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QUEST MEANS BUSINESS
Action Needed on EU Unemployment; Record EU Unemployment; New Italian PM Visits German Chancellor; Italians Learning German to Emigrate for Better Opportunities; Apple iBond Sale; Dow Down Slightly; Dollar Down; Airport Charge Shake-Up
Aired April 30, 2013 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Skidding deeper into a jobs crisis. The head of the International Labour Organization tonight on this program says Europe must take its foot off the austerity pedal.
In Bangladesh, a disaster waiting to happen again, and action is needed now.
(BEGIN VIDEO CLIP)
GUY RYDER, DIRECTOR-GENERAL, INTERNATIONAL LABOUR ORGANIZATION: It will happen again if action is not taken now.
(END VIDEO CLIP)
QUEST: I'm Richard Quest. We have an hour together, and I mean business.
Good evening. Tonight, a call for action and a rethink on austerity in Europe and the continent's unemployment levels reach new highs. The jobless rate in the eurozone is at 12.1 percent, an all-time record. On this program tonight, both the commissioner for employment and the head of the ILO agree on one thing: urgent action is needed to stop the inexorable rise of the jobless numbers.
Now, if we look at these numbers -- come and join me over at the CNN super screen. And this particular one, this chart that I'm going to show you, more than anything else, shows the situation when you compare the eurozone with the United States. It is as simple and blunt as this.
I want -- obviously, we focus on this area here. And if you look, during 2009, you have a convergence taking place after the treat recession, and that continues right the way until 2011, and then, of course, the US with its more vibrant, flexible labor markets kicks in, some would say, and the number falls.
Meanwhile, in the eurozone, as the European debt crisis begins round about here -- Greece, Portugal, Spain, Ireland -- that number starts to rise ever higher. Of all of these countries, of course, Greece is worst of all. And if you look again at these particular numbers, you will see just how that has translated itself.
That is Greece, with its extremely -- let me just choose a different color -- with its extremely sharp rise. Spain takes a much more measured, but it picks up a little bit further on. Italy, although numerically much less, Italy is still now starting to show that increase. It's still below the eurozone average.
These are the numbers that make distressing reading for everybody concerned. The head of the International Labour Organization, Guy Ryder, says it's now urgent that the EU holds back on the austerity policies. I asked Guy Ryder the one important question: not only must it -- austerity must stop, but what policies thereafter need to be introduced?
RYDER: Well, very simply, and it won't be for the first time that I'm calling for this, we need to see European governments and the European Union collectively taking their foot off the austerity pedal, easing up on the austerity pedal.
We know that public finances need to be consolidated, but there's no need to do it at the pace and with the depth of what's happening right now. So, basically, take your foot off the austerity pedal.
At the same time, we need those targeted employment promotional measures, which have to do with getting young people into work --
RYDER: -- which have to do to -- with infrastructure and the rest of it. It's not a new story, but the need is ever more urgent.
QUEST: Give me specific policies to create jobs that you would like to see.
RYDER: Number one, youth employment guarantees. The EU's put 6 billion euros aside to do it. Get that money spent, get young people into education, into work. The money's there, it just takes, now, the movement to do it.
Number two, simply rise the limits on the expenditure levels on public expenditure. We have space in many countries to put more money into the economy, to give more space to wage increases, to get demand moving. These, too, can be done straightaway.
QUEST: But I gather you would not necessarily be in favor of what the IMF and the OECD and others would call the structural reform of the labor market. In other words, making it easier to fire and therefore hire. Employers would take more. I gather you would not be in favor of those sort of moves.
RYDER: No, I wouldn't reject those moves, but the experience up until now -- and these measures have been tried, they've been tried in Greece, they've been introduced in Spain and they're being reviewed in Spain.
But the problem with structural reform, for which there is a place, is that in times of overall economic contraction, making it easier to hire and to fire will result in more firing and less hiring. So you have to combine necessary structural reforms with other measures. If that's the only thing you do, you're not going to go forward.
QUEST: We have these numbers at the moment: 12.1 percent, 10.9 percent. If we take Spain, 26 percent.
RYDER: That's right.
QUEST: When would you expect to see a reduction in unemployment in Europe?
RYDER: Well, the orthodoxy is that we're going to see something get better next year, 2014. I have my doubts. I really do have my doubts because these predictions of an upturn in growth and jobs, it's like the ever-receding horizon. The further you move forward in time, the further away the horizon gets. And we've been proved wrong on numerous occasion when it comes to predictions on growth and job creation. So, I think 2014 is quite optimistic.
What is needed, of course, is a change of policy direction. Then I think we could look forward to things getting better rather more quickly.
QUEST: The head of the ILO, Guy Ryder. Europe's employment commissioner admits these jobless numbers will not get much better, if at all, during the course of the rest of the year. So, I put Guy Ryder's point to commissioner, that it was time to back off austerity in Europe and go for growth.
LASZLO ANDOR, EUROPEAN COMMISSIONER FOR EMPLOYMENT: Well, indeed, somebody has to find the reset button here. It's not only that the level of unemployment in the European Union is extremely high, but there's been also a tremendous polarization along groups of EU member states.
The northern countries, with relative financial stability, growth, and a decent level of employment. And on the other side, the southern countries particularly, and some more peripheral states, where unemployment has been just increasing in the last two years without too much hope of recovery. So, this is not only a situation on the labor markets, this is a broader macro-economic question --
QUEST: No, wait! Well, no, hang on a second.
ANDOR: -- in the aspect --
QUEST: Just a minute, Commissioner. Just a minute, Commissioner. It is -- they are two sides of exactly the same coin. Yes, there is a financial crisis in those countries, but the policies being implemented have led to these horrific levels of unemployment.
ANDOR: Well, indeed. The social consequences of the crisis are really serious. The Commission here in Brussels, we have been calling the member states to address these consequences, but many of them are really severely constrained. They have no means.
And that's why the whole game on the EU level should be changed and many aspects reconsidered, including, for example, the time horizon of the fiscal adjustment and other issues, too.
QUEST: Right. In those countries, we now have in the European Union, we have a discrepancy between Austria at 4 percent and Greece --
QUEST: -- and Spain up in the high 20s. And the prospect of Cyprus going -- of Greece, sorry -- going over 30 percent next year with the new unemployment -- the new layoffs. That, sir, you would accept as being unacceptable?
ANDOR: Well, certainly, the overall level of unemployment is unacceptable and the direction in some countries. Unfortunately, in the short-term, it's very difficult to reverse these dynamics in countries like Cyprus.
QUEST: But a final question really comes down to this: when do you expect to see sizable and meaningful reductions in unemployment in the Union?
ANDOR: Well, overall, we do not expect it this year, but we expect urgent action to start this year, particularly the implementation of what we call the youth guarantee, a scheme focusing on the young generation, those under 25, to get within four months after leaving school or becoming unemployed a quality offer of a job, training opportunities, or further learning opportunities or apprenticeships. So, this action has to start in order to see a complete recovery as soon as possible.
QUEST: European Commissioner for Jobs. Now, the German chancellor, Angela Merkel, says creating jobs should be Europe's top priority. The chancellor is meeting the new Italian prime minister, Enrico Letta, in Berlin barely 24 hours since -- when his vote of confidence. He, of course, made the pilgrimage to Berlin, as all new leaders in Europe seem to do after election while taking post.
Mr. Letta says closer integration in Europe is the key to its economic future. Our senior international correspondent Ben Wedeman is in Rome. Another lovely night, at least meteorologically, in Rome for you, Ben.
Look, he didn't let -- look, come on. He didn't waste much time, did Letta, did he? Barely had the ink dried on his confidence motion, and he's on a plane to Berlin. Hollande did exactly the same thing when he took office. Is now the de rigueur when elected, you go and pay homage to the chancellor?
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, she's the headmistress of the European Union, and certainly everybody needs to go and pay homage. She did praise Italy's structural reforms, but as the headmistress, she also told Mr. Letta that everybody must do their homework. And what's interesting here in Italy is that many Italians are doing their homework, but in German.
UNIDENTIFIED FEMALE: Gianpaolo -- (speaks German).
WEDEMAN (voice-over): Gianpaolo is struggling with German, taking an intensive course in Rome's Goethe-Institut. He isn't trying to learn a new language for his next vacation. Instead, Gianpaolo, a journalist, is looking for greener pastures to the north as Italy struggles through its worst economic crisis since the second World War.
GIANPAOLO CUFINO, STUDENT: We are courageous to make this choice and leave Italy. Maybe we'll come back, if the --
CUFINO: -- situation in 30 years goes better.
WEDEMAN (on camera): You're not an optimist.
CUFINO: Nein. Nein.
CUFINO: Nein. In Deutsche, nein.
WEDEMAN (voice-over): The Goethe-Institut, funded by the German government, has seen numbers of students in its German courses in Rome jump by more than 20 percent in the last two years. Julia is studying architecture, but says there's no work here. She doesn't want to emigrate, but sees no other choice.
"It's here that I really want to live," she says. "I love my city, I love my country, and I'm sorry I don't have the opportunities here that I can have abroad."
And it's not just Italians who are looking to Germany. Joanna is from Poland.
JOANNA DUBIEL, STUDENT: Yes, Germany for me, personally, it's the best country to go and to live.
WEDEMAN (on camera): In Poland, no?
DUBIEL: No. No, not now.
WEDEMAN (voice-over): Institut director Susan Hoehn says the Institut's branches in Spain have seen even bigger jumps in enrollment.
SUSAN HOEHN, GOETHE-INSTITUT IN ITALY: It's 60 percent in the last two years, and we are looking for teachers and we are looking for space, and it's incredible. It's also a little bit sad, I think.
WEDEMAN: At Rome's biggest university, La Sapienza, students are well aware the job market is grim. Youth unemployment in Italy is almost 40 percent.
"As soon as I finish university," says Claudio, "I won't find anything. I'll go abroad."
WEDEMAN (on camera): In 2012, more than 80,000 Italians left the country, many of them young. That's a 30 percent increase over the year before.
WEDEMAN (voice-over): Italy's young, it seems, are ready to kiss their country good-bye.
WEDEMAN: And Richard, even though the unemployment figures for Italy were actually better, the unemployment rate dropping 0.1 percent this month, we saw an increase in youth unemployment. Richard?
QUEST: Ben Wedeman in Rome for us this evening. Good evening, Ben. Good to see you.
When we come back, Apple's launched its first new product of the year. You won't get it in the shops, but it's all about iBonds. Felicia Taylor's in New York --
QUEST: -- after the break.
QUEST: Apple's expected to begin selling billions of dollars of corporate bonds, perhaps sooner rather than later, and it could turn out to be the biggest non-bank bond sale in history. You may well ask, why is Apple issuing bonds? All companies do it, of one description or another.
But Apple, of course, sits on a vast, huge pile of cash. Why issue debt? Felicia Taylor is in New York and joins me.
FELICIA TAYLOR, CNN INTERNATIONAL CORRESPONDENT: Yes, Richard, this is obviously a very interesting question. It's a tactic that Apple is using, because obviously they're not going to have to pay taxes on bringing back some of the international debt that they sit on. It would be at a 35 percent tax rate.
So, initially, what they're going to do is offer about $17 billion worth in bonds, and that's going to -- it's already over-subscribed. They've got about $50 billion worth of people that are interested in purchasing this kind of a bond sale.
This is now marked the largest non-financial debt deal ever announced in US history, right behind what was Roche Holdings. So, this is a good deal for Apple. They've got to return some kind of dividend or shareholder equity to their stockholders, and that's the whole point of doing this.
So, they don't want to spend the 35 percent tax in repatriation that they would have to do by bringing it back to the United States.
QUEST: Yes, because when they --
TAYLOR: So --
QUEST: -- when they announced --
TAYLOR: -- it's a good deal all around.
QUEST: Well, hang on. Hang on. Arguably. Let's not -- let's not --
TAYLOR: You are feisty today!
QUEST: No, I'm not!
TAYLOR: I've been watching you all afternoon --
QUEST: No! No, no! You just said it's a good deal all around, and arguable, it's not. Because they are maintaining -- they are --
QUEST: No, come on, Felicia. They're keeping the money overseas, thereby depriving the US Treasury from their share of the tax revenue.
TAYLOR: Wait, whose side are you on? Shareholders are going to benefit from this, the company ends up benefiting from this. You can see the stock has actually gained about 13, 14 percent in just the last few days --
QUEST: Do not confuse --
TAYLOR: -- based on this kind of issue.
QUEST: No. Do not confuse a gain of that sort of percentage on the basis of massaging the share price through stock buyback. The only reason that stock buyback is there is because shareholders are angry at the cash pile, and they're pointing out it's their money.
TAYLOR: That's true. There's no question about that, and it has been way too long, and Apple has overstayed its welcome in terms of giving back to the shareholder. You're right about that. But they're finally doing something about it. And they've had to. This company has --
QUEST: Massaging and --
TAYLOR: -- serious problems on its balance sheet, they --
QUEST: That's massaging -- that's massaging the share price.
TAYLOR: Why don't you massage my shoulders?
QUEST: Well, that's a -- that's good! You'll get the share price moving. Felicia Taylor --
QUEST: -- in New York. I can honestly say I wasn't expecting that. The Dow Jones --
QUEST: -- Industrial's down 2.4. They clearly weren't expecting that, either. It's almost unchanged, 14,816.
So, to tonight's Currency Conundrum. The Venezuelan currency is the bolivar. What I want to know is, how many times has it been devalued? We're really cheerful tonight, aren't we? The Venezuelan bolivar, how many times has it been devalued in the last decade? Three times, four times, or five? The answer later in the program.
The dollar is down against the pound, the euro, and the yen. Those are the rates --
QUEST: -- this is the break.
QUEST: Britain's aviation regulator has been attacked from all sides over plans to limit the charges airlines pay to use London's biggest airports. The Civil Aviation Authority, the CAA, sets the rules for what they can charge.
Now, the airport operators say the limits go too far. The airlines say they don't go far enough, and IATA, the trade body, says it's like prescribing a placebo to treat a serious illness.
This is what's on the table. Britain's busiest airport, Heathrow, from next year until 19, the CAA says it can be capped at retail price index minus 1.3. It's a formula, basically: RPI minus 1.3.
Now, that's a big drop compared to what airlines currently use to pay at the moment, where it's RPI plus 7.5. In other words, inflation plus 7. Now it's going to be inflation minus 1.3. The plans have gone down badly with everyone.
QUEST: The criticisms from the airlines, from the -- that use Heathrow over the trade bodies. Willie Walsh -- of IAG, the chief executive, says that the -- was particularly scathing.
He said, "Heathrow Airport is overpriced, over-rewarded, and inefficient, and these proposals, which will result in an increase in prices, fail to address the situation in the past. The CAA has rewarded Heathrow for inefficiency, and it's now the most expensive airport hub in the world."
The International Air Transport Association, IATA, rubbished the plans. It says, "Today's proposals do not even begin to address Heathrow's cost problems seriously."
I put these points to the CAA. The airlines, don't like them, the airports don't like them, associations don't like them. The CAA's managed to annoy everyone.
IAIN OSBORNE, GROUP DIRECTOR OF REGULATORY POLICY, CAA: We need to make sure that we are getting the steady flow of investment to keep Heathrow at the forefront of passenger service. We've seen a good improvement of passenger satisfaction at Heathrow, and we want to preserve that.
And we want to get away from what we've seen over the last ten years, which have been high increases in charges. So, that's a bundle package.
QUEST: Why aren't prices going down?
OSBORNE: Well, they're going down in real terms because we are putting pressure on -- particularly on cost-efficiency. That's what we think is reasonable.
We're still seeing a 3 billion pound investment package over the next five years at Heathrow. That's necessary to keep the quality going, but because we're putting pressure on cost of capital and operating costs overall in real terms, we're seeing declines.
QUEST: You see, the thing is, the airlines say that you're not -- you're charging them, or you would charge them too much. The airports say you're not giving them enough money to do what they need to do.
You say the consumer is -- but these airports are now competing against multi-runway airports with multi terminals and investment in, say, Frankfurt, Schiphol, and Paris, aren't they?
OSBORNE: Well, because passengers have got choices, it is very important that Heathrow both offers a world-class service and sees moderation in the charges it's setting out. But both of those are important.
Price controls -- at this point, you are taking money out of one pocket and putting it into another or vice-versa. It, to some extent, is zero-sum. And so you do tend to get criticized on both sides. We are not looking to go down the middle, we're looking to work out what matters for passengers, because that's who we're here to protect. And --
QUEST: But you say you're here to protect passengers.
QUEST: But if these airports price themselves out of business, and we know Ryanair's moved out of airports saying they're too expensive. Now, I don't expect British Airways will move out of Heathrow anytime soon, but if you price Willie Walsh to move flights from Heathrow to Madrid, you've not really succeeded, have you?
OSBORNE: Right, and I think Heathrow need to be very aware of the danger of pricing people out of the market. We are looking to put an end to the inflation-busting price increases that we've seen. In real terms, taking account of inflation, we want to see prices come down while still getting the substantial investment so as to get improvements in passenger experience.
QUEST: So, BA's statement saying the CAA must not be allowed to fail again, you take that with a pinch of salt?
OSBORNE: Well, as I say, we're here for passengers. We want to make sure that people are getting a good overall experience. The end of inflation-busting price increases is gone -- it's gone, the era is gone. But we can't -- we can't cut to the extent that passengers go back to the situation as it was 10, 15, 20 years ago, where Heathrow was not that nice a place to use as an airport.
QUEST: That's the director of policy at Britain's CAA. We have much more coming up on QUEST MEANS BUSINESS.
(BEGIN VIDEO CLIP)
RYDER: The worst trap we can fall into is the fatalism of which you talk, the belief that Bangladesh is Bangladesh, life is how it is, and nothing can be done.
(END VIDEO CLIP)
QUEST: The head of the ILO on the tragedy in Bangladesh.
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. This is CNN and here the news always comes first.
(BEGIN VIDEO CLIP)
QUEST (voice-over): A powerful explosion has rocked the Syrian capital of Damascus. Our reporter, Fred Pleitgen, said a minibus exploded and 13 people have been killed. Syria's ambassador to the U.N. says if the regime had chemical weapons it wouldn't use them against its own people.
Hundreds of people have been protesting over working conditions in Bangladesh. A search team's pulled more bodies out of a collapsed factory building. Nearly 400 are confirmed dead. We'll be hearing from the Bangladesh high commissioner to the U.K. after this news summary.
Sources tell CNN that female DNA has been found on one of the bombs used in the Boston Marathon. The FBI's trying to track down the source of the DNA. Officials say it could belong to anyone who came into contact with the pressure cooker even before it was made into a bomb.
Unemployment reached a new record in March. The jobless rate in the Eurozone is now at 12.1 percent. The head of the International Labor Organization told me on this program Europe's governments must slow the pace of austerity.
The Netherlands is celebrating the inauguration of its new king. Wilhelm Alexander became the monarch after his -- after his mother, Queen Beatrix, abdicated. The dowager queen announced the decision in January, saying that was time for a new generation to lead the nation. The king's wife, a former banker, becomes the queen. The monarchs have three daughters.
(END VIDEO CLIP)
QUEST: Now our coverage of the collapse and disaster of the building in Bangladesh. The country will see more industrial disasters like that building collapse, which has killed nearly 400 people.
The director general of the ILO, the International Labor Organization, Guy Ryder, whom you'll hear from in a second, said the fault lies squarely with the employer and the authorities who've done nothing for too long. And he says this will happen again if action isn't taken soon.
Also tonight, the Bangladesh high commissioner to the U.K., Mohamed Mijarul Quayes, says the day before the collapse, the building had been inspected and declared unfit. The building declared unfit.
So pressure now mounts on the Western companies who used the manufacturers that were based in that building. Two big brands have already stepped forward to say they'll compensate victims.
(BEGIN VIDEO CLIP)
QUEST (voice-over): One is a Canadian retailer, Loblow, whose Joe Fresh brand was made in the collapsed factory and insists it operates under codes of conduct ensuring good working conditions.
The U.K.'s Primark says the same thing, and it's offering long-term aid for children who's lost parents in the disaster. It's also urging other companies connected with the tragedy to help as well.
(END VIDEO CLIP)
QUEST: The statement that Primark has put out during the course of the week, Primark's shocked and saddened by the appalling conditions, confirms that one -- that its supplier was in the factory and says, "accept all responsibilities in this disaster."
But this perhaps is the root cause of many of the problems, some would say. These are T-shirts bought just today in London from one of the stores. Four dollars 50 for the T-shirt, or a shirt perhaps for just $7.50, a pair of shorts $3. And this one, a pair of jeans, again, bought in London, expensive London. The price, $10.
When you think about the price that we are paying in the West, in the developed countries, just think about this: a reminder of what we know. CNN has been told that the Bangladeshi government turned down offers of help from the United Nations and the U.K. after last week's building collapse. Hundreds of people are still now missing.
Demonstrators are demanding the death penalty for this man, Suhell Ranu (ph), the owner of the garment factory. This was him leaving the courthouse on Tuesday. He had to wear a helmet and bulletproof vest. Authorities are bracing for the death toll to rise. Rescuers are using cranes to lift the debris. Finding anyone alive is unlikely. Now, of course, it's a matter of recovering the bodies.
And all throughout, the clothes that people like you and me are buying in developing -- in developed countries.
Earlier, I asked ILO's chief, Guy Ryder, to be brutally honest about where he places the responsibility. How much do you and I bear for the fact that we push prices of garments down? Guy Ryder is in no doubt where the blame lies.
(BEGIN VIDEO CLIP)
RYDER: Well, I think that the responsibility lies very, very squarely on the shoulders of the employer directly concerned, but also on the authorities in Bangladesh which simply for too long have refused in the face -- this isn't the first time -- of repeated tragedies of this nature. They've refused to act to take the measures which are necessary.
And you know, without action right now, this will happen again. We all know it. Now are we all guilty because we want to buy cheap clothes in the High Street? I don't think we can say that the consumer is guilty.
But I do think the consumer and the buyers in the High Street can really make a difference. They can bring real pressure to bear to make the needed changes (inaudible). And they should make their voices heard.
QUEST: If the Bangladeshi government is either unwilling or doesn't have the capability to enforce proper measures, then surely it must default to the buyers, the Primarks, the Walmarts and -- or whoever it might be. They are the ones with the economic power to actually get something done.
RYDER: Look, everybody has to play their role in all of this. The ILO will be in Dhaka tomorrow, talking to the government. We want to see the government adopt a national plan on building and fire safety. This is not beyond the capacities of government. It is entirely within the government's capacity to adopt and implement such a plan.
We want to see the government adopt appropriate legislation in the field of labor, which it's failed to do for a very long time. Those are things that can start tomorrow. We're talking also with the buyers. And we've met with them recently. My belief is the buyers, for all sorts of reasons, they want to do the right thing; they want to safeguard their own reputation.
They also have an interest in definitely not being associated with this type of tragedy. So, yes, they have a role to play. They have to insist that they will source only from safe workplaces where people are working acceptable conditions.
You know, this is a market worth US$19 billion a year to Bangladesh. They care about that money. It's an important lever and the buyers are one of the actors who can help us to make a difference so that these appalling tragedies simply do not happen again.
QUEST: You're not quite shrugging your shoulders in this. And (inaudible) but there is a certain fatalistic view that you have that's coming across, that it will happen again and that the parties involved don't seem willing to take the necessary steps.
RYDER: No. It will happen again if action is not taken now. And that is precisely why my colleagues will be in Dhaka, talking to the government, to employers. We are working with the buyers to make sure that action is taken now before it is too late.
The worst trap we can fall into is the fatalism of which you talk, the belief that Bangladesh is Bangladesh, life is how it is and nothing can be done. Well, everything can be done to change this situation. And I think the ILO, for one, wants to be part of that story.
(END VIDEO CLIP)
QUEST: That's Guy Ryder.
The Bangladeshi high commissioner to the U.K. is Mohamed Mijarul Quayes and told CNN's Jim Boulden in the midst of this tragedy, the country could come out of the disaster with better building and employment practices.
(BEGIN VIDEO CLIP)
MOHAMED MIJARUL QUAYES, BANGLADESHI HIGH COMMISSIONER TO THE U.K.: It's very sad, but the day before this incident happened, the inspector had inspected and declared this building to be unfit.
JIM BOULDEN, CNN CORRESPONDENT: Unfit you're saying?
QUAYES: And it's said that despite that, the workers were there. And what the government is (inaudible) to see that the building codes are enforced, that the inspections are properly done and wherever there's a departure from the codes, that actions take --
BOULDEN: But we heard this after the fire in November. And yet we still have the building collapse. So how can you say that it's more than just words? I mean, what can you tell me that makes me believe that this is going -- these inspections are going to take place and if a building's unsafe, it's going to remain shut? Because that building was declared unsafe and yet the workers still went in.
QUAYES: I think that's a very, very valid question to ask. And I will give you an example.
The day before -- of course, this was inspected and declared unfit. But the day after in Radjahi (ph), in a shopping mall, people discovered cracks in a pillar in the ground and first floor. Immediately, the building was evacuated and the mall shut down.
And therefore, (inaudible) that the awareness and the capacity to respond real time is improving. I mean, I can -- I must -- (inaudible) not all there. And obviously with a population the size of Bangladesh, with the number of contractors that we have, it will for a while be a journey rather than a destination that we can say today.
You would -- you would say that there's a great obligation on the part of the government to ensure that proper inspections are done. I acknowledge that. The need for the inspections to be flawless and to enforce that, the government is really very mindful about it. And I -- and I would -- I would say that this, tragic and sad as it is, has been a great wakeup call.
BOULDEN: The NGOs have said that these women, as you talked about, who work in the industry, need a living wage. They need a higher minimum wage.
QUAYES: When our -- when our business -- when our importers, when importers from abroad go to Bangladesh, look up, give their wish list and they talk about, you know, cutting cents and they go for the lowest price that is possible, now when you have to have the lowest price, it can only mean that down the line there will be smaller share for everybody in -- everybody, let's say.
And therefore I would be very happy if Oxfam and others could also talk to our buyers. Hopefully we would all recognize our responsibilities in this. I do not -- I do not, for one minute, say that we -- the Bangladesh government does not have this obligation to strengthen its inspection and adherence to the code.
But beyond that also there's a bigger spectrum. And I think in looking at the garment industry, which I would like to separate from the building code thing, we need to look at how the -- there can be improvement in the terms of employment, in the safety and security, in how buyers negotiate prices, in how the prices then translate in terms of what the consumer gets.
This is possible. This is possible. It doesn't need a high-fangled (ph) economist to work it out.
(END VIDEO CLIP)
QUEST: That's the Bangladeshi high commissioner in London.
And of course, the question that we're asking, not just -- I mean, it's a rhetorical to some extent, but it goes back to the fundamental issue of whether we are prepared in the developed world to pay more for our clothes so that it doesn't all become a race to the bottom for the price tag.
We'll talk about that in the -- we'll talk about that in the "Profitable Moment" at the end of the program, @RichardQuest is where the debate continues. And I'll be back after the break.
(BEGIN VIDEO CLIP)
QUEST (voice-over): An early answer to tonight's "Currency Conundrum," earlier I asked you how many times the Venezuelan bolivar had been devalued over the last decade. The answer, in the last decade, is five times. The last time was in February. The bolivar was devalued by 32 percent against the U.S. dollar to counter budget deficits.
(END VIDEO CLIP)
QUEST: Slovenia's been downgraded; Moody's cut the country's credit rating two notches to Ba1. That means it's now classed as junk. That of course bears in mind the importance of that is what -- which funds can then buy it and investment grade and all that sort of stuff. Moody's says there's been a marked deterioration in Slovenia's balance sheet, and the country's banks will continue to struggle.
Moody's says the weak outlook will heighten the chances that Slovenia will require a bailout of some kind. We've talked about this on this program before. Earlier this month, the country's prime minister told us her government was capable of fixing its economic crisis without needing outside help. Perhaps Moody's doesn't agree.
Spain is seeking deeper into recession. Just take a look at the chart. The Eurozone's fourth largest economy shrank a half a percent in the first quarter. There you have it.
Now you know, glass half-full, glass half-empty, that was Q4. So arguably it is better than Q4, worse than Q3. But it's certainly nothing to write home about. A sobering picture, the seventh consecutive quarter of decline, stretching back to 2011. The recession's pushed Spain's unemployment to 27 percent.
The government expects GDP will fall 1.3 percent this year. And of course you will be aware it has pushed out to trim the budget deficit to below 3 percent. It's now got permission or at least tacit approval from the commission to adjust that.
In Mexico, Congress has given final approval to restructure its telecommunications sector by increasing competition. The reforms will be design to curb the power of dominant players, such as Carlos Slim and the broadcaster Televisa.
What a busy day it's been. The weather forecast now.
I'm told there may be the odd gale about. And certainly the nice warm temperatures may not last too long. But the man who really knows is Tom Sater at the World Weather Center.
TOM SATER, AMS METEOROLOGIST: Thank you, Richard. Let's fly around the world in two minutes and see if we can find any hiccups for business travelers. We're going to start in Europe, where we still have an area of low pressure spinning over central Spain, dropping as much as 40 millimeters on the northern coast, but also drawing the cooler air down, even as far south as in Northern Africa.
But temperatures try to rebound. Not as chilly as the last couple of days. In fact we showed pictures yesterday of Spain. The snow on the plains, well, actually it's in the province of Vergos (ph). But yes, it is starting to melt now after a little reminder of what winter there was. Barcelona's at 15; Torino's at 8; Paris is at 9, picking up some light rain.
We'll show you a radar in a moment. London's at 11. But we still have this bubble of warmth. Kiev's currently at 20 degrees. We have seen the numbers really become more like summerlike.
So if you have pollen allergies or to grass or trees, you know, buddy, keep that in mind if you're traveling in this part of the world here, in Hungary and Romania, Bulgaria, already getting to up 30 degrees and maybe even a degree or two higher in the days ahead.
Here's the rainfall, really trying to fan itself out, not quite as heavy in the last 24 hours, again only about 3 millimeters have fallen in Paris. But right across central Germany as well, so travel, not much in the way of delays from Munich to Glasgow to Dublin, maybe 15-30 minute delays.
Elsewhere in the States, some heavy rain moving in toward New Orleans and down to the south in the peninsula of Florida. Most of the rainfall is off the coast. If we find any delays, maybe isolated afternoon thunderstorms in Orlando.
But it's the Canadian Maritime areas and Halifax where again fog could be an issue.
In India, it is the pre-rainy season heat, staggering numbers. Nagpur hit 45 degrees on Monday and Tuesday. They're going to see their temperatures soar, up to 47 on Thursday and Friday. Hong Kong International Airport picking up near 40 millimeters of rain in the last 24 hours. Now the rain is in Tokyo, a few delays there. The funnel system kicking up the winds in Taipei.
Look for possible 30-45 minute delays there. Elsewhere, take a look; Singapore, thunderstorms; Kuala Lumpur. But Cairns in Australia, we've got our tropical system here. This is Zane, about 250 kilometers from the coast. Should stay just to the north. But winds could be issue there, Richard, back to you.
QUEST: And as the week goes on, Tom, we will be presenting the program from Berlin on Friday. So I'm going to need a fairly good forecast for Berlin on Friday, probably tomorrow, just so I know whether we'll need an umbrella.
SATER: You got it.
QUEST: Or whether it's going to be smooth sailing. Well, not sailing in Berlin, which is not -- you get the idea. Many thanks.
Tom Sater at the World Weather Center. I'll be back after the break.
QUEST: Anyone who's done it knows that planning a wedding can be exciting. Huh. Stressful and of course very expensive. There's the perfect outfit, there's the flowers. And then, of course, you've got to make sure you can do the first dance without treading on each other's toes or falling over. It's easy to get overwhelmed.
Help is now available. And of course it's online and it's an online pinboard. And you might wonder what sort of sad people have to go to an online pinboard to help plan their wedding. Maggie Lake reports.
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MAGGIE LAKE, CNN CORRESPONDENT (voice-over): Here comes the bride, all dressed in something you've probably seen on Pinterest. The photo sharing website has become a must-have tool for brides to be.
NICOLA BARBER (ph), VOICEOVER ARTIST: Outfits for the flower girls.
LAKE (voice-over): Thirty-four-year-old Nicola Barber, a voiceover artist, and her fiance, Brian Dalessandro, a researcher by day, rocker by night, wanted to plan a wedding that reflected their unique personalities and they life they've built in New York.
BARBER (PH): We like the idea of having a cravat. I'm British, so we like the idea of having a morning coat.
BRIAN DALESSANDRO: I kind of wanted like British rock star.
LAKE: A few years ago, brides like Nicola were stuck doing this, ripping pages out of a magazine and posting them on a board or stuffing them in a folder and bringing them to the wedding planner.
LAKE (voice-over): Now users create virtual inspiration boards. For brides, it's a game-changer.
BARBER (PH): I have a bunch, a huge pile of tearouts from magazines in the office that I don't even look at because it's just so complicated. Here, everything's organized into categories. And I'm a very organized person. So I like to be able to see it.
DALESSANDRO: She would take all the million choices and narrow it down to 10, put it all together and, you know, with the colors it's nice to be able to see everything side by side.
LAKE (voice-over): While wedding posts are hugely popular on Pinterest, early investor Rick Heitzman (ph) says growth is exploding in many areas.
RICK HEITZMAN (PH), EARLY INVESTOR: Where Pinterest pulls together a lot of interests around these passioned topics, whether it be vacations or weddings or anything, it's not algorithmic based, but it's human based. So you have people that you're have more of a tangible contact with than you would necessarily a Google algorithm.
LAKE (voice-over): According to Nielsen, Pinterest reached a 10 million user mark faster than any stand-alone site in history. Mobile app user growth, a key measure for investors, is up well over 1,000 percent.
HEITZMAN (PH): I think you're going to see a growth path and a value path similar to a Facebook or Twitter.
LAKE (voice-over): Though only three years old, Pinterest's trademark red pins are all over the web. The company doesn't advertise or make any money off posts, but many believe it's just a matter of time.
Nicola (ph) and Brian use Pinterest for their shoes, clothes, flowers, even the honeymoon. The only thing they didn't need to pin: the entertainment -- Maggie Lake, CNN, New York.
(END VIDEO CLIP)
QUEST: "Profitable Moment": it is impossible not to feel deeply uncomfortable about what happened in Bangladesh. The scale of the disaster is such that we cannot ignore the key question: who is to blame? And how do we stop it from happening again?
Of course, no single party can be excused. The government whose regulators failed to spot the problems, the clothing companies who tried to drive down costs so they can sell shirts at $10 a shirt after transporting them 8,000 kilometers while you and I, who created demand for these cheap items in the first place.
Every part of the supply chain shoulders the blame. Bringing down costs and seeking opportunities in foreign countries, of course it's an important part of globalized economy, improving infrastructures. No one wants to turn the clock back to inefficient, protectionist days.
We have to come to accept and expect that these sorts of prices are scarcely believable and we have to accept that they come at a cost in this perpetual race to the bottom. Frankly, it's only so low we can or should go.
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.
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QUEST (voice-over): The headlines at the top of the hour: a powerful explosion has rocked the Syrian capital of Damascus. Our reporter, Fred Pleitgen, says a minibus exploded, killing 13 people.
Meanwhile, Syria's ambassador says if the regime had chemical weapons it wouldn't use them against its own people.
Hundreds of people have been protesting over working conditions in Bangladesh. A search team's pulled more bodies out of a collapsed factory building. Nearly 400 are confirmed dead.
And unemployment in Europe has reached new highs. The jobless rate in the Eurozone now 12.1 percent. The head of the ILO told QUEST MEANS BUSINESS Europe's governments must slow the pace of austerity.
(END VIDEO CLIP)
QUEST: You are up to date with the global news headlines. Now to New York and, of course, "AMANPOUR" is live.