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QUEST MEANS BUSINESS
Interview With France's Foreign Minister
Aired November 30, 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: Greater political unity. France's finance minister tonight tells us it is the only way to make the euro work.
In our in-depth interview Christine Lagarde also warns bankers, beware when it comes to bonuses.
And also tonight, you can't keep a good thing down air and business travel are on the up. We have two chief execs.
And I'm Richard Quest. We have an hour together, I mean business.
Tonight the French Finance Minister Christine Lagarde on this program gives us an in-depth interview in which she calls for greater political unity to save Europe's economic project. I was in Paris yesterday to meet Madam Lagarde, less than 24 hours after she and other European ministers have bailed out the Irish economy.
She tells me tonight this crisis can only bring member states closer together. But as we've seen during the course of the day, a financial squeeze is testing the very foundations of project Europe, despite the huge bailout costs that have already been put in place. Borrowing costs at the moment are rising to new record levels for countries like Spain and Italy. Traders are offloading euros, which has fallen by several percent in the last couple of days.
And all the talk is of another bailout coming on the heels of Greece and Ireland. Whether it is Portugal or Spain is the rumor of the market. Some question of the very survival of the single currency, despite the best efforts of European finance ministers, Eco Fin (ph), to put it right.
In countries like Ireland there are serious questions about the deals that have been agreed. And the loss of sovereignty in order to get the bailout cash. My first question to Christine Lagarde, the French finance minister, isn't it inevitable and now understood, that if you are going to be part of the euro, you have to give up some sovereignty.
CHRISTINE LAGARDE, FINANCE MINISTER, FRANCE: Well, being part of the same monetary zone, with one single currency, which is the public good of all member states, and each and every member of the population of each and every member state. You can call that a loss of sovereignty, but it is in effect, a common asset that we have. And we are joining forces in that respect, which is why we are giving a hand to Ireland at the time when it is being very difficult for the Irish people and Ireland as a result of market appreciation of the risk.
QUEST: But there's a reluctance for policy makers, including yourself, to some extent, to basically call the spade the shovel, and say, yes, you did give up some of your sovereignty when you joined the euro. You are going to have to take some of the medicine that we are proscribing.
LAGARDE: It's a program that we're putting in place. And a program is, there is quid-pro-quo, so you give on the one hand, at a discounted rate however, you know, difficult that is, but in consideration for that there must be commitment on the part of those that receive the program, or have the benefit of the program. And that takes the form of very strict management of public finances. Cuts in the compensation of the civil servants, and any and all other measures that have been taken and been decided by the government of Ireland.
LAGARDE: That's how you call it, I suppose.
QUEST: There is one aspect in all of this, commentators are now saying-
LAGARDE: It's not quip-pro-quo, it is quid-pro-quo. In other words, you get something in consideration for something.
QUEST: There is one thing though. That we are inexorably moving towards, and that is a realization that monetary union cannot exist without greater fiscal union-and the P word, "political" union. That's the truth isn't it?
LAGARDE: We are moving in that direction, Richard. We are definitely moving in that direction. If you look at the work that has been undertaken by the Herman Van Rompuy, the president of the European Council, together with the task force, of which I'm a member, that is where we are heading. We are heading towards better coordination, more joint economic governance, accountability, sanctions, if things-if the discipline is not respected. That is what you call better inclusion.
QUEST: Because the euro won't work without it. We have-you've discovered that over the last few years. The euro cannot work with just monetary union on its own.
LAGARDE: Well, the crisis has made it plain and clear that we have to respect the same principles. And that we cannot have exceptions and derogations, and what have you. And once you agree that you have to keep the deficit down, that you have to reduce the debt. You just have to stick to it, yes.
QUEST: Haven't the one thing been shown over this crisis, Ma'am, and that is the institutions were found wanting. Not through any, perhaps, lack of ability of those involved, but they simply couldn't cope.
LAGARDE: Which is why it is-
QUEST: Would you agree with that?
LAGARDE: Well, there have been deficiencies. Clearly, I'm not trying to, you know, evade that. There have been discrepancies, there have been shortfalls, and obviously, this European Union is being built through crisis and was initially created as a result of major crisis in Europe. And all the founders of this European construction have actually said so. It builds up and it strengthens over a crisis.
QUEST: But you are saying that we are destined to live our lives by crisis then? And if we accept that?
LAGARDE: I'm talking about institutional crisis.
QUEST: Yes, institutional crisis.
LAGARDE: And that's-in a way, that is the way Europe evolves, strengthens, gets better.
QUEST: Are you worried, come January, when the bankers bonuses come out, we are just as austerity measures hit all of us, in the higher taxes, and lower social services, the bankers are going to make off like bandits?
LAGARDE: I think the bankers better be careful when they attribute bonuses.
QUEST: I'm sorry?
LAGARDE: I think the bankers better be careful when they attribute bonuses, come January.
QUEST: Is that a threat?
LAGARDE: Not a threat. It's just a call for a sense of public interest, which I know some banks share. And you know, there are rules, they have been put in place and they need to be respected.
QUEST: And if they don't?
LAGARDE: Well, then they don't respect the law, what do you expect?
QUEST: No, but I mean, you-you-if we get egregious bonuses this year, you would be in favor of the swiftest and strictest taxies, levies, sanctions, all sort of things against the banks?
LAGARDE: You can count on me. I'm checking that the rules that we have put in place are respected, and are respected across the board. And we will make that point very clear at the international level, yes.
QUEST: The French Finance Minister Christine Lagarde. And in our second part of the interview, Madam Lagarde confronts the debt crisis in Europe. And I even asked her about rumors that France, itself, would need a handout and a bailout. Find out how that went down, with the minister later in the program.
There is no way from getting away from the dreadful mood on the trading floors. If you look at the numbers you'll see exactly why we have been talking about this. Stocks suffered another day of losses. Not as bad as we have seen. Financial stocks were the worst of the lot. The Zurich SMI, perhaps not surprising, down 1.3 percent. But it was a hefty sort of umph day, down overall.
The euro is barely keeping its head, 1.30 is the mark at the moment, or the level at the moment. It is about a seven- or eight-week low. Bear in mind, if you go back to the Greek crisis, back in May of this year, we were down at 1.19. So there is a lot more room there, a lot more wiggle room than it might seem. But the worry is that the crisis could affect other countries in the Euro Zone.
To the borrowing costs, Greece, these are-this is the yield, the bond yields, the cost of borrowing as against, over the-for the countries, and of course, the German bunde. The German bunde is just over 2, and change; so you are seeing a very strong premium for Greece, obviously, Ireland at 9.36, Portugal at 6.9, Spain up 5.5. Some of those are at record highs.
And I think what is interesting about these numbers here is bear in mind, two of them, Greece and Ireland, don't have to go to the market now, for several years.
So to the Big Board, in New York, where the Dow Jones is up 6-just 6.5 points, 11,059. Consumers were feeling confident in-at the moment, home prices-there were some good numbers. Five-month highs on consumer confidence, but home prices fell 2 percent in the third quarter.
So, when we come back in just a moment, Google, the company is in the spotlight. The world's largest search engine faces an investigation by Europe's anti-trust regulators. What is at stake? In a moment.
QUEST: An investigation and a potential acquisition. There was plenty on Google's place today. Both the good, the bad, and some might say, the downright ugly. Come and join me over in the library and we'll got through it, bit by bit.
Perhaps, the good-well, yes, obviously when you look at the rest of it. GroupOn, which is the deal a day company, that has been around for a few years, and now the rumor is that Google might buy it. The numbers that are being-a couple of weeks ago, months ago, it had been rumored $2.5 to $3 billion. But now some are suggesting up to $6 billion for the online discounter, that sends these to different cities. An announcement could come at some point this week.
If it did go ahead, a big "IF", it would be Google's largest acquisition to date, at some 6 billion. But that is a number that the market is rumored. It would dwarf the 3.1 billion for DoubleClick. Now, if that is the good, this can't-when the EU announces it is going to start investigating you, that can't be good news. The reason, for the potential abuse of market dominance position; now, keep in mind, whenever the EU has launched such an investigation, it usually does involve some fines being paid at the end of it. As Microsoft learned, to its cost, on Internet Explorer, and the dominance in that. Billions were paid. So, an EU investigation by Google has to be taken seriously-by the company-which of course, is why Google says it most definitely is doing exactly that.
Similarly also to be taken seriously, is the invasion of privacy, and the rumors there. Several European countries are now openly criticizing Google, for data protection, rare infringements, regulators in Germany, France, Britain, Spain, Italy, the Czech Republic, are now saying they are going to investigate allegations that it has invaded privacy with the maps, with the Google maps, the Google street maps device that it has been-again, Google says, is cooperating fully with the regulators.
Google is clearly under fire across a number of areas. The company, though, is fighting back. Jim Bittermann in Paris, has sent this report, which shows just how Google is countering the critics.
JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): Google has a new tricycle and wants everyone to know about it. The ubiquitous Internet search engine organized a press tour to Chateau Chamboard (ph), in the Loyar (ph) Valley, to show off the way it is collecting images for its street view maps. In this case, with a high-tech tricycle that can be used around ancient monuments and pedestrian passageways, to shoot the ground-level photos which are then incorporated into Google Maps. A demonstration, organized, in part, to help dispel lingering hostility toward the street view project, here, and elsewhere in Europe.
In a number of countries some accuse Google of invading privacy with street view, capturing pictures of people, buildings and trademarks. And then displaying them across the Internet in ways which no one but Google can control; there have been complaints. And according to lawyers for a number of French critics, there could be a lawsuit, over not just the images, but personal data, e-mails, passwords and the like, which Google said earlier this year, was accidentally collected in more than 30 countries.
VIRGINIE GALLARDO, LAWYER: We don't know what they are going to do with all this personal data. At the moment, we have an investigation. The French agency is investigating on that point.
BITTERMANN: Google France says the wi-fi data collection was stopped and will not be used again. As to the privacy issues, the company insists that faces, license plates, and any other identifying images will be blurred to keep everything anonymous. And that houses and buildings can be removed from sight if their owners ask.
ANNE GABRIELLE DAUBA-PANTANANCCE, GOOGLE COMMUNICATIONS MANAGER: The new technology, we need to explain. And that's is the role of Google, to explain why we want to do that. But at the end of the day I think our goal is to give access to information to everyone, and to be transparent, and to explain why we want to do that.
BITTERMANN (On camera): If Google street view still has its skeptics, the company has won over one major critic. Google signed a landmark deal with a major French publisher, permitting the digitization of out-of-print books. Just a year ago, French publishers won a copyright infringement case against Google over a similar project, which did not have prior agreement.
(voice over): It's all part of Google's charm offensive here, which includes a promise to President Sarkozy that the company will create a still vaguely defined French cultural institute.
WILLIAM ECHIKSON, GOOGLE PUBLIC AFFAIRS: We're investing in France because we are very popular in France and growing fast in France, and French customers love Google products. But they also want to be sure that we are willing to give to France.
BITTERMANN: And if modern technology does have something to give to this ancient land, there is little question the nation will be happy to take it. Jim Bittermann, CNN, Paris.
QUEST: Interesting stuff on Google, very much in the news today.
When we come back in just a moment, behind the scenes in running a company. It is, of course, "The Boss", branching out and knowing your business, two of our chief execs say that is what it takes if you are going to be at the helm, the top, of the company.
QUEST: Time now for "The Boss", where of course we go behind the scenes with the people at the top of the game. And we are following three chief execs. And these are the three, you'll know them by now. Let me remind you.
There is Sarah Curran, who heads up MyWardrobe.com. She oversees the successful online retailer. It is in the midst of relaunching her brand. She has to stay on top of fast-changing fashion world. She is boss No. 1.
On the other side of the Atlantic, in New York, we follow Richard Braddock. He is the chief of Fresh Direct, which is an online grocer. Now his big goal, at the moment, is the expansion of his company into New Jersey.
And across the Pacific, how about Michael Wu, in Hong Kong, from Maxim's Group, one of the cities largest caterers. His big force ahead, is to move and expand, into Mainland China, as fast as possible.
So, on this weeks edition, our attention is on Sarah and Michael. In Hong Kong, Michael Wu shows us how he motivates his staff. And in London, Sarah is doing the same thing. But that, in her terms, means knowing your business inside out.
UNIDENTIFIED MALE: Previously, on "The Boss", Michael Wu laid out his strategy for China.
MICHAEL WU, CEO, MAXIM'S GROUP: Change is quite easy for us. It's in our blood.
UNIDENTIFIED MALE: And Sarah Curran tells us why it is important to hire the best people.
SARAH CURRAN, CEO, MY-WARDROBE.COM: It is really important to surround yourself with experts.
We're in Nottingham, which is two hours away from London. This is where we have our operational part of the business. So, we have our customer service team, finance, Web development. And this is also where we do the auto-fulfillments. And so I'll take you through.
UNIDENTIFIED MALE: Sarah Curran moved her operations to Nottingham in 2006. A the time she managed three employees. Today, she's leading a team of 90.
CURRAN: When we started, obviously, you know, it would trickle from an order a day, to five, to 12. And now we handle between sort of 250 and 300 orders a day.
UNIDENTIFIED MALE: This warehouse is Sarah's home. It represents everything she's worked for.
CURRAN: This is where we received the goods in.
UNIDENTIFIED MALE: This was her start as a leader. It was here that she developed her managerial skills. She had to work at it.
CURRAN: I think these are a really key brand.
When we launched, originally, in 2006, you know at that time, there was no seminars on e-tailing. There was no handbook, there was no instruction. We literally learned as we went along.
UNIDENTIFIED MALE: As the orders have grown, so has Sarah's role. But being a chief executive has not come naturally. She's had to learn on the job.
CURRAN: There is not really one part of the business I haven't done myself. Obviously, when we started in 2006, I would do everything from, obviously, the buying, to then receiving the goods in, and I do remember my first order. It took me an hour to pack, because it was just-everything- there was tissue paper everywhere. And I just wanted it to look perfect.
This is the wrapping and packing department.
UNIDENTIFIED MALE: Like every self-made CEO, Sarah knows the business inside, out.
CURRAN: It has just arrived, yeah?
UNIDENTIFIED FEMALE: Yes.
CURRAN: And you have just packed it up and you have quality controlled it?
What has she ordered?
UNIDENTIFIED MALE: Today she appears at ease in her role. And she acknowledges her growth as a chief executive.
CURRAN: If you were to see the person, even the person that I have become over the last 12 months, I think I have changed. I've become a lot more confident in my decisions.
When you've got 90 people in the business, and they are all looking for one person to lead the ship, you need to have the confidence to stand up and be that person.
UNIDENTIFIED MALE: Day by day, Sarah is changing the course of My- Wardrobe. She's "The Boss", confidently leading the way.
Michael Wu may be plotting his campaign to enter China, but this week he's turning his attention to matters closer to home, recognizing his staff.
WU, SPEAKING CHINESE: Good morning, Cakes Department. How is everyone?
UNIDENTIFIED MALE: No matter where he takes the company, Michael knows its success has to be a team effort. And just like Sarah, he knows too well, the importance of valuing his staff.
WU, SPEAKING CHINESE: We've sold out of the Mooncakes from Hong Kong. Thank you for all your effort. We have sold more than what we've set for our target.
UNIDENTIFIED MALE: For the some-odd 150 employees this is an opportunity to hear directly from their boss.
WU: I like to join these meetings because it gives me an opportunity to tell them about the company's direction to encourage them, to congratulate them on their good job. And, really, an message which I want to deliver to them.
UNIDENTIFIED MALE: For Michael it is an opportunity to celebrate their performance and reward them publicly for their efforts.
WU: I think recognition is a key element of motivation. Just the very, very simple recognition. Just for those staff to be appreciated, that we know, that they've done a good job. Just a simple pat on the back.
UNIDENTIFIED MALE: By rewarding his staff, Michael engages his team. He knows that is key to creating motivation, and retaining great employees.
WU, SPEAKING CHINESE: I want to encourage you all. You have done a great job. But we shouldn't look down on our competitors.
UNIDENTIFIED MALE: As the boss, Michael knows he can be respected and also feared. So, he encourages staff to write to him anonymously. It is an interesting philosophy.
WU: I encourage them to write anonymously. They are free to say what they really feel. Once they put a name onto that, they will be afraid that I will investigate, and they will be revealed.
UNIDENTIFIED MALE: With the correct communication and staff Michael has his army ready to attack.
WU: I have good news to share. I created a new product.
UNIDENTIFIED MALE: Next week, on "The Boss": What is Michael's new product? And how is he going to sell it?
And we're back in New York, as Richard Braddock gets ready for the busy holiday season. It is Thanksgiving.
QUEST: "The Boss", only here on QUEST MEANS BUSINESS. And in the weeks ahead we will give you the chance to nominate somebody that you think should join us, on "The Boss". When you and I come back, and talk, in a moment, we continue with Christine Lagarde, the French finance minister. We're talking about bailouts and no country is off limits. Apparently not even France.
QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS. This is CNN and here the news always comes first.
QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN. And here, the news always comes first.
And there's more fallout from the disclosure of secret diplomatic cables on the WikiLeaks Web site. Some of them shedding light on the complex relationship between China and North Korea. A Chinese official is quoted as saying North Korea is behaving like a "spoiled child" and that we may not like them, but they are our neighbors.
Iran has agreed to come back to the international negotiations over its nuclear program. President Mahmoud Ahmadinejad announced in a speech on Tuesday that Tehran would participate in new talks with the U.S. and other nations. The meetings are set for December the 6th and 7th in Geneva. Iran has been under stiff sanctions for continuing to enrich uranium.
In Russia, President Dmitry Medvedev's State of the Nation address included a warning about Europe's ambitions for a new missile shield. He said if Russia and Western nations can't work together on anti-missile defense, a new arms race could break out and Russia may deploy new weapons systems. Moscow has demanded an equal voice in the systems' operations.
US Defense Secretary Robert Gates is urging lawmakers in the U.S. Senate to repeal the "don't ask, don't tell" policy for America's military forces before the policy is repealed by the courts. A Pentagon study which was released today is boosting the argument for dropping the policy, which concluded by letting openly gay or lesbian troops serve in the U.S. military. It says it would have little lasting impact on the U.S. armed forces.
The picture you're looking at at the moment. Gates is briefing reporters on the study right now. He's also taking questions, of course, on WikiLeaks.
And so to return to our discussion with France's finance minister, Christine Lagarde.
We've already heard how she talks about crisis, bankers' bonuses and the way forward for the European Eurozone.
But now, what about Ireland, bailouts and Greece?
I put it to Christine Lagarde that despite the bailout of Ireland, the crisis has not gone away.
And I asked her, should we now be putting in place a plan for Portugal?
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, FRENCH FINANCE MINISTER: Don't forget that this -- this crisis mechanism, number one; and the assistance programs that go together with it are coupled with something which is far more important, which is the determination of all member states to actually improve their public finances.
What we heard yesterday from our Portuguese colleagues is, number one, that is budget was voted on Friday afternoon. Number two, that they were considering a acceleration of substantial and significant reforms to improve the situation of the Portuguese market. That's on Portugal.
And we heard on Spain, our Spanish colleague indicate that the various mergers of the savings and loans institutions would be accelerated, number one, and that the pension reform would also be accelerated.
So those two indications coupled with a very strong budgetary constraints that have been put in place in place in Spain and in Portugal give me the confidence that those two countries are really taking the job of restoring public finances seriously.
QUEST: So you don't expect to have to offer financial assistance from the facilities to Portugal?
LAGARDE: Well, I certainly hope that the Portugal -- that Portugal's determination to continue to reform, to abide by very strict principles in term of -- in terms of public finances, will be sufficient to convince the markets that Portugal is -- is -- is a -- is a sensible risk and not one that requires public assistance.
QUEST: The markets today, Monday and -- do not seem to be overly impressed that -- that a firebreak has been built.
LAGARDE: I think you're -- you know, whoever can read the markets will tell. But my sense is that it's not so much the average package which is the cause of concern on the part of the market. It has more to do with the crisis resolution mechanisms that we put in place in the last few days and that was confirmed at yesterday's meeting of ministers of finance.
And I think it's that agreement, or the principles of it, which are causing concern because of uncertainty, doubts about it, you know, the content and -- and scope and consequences, which is really fueling a bit of anxiety. And I'd be very happy to try to clear that.
QUEST: It seems as if Ireland was railroaded into a -- into accepting a package, a package which became inevitable, but the Irish had to be dragged kicking and screaming before they would realize the -- the truth of the position.
LAGARDE: No, the -- the Irish people and those that I -- I speak to, like my friend, Brian Lenihan, did not come screaming and kicking. But it takes a while to actually accept the idea that you need external assistance, because it comes naturally that as a sovereign state, you can look at yourself, you can see to it. But there are instances where you can actually need help and external assistance from your partners. And, clearly, those euro partners were the first -- the first call.
QUEST: And -- and that brings me -- and I realize it sounds like I'm going back on myself, but that brings me to Portugal.
Why are -- why is it necessary, do you think, to wait until perhaps the thing blows up before ministers say if Portugal needs $100 billion, it's there on the table waiting for it?
LAGARDE: Portugal is a completely different case. Look -- look at it. Portugal has much smaller banking system. Portugal is keeping its deficit down. No comparison with Ireland. Ireland was in a deficit of 32 percent. Portugal is below 10 percent and is on track to restore its public finances.
I -- I really think that it's a different story, which is why we need to work things out on a case by case basis and, you know, that's also a message that we're giving to the market. Nothing can be sort of net (ph). There is no straitjacket. It has to be tailor-made. It has to be case by case. And it has to be in line with IMF principles.
QUEST: Were you surprised that France has been the -- the very name France has been uttered as being questionable on its debt and on its -- on bailouts, as it was over the last 48 hours?
I mean it raised an eyebrow when I saw it. You must have sort of wanted to -- well...
LAGARDE: Well, I thought, you know, what -- what kind of bee did he have in his bonnet when he decided to edit that kind of front page, yes, whoever that was.
QUEST: And so you're saying there's absolutely no risk, no danger that France will go to the facility?
LAGARDE: Yes. In other words, no, if that makes any sense.
QUEST: Madam, many thanks, indeed.
LAGARDE: Thank you.
(END VIDEO TAPE)
QUEST: It made perfect sense. Yes, there is no danger that France would go to the facility.
Christine Lagarde talking to me in Paris yesterday.
In a second or three, well, you and I will talk about the release of Pentagon and State Department documents. It's just the beginning. The founder of WikiLeaks says his next major target is a U.S. bank.
QUEST: Slightly earlier than normal in our hour together, we need to take a look at the weather forecast.
There's snow in the U.K. and Europe and the cold is bone chilling.
Is there any sign -- sign of the end in sight?
Guillermo Arduino is at the CNN World Weather Center doing warm duty there.
GUILLERMO ARDUINO, CNN METEOROLOGIST: The cold hasn't started yet.
How about that, hmmm?
It hasn't started. I mean it's going to start tomorrow, because that's when the -- the snow is going to stop. And I have a couple of pictures.
First, this iReport, you see, this is -- what is this, Richard?
Per -- Perterlee. I -- I have to Google it. I don't know what it is. But it's somewhere in the United Kingdom.
But pay attention to the third picture. Matt is going to roll them now. And we have a collage.
This is number one. This is in Scotland. Number two, look at number three.
ARDUINO: OK, come back to me, Matt?
Those are your pictures. It's cold there. Well, I said that the cold is going to start tomorrow in Britain. We have seen snow in Madrid, too, today. I got phone calls from friends there telling me, hey, there is some snow here. Well, that's going to end soon. I think that London will see snow tonight. Tomorrow, it's going to be cold. And probably we will not see snow. Probably we'll see some sunshine tomorrow. But it's the beginning of a negative -- very negative bone chilling cold temperatures.
So they are 10 to 20 degrees below average. And as Richard was saying before average, also, before it's supposed to, because winter has not started yet.
Well, the reason why we got so much snow is we had winds from here, coming this way. Then we have warmer water here in the North Sea. And that wind is picking up the moisture. And then it was -- it falls down here on Britain, especially this coast, up to 20 centimeters. So I wouldn't be surprised if that picture is coming from there.
Also, Gale Edmunds (ph), one of our producers, this is her mother's house. And you see this is also a nice mound of snow. This from the train station. She sent me these pictures yesterday, so I rolled them maybe 20 hours ago. So I wanted to show them -- show them to you again.
But look, more snow coming, especially -- London may be sandwiched here. We may see snow in any case, because the possibility is there.
But the beginning of the cold air. And, Richard, you know, London has a 1 degree in the forecast, the high temperature. Look at Berlin, minus 8. Athens, really, really cold -- back to you.
QUEST: Gale will not be talking to you.
Perterlee, as you described it, is just about from where she comes from in...
QUEST: -- in the northeast of England. They have some very odd accents there. And Gale will happily give an example of that in the future.
We'll look forward to the cold weather.
Guillermo, many thanks, indeed.
ARDUINO: Thank you.
QUEST: They say it is embarrassing. It could be an awakened encounter, coming as it does just days after the largest ever disclosure of confidential information from the Web site, WikiLeaks.
The U.S. secretary of State, Hillary Clinton, has arrived in Kazakhstan for an OECD summit. Now, she's attempt to avert a major diplomatic emergency triggered by the discusses.
A North Korean delegation has arrived in China amid a leak that Beijing likened the communist dictatorship to a spoiled child.
And now it looks like WikiLeaks is about to test the business world in a major U.S. bank implicated. The founder, Julian Assange, told "Forbes" magazine his organization will release documents early next year. What documents and what they will say, he won't say. But he compared the information to the explosive e-mails unveiled to the collapse of Enron.
The sheer scale of this leak of documents is likely to be a game- changer, not just for diplomats, but also for the business world and security, internal and external communications.
And to join us and talk about this, Parry Aftab joins me, the founder and managing director of WiredTrust.com, which provides guidance on maintaining secure systems.
Parry, let's leave aside diplomacy for a moment. That's another ball of wax, kettle of fish, whatever you want.
Within the business world, what's the danger -- the risk as a result of these WikiLeaks?
What are we likely to do now?
PARRY AFTAB, MANAGING DIRECTOR, WIREDTRUST.COM: Well, corporate WikiLeaks are very problematic. You either have trade secrets that are moving out, information that is deemed confidential or other issues about corporate problems that you may not want made public that, too often, are being made public.
QUEST: For a long time, we've always thought that corporate espionage was well protected by law. So if something went wrong with your material, you know, the Feds or the police would come along and you'd be -- as, indeed, we know from S&P and Oracle, you know, you sue and you get damages.
AFTAB: Well, suing and get damages is one thing. But often money -- money rewards do not suffice and you find a lot of information that can give others a leg up on you is already out.
QUEST: So let's just talk -- if you are in a company, you do have to have the honesty of communication -- honest communication with colleagues.
What's the number one rule that you need to bear in mind?
AFTAB: Well, honest communications and appropriate business communications are two very different things. You need, as a corporation, to set rules and enforce them. You need to use monitoring technology to make sure that your employees are only using technologies and information they are permitted to use and nothing else.
And as an employee, you need to recognize, in the United States, you could be fired for any and all reasons, as long as they don't violate the civil rights of someone, which is rarely the case.
QUEST: Oh, hang on. You want bosses to spy on their employees, to make sure they're not about to make off with or leak the confidential stuff?
AFTAB: I want bosses to make sure that their personal and private information of them and their customers are secure. And that means that you provide locks to your system and you monitor them to make sure that no one is breaking them. And that means monitoring, yes, but with information that's provided in advance to employees that they are being monitored, what they can and cannot do.
QUEST: All right, many thanks, indeed, for joining us.
And the message, of course, from this discussion is don't think that the WikiLeaks State Department e-mails and cables is just about diplomacy. It's in the business world, as well.
In a moment, turbulence may be easing -- what's powering aviation's recovery and what passengers make of key industry players.
Tim Zagat after the break.
QUEST: Tonight, with new signs of an aviation recovery, we're looking at the health of the travel industry and a survey of passengers driving forward. If you take a look at the what the latest Zagat survey says about the number and the way people are flying -- Zagat, of course, is very much based on the membership. It's very much based on the anecdotal reporting of people. Frequent flaying -- apparently we are flying more -- 17.4 flights per representation in 2010, over 16.6.
Now, that's still some way off the 2007 all time high.
The point made was but we may be flying more, but not necessarily in a way that we like to -- as one person commented, Point A to Point B with a bag of pretzels.
Different classes -- now, if you look at the airlines, Continental Airlines was voted the top premium U.S. airline. JetBlue was voted top economy. Singapore won premium and economy for international carriage.
Interestingly, the comment on that one was the only difference between economy and business class is the size of the shrimp on your salad. Somebody hasn't traveled economy, particularly the one who was having the pretzel.
Finally, baggage charges -- the fees checked for people to check in luggage. Forty-five percent of people said they tried to avoid flying airlines that actually charged the extra charge. Now, the comment from those people involved said: "My bags get better service but they pay extra for it."
An interesting view, of course, baggage charges, different classes, frequent flying.
Are we seeing a resurgence in business travel?
Tim Zagat joins me from New York.
Tim, lovely to see you and many thanks.
But we need to talk about people are flying more, they just don't like the mode and means by which they're having to do it.
TIM ZAGAT, CEO, ZAGAT SURVEY: That's absolutely right. There's an awful lot of problems in air transit. But there are some places in the world and some airlines who seem to know how to make it pleasant. And there are others that are, principally because they're facing very severe financial stress, don't do it right.
QUEST: I looked at the num -- I looked at the reports and the survey. I mean, there are some airlines, particularly in the domestic U.S., that don't necessarily -- Southwest always comes up pretty well. Continental comes up pretty well. United said to be lacking in many references, as, indeed, did U.S. Airways.
What can we make of that?
What are the good ones doing and the bad ones not?
ZAGAT: I think the major airlines that we think of as the traditional majors have been facing problems of high labor costs and high inefficiencies in their older aircraft. When you think about the new, good airlines, you're talking about JetBlue, which is not really new, but it's still flying newer planes with younger people doing the service.
America West and your -- they have enormous advantages. They're flying at 8, 9, 10 -- 10 cents a passenger mile, whereas the older carriers are flying at 13, 14, 15 cents...
ZAGAT: -- it's just -- they're not competitive.
QUEST: Internationally, I have to say, I didn't even raise an elbow when I saw S.Q. taking the award, number one, for international premium and economy. But thereafter, it is the usual suspects. And what I found interesting in your study, we're not -- your study or your -- what your people think, we're not seeing the Gulf carriers coming, the Emirates, Etihads and Qatars, coming through yet.
ZAGAT: Well, actually, Emirates is doing fairly well now. And Qatar is doing -- is picking up even though it's very new. But Singapore, Cathay Pacific and New Zealand, airlines like that, which have very long haul flights, seem to be providing a much more attractive experience.
QUEST: Tim, as we look at the -- at the recovery taking place, the one thing that I hate, and I know other flyers do, it is the nickel and diming, the extra charges. We heard there about the baggage charges, the change fees.
That, again, comes through very strongly, isn't it, people don't like that?
ZAGAT: Yes. We had 8,000 people who are frequent fliers commenting. And they really hate nickel and diming. And they're seeing it a lot on domestic load travel. The airlines that are flying the two hour flights in the U.S. and short flights in Europe and elsewhere.
The longer haul flights obviously have bigger planes and they also provide more in the way of food, service and entertainment.
QUEST: Finally, we -- we're doing a sort of an -- a -- a Twitter or a question that I've been looking at all day.
What do you think, personal opinion now, Tim, personal opinion, for you, and what would you say is a reasonable amount when you should go -- for length of flight from economy to business, that a company should let people fly business -- four hours, six hours, eight hours?
What do you think?
ZAGAT: I really don't have an opinion about that. I think it's up to the companies that are doing it, not to me.
QUEST: A diplomat right the way to the end.
Tim Zagat joining me from New York.
Many thanks, indeed.
Now, if business travelers are returning to airports, it can only mean airport security lines are getting longer. They've been growing longer for most of the time that we've been alive. We've been loading bags onto conveyors. As you know, intrusive pat-downs have become highly controversial. You may be surprised to learn, though, security at airports has been the subject of cartoons for many years, all since before World War II.
Have a look at some of the best of these cartoons and a good laugh. I've posted it for you. You can find it, Facebook.com/cnnquest. That's where you can find that.
I promise you, I was surprised just how many cartoons there have been about security on airports.
Now, back on Thursday, QUEST MEANS BUSINESS and Q&A, Quest and Ali. You choose the subject and the topic, we give you the answers. We'll battle it out and give you the explanation we like best. There's even a quiz. You can join that at CNN.com/qmb and send us your talking points.
When we come back in a moment, a Profitable Moment.
QUEST: Tonight's Profitable Moment.
On this show, we had a moment of honesty and it came to us from the French finance minister, Christine Lagarde. I mention that because throughout the entire European debt crisis, there has been a theme repeatedly shouted by commentators. The Eurozone will only work properly when member countries have closer fiscal and political union.
That would have prevented Greece fiddling the figures and Ireland's banks nearly going bankrupt in the country. It is the truth that until really no one in this crisis, no one ever dared speak too openly.
Well, tonight on this program, Christine Lagarde pretty much said it outright -- a successful euro requires a closer degree of political union between member countries. Now that also means a transfer of sovereignty from some countries to the European center, the quid pro quo for assistance, as Madame Lagarde admitted.
It is time that more leaders were quite so honest and didn't behind -- hide behind a wall of obscure comment. Europe had hoped there would be no major crisis, so integration could happen slowly. Bad luck, the crisis has arrived.
And that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest.
Whatever you're up to in the hours ahead, I hope it's profitable.
"WORLD ONE" now.