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QUEST MEANS BUSINESS
Greece Tries to Cut Deficit; Nissan Orders Recall of Trucks, Minivans
Aired March 3, 2010 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Slash and burn: Deeper cuts and steeper taxes, as Greece tries to cut the deficit.
Next in line: Nissan is the big company to order the latest recall.
And is this how James Bond would go to the local shop? Tonight, Aston-Martin's chief executive launches the commuter car.
We have an hour together. I'm Richard Quest. And, yes, I mean business.
New cuts to avoid a catastrophe. Greece has announced its new austerity plan and the European Commission has welcomed it. Trade unions and members of the public did not, indeed. These are the scenes of protests that took place outside the offices on the country's prime minister, of pensioners protesting against losing some of their benefits. Tonight we speak to Olli Rehn, the E.U.'s economic and monetary affairs commissioner, about why he believes measures that cause this are going to be a turning point in the crisis.
Also, she is one of the best-selling artists of all time, and she is willing to put her money where her mouth is. She is Nana Mouskouri. And she tells me why she's willing to give her pension to save Greece.
The details that you need to know about the budget deficit cuts and the raising taxes to avoid what the government is calling a fiscal catastrophe. It is trying to convince European allies and markets that it can get its financial house in order. So, this is what has absolutely been decided.
The government says the new measures will save up to $6.5 billion. That is the equivalent of 2 percent of GDP. The axe will fall on civil servant's pay. They had been enjoying two extra months salary for every year that they work. It will be slashed by 30 percent, bonuses down. There will be a steep rise in VAT, a hike in fuel tax, and extra duty on cigarettes and alcohol.
Now, bear in mind, these cuts are on top of stern austerity measures that have already been imposed by the Papandreou government. The prime minister says Greece will have to accept painful sacrifice.
(BEGIN VIDEO CLIP)
GEORGE PAPANDREOU, GREEK PRIME MINISTER (through translator): I informed the president of the difficult decisions that we took. Decisions that were not a simple choice, but a necessity to be taken, a necessity for the survival of our country and our economy, so the country can escape the speculators and the debt of nation, so we can breath and give this battle, a battle that I and the government are giving, along with the Greek people, for a more just society, for the big changes that will bring development, jobs and prospects to the country.
(END VIDEO CLIP)
QUEST: That is all very much in the future. The new tough measures being proposed could provide a turning point for Greece's economy. And something has to be done. These are the numbers that you'll need to know about. The idea is to off 4 percent, planned budget savings; the reduction of deficit from 12.7 to 8.7 percent in 2010 alone.
Now that is an astonishingly large reduction in deficit at a time, of course, when the economy is in recession. Never mind fiscal stimulus, this is just wiping out. But even at 8 percent it is still bigger. Public debt is about 120 percent of GDP. And worries over debt have made it more expensive for Greece to actually borrow money on the international exchanges.
Now, that is why the announcement that was seen today was so significant. Because there was actually a rally in Greek government bonds. Yields fell, it is now cheaper for Greece to issue bonds. And, of course, up to 20 billion of debt comes due in April as the spread between the German bund-the German bond, if you like-and the Greek bonds gets narrower, which is what we saw today as prices rose. That is very good news for the Greek government that is trying to actually-that has to pay down its debt.
The euro-well, I mean, you have got to look closely, so I'm going to come right in, and have a look with me. Just around there. The euro did perk up just a little bit after the spending cuts were announced. The currency has touched its highest level against the dollar in some two weeks. It is still way down since the beginning of December.
Nonetheless, for the president of the European Commission, President Barroso, the announcement that Greece has made was certainly welcomed indeed.
(BEGIN VIDEO CLIP)
JOSE MANUEL BARROSO, PRESIDENT, EU COMMISSION: This is in the interest of the Greek people who will benefit from sounder public finances, better growth prospects and job opportunities. It is, as well, important for the overall of the financial stability of the Euro area. The commission considers that correcting imbalances and restoring competitiveness is essential to put Greece back on a sustainable path.
(END VIDEO CLIP)
QUEST: Of course, what Greece has done today is part of the longer- term plan and ultimately will have to be ratified, not only by the European Commission, by European governments as well. I spoke to Olli Rehn, the EU commissioner for economic and monetary affairs. So, he had been persistent. Greece needed to do more, had they now done enough?
OLLI REHN, EU COMMISSIONER FOR ECONOMIC, MONETARY AFFAIRS: It is enough for now and for the purposes of fiscal consolidation in 2010. Assuming that these measures are duly, fully and timely implemented. We do, indeed, endorse these measures and they will enable Greece to meet its present target of budgetary deficit reduction.
QUEST: The other side to this coin is that now other European governments have to rally to support Greece. Greece has done its share of the bargain.
REHN: These set of measures which Greece has decided should certainly help the calm the markets and facilitate finally some stability in Europe, in the Euro area, in the European Union. In case they need the Euro area countries, the European Union are ready to take coordinated and determined action in order to ensure financial stability in the Euro area as a whole.
QUEST: Right. I mean-I just, but Commissioner-
QUESTION: But Commissioner it is a bailout by any other name. Whether you actually give Greece the money, whether it is done through loan guarantees, at some point, Commissioner, that European countries are going to have to stand behind and guarantee Greece.
REHN: It is no bailout. Let's be clear about that. But we are, of course, ready to ensure financial stability in the Euro area, and we have the ways and means to ensure financial stability in the Euro area, as a whole. And the European Commission stands ready to put in place a European framework for coordinating actions and as it stands, if needed.
QUEST: The-the task now, for the Commission, is to monitor the promises made by Greece, because if history is any judge, it has been the failure of countries to live up to promises that got the Euro Zone into the mess in the first place.
REHN: We have, indeed, in the last couple of weeks, very closely monitored and worked together with the Greek government. And we have been fully informed before the measures were taken on the nature and the content of these measures. Next report we will present and meet (UNINTELLIGIBLE) to the Euro Group and to the Econ council of the European Union. That will concern this year's fiscal consolidation, these measures are taken which we endorsed. And in May we will focus on the medium-term issues for 2011, '12.
REHN: Concerning fiscal balance and structural reforms in Greece.
QUEST: Do you believe, tonight, that the Greece problem has been at least put to rest of the time being?
REHN: This would certainly help to solve the problem, the main problem of Greece, and this can be seen, and this can be-even more important-this can made a turning point in the fiscal history and the economic development of Greece, which I think both the Greek society, the Greek people, and the European Union should welcome and support.
QUEST: European monetary commissioner. Greek stocks ended the day slightly lower. That followed three days of robust gains. Investors were, perhaps, taking profits off the table, and why not?
Probably concerned about the effects that such steep budget cuts would have on growth. The index has fallen more than 8 percent since the beginning of the year. Shares in Alpha Bank put in the worst performance this session; they slid more than 3.5 percent.
Over to the wider European markets. And those plans to get Europe's biggest deficit also bolster the major indices. The FTSE touched a seven- week peak. Mines were strong for blue chips and the weaker dollar helped lift commodity prices. Only Zurich was out of favor, and even then, just by a tad.
In this hour, later on, we'll be talking to Angel Gurria, the secretary general of the OECD, about Greece's economic crisis, and what the country needs to do to get back on track.
(BEGIN VIDEO CLIP)
ANGEL GURRIA, SECRETARY GENERAL, OECD: Everybody is fighting with the question, don't withdraw the stimulus package, and at the same time support the unemployment situation; and at the same time consolidate fiscally, bring down the deficit, all at the same time. In the case of Greece, there has to be one single focus, one single message, one very strong message to the markets, and everything that we need to make it believable has to be put on the table.
(END VIDEO CLIP)
QUEST: Now, who better to tell us what it is really like in Greece? Nana Mouskouri, Greece's best-known singer, about her country's economic crisis and why she offering her pension to help out. Nana Mouskouri, a treat, indeed.
Now, the news headlines, Fionnuala Sweeney joins us.
Good evening, from the CNN news desk.
FIONNUALA SWEENEY, CNN NEWS ANCHOR: Hello there, Richard.
Well, Chile has just been hit by strong aftershocks. The most powerful tremors since Saturday's massive earthquake. Karl Penhaul joins us now from the Dichato, Chile, with the latest on the quakes and their aftermath-Karl.
KARL PENHAUL, CNN INT'L. CORRESPONDENT: In the last few moment, Fionnuala, military authorities in the regional capital of Concepcion have sounded the all clear. And as you can see, cars and people are beginning to head down from high ground, back to the lower lying ground. Here, where we are in Dichato, we are about a kilometer away from the ocean.
And within the last hour, because of those very strong aftershocks, the military did sound a tsunami alert. We were down in an area where food aid was being given out and suddenly the military hold up their hands, they shouting, tsunami! Tsunami alert! Get out, get to high ground. At that point, citizens who were receiving their aid, a lot of them just tossed that on the ground, and began to run. Those who were too old, too unfit to run were being dragged by their neighbors. Some of them were clearly breathless, some of them were in tears.
And at the same time there was a stampeded of vehicles heading up this hill to get to high ground. And again, now, as I say that tsunami warning has been lifted, which is why you see those vehicles once again heading down.
But I want to take you around here, as well. Because when that tsunami alert goes off, everybody heads to high ground. There were Chilean Marines handing out food aid. They were ensured that the citizens were up the hill first, but then followed running afterwards. And here, we have firefighters. The firefighters who had been carrying out search and rescue operations, they too, suspended what they were doing and all headed to high ground.
Now, not all the citizens, it has to be said, are convinced that now the authorities have lifted the tsunami warning. Why? Because of experience. On Saturday, this coastal fishing village of Dichato was flattened by three tsunami waves, not by the earthquake, but by three tsunami waves that followed several hours after. And they say that if they had listened to the authorities, they could now well be dead. Because they heard official warnings over the radio saying that there was no danger of a tsunami on Saturday. They trusted their instincts, they are fishermen, they trusted their instincts and headed to higher ground. And surely enough, after they got to high ground was when those tsunami waves rolled in.
So, again, today we have the scenario of those strong aftershocks, the tsunami warning, everybody heads to higher ground and some of them, for now, at least, are deciding to stay here, Fionnuala.
SWEENEY: All right. Karl Penhaul, thank you very much indeed for that illuminating report from Dichato, in Chile, where the tsunami warning, as you heard, has just been lifted following two strong aftershocks.
QUEST: Now, when we come back in just a moment, more facing the music. This time the executives of defunct oil company face Kremlin bosses who forced to shut it down. But the forum is very different. I'll explain in a moment, stay with us.
QUEST: Welcome back.
A bankrupt oil company is taking the Russian Federation to an independent court and is seeking $98 billion in compensation. Yes, basically, a $100 billion, between you and me.
This is, of course, after it was driven into bankruptcy by a multi- billion dollar back tax claim. The case for a $100 billion is the biggest that the European Court of Human Rights has ever considered. Yukos is seeking to overturn years of defeat in the Russian courts.
Now, let's remind ourselves. We all know about Yukos, but do you remember what it was all about? Let's go back to 2003 when the company's former chief executive Michael Khodorkovsky was jailed for tax evasion and fraud. He was once Russia's richest man. He claims, and he still claims, that he was punished because he challenged the Kremlin.
Move to 2004, and the case was lodged with Europe's top human rights court. It has twice been delayed as Russian officials couldn't attend. However, by the time we get to 2007, the ECHR ruled that Russia had violated Khodorkovksy's rights, partner Platon Lebedev.
So, in addition the Strasberg-based proceedings are hearings underway at the permanent court of arbitration at The Hague. You are getting an idea that lawyers are making a great deal of money. And all the time, of course, Khodorkovsky is stuck in prison. Both sides squaring up to go face-to-face in Europe's top rights courts. Our CNN International Correspondent Matthew Chance is in Moscow.
And, Matthew, I suppose the gist is here, that they hope they are going to get a-what they believe is a fairer hearing than they got in Russia. But if they win in this court, will Russian government honor it?
MATTHEW CHANCE, CNN INT'L. CORRESPONDENT: I think, you know, when you are talking about a sum as large as $100 billion, it is incredibly unlikely that any government, let alone the Russians that have thinly veiled contempt for courts like this European Court of Human Rights, would actually go to the lengths of paying such a large sum of money. It is too much, even by the standards of cash-rich Russia.
What it would do, if the ruling came against Russia, it would be an incredibly humiliating blow for them.
CHANCE: In this very public arena. And it would open up all sorts of claims against their state-owned property abroad, Richard.
QUEST: But the Russians are engaged in this-in this-in this battle, within the courts. So there is the inherent risk that it could go against them. And at the same time, just remind me about Mr. Khodorkovsky, where he is, and his perilous plight?
CHANCE: Yes, well there is a strong risk. And I think, of course, the Kremlin are very aware of the possibility that the ruling could go against them. But they have got 22 lawyers representing them in this case; 10 of them are expected to speak at the proceedings, the hearing, tomorrow. And so they are obviously going to pull out all the stops to try to make their case to prevent, what, again, would be a very humiliating outcome if the ruling is against them.
Mikhail Khodorkovsky is still languishing behind bars. He was arrested, as you mentioned, in 2003, on a fraud, corruption charges. He was convicted of that, sentenced to eight years. He has also been charged, as well, with more fraud and corruption charges, and faces several more decades in prison, if he is found guilty of those charges. But at the moment he is still very much behind bars and he is likely to stay that way.
QUEST: You've anticipated, just be brief on this one, Matthew. Is there any sign of mercy from either the president or the prime minister? You are shaking your head.
Is there any sign of mercy for Khodorkovsky?
CHANCE: I don't-I don't think so. I really don't think so. I mean, he is seen as somebody who, by the current people in power, much too influential, much to important for them to release at this point.
QUEST: Matthew Chance, a late evening for you, working late in Moscow. Many thanks indeed.
When you and I come back together, two more automakers are joining the recall bandwagon in the U.S. Is there a car that hasn't been recalled? When we come back in just a moment, we'll ask that very question. Good evening.
QUEST: So, car recalls. Does it ever end? Nissan is the latest automaker to go down the recall route. It is recalling more than half a million trucks and minivans. You want to know exactly how many? 540,000 to be exact.
The Japanese automaker's North American division has brought about this worldwide recall. There were three reports of brake pedal pins partially disengaging, which hinders braking ability.
Now, whether it is accelerators on the Toyota, or brakes on the Nissan, well there is also a separate, unrelated fuel gauge issues. Apparently, you could think you have got more fuel than you actually have. And that, of course, leads to you running out of fuel. Nissan points out there have been no accidents or injuries in connection to the autos being recalled.
Now, on this program, last night, I had the chance to speak to the chief executive, Renault Nissan, Carlos Ghosn. It was prior to the Nissan's recall announcement. Mr. Ghosn gave no indication of what was about to befall us, within 24 hours. You could, however, tell the possibility of such a move was certainly very much on his mind.
CARLOS GHOSN, PRESIDENT, CEO, RENAULT-NISSAN ALLIANCE: In fact, what you learn is that you should make sure that in your processes and your action, you have to be very proactive in the way you handle consumer concerns about quality; because if there is any breach in the trust around the quality of the product, and particularly your response to these quality problems, it is a disaster for any carmaker.
So, we are reviewing all our processes. We are being absolutely very- you know, cautious into our approach. Very prudent in out approach, because hopefully this lesson, which is coming from one of the competitors, will not be lost. We will learn things and we will adapt to this.
QUEST: So, as the chief, is this something you are taking-your role and what things that you can learn from what you have seen happen at Toyota? You are looking closely, yourself at?
GHOSN: Exactly. We are looking to our own processes. We are looking to our own situation. We are making sure that the decisions are being made very quickly, as near to field as possible, to avoid situations, embarrassing situations, where the consumer has the impression that it takes a lot of time to react to a quality problem.
(END VIDEO CLIP)
QUEST: Oh, dear. Well, one does wonder, is there a car company that has not recalled during this latest crisis?
Maggie Lake, in New York, answer my question.
MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT: It doesn't seem like it, Richard, that is for sure. There are a couple that aren't on the list, at the moment, but don't hold your breath. Take a look at it, it is a who's who of large automakers around the world. And this is just coming, in the last couple of months.
We all know about Toyota. The biggest one, they kicked it off. But GM has got over a million out, power steering failures at issue there. Honda, nearly that, airbags seem to be the problem there. Nissan, you went over that problem today. Mazda, they have the fewest. This is only 12,000, but it is because of heated seats, which you can imagine, made for some pretty interesting headlines here in the U.S. And I've got to say, if you are going take one of these that you have to be susceptible to, I think heated seats probably less damaging than some of these other things, if you are going 70 down the highway.
But nevertheless, all serious, and especially for the consumer, it is very confusing for consumers who have been sidelined because of the economy to figure out what to do. But you heard what the CEO said, that there is a sense that there is a sort of new order in and they have seen the damage that has happened from Toyota and the public relations. Not only from consumers but also from regulators here in the U.S. and all of the pressure about when they knew what did they know? Did they drag their feet in addressing it? So, it seems like everyone rushing to come clean and address any, any problems that they might be having.
QUEST: You see, in the highly litigious environment, of the United States, the recall is not an unknown phenomenon. So, companies are used to it. So, I'm wondering the distinguishing factor here, really does come down to what did you know, when did you know it? And how dangerous was it in the first place?
LAKE: And that is right. And you will remember from the Toyota hearings there was a lot of time spent on that issue. Not just the safety of the vehicles, what are you doing to address it? But a lot of time spent on the fact that maybe they weren't forthcoming. Did they put profits before safety? And that is what is really damaging to the overall brand.
Remember, recalls on cars happen a lot, happen frequently, and although they are damaging, it is seems like companies get over it. One company that is not on the list now, Ford, had a very big recall problem with their Ford Explorers earlier last decade. But it is this issue of-of, you know were they motivated by something else other than consumer safety.
LAKE: That seems to be what the other automakers are really taking from the lesson of Toyota.
QUEST: Profits before safety? Was that the moral of the tale? Many thanks, Maggie Lake in New York. Maggie joining us.
When we return in just a moment-ah, that's where you are. Stay exactly where you are, in fact, because in just a moment, debt-stricken Greece is making new moves to what it calls its fiscal catastrophe.
The head of the OECD will be on the program. He has some interesting views about Greece, but also about the role of the IMF in the crisis. In a moment, good evening.
QUEST: Good evening.
I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN.
They're not just tightening their belts in Greece, they're trimming the fat and they're doing it with a massive scythe and sword. The voters aren't happy. The prime minister, George Papandreou's new cost cutting measures sparked a round of protests. This time it was pensioners who have been taking to the streets in a show of displeasure. They broke through police barricades, basically saying how were they expected to live on the new, reduced pensions and cuts in their benefits as a result of the crisis?
The new measures have got them so fired up that the measures aim to save $6.5 billion. That would freeze the pensions. It would have cuts to civil service pay. Holiday bonuses will be drastically reduced. VAT is being increased to 21 percent. The government will take an extra helping of taxes on fuel, cigarettes and alcohol.
And all this is in addition to the first round of austerity measures that were introduced a couple of weeks ago. Lean, to be true.
Is it sufficient for what needs to be done in Greece, facing financial catastrophe?
I put that question to the OECD secretary-general, Angel Gurria.
ANGEL GURRIA, SECRETARY-GENERAL, OECD: You have to over shoot when you have a situation like the one in Greece. If you need to do 50, you need to announce that you're going to do 75 and you need to prove that you're ready to do 75, because then the markets will believe it. The markets become very skeptical and it's like that old Avis propaganda. We say we're number two, we try harder.
The market puts you a very, very tough test. So you have to really stretch.
QUEST: So do I gather that nobody really experts Greece to do all this full amount?
GURRIA: I think it's going to be very important to see how Greece takes off and the direction it takes. They have a good, competent economic team and the prime minister apparently is ready to take on the -- bite the -- bite the bullet.
If there are small deviations, it's not going to be important. The importance is how it moves in the right direction.
QUEST: The result of the developing nations are being told, don't cut your stimulus packages just yet. And yet here you have a situation where Greece has not only been told to cut its stimulus package, it's being told to basically slash its budget.
GURRIA: Everybody is fighting with the question of don't withdraw the stimulus package and, at the same time, support the unemployment situation and at the same time consolidate fiscally, bring down the deficit -- all at the same time.
In the case of Greece, there has to be one single focus, one single message, one very strong message to the markets and everything that we need to make it believing has to be put on the table.
QUEST: The OECD is independent.
Are you satisfied with the way the European Commission and the E.U. has handled this?
GURRIA: I think we all missed, perhaps again, I should say, the signals. We were going to Greece two or three years ago and saying this is untenable. Then there were a couple of election processes. The new government came in. The situation blew up in their face.
I think we all are somewhat responsible. But the Greeks are responsible themselves. It's twice already since the question of statistics has come up with two different governments.
So I think we have to fix that. The credibility is at stake.
QUEST: Should the IMF just sort this mess out once and for all?
GURRIA: The IMF is ready. They are there to be called Greece is a member of the IMF. They have a right to call in the IMF.
QUEST: But the Europeans won't let them.
GURRIA: Well, the question is, I think the IMF has one advantage and that is the IMF can put conditions to Greece, but, also, the IMF can put conditions to the market. We know about that in Mexico.
QUEST: Let's talk about the -- the way the recovery, the fragility of the recovery. What we're seeing in the United States at the moment is extremely weak, fragile, in some areas, not necessarily -- we saw fourth -- strong fourth quarter growth numbers. But we're seeing consumer confidence numbers suggesting outward looking, things not looking good. The same in Europe.
GURRIA: It is a fragile recovery. It's going to be weak for the next couple of years. And we see even the next five to six years with very modest growth because of relatively high unemployment that will be more or less structural. That means more or less permanent -- higher unemployment than we had before the crisis. And, also, risk aversion, a higher cost of capital -- all those things are going to make the recovery very difficult.
So we're going to have a very sluggish -- positive but sluggish growth.
QUEST: I mean, you -- you say positive, but the -- if we strip out the stimulus coming from governments and, if you like, the policy accommodation, you're left verging on teetering back into a recession.
GURRIA: The great secret here is are we already on the other side?
Or have we gone from a policy-based recovery -- that means with hitting -- hitting the recession on the head with a deficit, with a bunch of money, with bills, you know, with deficit and debt -- to a self- sustained recovery?
We're not yet there. But we have to roll out...
QUEST: So (INAUDIBLE) you call it a recovery?
GURRIA: Well, but we have to roll out all the -- all the stimulus packages at the same time leave the monetary stimulus there for some time, until it catches on. It's not going to be easy in the sense that it's not going to be anything to write home about in terms of the size. But we do need to -- those stimulus be in place for some time yet before it takes off by itself.
(END VIDEO TAPE)
QUEST: The secretary-general of the OECD.
Now, let's say with the issue of Greece, which is so much on our agenda, because it's the variety of the crisis. Greece's best known singer, Nana Mouskouri, is doing her bit to help her debt-ridden country. Ms. Mouskouri, who serves as a member of the European Parliament, says she'll give up her pension.
I spoke to her earlier today.
I asked her what good it would do.
NANA MOUSKOURI, GREEK SINGER: Because I think I am Greek and also I worked for five years in the European community as a deputy, a real deputy. So I think when your country is in trouble and there -- with the measures, there are a lot of cutting that would be done anyway. So I just preferred to -- to give my whole pension.
At the moment, my country is the -- is in trouble economically. So I just want to be able to help. There's nothing more than the ambition to be there. Like every Greek, I believe to -- to be there present for the country.
QUEST: This -- this show of solidarity coming at a time when there seems to be an acceptance within Greece about the terrible economic plight. But, of course, the solutions, that causes many disagreements.
MOUSKOURI: I know. But because there are -- it is so complicated to solve and, you know, we are in a -- under a great pressure. And I think Greeks will -- our (INAUDIBLE) will, when the problem is there in front of us, we have to be together. Solidarity is a very important thing. And -- and we are not going to let down our country. And this was very important. I don't think it's a -- it's so much a surprise, because I'm sure that there will be a lot of other colleagues who will do the same thing. And if not, there will be something organized officially for...
MOUSKOURI: -- for us. Yes.
QUEST: When we -- on my program, we are a business program, so we have a lot of economists and we have a lot of financiers talking about this. But Ms. Mouskouri, give me an idea, please, of what the ordinary Greek people that you talk to, what are they saying about it?
How -- they -- they accept something has to be done, don't they?
MOUSKOURI: They -- they hope there was something to be -- to be done, absolutely. But the problem is that the ordinary people do not know always what is going on. You know how it is politics, so they just follow up with the news. Up to now, the -- that we did not have the clear situation. But all of a sudden, we are obliged to face reality. And the ordinary people, like you say, they face reality and they're faced with -- with, you know, with this frozen situations. They cannot have a raise. They cannot -- they cut from -- from several things.
So they have to make their living with it and it is normal that they don't understand right away. They have to...
MOUSKOURI: -- learn and to -- to learn to -- to accept it, you see...
MOUSKOURI: -- this. And this is very hard.
QUEST: How worried are you for, if you like, the fabric of Greek society as a result of what's taking place?
MOUSKOURI: You know, I just don't want to do -- judge the people. I don't live here so -- all the time. I'm really a very big part of it.
But I think Greece, if following a living like the whole world is living and every -- everything is different. And since, of course, the euro, we are to the euro, everything is more expensive. And they didn't learn to live with it up to now yet, like other countries do.
We are not alone. You know, there -- there are countries like Spain or -- or -- or Portugal or even Italy -- I think the world is the crisis around the world that happened the last two or three years is a strong crisis. Maybe at the beginning, it left out smaller places like -- like Greece.
All of a sudden, they face reality with even more problems.
(END VIDEO TAPE)
QUEST: The comprehensive coverage that you've come to expect from QUEST MEANS BUSINESS.
From Nana Mouskouri to the European commissioner, right the way through to the secretary-general of the OECD. Now, that's what you call coverage.
In a moment, more coverage. Stephanie Elam is at the New York Stock Exchange.
QUEST: Now, U.S. stocks are trading modestly at this hour. The market has finished in positive territory every day this week. But it's proceeding with caution and we shall do likewise -- Stephanie Elam, proceed with caution, if you will, please, about telling us how we're doing today.
STEPHANIE ELAM, CNN CORRESPONDENT: Yes, what did you do, Richard, because right when we were coming to talk to you, the markets turned negative?
QUEST: Yes, well, no doubt -- don't blame me. Don't -- I -- I kept me hands to myself. No buttons were pushed over here.
Listen, how bad are we looking?
ELAM: We're not that bad. We're actually off about 6 points right now on the Dow. It's 10399 right now. Investors really may be holding out for the all important government jobs report, which we will get on Friday. That's the big boy that we get every month that tells us how the last month was.
In the meantime, we did get a couple of reports to kind of set us up on the U.S. employment picture. The first from Challenger Gray & Christmas. It said announced job cuts fell to the lowest level since 2006. That's well before the recession, obviously.
The second came from payroll services firm, ADP. And it said 20,000 private sector jobs were lost in February. Yet, still, a loss, but much better than the 700,000 number that we were seeing a month around this time last year. So, obviously, a lot better there.
ADP also saying that the March repot -- March report may actually show that private sector jobs were added during that period. The ADP number matches the number of job losses analysts are expecting from the government...
ELAM: -- so we'll be looking for that number there.
They're also predicting a slight up tick, however, Richard, in the unemployment rate. So obviously we'll be looking out for that. But that's all factoring into the movement we're seeing today.
QUEST: The beige book, that wonderful document that tells us what's happening around the United States, the anecdotal report from the U.S. Fed, was it beige?
ELAM: Yes. You know, we -- we were actually talking about it yesterday, how it was -- it used to be called the tan book and couldn't figure out which was...
QUEST: Yes, you're right.
ELAM: -- worse, tan or beige.
QUEST: It was the -- it used to be called -- of course. And then, of course, you had the tan can in Japan. You had the tan book in -- yes, I know.
What does the beige book show?
ELAM: The beige book basically is an economic survey of the U.S. economy. It's broken up into 12 regions and it's printed in a beige book, ergo the name. But the survey showed that economic conditions continue to expand since January, though severe weather in parts of the country, really, last month, cut into some of that growth.
The Richmond region, that incorporates the nation's capital, Washington, D.C. was hit particularly hard economically because of all of that snow that they got. The Fed says nine of the 12 districts surveyed reported improved economic activity. And that's down from 10 of the 12 in the January beige book.
So expanding but weather has been out of control over here -- Richard.
QUEST: All right. Many thanks, Stephanie Elam, with the beige book - - or not as the beige book, which was beige but it's not. Well, you get the idea.
Many thanks, Stephanie.
Now, the weather forecast. Before we actually get to what's happening to you or I, wherever we might be, there are some particularly unpleasant mudslides which, of course, some tragic circumstances.
Jenny Harrison is at the World Weather Center to bring you up to date -- good evening, Jen.
JENNY HARRISON, CNN METEOROLOGIST: Hello to you, Richard.
Yes, we're talking, of course, about Uganda. There have been several villages actually impacted by these recent mudslides. I'm going to show, first of all, the satellite. You can see again, in the last few hours, there, of course, is Uganda. You can see the cloud erupting, showers and thunderstorms have been in the forecast, with more to come, as well.
But let me just tell you and take you, first of all, to where I'm talking about. This, of course, is Uganda. This is the general area, eastern portions of the country. This is Lake Victoria. A big influence, in fact, when it comes to actual weather conditions. It brings out a lot of moisture and some heavier spots of rain, as well.
And then if I take you right in, this is the particular village of Bududa. And you can see there are a number of places round about -- now we are talking about some massive landslides that have occurred, of course, mudslides. All the rains coming down the steep mountainside.
Why has this occurred?
One of the reasons could well be this. You're looking at an image here on Google Earth showing deforestation. You see these rectangular areas of brown. Well, of course, that doesn't happen naturally. So that is a good indication, of course, always on the slopes leading down into these valley areas, just like that village of Bududa.
Now, the mudslides occur, not surprisingly, during an event such as some very heavy rainfall. The ground, of course, is soaked very quickly and the gravity pulls all of that rain down the side of the slope. But in some cases, it is very, very steep and the slope itself cannot actually support the ground. And then, of course, that is where we see a mudslide. But not only that, when you've got the water coming down such a steep mountainside, if there's no vegetation there, then of course there's nothing at all to hold all that soil in place. And that is most often how these mudslides occur.
Now, there is more rain in the forecast over the next few days. Typically, Uganda has a couple of rainy seasons, not really starting until March. So these rains coming a little bit early and, of course, on the heels of a very dry January. So we're looking at some pretty dry soils beneath there.
Now, of course, in Australia, you've seen huge amounts of rain in Queensland, really, for the last few weeks. This low cloud heading to the south, that is the remnants of the recent storm that's brought these huge totals -- over 200 millimeters in Lambore, you can see there, on the coast. There are flood warnings in place across in Queensland. Those rains continuing, as you can see, into New South Wales. And the flood warnings posted there, as well.
And look at some of the accumulations, maybe up to about five centimeters. So if you're heading there, you need to be prepared. There's been some widespread floods.
Now, another area here, the Western Mediterranean. A cruise ship has reported three rogue waves up to eight meters that have actually broken the glass. And so far, two passengers have been reported dead. This is the system responsible for that. It's heading eastwards.
We've got snow on the leading edge of that storm, again, kicking up the waves over the next few days. And then by the weekend, cold air spreading into the southeast again.
And now it's time for a short break here on QUEST MEANS BUSINESS.
He's back with more of QUEST MEANS BUSINESS after the break.
QUEST: Now, look at this little baby. It's a new car being shown off the Geneva Motor Show. It's not just any car. This -- well, you can see from the -- the name there. It's a -- it's made by Aston Martin. It's, of course, stylish. It's a sports car. It's Aston's new Commuter Concept Car. It's running around for the city. Small does not -- actually, small is relatively cheap considering it's an Aston Martin. It's -- the price tag is roughly -- now you, too, can have an Aston for about 30,000, 35,000 euros.
Don't be surprised if it does look a little familiar. It was designed by Toyota. Yes, quite -- and perhaps not the best name to be associated with at the moment.
Aston's chief exec isn't worried.
Jim Boulden talked about the car in Geneva.
JIM BOULDEN, CNN CORRESPONDENT: Ulrich, when I think of Aston Martin, I think of big, bold, fast. I don't think of that.
Why did Aston Martin do that?
ULRICH BEZ, CEO, ASTON MARTIN: For its size, it's big and bold.
BEZ: But very, very clear the world and life is changing. And if you -- if you would not change, we would still sit in the caves and -- and this is also for -- really for us. I think, you know, a lot of companies in traditional industries, change is made maybe sometimes too late or never happens. And this is why companies come and go.
We are in a (INAUDIBLE). We think that there is a huge need for a luxurious, very high priced, high valued small product.
BEZ: Because London, Paris, in the cities, it's not always the big fun to be in a big car.
BOULDEN: But I've heard of a starter house, but I never thought I'd see a starter Aston Martin.
BEZ: I don't think this is a starter, because I don't think, really, that somebody who -- who -- who has not a clear (INAUDIBLE) of the target of himself, that -- what he wants to reach in his life. And in five years, I will have a (INAUDIBLE). In 10 years, I'll have a DVS (ph) and maybe in -- in 20 years, I am a driver -- I have a driver with a Rolls Royce. You can have plans like this.
BEZ: You may start with these things. But from the price perception, from what it is, it is not a starter car. There's nothing wrong with it.
BOULDEN: Let's have a quick look.
But this is, of course, a Toyota platform.
So are you worried that the Toyota problems will spill over to Aston Martin?
BEZ: No. Look, technology will always, in the complexity we have, will have a failing and you have to manage a failure. And everybody of us -- if it is in the -- in the area of craft -- a business, if it is in any other business, you have a -- a problem.
BEZ: You need to -- you need to fix the problem. The problem with Toyota came because their volume is -- is so high in this.
BEZ: But we need to -- we need to -- we need to cope with this. And in -- a few years ago, we had a problem with Audi in...
BEZ: -- which was over -- it's not a problem. And we have recalls in all companies in the world. We have recalls in (INAUDIBLE) in Hyundai, going through the recall list.
So it's -- it's a business we have to manage.
BOULDEN: But this is a Toyota platform...
BEZ: This is a Toyota platform because I am totally convinced that there is, at the base, a quality and reliability is absolutely perfect and is leading. And I have no doubt in -- in what we are -- what we are doing here. And, of course, we are -- we are applying all what we apply and we do all our -- our tests (INAUDIBLE).
So I am absolutely (INAUDIBLE) no issue and is -- is the engine and drive line for this kind of car is not the emotional part. The emotional part is now (INAUDIBLE).
BEZ: This is only to drive with the lowest fuel consumption, with the smallest space and no emotion in the drive line. It will be good.
(END VIDEO TAPE)
QUEST: And I'll have a Profitable Moment in just a moment.
QUEST: Finally, tonight's Profitable Moment.
Greece -- those deeper cuts to win back the confidence of the markets and E.U. partners. The pain is going to be long and hard for the Greek people. But if Greek keeps -- Greece keeps its promises, then it really is up to the Eurozone countries to play their part, too, whether through guarantees of Greek bonds or more direct assistance.
Nations like Germany and France will need to stand together. Perhaps the really big issue for me is why euro pride isn't allowing the IMF to sort out this mess. The IMF has decades of experience and is uniquely qualified to bridge the markets and the country.
Anyway, what point is there for E.U. countries being members of the IMF if they can't call on it to help them out?
It's European pride gone made.
And that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
I'll be in Bahrain next week.
For the moment, whatever you're up to in the hours ahead, I do hope it's profitable.
"AMANPOUR" is next.
But first, the headlines.