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QUEST MEANS BUSINESS
EU Sanctions Libya; Bernie Madoff Speaks Out; John Galliano Faces Accusations of Racism, Anti-Semitism
Aired February 28, 2011 - 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: The EU slaps sanctions on Libya.
Tonight, from his cell, Bernie Madoff tells us how his family has been destroyed.
And damaging new video on that story, John Galliano faces racism allegations.
I'm Richard Quest. We start a new week together and I mean business.
The world is closing the door on Moammar Gadhafi. The European Union is now the latest to cut off supplies of weapons, money, and escape routes for the Libyan leaders. The EU has taken its cues from the United Nations, where the Security Council is imposing tough sanctions on Gadhafi's regime and wants him referred to the International Criminal Court for a possible trial as a war criminal.
Now, exactly the range of sanctions and the nature of them, you can see quite clearly, if you join me over in the library. There is an arms embargo, a visa ban, and no equipment of repression. This is what the EU has introduced, or the sanctions they propose to introduce. This is the interesting bit, no equipment of repression can be supplied to Libya. There are also restrictions on Colonel Gadhafi, and 15 other people and members of his family.
Now, that is the EU stuff. But Gadhafi's assets have also now been frozen by the United States, the EU, and Britain. Five family members have also been prevented from travel. And Germany is considering a 60-day freeze on oil payments, because although the amount of oil being produced from Libya has certainly reduced and we have certainly seen that in the international markets, oil is still getting out. That is being paid for and now the authorities are keen to ensure that cash does not transmit across.
But there are more measures in the works. A no-fly zone is being mooted and considered. The EU and the U.S. are working on some form of plan that would make that possible. And you can see from this little map here, there is Tripoli, and there is Benghazi, where we will be talking to our correspondent Ben Wedeman, in just a moment.
The over-arching effect, whether it is assets frozen, arms embargoes, or no-fly zones, Hillary Clinton says nothing is off limits.
(BEGIN VIDEO CLIP)
HILLARY CLINTON, U.S. SECRETARY OF STATE: Without meaningful steps toward representative, accountable, and transparent governance, and open economies, the gap between people and their leaders will only grow and instability will deepen. What might have been possible in the 20th century, with new technologies and the power that people now have to connect, is no longer possible. And to hang on to systems that are unaccountable, and that do not respond to the legitimate needs of one's people, poses a danger. Not only a danger to leaders, but a danger to all of our interests. By contrast history has shown that democracies tend to be more stable, more peaceful, and ultimately more prosperous.
(END VIDEO CLIP)
QUEST: Our correspondent Ben Wedeman is in Benghazi, in eastern Libya. Ben joins me now on the phone, on the line.
Ben, we have a lot of ground to cover, so let's take this at a fair clip. First of all, will the sanctions from the EU, U.S., or anyone else really make a jot of difference in the eyes of Gadhafi?
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, certainly he's going to feel much more isolated as a result of these travel bans and freezing of assets. And generally putting Libya under a very heavy burden is going to make a difference. And what is important is not necessarily the difference it makes to him, personally, because we have seen he has his own personal agenda that no one can quite make out. But the people around him, his family, his sons, his daughter, and others close to him in the regime, will suffer. They will pay a price for his continuation in power.
Certainly, Libya's oil revenues are key to Gadhafi and the entire country, as a matter of fact. And that is one of the worries, because a majority of Libya's oil comes from the eastern part of the country, which is no longer under his control. So the people here are worried that, as is often the case when the West imposed sanctions, the leader somehow managed to get around them while-
WEDEMAN: While many of the people actually suffer, Richard.
QUEST: Ben, in Benghazi, itself, the lights may be on, but who is paying the bills. I mean, how is life managing to-because obviously there is no infrastructure in terms of government that can relate outside of the area.
WEDEMAN: Well, what we have at the moment is that out of the courthouse is what amounts to a local government. Every city has a system whereby security is maintained, whereby they make sure that there is adequate food and medicine available to the population. But in the long run, obviously, it is not sustainable. We see ships coming in and out of the ports here in Benghazi, for the most part, it is people being evacuated from the area. So this current standoff where you have the east controlled by the opposition, and the west more or less controlled by Colonel Gadhafi, it is not sustainable. It can't go on. There is not much-there is very little in the way of trade going on here. Certainly in terms of trade with the outside world, it is minimal at the moment. So, this is a standoff that is not sustainable.
It is hard to say how it is going to end. When you talk to people here they say their number one focus is just to get rid of Gadhafi. But I've seen on the ground that in terms of military preparation, there is almost zero to none. They have tanks, they have ships, but there doesn't seem to be a central military organization-
WEDEMAN: -in place to break this stalemate, Richard.
QUEST: Ben Wedeman joins us there, from Benghazi.
And Gadhafi's assets around the world-the numbers involved, it depends on who you speak to and what you read. Is it billions of dollars? Atika Shubert has been piecing together what we know.
Do we know?
ATIKA SHUBERT, CNN INTERNATIONAL CORRESPONDENT: We don't know for sure. It is definitely in the billions of dollars, but no one is quite sure if it is on the low and or the high end. And it depends what access to funds Gadhafi has. We do know that, for example, his son, Saif Al Islam Gadhafi, owns a $15 million home in Hampstead. So that is one example of property investment. But there is obviously a whole range of other bank accounts and so forth where they could have stashed money.
What they'll be looking at now, in terms of the freeze, is whether or not Gadhafi has direct access to funds, say, in the Libyan Investment Authority. If he has access to funds like that, then will the freeze affect a sovereign wealth fund like that? That is a big question for investigators now.
QUEST: So what has been frozen, by the EU, the U.S., and the U.K.?
SHUBERT: Well, what has been frozen are the funds of Gadhafi himself and several family members. Not all family members, but some of them. But, of course, if he has access to state funds, for example, then those may be frozen as well. It really just depends on how much access he has.
QUEST: I just wan to pause there, if I may, this is unfair, you've not heard this, but come along with me if you will. The U.S. has frozen at least $30 billion in Libyan government assets, which are under U.S. jurisdiction after enacting these sanctions, according to a Treasury official. It is the largest amount ever blocked under any sanctions program.
So here we have vast assets being sequestered because they might actually end up being under the control or authority of Gadhafi.
SHUBERT: Well, exactly and this is likely going to be the Libyan Investment Authority. They have an estimated $32 billion in liquid assets, most of that within American banks. Now if Gadhafi has direct access to that, and he does seem to control pretty much the entire economy, then he would have access to those funds to pay off militias, or whatever else he needed. And that is exactly what they are trying to stop.
QUEST: Well, that is what we need to say. What is the purpose? I mean, these are billions of dollars. He's not going to go to an ATM machine and just take out sort of a billion here and a billion there. So what good does that do? What would the-what the money, could it be used for?
SHUBERT: No one is really sure. What they are afraid of is that he's paying militias or he's getting weapons, and getting them to turn against his own people. And interestingly, there is an example last night. Actually, Prime Minister David Cameron just spoke about this. That the British treasury stopped a shipment of more than $1 billion in bank notes going to Libya. It is those kind of Libyan dinars that might be used to pay off militias, for example.
QUEST: Atika Shubert, who will stay on this and keep watching and come back when there is more to report. Many thanks.
Now, more countries in the Middle East are feeling the affects of the pro-democracy agitation, that is sweeping the region. For instance, Oman, the sultan has ordered 50,000 people be given jobs, after thousands of protestors rallied against unemployment over the weekend. The sultan is also bringing in new benefits for job seekers.
Oman's health minister says one person was killed over the weekend in protests, earlier reports said two had originally died. Demonstrators gathered in the main square in Sohar and a supermarket was burned.
The unrest has spooked the stock market. Tunisian exchange has been suspended to protect investments while the political situation remains unstable. In Dubai, the financial market has now fallen to its lowest point since 2004.
In a moment, how to help India's poor afford to eat and drink, and still cut the deficit. Well, talk budgets and beer with the founder of Cobra Beer.
(DESK BELL CHIMES)
QUEST: India is ramping up spending to try and protect the country against rising inflation. Today's budget increases spending by 13.4 percent and much of that will go toward schemes like providing cheap grain for people struggling with high food prices. Spending up 13.4 percent.
Now, the Indian economy grew at 8.2 percent in the last quarter of last year. The projections of further growth are key to this new budget. Our Sara Sidner explains a careful balance, particularly bearing in mind that rising inflation, between growth, inflation, and what the needs of the rural people.
SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT: Well, there have been some tumbles. India's growth story is still an amazing one. The government saying that the GDP will increase by 8.6 percent this past fiscal year and that is nothing to sneeze at. But there is a serious tug of war going on between growth and inflation. Now, that certainly was reflected in the budget announcement today. A good portion of the announcement talked about inflation, particularly food inflation, which has been in the double digits for months now and has really upset the people of India. The finance minister, talking about some of the things that would be put in place that will hopefully bring that down; one thing being a national food security bill that is supposed to touch some of India's most vulnerable and make sure that they have food in their homes, also a promise that the average inflation numbers will be brought down.
The Finance Minister Pranab Mukherjee talked about some of the root causes of inflation and how India proposed to fix them.
(BEGIN VIDEO CLIP)
This government revealed shortcomings in distribution and marketing systems which are getting accentuated due to greater demand for these food items, with rising income levels. The huge imbalances between the wholesale and retail prices and between markets in different parts of the country, are just not acceptable.
(END VIDEO CLIP)
SIDNER: To help alleviate the bottlenecks that have been caused by insufficient infrastructure and choked food supply, also leaving food to rot, the finance minister announced a 23.3 increase on spending on infrastructure. He also announced something that the corporations seem to be very happy with, India Inc, happy with hearing that there is going to be the allowance of foreign investment in infrastructure. And that will double from $20 billion to $40 billion. The government has said in the past that it wants to spend about $1 trillion on infrastructure but was hoping that the private sector would pay for most of that and that, you can see, reflected in the policy and the budget announced today.
The government also increased the minimum wage for unskilled workers which will now be linked to the consumer price index. The issue of government corruption has certainly been a big one here. There have been several protest in India. Large-scale protests with people very upset about several cases that the government is now investigating. The finance minister did touch on that, very briefly, talking about the fact the budgetary process needs to be transparent.
He also touched on the issue of black money. That is money illegally obtained, unaccounted for, and untaxed, saying the government now has a five pronged approach in place to try and tackle that issue. But all in all, he said that the nation should be proud of its growth story and again, expecting that the growth for the GDP will be at 86 percent for 2010, 2011. Sara Sidner, CNN, New Delhi.
QUEST: Lord Karan Bilimoria is the chairman of Cobra Beer, the company he founded and also president of the U.K./India Business Council. His lordship joins me now, fresh from meetings with the Indian prime minister and other business leaders.
This budget, this balancing act, to protect the poor against the rising inflation, but at the same time ensure the growth, remains at 8 percent, 9 percent, which it need to.
LORD KARAN BILIMORIA, CHAIRMAN, COBRA BEER: India's story is of growth, but it also is a story what it calls "inclusive growth". And it is all very well having 8, 9 percent growth, which it is achieving, but you have also got hundreds of millions who are in poverty; 600,000 million on less that $2 a day. So it is a question of 600,000 million people in the rural areas which now just makes 15 percent of GDP.
QUEST: But did you have a budget deficit, and you were saying earlier, (UNINTELLIGIBLE) it is heading towards 10 percent. To continue to run deficits and large subsidies is not sustainable in the long run.
BILIMORIA: Well, what India has got to do is keep growing. And this budget is dependent on growth. And that growth has to generate jobs, particularly in the manufacturing sector. And it is happening. It needs investment. It needs to attract foreign direct investment. And it has been doing that in huge amounts. I mean the infrastructure alone, there is $1 trillion required of investment over the next 10 years.
QUEST: So what is the biggest danger, in your view, to that growth? Besides, of course, sclerotic (ph) Western developed nations not buying products?
BILIMORIA: What needs to happen, and continue to happen, is confidence in India being able to manage this growth. It has got the central government. It has the state governments. It's got an independent central bank that operates very independently. And it has got a good rule of law, a free press, it is a very attractive area for investment. It is one of the most attractive in the world today.
QUEST: No one doubts that. No one doubts that. But you've been meeting with the prime minister and you've been hearing from them about their concerns.
BILIMORIA: Biggest challenges are education. That is the most important. And the prime minister's Global Advisory Council, which I sit on, the main topic we spoke about is education, education, education, primary, higher education. Millions of new graduates, vacancies, colleges need to be built. That is number one. Health, there isn't-there is public health, but much more. So this budget has increased health expenditure, has increased education expenditure. That needs to be done.
QUEST: Can India rely purely on growth as a way of creating enough economic activity to beat the deficit? Or at some point do they have to make cuts?
BILIMORIA: What India has done is to drive that growth. For example it lowered taxes years ago-I mean, over here we've increased taxes. To generate growth you have to lower taxes India's done that, and actually their tax receipts have gone up.
QUEST: But that is trickle-down economics.
BILIMORIA: No, well, it has got to be across the board. You have to have ground-level work combined with the growth that generates the job and the prosperity. And it has happened. Millions are being lifted out of poverty in India every-the middle classes now, number 300 million.
QUEST: As between, frankly, it is between say, China, with its 8, 9 percent or 10 percent growth, and India with its 8, 9, or maybe even 10 percent, some day, growth. How do you rank the two, in terms of opportunity? Which do you favor in terms of which looks the most attractive?
BILIMORIA: In the period going up to 2050, there is no question about it, there will be three top economies in the world, the United States, China, and India. The demographics, China has an aging population, because of the one-child policy. India has actually got, demographically, a very young population. If that population is educated, if the opportunity is there, if India keeps opening that up, which it needs to. And the democracy that India has, the institutions that India has, in the long run India is just going to be the most amazing opportunity.
QUEST: I was a bit concerned that you said, India, China, the U.S.? Did you mean to leave out the European Union?
BILIMORIA: And the United Kingdom, in 2050, will still be one of the top 10 economies in the world.
QUEST: Your lordship, many thanks indeed for joining us. Many thanks.
Now, when we turn back, and turn-coming up, everybody gather around, the nights are drawing in, and I'll show you why this is important.
(BEGIN VIDEO CLIP)
QUEST: Surviving the dark days of winter, when Helsinki only has half a dozen hours of daylight. QUEST MEANS BUSINESS is in the Finnish capital after the break.
QUEST: Welcome back. QUEST MEANS BUSINESS, I want you to look at these. Have a look; these little lights, on a set of headphones. I'm going to explain why these are important in a moment. But the core fact you need to know is it has already been three and a half hours since darkness fell in Helsinki, in Finland, tonight.
Now, the sun won't rise again there for another 10 hours. It is a short day. But even that a luxury compared to some parts of winter. In Helsinki, in December, the sun rises just before 9:00 a.m., and it sets six hours later. In the middle part of Finland you barely get five hours of daylight. And if you go up to Lapland, just 46 minutes between 11:45 and half past 12. It is hardly a very robust or pleasurable place to live, you might say. And it is a serious problem for some people. Now, as I was talking to you a second ago, this gadget is one of the things that helps people stave of seasonal affected disorder. You shine the light in your ears and it keeps it at bay. Well, for this week's "Future Cities" I went to Helsinki to find out how else the Finns let a little light into their lives during winter.
QUEST (voice over): Winter in Helsinki. It is half past 3:00 in the afternoon, and the city is falling into darkness. During its deepest darkest months the Finnish capital has a mere five hours of daylight each day. It is a stark contrast to the long summer days, and the impact is felt across the city.
UNIDENTIFIED MALE: The daylight and the big difference between summer and winter is enormous. Somebody has said they are kind of two nations living in one country. There is a huge difference on people's mentality and attitudes between summer and winter.
QUEST: The lack of daylight has a real medical effect on many of those living in Nordic countries. It is called seasonal affected disorder.
UNIDENTIFIED MALE: As an illness let's say 1 percent of the Finns suffer from winter seasonal affected disorder. But there is a much bigger (INAUDIBLE) having SAD like symptoms, that means, increased appetite, weight gain, and long sleep. And it is about 40 percent of the Finns have this kind of a SAD like symptoms.
UNIDENTIFIED MALE: If it is black everywhere and no snow, then the darkness really hits, and it is kind of a depressing thing. And then you really need to find out something to keep your-to keep you alive, I would say.
UNIDENTIFIED MALE: I sometimes feel a little bit depressed. And it is very, you know, when you don't get light it is just-I don't know how to explain it in English, it just gets you. Yeah, it is hard.
QUEST: In order to brighten things up, Helsinki has introduced an annual event called the Season of Light.
JUSSI PAJUNEN, HELSINKI MAYOR: We have started a new tradition three years ago using the art of light to illuminate the city.
MIKKI KUNTTU, FINNISH LIGHT ARTIST: I guess I tend to be a bit more tired in the dark time of the year. But then when I look at it from a designers, light designers point of view, it is also a great resource for us. Because the dark time of the year and then we can do our magic.
QUEST: The festival takes people on a tour of Helsinki's landmarks. The organizers hope it raises awareness of the role that light plays in the city.
TULAY SCHAKIR, FINNISH LIGHTING DESIGNER: Whatever you do with lights it affects everything. And also it is very-uh, subtle in the sense that people are rarely aware what is going on in an environment with light, but they sense it and it is very effective.
QUEST: Tulay Schakir's piece is called Good Light/Bad Light. It explores the connection between public lighting and a feeling of safety.
SCHAKIR: When you use that human touch, with light, in certain areas, it gives a feeling of security in a way, for people who are using it, because it technical light is somehow, it might leave the area very distant and cold.
What is better than take a night out just go and watch some beautiful lightening installations? There should be a lot more of that.
QUEST (On camera): Once the season of lights is over and the dark days of January set in, Helsinki has to rely on the streetlamps and the bright lights of the shop windows to try and cheer the city up a bit.
(Voice over): There are some things you can do to help alleviate the symptoms. Help comes in the form of something really quite simple; a very bright light.
DR. TIMO PARTONEN, NATIONAL INST. FOR HEALTH & WELFARE: This is a life lamp. And when the lights are on you sit in front of this device. It is abut a half a meter away. The key is regular use. If you, every now and then take light, it is not enough.
QUEST: The therapeutic bright lights can be found across the city. In some offices the city provides lamps for every employee.
UNIDENTIFIED MALE: Enough light (UNINTELLIGIBLE) but then, well, you'll spot the effect when you are not using it for several days, and then you are just you notice that your energy level is getting lower.
QUEST: For some people it is a dip in the Baltic's icy waters, which helps boost the spirits. For others simply leaving the country in search of the sun is the answer.
ALEXANDER STUBB, FINNISH FOREIGN MINISTER: The way in which I get out of it you know, I take a trip with my family to La Cerotin (ph) or someplace like that. And that gives you the jolt of sunshine that you need. I do a lot of sports, that is sort of escape.
QUEST: Obviously, there's only so much the city can do about winter darkness. If you want to live in Helsinki, you'd better get used to dark days. There are some things you can do. Grab a latte and sit in front of a light box 15 minutes a day and suddenly everything is summer sun.
(END VIDEO TAPE)
QUEST: A final report there from Helsinki. And I can't wait to try these -- in fact, I'll refer back to these in our Profitable Moment at the end of the program.
When we come back, just a second or two away, discontent in Athens. We'll be taking to Greece's minister for culture and tourism about a rebranding of Greece. And I'll be asking him whether now is the time to do it.
QUEST: Hello. I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN. And here, the news always comes first.
Libyan strongman Moammar Gadhafi is standing his ground tonight in Tripoli. That's despite growing international pressure. The U.S. has frozen at least $30 billion in Libyan government assets. The U.S. secretary of the State, Hillary Clinton, is now saying nothing is off the table.
The European Union is also freezing assets and issuing visa bans for Gadhafi and five of his children.
Offers of government jobs and unemployment benefits are not pacifying protesters in Oman, after a weekend of demonstrations and clashes that left at least one person dead. Crowds came out for a third day on Monday in the industrial town of Sohar. Witnesses did not report any violence.
New Zealand is burying the first victims from last week's deadly earthquake, including one of the youngest victims, a five month old boy. Police say the number of people who died in Christchurch is now 154. That number is still expected to increase.
Some ballots from Ireland's election are still being counted and recounted, but talks are already underway to form a new coalition government. The center-right Fine Gael Party appears certain to come out on top, with Enda Kenny as the new prime minister.
We need to stay in Ireland because the prime minister in waiting says one of his top priorities will be to renegotiate the country's crippling budget multi-million dollar bailout. Enda Kenny says the $113 billion loan was extremely unpopular with voters and one of the main reasons why the previous government lost the election.
Earlier today, Portugal's finance minister said his country was ready to cut its budget deficit and implement painful reforms. He warned that these actions would count for nothing unless Europe took strong action to resolve the region's debt crisis.
And Greece has already made it clear it wants to extend the deadline and debt state for the $150 billion bailout from the E.U. and the International Monetary Fund. But it still maintains it will not need to renegotiate its sovereign debt.
Tourism is one of the most important parts of the Greek economy. And, of course, that has been battered by often sights and sounds of riots and demonstrations, with people protesting against the austerity measures.
I spoke with -- I spoke to Pavlos Geroulanos, the Greek minister of culture and tourism.
And I needed to know if Greece was bracing itself for a spring and summer of discontent, which could put off the tourists.
PAVLOS GEROULANOS, GREEK MINISTER OF CULTURE AND TOURISM: I don't believe so. Of course, there's reactions to the measures that we're taking. These are measures that should have been taken years ago. And they were all -- we're taking them all at one time.
So, of course there's plenty of groups that -- whose interests are being touched by these measures. And, of course we will have some -- some riots and so forth.
But the reality is that these are vital changes. And as they're taking place, Greece is moving into a completely new time.
QUEST: But the changes are -- it's a process that's underway now and the opposition against those changes is still very vocal and on the streets.
GEROULANOS: Not as vocal as one would expect. Compared to the number of changes that are taking place, the vocality of the -- of the demonstrations is rather low. What we see is that people have tremendous resilience and people are standing by the changes that are taking place because they understand that they're vital.
QUEST: How much worse is it going to get for ordinary people who have seen, for whatever reason, they've seen pensions reduced, they've seen social spending down, they've seen taxes going up?
Is there another shoe to fall?
GEROULANOS: No. I believe the worst is over. The worst is over for the big mass of the population. Special interests might be touched upon, because we are changing certain things that needed to be changed, as -- changed.
I will give you an example. We have established an electronic way of giving prescription drugs. This has cut down the black market of drugs in Greece to about 40 about. That, of course, is touching people's income, but it's need -- it's a change that needed to be done and everybody knows it has to be done.
QUEST: If we turn to the tourism industry...
QUEST: -- because a large, important part of foreign revenue, and, indeed, GDP, is tourism in Greece.
GEROULANOS: Of course.
QUEST: You're aiming to rebrand, to a certain extent.
GEROULANOS: I don't like the term so much, but, yes, we are trying to -- to promote a much richer part of what Greece is all about. You know, until now, most people had an -- an icon of Greece that had to do with the sun and the sea. And we don't want to abandon that, but we want to show that Greece is a lot more than that, a lot more than meets the eye.
And we're finding richness everywhere, all over Greece, that we can promote as alternative ways of coming and visiting our country...
QUEST: All right, look, at the end of the day, then...
QUEST: -- it's sun, it's sea, it's culture.
GEROULANOS: And there's a lot more.
QUEST: Such as?
GEROULANOS: Such as, if you go down the Peloponnese, for example, and you go around, you will find amazing places to hike. You will find amazing places to visit, new gastronomy, which...
QUEST: -- but is this the right time?
GEROULANOS: -- which -- which I...
QUEST: Is this the right time?
The country is in recession or bad -- or coming out of recession...
QUEST: But it's still mired in problems. Surely, you'd be better off waiting until things are getting better and then go full force.
GEROULANOS: Oh, absolutely not. This is the time to change everything. This is the greatest opportunity we've had to look at things differently. And, by the way, the bigger -- most of the problems that we have had in Greek tourism have been because we've never looking at Greece in a different light.
QUEST: Yes, but is now the time to do it...
GEROULANOS: This is the time to do it.
QUEST: -- you -- your tourists this year could be faced with strikes in hotels, disruption of the industry, whether it's aviation...
GEROULANOS: Oh, no. Absolutely not. Right now, what we are -- what -- what you're seeing, the worst is by far over. And what you will see is Greece making a turnaround. I'll give you another example. Basically, what you're seeing in Greece right now is a completely new generation of -- of people and activity in business, as well as in culture. Two days ago, after 33 years, we had the first nomination for a Greek film for the Oscars. We've had a tremendous amount of -- Greek festivals are going through the roof in terms of popularity and they're getting very good press in Europe. We're investing in what can bring value to Greece. And this is the time to make that shift and to get Greece known in a completely different light.
(END VIDEO TAPE)
QUEST: That is Greek's -- Greece's culture minister talking to me earlier, a robust discussion on the prospect for their tourism industry. And it's something we'll follow closely as we head into the tourist season.
The European stock markets closed with gains. There were gains in Frankfurt and Paris. There were losses in London. If you come to me in the library, you will see what I mean.
Look at that. London was off just a tad. I'll explain the reason for that in a moment.
But if you look at the Xetra DAX Paris and the Zurich SMI, it was a stabilization of the oil price, which seems to have given people a little bit of cheer. Buyers took advantage of some selling. So -- but there's still a very strong view -- an upbeat outlook, economic views from Warren Buffet. He says -- you may have seen this quote -- Warren Buffet says that the elephant gun is loaded, which, of course, everyone is now assuming there's going to be some massive acquisitions. He's got billions of dollars in reserves from his Berkshire Hathaway company.
So maybe Virgin will be looking at Siemens, Siemens IPO, possibly, for its lighting unit.
I talked about London and this is one of the reasons the market -- even though HSBC was up 170 percent, at $13.2 billion, and the company -- the bank said all parts of the business were profitable, David Buick describes this as one of the best run banks in the world.
But these numbers, it was certainly -- it missed the upper range of the target and it was considered to be somewhat of a disappointment.
It just goes to prove to you, it reminds me of the old saying, so what have you done for me lately?
Never mind the fact that it is still extremely profitable.
The Dow Jones Industrials up .5 percent. The NASDAQ, the tech stocks are down marginally, as -- in the opposite direction.
There was data showing personal incomes climbed faster and better than expected. So the numbers reflected somewhat in the market.
When we come back, he calmed investors out of billions. Now he is paying the price with 150 years in prison. We've never really heard the voice of Bernard Madoff, talking about his crimes -- until now, after the break.
QUEST: On the eve of Paris Fashion Week's ready to wear shows, John Galliano is in some hot water, indeed. New video appeared on the Web site of Britain's "Sun" newspaper apparently showing the designer using racist language. Now, today, Galliano was interviewed by police about a separate incident of alleged anti-Semitic abuse in Paris.
Jim Bittermann, our senior international correspondent, is in Paris and joins me -- Jim, before we go through the -- the details, we need to make clear there are two incidents over the -- the most recent, where he was arrested, and this earlier incident, where the video has just surfaced.
JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, actually, there's three, Richard, because the -- oh, there was an earlier incident in October. Then there was the video from January. And now there's one from last Thursday. So -- but it's really, in many ways, I think it's the video that's the most damning, even though that's not involved in the police case. And maybe we can just take a look at the that, Richard, and it will give you an example of the kind of things that people are accusing Galliano of doing.
(BEGIN VIDEO CLIP)
JOHN GALLIANO, DESIGNER: No, but I love (INAUDIBLE).
People like you (INAUDIBLE).
UNIDENTIFIED FEMALE: Are you blond?
Are you blond (INAUDIBLE)?
GALLIANO: No. But I love Hitler.
UNIDENTIFIED FEMALE: Do you?
GALLIANO: People like you would be dead today.
UNIDENTIFIED FEMALE: (INAUDIBLE).
GALLIANO: Your fathers -- your forefathers would be f-(EXPLETIVE LANGUAGE) gassed and f-(EXPLETIVE LANGUAGE) dead.
UNIDENTIFIED FEMALE: Oh my God (INAUDIBLE).
UNIDENTIFIED FEMALE: Do you have a problem?
GALLIANO: With you?
UNIDENTIFIED FEMALE: (INAUDIBLE).
You don't want peace?
You don't want peace in the world?
GALLIANO: Not with people who are ugly.
UNIDENTIFIED FEMALE: Now, where are you from?
UNIDENTIFIED FEMALE: Where are you from?
GALLIANO: You are (EXPLETIVE LANGUAGE).
(END VIDEO TAPE)
BITTERMANN: So, some pretty -- some pretty rude remarks there -- obscene remarks. Like I say, these are not part of the two legal charges that have been brought. As I said also say that Galliano's lawyer has denied the accusations that he's made the defamatory remarks and has called -- filed a counter-charge against Galliano for -- not against Galliano, but on Galliano's side, saying that the two people accusing him are, in fact, defaming him unjustly -- Richard.
QUEST: All right, but -- but, Jim, whatever may be the mechanisms and machinations legally of the Thursday arrest, you know, the elephant in the living room is this tape from January.
And LVMH, Dior's owners and Galliano's employer, which has already suspended him, what are they saying tonight?
BITTERMANN: Well, they're not saying a whole lot, except to say to that they have a zero tolerance policy as far as racist and anti-Semitism remarks are concerned. And they have suspended him indefinitely, until the results of their own internal investigation are known.
One thing is certainly all -- or almost certain -- is that the show that Dior has on Friday, I doubt very seriously if we're going to see Mr. Galliano out on the catwalk at the end of it, since he's been suspended and probably will still be suspended on Friday.
But it's hugely embarrassing for the company. And a lot of people in this town predicted that you would have this kind of a thing with the -- Dior is a very conservative house. It took a very daring move in hiring Galliano 14 years ago. He's a very flamboyant, sometimes outrageous character. And everybody has said somewhere along the line, there was going to be some damage done to the image of the House of Dior because of his outrageous conduct.
BITTERMANN: And perhaps this is it -- Richard.
QUEST: Last week, we talked about the -- on this program -- we talked about the first incident or the arrest incident. And our guest, was the editor of "Women's Wear Daily," said on this program companies like LVMH move fast because they can't afford to have their brand sullied -- Jim, is it your feeling, looking at this, that they will move quite quickly, because this is a firestorm that's licking at their heels?
BITTERMANN: Absolutely true. I think -- I think, really, the damaging thing, no matter what happens with the police investigation, that video is so damning that I think for LVMH, it's got to be so uncomfortable, having that video out there, and especially right now, just as they're about to do their shows.
So, yes, I think they'll move very quickly one way or the other. But I suspect we know what -- the direction it's going to go. One fan -- fashionista here in town said to me this afternoon, she said, "You know, he's toast."
QUEST: Well, I'm -- yes, that's one way of putting it.
All right, many thanks.
QUEST: Jim Bittermann in Paris tonight.
He'll be watching the fashion shows for us in the weeks ahead.
Now, another controversial character making headlines even from behind bars -- this is a story that you and I have talked about over the years -- Bernie Madoff. But we've never actually heard Madoff in his own voice.
Well, of course, you'll know he gave a series of phone interviews to "New York Magazine".
Carol Costello listened to the conversations of the man himself.
CAROL COSTELLO, CNN CORRESPONDENT: (voice-over): In more than a dozen phone calls, convicted Ponzi schemer Bernard Madoff opened up to "New York Magazine" about his multibillion dollar fraud, his victims and the fallout for his family. But mostly Madoff talks about himself, the stress of running the fraud and even insists he is, quote, "a good person."
BERNARD MADOFF, CONVICTED PONZI SCHEMER (via telephone): It was a nightmare for me, yes of course, only for me.
COSTELLO: But he says, quote, "Look, imagine going home every night not being able to tell your wife, living with this ax over your head, not telling your sons, my brother; seeing them every day in the business and not being able to confide in them."
Madoff is serving a 150-year sentence in a federal prison after admitting he ran the scheme for at least two decades. But he says, quote, "Everyone was greedy. I just went along. It's not an excuse."
Madoff says, in his view, several hedge funds and banks were complicit. He believes many of his victims will get a substantial amount of money back. But he shows little sympathy for investors.
"These people probably would have lost all that money in the market. I'm not trying to justify what I did for one minute. I'm not."
Madoff maintains that his family new nothing about the fraud and says his wife, Ruth, who initially stood by him, has cut him off.
MADOFF: And -- and angry at me, of course.
How could she not be angry at me?
You know, she tries not to be, but it's hard not to be. You know, I destroyed our family.
COSTELLO: In December, Madoff's younger son, Mark, committed suicide.
Madoff says, quote, "Let me tell you, I cried for well over two weeks. I cried and cried. I didn't come out of my room. I didn't speak to anybody and so on. I have tears in my eyes when I'm talking to you even. Not a day goes by that I don't suffer."
(END VIDEO TAPE)
QUEST: Carol Costello reporting there.
Ten minutes to the hour.
Guillermo is at the World Weather Center for us this evening -- good evening to you.
GUILLERMO ARDUINO, CNN METEOROLOGIST: You know, we have severe storms in the States. We have two tornadoes confirmed in Kentucky in the last minute. It is the combination of cold air to the north and very extremely warm conditions in the south.
So we see these storms developing into tonight. So, you know, the good thing about this storm is that it's moving very rapidly. But, see, these areas, at least until tomorrow morning, we're going to be dealing with severe weather.
Of course, we're not going to be seeing the same kind of weather that we see down here, in the Northeast, but in the -- in these last hours, we have these storms popping up, bringing delays, of course, at airports.
Did you know that we got snow in San Francisco finally the other day, on the weekend?
It had not happened since 1976. And we anticipated it, we got it.
Well, let's see what's going on on the other side of the country -- Boston, New York, Newark, one hour-and-a-half, one hour 45, two hours 55 in Newark; Philadelphia, 115. You know, bad weather there is causing some problems, as well.
As for later, we will see some more problems in Washington, DC. Atlanta will continue to see the delays right now, as we speak, because of the severe weather that I was talking about.
Portland, Oregon, on the other side of the country, with some rain showers. The snow will continue, also, in B.C. Canada, British Columbia, Vancouver. So if people are coming to the streets from these cities, they're going to see some snow -- Richard.
QUEST: Guillermo at the World Weather Center.
The old saying is never tinker with a winning formula. That's not stopping Red Bull, as they gear up to defend their Formula One title, they've got a new man on board and a new name.
QUEST: March is around the corner. And for racing fans, it does mean the start of the Formula One season. Of course, we know that the first race has been changed. It's no longer going to be Bahrain because of unrest. It will now be in Melbourne.
The reigning Constructors' champions, Red Bull, confirmed it will have a newly named engine.
It signed a rebranding deal with Infiniti, the primary division of Nissan.
CNN's Alex Thomas has more.
ALEX THOMAS, CNN SPORTS CORRESPONDENT (voice-over): Red Bull racing - - Formula One's team of the moment, winner of both the Constructors' and Drivers' championships in 2010, beating some of motor racing's most prestigious names, like Ferrari, McLaren and Mercedes. A new sponsor, Infiniti, Nissan's luxury car brand, is hoping Red Bull's star status will boost its own profile.
(on camera): Why pick Red Bull?
ANDY PALMER, INFINITI SVP: It's the coolest team on the -- on the grid, really, isn't it?
I mean, world champions. Their -- their profile is -- is absolutely spot on for Infiniti. For us, at least, the -- the major point is that so many people watch the race, you know, 500 million people. It's -- it's obviously very commensurate with our brand -- our brand positioning, which is in star performance.
THOMAS: In just six years, Red Bull racing has gone from a new Formula One team to world champions. Team principal, Christian Horner, says Infiniti aren't just another sponsor.
CHRISTIAN HORNER, RED BULL RACING TEAM PRINCIPAL: And the technical wealth and resources that Infiniti have at their disposal through -- through Nissan is quite phenomenal. And as an independent team, that's previously the -- the one missing piece that Red Bull has had, compared to the likes of Ferrari or McLaren Mercedes or -- or Mercedes, indeed, themselves.
So for us, it's an important -- as important a technology partner as - - as a commercial partner.
THOMAS: Tell us about the new car.
How is it performing ahead of the new F1 season?
HORNER: Well, it's been a busy winter. We've had a good testing period so far. It's very difficult to tell where we sit in the pecking order, but, you know, the drivers are happy with the car and it's going to be a fascinating season -- 19 races, maybe 20, if Bahrain comes back. It's going to be a -- a phenomenal season of Formula One racing.
THOMAS (voice-over): Although the exact amount hasn't officially been released, the deal is thought to be worth around $11 million a year.
HORNER: Well, it's a very exciting partnership between Infiniti and Red Bull Racing. And, you know, at Red Bull, we've been looking for the right partner, the right technology partner. And at Infiniti, a part of the alliance that involves Renault and Nissan, I think we've found exactly the right partner for -- for Red Bull Racing moving forward.
THOMAS (on camera): Does this reflect a buoyancy or a -- a confident mood in your company about the future of the -- the car market?
PALMER: Well, we're -- we're incredibly bullish about the future of Infiniti. It's certainly going to be a -- a major part of our mid-term plan, how to promote the -- the -- the alternative luxury car. It's certainly true that the -- the car market overall is -- is growing. We're out of crisis. And it's certainly true, even in -- even in markets where things still remain a little difficult, like Europe, that the luxury car segment is -- is certainly showing good signs of recovery.
THOMAS (voice-over): Andy Palmer also says Nissan has no plans to compete in Formula One, but says Infiniti is hoping its collaboration with Red Bull Racing will develop further over time.
Alex Thomas, CNN.
(END VIDEO TAPE)
QUEST: Tonight's Profitable Moment.
I have always been amazed by how we could be affected by the weather and daylight. Some people love the dark winter hours. It makes them feel warm and toasty. Others can't wait for long summer days. And as we heard in Future Cities, in Helsinki, if you live there, you get the extremes of both.
Light can be hugely beneficial to those of us who travel a great deal. Anyone who's living lives on planes, crossing time zones, knows that jet lag is really nothing more than a manifestation of those time zones and atmospheric conditions. You can't avoid it, believe me.
But it can be mitigated. Which is why I always give a piece of advice. After flying many time zones, if it's sunny when you arrive, sit outside and get some of that sun on your face.
Now, I don't know if these things actually work in Helsinki, in terms of Seasonal Affected Disorder, let alone after flying around the world. But I can tell you, I can't wait to see if it works on jet lag, too.
And that is QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I do hope it's profitable.
"WORLD REPORT" is next.