says it is good for stability and prosperity, the law that

is.

Some businesses like HSBC and Standard Chartered have voiced their support for the new law. Others believe it will hurt Hong Kong's standing as a

critical financial hub.

CNN's Ivan Watson is our correspondent in Hong Kong.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): July 1st, 2020 may be the day Hong Kong's autonomous bubble finally burst. A

controversial new law dramatically expanding the Chinese central government's powers in Hong Kong was imposed under cover of darkness as

riot police began fanning out across the city's center.

A National Security Law written behind closed doors in Beijing was only made public at 11:00 p.m. on Tuesday, the moment the law went into force.

The timing, hardly a coincidence. Because hours later, officials began celebrating the 23rd Anniversary of Hong Kong's handover from British to

Chinese rule.

According to International Treaties, Hong Kong was supposed to enjoy relative autonomy from communist-ruled China until the year 2047. But the

new law threatens critics of the Chinese government with possible life imprisonment.

At a press conference Wednesday, Hong Kong's top officials argued the law would be good for the city's long term stability.

(BEGIN VIDEO CLIP)

WATSON: You have repeatedly said that it will be a tiny minority of people who could be prosecuted and targeted by this law. Are you anticipating

dozens of people being prosecuted -- hundreds, thousands?

CARRIE LAM, CHIEF EXECUTIVE, HONG KONG: I would rather not arrest or prosecute anybody if everybody abides by the law. The purpose of this piece

of legislation is not just to punish. It is also to deter -- to deter people from committing such serious offenses as secession, subverting the

state power, terrorist activities.

(END VIDEO CLIP)

WATSON (voice over): For years, Hong Kong offered a split screen commemoration of the July 1st Handover Anniversary. Government displays of

patriotism while not far away, a prodemocracy protest march often critical of Beijing.

[15:15:06]

WATSON (voice over): But after a million-man march last year, some protesters broke into the city's Legislative Council building, trashing it.

The city then descended into months of increasingly violent confrontations.

This year, police banned the annual protest march before it even began and immediately started arresting demonstrators.

WATSON (on camera): This new National Security Law arguably formalizes changes that have already been taking place in Hong Kong over the last

year. I mean look at the fortifications around the government's headquarters -- the riot police presence, the wire mesh defending the

pedestrian overpasses.

All of these are new measures responding to a portion of the population that's deeply unhappy with its own government.

WATSON (voice over): The Chinese government's power play has had an immediate chilling effect with some opposition activists disbanding their

political party office this is week.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Probably in the future, we may never see a million people on the street again. Not because we are satisfied with the

government, but just because we are now living in fear.

(END VIDEO CLIP)

WATSON (voice over): Beijing's message is unmistakable, Hong Kong's culture of protests will no longer be tolerated.

Ivan Watson, CNN, Hong Kong.

(END VIDEOTAPE)

QUEST: Breaking News on the business front. Apple has just announced it is closing a further 46 stores in the United States. They will be in Georgia,

California, and Texas, where the number of COVID cases are jumping quite alarmingly.

It is all part of the COVID measures that are now being taken as a result of these rising cases. So Apple closing -- having already closed a good 80

are now closing a further 46 stores in the United States.

It all happens as the race for a vaccine gets ever more intense. Early reports from Pfizer are showing positive results. Investors are embracing

development of what they are doing as a hope for economic recovery as well.

We will talk about that after the break. It is QUEST MEANS BUSINESS. We're live in New York.

(COMMERCIAL BREAK)

QUEST: U.S. stocks are flat as the third quarter gets under way. Good Lord, just think about it, we are already in the third quarter, July,

August, September. Where has the year gone? I know where the day has done, the day has gone along with the gains that have gone.

[15:20:17]

QUEST: I mean, this is a true market going nowhere story. And I think it is because the market is suggesting -- Dr. Fauci is saying the U.S. could

hit 100,000 new case as day.

Apple just announced it is temporarily shutting another 46 stores. That's Georgia, California, Texas, and in those places, COVID cases are jumping.

Now, Pfizer shares also jumped, developing a vaccine with Germany's BioNTech. The company says, it triggers antibodies and no dangerous side

effects. That's a good claim in a market like this.

The W.H.O. is working to verify reports that the U.S. is intending to stockpile remdesivir. Now, you'll remember, it is one of the few, it's

actually one of the two drugs that's been shown to work against COVID-19 reducing mortality by 35 percent in the worst cases.

Now, the Trump administration said it has three-month deal with Gilead. It has set the price, we saw that last week. Supply would go to U.S.

hospitals. Little would be left for the rest of the world. Elizabeth Cohen joins me.

First of all, is this the case? Has the U.S. managed to suck up the global supply of this? And if it has, there is not much anyone can do about it?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Richard, let's talk a little bit about remdesivir and what it does. The study that was done on it

showed -- and this was a worldwide study -- it showed that it saved about four days off of a hospital stay. So this has not been proven to be a life-

saving drug at all.

Obviously, you want that, right, you want to have a hospital stay that is four days less, but just to sort of put in perspective what this drug does,

so remdesivir is currently on the market, it is being used in various countries. And the U.S. says, hey, we need more of it. They have announced,

we have secured 100 percent of the manufacturing of this drug that will be done in the month of July and 90 percent of what will be produced in August

and September.

So what does that mean for the rest of the world? It a little bit hard to know because it is hard to know how much they already have and how much do

they need.

Now, the U.K. has said -- a U.K. health official has come out saying that they have adequate supplies. So that's certainly good news. But the World

Health Organization says they are going to look into this. They read the U.S. announcement about securing these supplies, and they definitely want

some answers, is this true? And what does it mean for the rest of the world?

This is a U.S. company. The U.S. has negotiated this deal. I don't know if anyone can make any objections. I guess, we will find that out -- Richard.

QUEST: Elizabeth, vaccines? Who is in the lead? Dr. Fauci said a few weeks ago -- you will correct me or you will get the exact wording because you

will remember it better than me.

He said that it is entirely possible a vaccine -- a good progress would have been made by the end of the year. Who is in lead?

COHEN: So, right, Dr. Fauci has said that he thinks and he certainly hopes that a vaccine will be available in the United States at the end of this

year or in the first part of next year.

But to be clear, he does not make any promises. Now, it is a little bit hard to know who is in the lead. I wish this were as easy to read as a

sports game, but unfortunately, it is not.

The Chinese are in Phase 3 -- they say that they are in Phase 3 clinical trials, which is the final stage before it goes on the market. The

University of Oxford in England says they have started their Phase 2/Phase 3, and we are told that in the U.S. that this month, the first company here

is going to start their Phase 3 and then another company will start in August and another one in September.

So, let's talk a bit about Pfizer. That's one here that we are getting some news on today. They are not due to start Phase 3 this month. They are

scheduled to start it a bit later, but they did announce results of their Phase 1.

So, let's take a look at that. Their Phase 1 study involved 36 people getting their COVID vaccine candidate. And on average, people did have an

immune response, and I have spoken with outside scientists who say that they were impressed with what they read in a study that they put online

today.

However, it was best after two doses. That immune response was best after two doses. And let's take a look at what happens after two doses.

When given a medium dose, so not even the highest dose, when given a medium dose, 75 percent of the people who were vaccinated got a fever, and 80

percent or more got a headache or fatigue and there were also some other side effects sort of along those lines.

Now, you could say -- and it could be a reasonable argument to make that a day, which is about how long the fever lasted, a day of fever and muscle

aches or headache is worth it if you are going to hopefully get a virus under control. But it will be interesting to see whether people will

tolerate that.

[15:25:16]

COHEN: If you heard that your best friend got a vaccine and they felt terrible for a day, will you go get the vaccine? That's a question that we

have yet to answer -- Richard.

QUEST: Elizabeth Cohen, many thanks indeed. The United Kingdom and United States are looking to redefine their special relationship at a time of

reopening up of economies.

The two countries have had a fairly dreadful time over COVID with very high levels of infection and mortality.

President Trump spoke to Her Majesty, The Queen on Tuesday.

The British Ambassador in Washington is Karen Pierce. She joins me now. Ambassador, thank you for joining us. First of all, what -- before we get

to the sorts of nuts and bolts of other matters, how concerned are you and how concerned is Her Majesty's government if the U.S. is going around

buying up remdesivir? And we do seem to be having some sort of arms race to buy up vaccines for nationals?

KAREN PIERCE, BRITISH AMBASSADOR TO THE U.S.: I wouldn't call it an arms race, Richard, although we are worried about reports that the Chinese are

buying up vast quantities of chemicals needed for some of the treatment, and potentially for vaccines.

A number of countries, including the U.S. and the U.K. and many of the E.U. countries have got together to make some pledges about not just the

development the vaccines, but making them available worldwide, and there was a big event on 27th June held by Global Compact, the people who brought

us that fantastic concert trying to help raise money so that vaccines could be made accessible around the world.

So, there is everybody rushing as we just heard in your report to actually make the vaccine, and then there are arrangements being worked on to make

sure it can get around the world to countries who need it.

QUEST: Let's turn to trade, because I know that so much of your work has of course dealt with trade and the possibility of a Free Trade Agreement

with the United States or at least some trade deal before Britain exits its transition at the ends of the year.

Now, bearing in mind that Donald Trump only has until November -- and let's not enmesh ourselves too much in the election -- is it likely that you can

get the necessary deal that the U.K. wants before the end of the year?

PIERCE: I would say it is possible. We are making good progress. The second round just took place. There will be another round at the end of

July. And there is what we call intersessional talks in between, which are kind of like working groups and they go through the detail of various

chapters like competition and anti-corruption.

As the British side, we are not putting ourselves under any deadline for the agreement. We want a good agreement. We would like it done

expeditiously, but we need to have a good round -- some more good rounds of conversations and discussions with the Americans so we can start narrowing

subjects.

QUEST: What's your relationship like with the administration? Bearing in mind that your predecessor became persona non grata, left under a cloud,

and there was a lot of work done to repair the damage in that sense.

From our point of view, how do you now regard the relationship?

PIERCE: Well, I'm a huge fan of America. This is the fourth time I have served here. And I see my job as Americans from both the main political

parties and beyond.

And you know, it's an election year, so I am not going to comment too much on the campaign or the individual parties.

But for any ambassador, my job is preserving and enhancing the special relationship, strengthening it in areas like new technology, reintroducing

it to new generations of younger Brits and Americans. And I hope to do that regardless of which administration is in power.

QUEST: And finally, the recent reports from Carl Bernstein on the way the President spoke to Prime Minister Theresa May as she was then -- I mean,

whichever way you turn, there is a hot house for you to live in here, Dame Karen.

[15:30:00]

PIERCE: Well, I've served in Washington before. And I think you're always on the front line in Washington politics, whether there's a Democratic or

Republican administration. That's one of the exciting things about doing a job like this. There isn't -- there's never a dull moment. That's a bit of

a cliche, but I think it's true. But I think the other thing to say is that the relationship between the U.K. and the U.S. is a very closely interwoven

one. And it takes place at all levels, from the very top to the very bottom, from people to people links. We have a lot in common, we have a lot

we work on together, particularly in science, innovation, military. And those things endure regardless of individual episode.

RICHARD QUEST, CNN INTERNATIONAL HOST: Ambassador, thank you. Let's talk again, as the year moves on, and as these trade talks gets ever closer. I'm

grateful to you, ambassador, thank you for joining us.

PIERCE: I'd like to see that.

QUEST: The Ambassador Karen Pierce in Washington. It is QUEST MEANS BUSINESS, and first of all, the airline grounded its fleet. Now, the

airline has gone bankrupt. It's Mexico's flagship airline, which has filed for bankruptcy in a moment.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. Well, we've worked our way up from Secretary Generals to

ambassadors, and still to come in the program, Prime Ministers. The Latvian Prime Minister will be with us. As tourism gets underway. There's a warning

from the Prime Minister to the people not to necessarily travel. A Newark government report is alleging Boeing covered up much of what they knew or

didn't know about (INAUDIBLE) should have known. They didn't want the inspectors to have find out about it. We'll have those stories for you in a

moment. This is CNN, and on this network, the facts and the news always come first.

[15:35:11]

Russian voters have approved the referendum (AUDIO GAP) Putin to stay in power (AUDIO GAP). According to the (INAUDIBLE) the package of

constitutional reforms passed by more than 73 percent, which essentially resets the clock on Mr. Putin's term limits, allowing him to seek office

two more times.

New York's Governor Andrew Cuomo says indoor dining is postponed in New York City until further notice. Excuse me. He cited lacks compliance with

public health measures. The kind of -- in California, they're going even further. Governor Gavin Newsom is closing all indoor activities in counties

now seeing increased transmission. The closures will impact almost three- quarters of the state's population.

Italian police have seized over 15 tons of amphetamines which they claim were produced by ISIS in Syria. The terror group's long been known to

finance its activities with drug trafficking. The market value of the confiscated shipment is well over a billion dollars.

The E.U. is once again got Schengen borders down and is welcoming international travelers. First time since March, 15 approved countries, not

of course, including China, or the United States, all hoping to revive the economy. Joining me now is Krisjanis Karins, the Latvian Prime Minister; he

joins me. Prime Minister, it is good to see you. And I was reading your comments the other day, a joint news conference. And you're basically

saying, hang on. Yes, we may have open borders, but think twice before traveling to a foreign country. Why is that?

KRISJANIS KARINS, PRIME MINISTER OF LATVIA: Well, we need to separate two things. We need to separate the economy from the health of society.

Throughout this pandemic crisis in our government, we have been listening to the epidemiologists, we've been listening to the advice of scientists.

When we needed to shut things down, we did. When we needed to move down to two people, two meters to keep social distancing, we did this. Actually,

even before our first fatality. So, we reacted very quickly, listening to the specialists. Then the specialist said that the situation improved, and

we gradually loosened things up, of course, helping out the economy.

Now, when we look at a European-wide level, what we're doing in Latvia, we move first with Lithuania and Estonia, our northern and southern neighbors,

we created a travel bubble. This travel bubble has been expanded to almost all of the E.U. And now, the E.U. is expanding to more countries that are

deemed epidemiologically safe, that is where the level of disease is roughly the same as it is in Europe. It has nothing to do with liking a

country or not liking a country. It has everything to do with listening to the advice of the scientists. And I think that we have to do this during

this health crisis. Is -- who else can we listen to? It should not be a matter of political opinion; it really should be up to the specialists.

QUEST: Right. But now, if you look at the United States, and obviously, there were unique factors in the U.S. about the way the reopening took

place. Europe is doing it in a much more considered and careful fashion. But you must clearly fear that what's happening in Texas, Arizona,

California, Florida, even on a minor scale could happen in Latvia.

KARINS: Of course, we're -- no one has protected. The fact that we're doing well right now, we're very happy about that, we have our society to thank

for that for their fantastic cooperation with the government. But we keep a weather eye on what's happening elsewhere in the world, not only in the

U.S., but in other regions. And we full well understand that at any time, a new wave or a disease could swell up. So, we're ready at any time, if

needed to change our measures to be a little more restrictive than we are today. So, we haven't decided that it's all behind us. It's only one --

shall we say, one portion is behind us, and we're looking to the future.

QUEST: Prime Minister, and what more would you like to see the European Commission and the European Center do? And I know they've done a lot and I

don't need you to -- with respect, remind me of what they've done. I'm more focused now on what more do you want the E.U. to do?

KARINS: Well, what the E.U. needs to do is invest money. This crisis is clearly different from, say, the one 10 years ago. That was a crisis of

needing to more austerity to not be spendthrift. This is a completely different situation.

[15:40:15]

My government is doing it, other governments are doing it. We are borrowing money and investing -- been investing that into our economy. We're doing

various reforms to make our state more efficient, to make services more efficient for our citizens. But on the E.U. level, we need to invest the

money, we need to think about European solidarity. How to stick together through the storm because any one country cannot weather it alone, neither

pandemically nor economically. We work as a union when we stick together. This is the direction, I think, we're heading.

And I think the proposal by the European Commission for the 750 billion is a right direction. We need to invest these monies, but we need to invest

these monies wisely. So, we need to come out of the crisis, economically speaking, stronger than we were going in. A lot of this is borrowed money,

we'll have to pay it back, so we need to make sure our economy is structured so that we can pay it back.

QUEST: Prime Minister, grateful that you've given us time, very much. Sir, thank you very much. I can -- I can tell you so without fear or favor that

I have always loved my visits to your country, particularly to Riga, where I think I switched the Christmas lights on one year. Sir, thank you for

taking the time to join us. I appreciate it.

KARINS: Thank you very much. I enjoyed speaking to you again.

QUEST: As we continue -- thank you. As we continue tonight on QUEST MEANS BUSINESS, we turn our attention to Facebook, which is on the ropes again

with the ad boycott. And now Mark Zuckerberg is getting personally involved, but July's revenues probably long since gone.

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QUEST: The woes of the airline industry in Southern and Central America continue. AeroMexico is the latest Latin American carrier to file for

bankruptcy (INAUDIBLE) under Chapter 11 in the United States. Let's not get into why they all do it in Chapter 11. But believe me, they can and they

do, and they restructure under the U.S. law even though they're not U.S. companies per se. Unprecedented challenges stemming from the pandemic. IATA

is warning of a long and difficult recovery ahead of the aviation industry. Matt Rivers is our correspondent in Mexico City. AeroMexico may have gone.

Interjet which is, of course, the second largest carrier. They are teetering on going. It ain't look good.

[15:45:10]

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: No, it really doesn't, Richard. I think you can make an argument that Latin America and the

airlines in this part of the world have been more impacted by this outbreak than just about anywhere else. AeroMexico, as you mentioned, filing for

what they're calling a voluntary chapter 11. In the United States, they're saying that they're doing so to get some preferential financing as a part

of the restructuring that goes along with this bankruptcy filing.

They say they're going to move forward with plans to quadruple international flights over the next month, but there's no doubt this is a

major hit for the airline. And they become the third Latin American carrier after Avianca and Latin American Airlines to file for bankruptcy. And

Richard, there's a couple things going on here.

One, this outbreak has been going on or shutdowns have been going on since March here, and what we have not seen is Latin American government step up

to the plate to bail out certain airlines, like we've seen in Germany, with Lufthansa, like we've seen in the United States, with the airlines there.

And secondly, I want to point out that the quarantine measures enacted by some of these countries, Colombia, Peru, Panama, which is a key hub in this

part of the world, they have shut down international travel, you can't travel even if you wanted to. So, there's a litany of things going on,

Richard, that have not bode well, for this region's airlines.

QUEST: Right, but the airlines are symptomatic of the economies, Matt Rivers. And if you listen to what Agustin Carstens told me yesterday,

bearing in mind, he was the central bank governor, head of the central bank in Mexico, now head of the Bank for International Settlements. Listen to

what he said about the economies of the region.

(BEGIN VIDEO CLIP)

AGUSTIN CARSTENS, GENERAL MANAGER, BANK FOR INTERNATIONAL SETTLEMENTS: Something that we have noticed here at the VA is, is the fact that in some

emerging market economies, the blow is much stronger than in advanced economies, is not only the fact that they have less policy space in terms

of fiscal and monetary policy, but also their health infrastructure is not as resilient.

They also have very particular problems, say like, for example, the density of big cities, and that is affecting them. So, yes, you're right. This is a

big blow for the economy, say, south of the border of the U.S.

(END VIDEO CLIP)

QUEST: So, Matt, taking that on board, the reopening of these economies is essential. But, and you fill in the details after that, it's a big but.

RIVERS: It's a massive but, because what you're talking about in Latin America is the epicenter of the world's epidemic or pandemic right now,

here in Mexico, in Brazil, in Peru, in Chile. We continue to see massive amounts of cases. And these economies have absolutely been buffeted by

this. There is no question that all of these governments are walking a very fine line, trying to reopen their economies, trying to jumpstart things,

once again, especially in a part of the world where so much of the economy is informal. These are not people who pull paychecks.

They have to go out every single day to earn their livings, and they haven't been able to do so under these quarantine measures. I mean, just

look at the fact that the U.N. is predicting across all of Latin America, Richard, a 5.3 percent roughly GDP contraction this year across all

countries. That would be the largest such contraction since they began keeping records in 1900, in this part of the world. So, it just is so

emblematic of a brutal economic situation in Latin America, Richard.

QUEST: Matt Rivers, that's why you're there to keep reporting on it for us and you will continue to do so, sir, I trust and hope. Matt Rivers in

Mexico City. After the break, well, now it's official, we know according to an inspector general's report, that Boeing at the best misled inspectors

over the 737 Max, and worse, simply lied.

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[15:50:00]

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QUEST: Now, that seems to be official, an alarming new report seen by CNN, exposes the flaws in the way in which Boeing built the 737 Max and kept

examiners and regulators in the dark about the MCAS system. Department of Transportation's inspector general found Boeing said kept him in the dark,

the FAA, about key changes. The flight control, MCAS system, was later blamed for two deadly crashes. Boeing shares are slightly lower, not

hugely, what has to be said.

Our aviation correspondent is Pete Muntean. He's with me in Washington. When I read the -- what is said -- what the -- Boeing did, we sort of knew

that they had obfuscated, oh, don't worry about that MCAS business, you know, just two lines in a long series of documents about it. But the FAA

let them get away with it. They were negligent in not asking for more details, surely.

PETE MUNTEAN, CNN AVIATION CORRESPONDENT: Well, it's a damning report, Richard, and it -- you key into what -- it perfectly. You know, it really

comes at a critical time for Boeing, as it's trying to do these recertification flights for the Boeing 737 Max out in Seattle, the third

day of three consecutive flights. This DOT IG report essentially lays out that Boeing shielded the FAA from knowing everything it possibly could

about the MCAS and essentially downplayed its significance and its implications on the flying characteristics of the 737 Max.

So, interesting in all of this, 500 slides that Boeing presented to the FAA over two days, and in those slides, only two lines dealt with the MCAS

system. Now, Boeing says it is leaning into this investigation, leaning into making significant changes when it comes to its dealings with the FAA,

and also making significant changes to the MCAS system making it impossible for it to overpower pilots, impossible for it to engage if there is a

single sensor failure, which led to those two fatal accidents and the grounding of this plane since last March.

We know that lawmakers are really looking at this though, potentially leading to an overhaul of the aircraft certification process, which could

lead to more regulations for Boeing and industry wide. This is a process that is typically been very lengthy and very expensive and something that

the industry would not particularly welcome, Richard.

QUEST: If we look at the airline industry at the moment, the planes are starting to fly this weekend. I was out at the beach and I noticed for the

first time, I actually saw contrails through the sky, and I could hear planes sort of heading in towards Kennedy. So, things are moving. The

question everybody's still ask is, is it safe? Can they be assured of safety on the planes?

MUNTEAN: Oh, what's so interesting here is that airlines are really pulling back the curtain on social distancing and what they're able to accomplish

for passengers. United Airlines spokesman Josh Earnest said today, that blocking middle seats, something that was first done initially during the

outset of this pandemic, was more of a public relations move, rather than a public health move.

I spoke to Earnest earlier today and he insists it is safe to fly on the airlines right now, as United adds thousands of flights to its schedule on

August, three times, what it was flying just last month. Here's what he had to say.

(BEGIN VIDEO CLIP)

JOSH EARNEST, CHIEF COMMUNICATIONS OFFICER, UNITED AIRLINES: It's very, very difficult, if not impossible, to socially distance onboard an

aircraft. Keeping the seat next to you, open, is not going to make a material difference.

[15:55:07]

What is going to make a material difference is wearing a mask, having a high quality air filter and thoroughly cleaning the plane before you get on

board.

(END VIDEO CLIP)

MUNTEAN: This whole concept really drew ire from the head of the CDC on Capitol Hill yesterday, Richard. He said that he wants to review the moves

by major airlines specifically calling out American Airlines, which says that it will fill every seat on board its planes starting today, meaning

that you have a higher chance of being on a completely full flight. It's a critical time for the airlines. July 4th is typically one of the busiest

travel holidays of the year, although this year, albeit much more muted.

QUEST: Pete Muntean in Washington. Pete, thank you. Quick look at the markets as -- before we go, to show you just how we're going to end the

day. The Dow has been all over the place, probably little change in terms of overall movement. They are one down, two up, but the movements except

for the NASDAQ, which is up one percent, the rest is pretty much middling.

And that is our program for tonight. I'm grateful that you've joined us once again. I'm Richard Quest in New York. Whatever you're up to in the

hours ahead, I hope it's profitable. Jake Tapper and "THE LEAD" is next.

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