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QUEST MEANS BUSINESS
Romania Under Scrutiny; Rise of the Right in EU; European Markets Close Lower; Fed Presidents Spook US Investors; China-US Cyber War; Ukraine Rejects Russian Gas Plan; Ukraine "Chocolate King" Runs for President
Aired May 20, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, CNN INTERNATIONAL HOST: Sergeant Kyle White rings the closing bell at the New York Stock Exchange. You see the US Medal of Honor for his work in Afghanistan, and a much deserved award for his battle against the Taliban. And he hits -- oh, look at that! Wow! That's one way to bring the trading day to a close. I would rather watch him do that than worry about what the market did. Down -- it's Tuesday, it's May the 20th.
Tonight, Romania's prime minister on this program will give me his reaction to accusations criminal gangs are running amok in Europe.
Serbia's finance minister will tell me tonight it needs help in coping with the worst flooding in more than a century.
And cracking down on Credit Suisse. The US says no bank is too big to jail.
I'm Richard Quest, tonight coming to you from CNN London. And I still mean business.
Good evening. Countries with more than 400 million voters, 28 of them, as the European Union prepares for elections that will shape its future. Now, as the countries prepare to go to the polls over the next week, one of its members, Romania, is being hauled across the coals by parties trying to make a bid for last-minute political capital.
Tonight here in Britain, a front-runner in the polls has taken out a full- page advertisement in order to defend its leader's comments about Romanian immigrants. In this letter, the UK Independence Party, UKIP as it's known, makes accusations about high crime and poverty.
Now, the open letter from the UKIP leader Nigel Farage, we'll talk about with the prime minister. He says things like "UKIP is not a racist party. There is a real unpalatable truth. The unpalatable truth is we should not be in a political union with Romania with an open door to all their citizens."
We're going to talk about this and other issues, now, with the Romanian prime minister Victor Ponta, who joins me now from Bucharest. Prime Minister, good evening to you, sir. Thank you for taking the time to join us.
Let us just get right to -- we'll talk about Ukraine and other issues and the economy in a moment, but let's get right to the nub of a big issue in the elections. And it is, sir, the comments by parties like UKIP against Romanian citizens immigrating or living in other EU countries. How annoyed are you?
VICTOR PONTA, PRIME MINISTER OF ROMANIA: I'm not annoyed, to be very honest. First of all, I would like to say to you good evening. Thank you very much for inviting me tonight. I would say that the beginning of our period as a member of the European Union, the first two, three years, that was a very tough experience for Romania in terms of economic, socially, and our competitiveness.
But now, we are the fastest-growing economy in the region, and all the politicians, even extremists and populists, like Mr. Farage, should know that we are the eastern border of the European Union and NATO.
And we are right now a successful story to show to Ukraine, Moldova, and Georgia, that this is the right path, and together, we can be stronger in front of the new Soviet Union movement which is coming from the east.
QUEST: Right, but -- we'll talk about the Russian movement in a moment, but I do need to just say, when Farage and the UKIP says 7 percent of all criminal networks across the members -- the EU are caused by Romanian gangs, when he talks about not wanting a group of Romanian men live next- door, you've seen the comments. How do you answer those comments, particularly on questions of crime?
PONTA: I would say that 99 percent of the Romanians living in UK or in France, in Italy, in Spain, they are very honest, hard-working, and very well-skilled people, and it's a shame for Romania that some of these representatives of the young generation we could not afford to keep them here in Romania, they prefer to have a better life, a better wage, better conditions of work there.
And of course, blaming the whole population, Romania and Bulgaria, doesn't matter, Hungarian, for just gaining votes, like Mr. Farage is doing, it's a senseless policy, and it's not going to help in any way the UK society or the European society.
QUEST: Is it racist, in your view, for any political party in Europe, to launch such a witch hunt as against a particular country like Romania?
PONTA: I wouldn't say it's racist. It's just populistic and it's just using the basic feelings of the people who fear for their work or for their daily safety. But all the reasonable European citizens know that together, we can be stronger in the world competition.
And this is the decision that has been taken by the founding fathers of the European Union. And Romania is not any more a problem for the European Union. It's rather just heading, like the Baltic states, like Poland, we are heading to the whole value of the European Union.
QUEST: You have had the vice president of the United States, Joe Biden, visiting, reaffirming, of course, the position of support from the United States for countries like Romania. You were threatened, of course, by a Russian minister who says jets would be sent across Romania. Do you fear Russian intervention or Russian meddling in Romania?
PONTA: I'm not afraid of this. We have lived for centuries with having such a big and aggressive neighbor like Russia, then Soviet Union, and now the new Russia which is heading or using, more or less the same methods like in the past.
Having here the vice president of the United States, Biden, last week it was the secretary general of NATO, Mr. Rasmussen. That just proved a very strong message of commitment of the United States, of NATO, for this part of Europe, which is the closest to the -- to Russia and to all the threats.
Actually, Romania is just about 300 miles from Crimea, which has been illegally annexed by Russia. But supporting Romania, supporting Poland, showing a clear commitment to the Baltic states, this is just making us stronger in our opposition towards Russia.
And it gives a very important message of help to Ukraine, Moldova, and Georgia that they should not give up, they should continue their democratic and pro-European path.
QUEST: So, when we talk about Ukraine and the forthcoming, of course, referendum, is it your feeling, bearing in mind that President Putin says he has withdrawn troops back from the border, although NATO disputes that, is it your feeling that Russia has got what it wanted with Crimea and is prepared now to let Ukraine go its own way?
PONTA: I would only say that when it comes to think and to evaluate Russian and the president's movements, we should always be very careful and expect the worst, because the illegal annexation of Crimea, it's a fait accompli.
And we should not just simply accept it like this, because then it's going to be another step and another situation like this, another clear threat to Moldova, which is the most important neighbor of Romania, and it's a country --
PONTA: -- which is also having provocation challenges. So, we should always be prepared to be independent in terms of energy, to be very tough not only in statements, but to prove commitment not to let to Russia to redraw the borders of Europe using force or blackmailing some other countries.
QUEST: Prime Minister, thank you for joining us this evening on QUEST MEANS BUSINESS, talking about these wide-ranging --
PONTA: Thank you very much, have a good evening.
QUEST: And a good evening to you, sir. Now, as protest parties take up the key positions in the upcoming European elections, CNN's Jim Boulden is following the progress.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT (voice-over): Austrian flags waving, tattooed supporters here to listen to the leader of the Freedom Party, which is Austria's fourth-largest party in the European parliament with two seats. One of the many far-right euro-skeptic parties gaining ground around Europe.
HEINZ-CHRISTIAN STRACHE, LEADER, AUSTRIAN FREEDOM PARTY (through translator): Whoever thinks about the upcoming European elections, "This doesn't affect me, I do not care, I will stay at home." Then it is his fault if this European Union is heading directly into a centralized state.
BOULDEN: Far-right politicians from the Netherlands, Sweden, France, the UK, and Austria may more or less occupy the same side of the political spectrum, but they are by no means united. France's National Front leader, Marine Le Pen, and Nigel Farage of the United Kingdom Independence Party, are vying to control the right bloc in parliament. And they're having to defend their anti-immigrant stance.
NIGEL FARANGE, LEADER, UK INDEPENDENCE PARTY: I don't care what you call us. You can call us right-wing, left-wing. You can call us small-minded, you can call us whatever you -- I don't care what you call us. But from this moment on, please do not ever call us a racist party. We are not a racist party.
BOULDEN: Le Pen says she does not need UKIP to form what she says could be a strong right-wing voting bloc in the new parliament to push for more anti-immigrant legislation and to keep Brussels from passing more laws the right says moves powers from the national capitals to the EU.
BOULDEN (on camera): While the rise of fringe parties here in Europe worry some, others see it as a catalyst, forcing center-left and center-right parties to work together in the EU parliament and in national parliaments.
BOULDEN (voice-over): In a number of countries, austerity and reform measures have only passed with support from each side of the aisle. Some call it the big, soft center.
GILELS MOEC, DEUTSCHE BANK: The reality of how first the European parliament is likely to function and how national parliaments and national governments are functioning in Europe is that because they are losing political space, both the center-right and the center-left tend to cooperate a lot more. It's actually the usual approach to managing the European parliament.
BOULDEN: Look no further than in the UK. UKIP does not have one seat in the national parliament, but may gain the most UK seats in the European parliament. It's been credited with forcing the centrist parties to confront Britain's rising euro-skeptic feelings.
FARAGE: And nobody wants to debate the key European issues in this election because they don't want to admit to the British public the extent to which they've given away the ability to run this country.
BOULDEN: In-fighting has kept the far-right parties from gaining more influence within the EU parliament. After this election, the parties are sure to try again.
QUEST: Jim Boulden is with me now. You heard -- we've heard Farage.
QUEST: You heard the minister -- the prime minister, much more measured, the prime minister, basically saying that the economy is growing in Romanian, yah boo sucks.
BOULDEN: Yes, I think if here were to attack Farage, that could actually help some of the parties like Farage's party. You have to remember, when it comes to these kind of elections, only 43 percent of Europeans voted last time in 2009.
So, you tend to get people who are very exercised, either on the left or on the right to vote in these elections, especially if there aren't local elections tied to them as well. In the UK, you happen to have local elections this Thursday as well, so you'll see a higher vote turnout in the UK.
But also, Farage has really energized that side, and it's left and right. He's energized left and right, and he has brought the mainstream parties to have to answer what he is talking about, which for him is a victory.
QUEST: And besides Farage in the UK, as your report makes clear, it is a pan-EU issue that could give a bloody nose to the parliament and the commission.
BOULDEN: If they can get 25 seats from 7 or 8 different countries, if they can form some sort of bloc in the right, then they could -- could -- thwart lots of legislation.
QUEST: Right, but --
BOULDEN: But --
QUEST: But --
QUEST: -- do these right -- do these extremists have commonality of purpose that they could have the idea of my enemy is my friend.
BOULDEN: Absolutely not.
QUEST: That's the point.
BOULDEN: And that's the point. Exactly.
QUEST: That's the point
BOULDEN: And the thing is, you don't have somebody speaking for all of that side, just like you don't have anyone speaking for all the side on the left. And that's where you get this idea of the soft center actually doing even better with fewer seats.
There will be fewer seats coming for the center-right and center-left, but that means they might have to work -- or they will have to work harder if they want to thwart the extremes on both sides.
QUEST: I want to go to this number, because forty --
QUEST: Forty-three percent. Nobody knows, but I hear it'll be lower this time around. It is post-financial crisis.
QUEST: It is going to be apathetic in the extreme.
BOULDEN: Well, it's interesting to me, and I looked at these numbers. You have some eastern European countries, so Slovakia, 19 percent. But Italy was 65 percent last time. You would think in Italy it would be even higher.
You'd think -- Greece was 52 percent. You would imagine more Greeks would want to go to the polls and to display whichever side that they feel they need to display for. So, wouldn't it be interesting if the fall we have seen in election, the number of people coming since 1979, going to the polls, if that were to rise this time around. In that way, it would be a victory for the EU.
QUEST: Jim Boulden, good to see you.
QUEST: Urging -- it's a real mish-mash of voting, isn't it? Because countries vote on their normal traditional days.
QUEST: So it goes on for some time.
BOULDEN: You also have PR, which you don't have in this country, but you will have on Thursday, which means that you vote for the party and not for individuals when it comes to Europe, but that's not true when you're doing the local election. So, I think people get in there, they get kind of confused.
QUEST: Well, I'll vote. I'll let you know what it was like. Jim, many thanks, indeed.
Now, turning to European markets, they closed largely lower. Vodafone was down 5 percent after quarterly results, which were not good. Nicht gut. A bit of Europeanism there, since we are in Europe tonight. All four markets, all four major markets were lower.
Credit Suisse rose one percent after the bank pleaded guilty to US tax evasion. We'll talk about that at the half past.
New York's seen a retail-fueled sell-off. Alison Kosik's at the New York Stock Exchange. When I spoke to you yesterday -- I think you were with me yesterday, things were looking a little more cheerful. What on Earth did you do wrong, Ms. Kosik?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It wasn't me, it was some Fed presidents Richard. Some words spooked the market, especially when the words came from presidents of the Federal Reserve, the group which actually sets interest rates.
So, we saw most of the Dow, 30, end in the red after a few of them gave some speeches today basically saying that the Fed could consider raising interest rates earlier than expected. Now, low rates were expected to stick around through next year.
And of course, higher rates, the big worry is, is that it could keep Americans from buying homes, cars, or taking out loans. So, Wall Street's not so sure the economy can handle that. So, everybody hit the sell button today, Richard.
QUEST: Alison Kosik at the New York Stock Exchange. And as that graph shows, the selling started and it continued right through the session. The graph of the day is almost as important as the movement itself.
When we come back, with much of the Balkans still underwater, officials say they are in need of aid. Serbia's finance minister will join us next. This is QUEST MEANS BUSINESS. Tonight, we're in London.
QUEST: China has responded to US hacking charges against five Chinese military personnel, and the only word is fury. In an exclusive interview with CNN's Christiane Amanpour, the Chinese ambassador has accused the United States of hypocrisy.
CUI TIANKAI, CHINESE AMBASSADOR TO THE US: You see, it's really amazing to see that some people still believe they have the moral high ground and credibility to accuse others. If we consider the Snowden revelation and so on and so forth, and people still can do that.
It's a bit incredible. The fact is, China is a victim to such cyber attacks. There has been persistent and large-scale attacks on China's internet, on China's government institutions, schools, universities, companies, and even individuals.
And these attacks originate from the United States. So, we have always requested the United States to give us a clear and thorough clarification, but we still have none of it yet.
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: The United States seems to be making a distinction between what it, I guess, does, which is national security, eavesdropping, surveillance, spying, hacking, and what it's accusing you and the Chinese government of doing, which is commercial cyber attack, commercial hacking, and also stealing trade secrets. What is your reaction to that?
CUI: I don't know how they can make a distinction between such activities. How do they explain their attacks on Chinese companies, universities, and even individuals? Is that for national defense, or is that for other purposes?
QUEST: That's the Chinese ambassador to the United States, talking exclusively. You can see the rest of Christiane's interview with the ambassador. It's on "Amanpour," which starts at the top of the hour. That's 40 minutes from now. And of course, it's here on CNN.
QUEST MEANS BUSINESS, we're in Europe this week, where there are European elections taking place. I'm in London, and this is, of course, is CNN.
QUEST: Ukraine has rejected a demand from Moscow to pay for Russian gas deliveries in advance. In a letter to the European Commission, Ukraine's prime minister has written, "Ukraine considers it unacceptable to set up a monopoly and politically-motivated price for the Russian natural gas. The price was almost doubled by Russia with no economic background for this."
Now, Russia's president, Vladimir Putin, says pre-payment is needed because Kiev has refused to pay a $3.5 billion gas debt, which is currently owed to Gazprom.
Ukraine's so-called "Chocolate King" has emerged as the favorite in the country's presidential election. Petro Poroshenko is a pro-Europe billionaire who owns Ukraine's biggest confectionery manufacturer. Erin McLaughlin has been following him on the campaign trail.
ERIN MCLAUGHLIN, CNN INTERNATIONAL CORRESPONDENT (voice-over): Presidential candidate Petro Poroshenko says he understands the importance of the elections on May 25th.
PETRO POROSHENKO, UKRAINIAN PRESIDENTIAL CANDIDATE: Ukraine is in one of the deepest crises in the Ukrainian history, and the only one way out from the crisis is election.
MCLAUGHLIN: And so, his campaign stops in Chernihiv. It's a small town two hours outside of Kiev. Despite the rain, the young and the old gather in the town square to see him.
Some here say they will vote for Poroshenko because he's a billionaire businessman and a seasoned politician. A longtime advocate of strengthening Ukraine's ties to Europe. Many here say they are less concerned about his policies. They will vote for him out of necessity.
"Frankly speaking, I'm going to vote for him because he has the biggest ratings," she says. "We want the general elections to be over as soon as possible." Poroshenko needs more than 50 percent of the vote to avoid a runoff election.
Opinion polls show him leading by at least 20 points against his top rival. But that kind of popular support is not enough to convince all Ukrainians this election is legitimate.
MCLAUGHLIN (on camera): This crowd pretty big, no shortage of supporters here. But can he unify the country?
MCLAUGHLIN (voice-over): Ukraine is deeply divided. The military is struggling to regain control of the east. Pro-Russian separatists have seized cities and towns and declared their independence.
They've held their own referendum. Separatist leaders say it overwhelmingly showed the people want to break away from Ukraine. Those results, however, are not recognized by the international community.
Poroshenko says he will only negotiate with the separatists if law and order is restored and local elections take place.
POROSHENKO: Any person elected, if he were elected by the people from the east, I would be more than happy without any additional condition to speak with. If it is a terrorist, they are not representing their people. They have just 500 people with guns.
MCLAUGHLIN: The violence has personally reached Poroshenko's campaign. He says a member of his staff was taken hostage, another shot in the leg.
POROSHENKO: But I'm proud of these people. They are ready to have a risk for their lives just so they can let the election take place in this region.
MCLAUGHLIN: If elected, Poroshenko says his first move will be to go east to personally guarantee the people's security. For now, it's difficult to see how that will be enough to restore national price and stop the violence.
Erin McLaughlin, CNN, Chernihiv, Ukraine.
QUEST: After the break, the news headlines, and then we'll talk to Serbia's minister about the help that they need to combat the floods.
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. This is CNN, and on this network, the news always comes first.
A string of deadly blasts have hit the central Nigerian city of Jos. There were two explosions at the local food market, followed by a third, which went off at a nearby shoe market. At least 46 people have been killed in the attacks.
Thailand's military has imposed martial law following months of violent street protests. The army chief says it's not a coup d'etat, despite a history of military takeovers in the country. The Thai constitutional court removed the prime minister from office only two weeks ago.
Several people have been killed in a train accident outside Moscow. Officials say 13 cars from a cargo train derailed and then hit a passenger train that was traveling to Moldova. Russian state media says 45 people have been injured, 5 of them have been critically hurt.
Romania's prime minister says he does not fear Russian aggression. Speaking on QUEST MEANS BUSINESS on the day the vice president visited the country, he called Russia's annexation of Crimea illegal and said when dealing with Russia, you should always prepare for the worst.
(BEGIN VIDEO CLIP)
VICTOR PONTA, ROMANIAN PRIME MINISTER: We should always be prepared to be independent in terms of energy, to be very tough not only in statements but to prove commitment not to let Russia to redraw the borders of Europe using force or blackmailing some other countries.
(END VIDEO CLIP)
QUEST: Serbia's prime minister has today declared three days of national mourning in the worst flooding to hit the country in more than a century. The flooding is due to last another week and may get worse in some areas. In all, 54,000 people have been evacuated from homes in Serbia and Bosnia. More than two dozen are confirmed to have died and the number is expected to rise as the floodwaters show just the awfulness of the situation. As for the costs, billions of dollar at the very least, and Serbian officials say they need cash.
Joining me now, Serbia's finance minister, Lazar Krstic, is on the line from Belgrade. Minister, what do you need most now and how can your European partners help?
LAZAR KRSTIC, SERBIAN FINANCE MINISTER: Good evening, Richard. We're still at the stage in where -- as you've said -- where we're trying to rescue lives and are still evacuating some people. The worst is unfortunately still not over as we have another wave coming down the rivers. At this point in time, I think what we are -- we're still at the stage where we're needing we're in need of generators, the pumps to pump out water, the heaters to dry the walls and then for everything that those 4,000 --
KRSTIC: -- people in Serbia that have been evacuated needing the in the temporary shelters such as baby food and medicines. We're getting a lot of that from all sides -- European Union as well as Russia, the Middle East --
QUEST: All right, so --
KRSTIC: -- our neighboring countries, so.
QUEST: So, you're very much still at the position of literally dealing with the crisis which, as you say, is forecast to get worse. And that is before we even think about -- maybe you're not even thinking about -- the longer-term reconstruction, rebuilding, regeneration?
KRSTIC: Well, we have started thinking about it. I mean, the water is moving down as the river moves to Serbia is the way that it's moving through Serbia, certain areas are starting to dry up and we're only starting to see the extent of the damage. We have -- we have today started the official process of collecting the information from the local municipalities from the field trying to aggregate the information, but it's not -- it's not looking good. About 200,000 people have been affected there -- their property damaged in one way or the other. I mean, just for comparison as a share of population that become some 7 and 1/2 million people in the U.S. have been affected. Ten percent of the schools have been closed today, you have dozens of cities affected, one of the cities basically --
KRSTIC: -- is still entirely flooded over 50 bridges, hundreds of miles of embankments, main railway --
KRSTIC: -- lines. We haven't had a disaster like this really in the modern history.
QUEST: And for a country that has obviously had difficulties in the past, is government functioning? Are you able to get the supplies when they come in to where they are needed?
KRSTIC: As a matter of fact I think the government as well has worked together with the people and we've shown great solidarity more than anything I think as we always do in this part of the world when it's the most difficult. So the basic infrastructure, the evacuation is in place. Had we not taken action the death toll would have been much higher than the current 22. And the provision of basic services is falling in place.
KRSTIC: So all right.
QUEST: Minister, finally just to recap. You need generators, you need food, I imagine you need tents, you need the infrastructure for people who are displaced in crisis like this, is that right?
KRSTIC: That's correct, that's the immediate need and as soon as a couple of days from now we will be -- we will be -- needing the nation and that's something we're collecting already as well as all the reconstruction aid. And that's something that's an effort that's probably going to last months if not even more than a year --
QUEST: All right.
KRSTIC: -- for parts of western Serbia and that's something we're hoping to get not only for Serbia but also as part of a broader regional cooperation with Bosnia as well as Croatia that's also been severely affected.
QUEST: Minister, we wish you all the well in this and of course we'll check in again with you as the week goes on, on this. And whilst -- thank you for joining us, I much appreciate it. I know you have many commitments on your time in the middle of this crisis, and talking to us -- it's important. Thank you, sir. And the -- while we were talking to the minister of course you saw on the screen how you can assist impacting your world, how you can help, and there you are, thank you -- up it goes again.
Floodrelief.gov.rs is where you can obviously look to donate in what is an appalling situation. Jenny Harrison's with me to -- now -- at the World Weather Center. Now, Jenny, last night Tom Sater was giving us a very good overview of why this was happening and the breakaway of the -- you know -- that had taken place that had caused so much rain. But as to the future, what's the immediate outlook?
JENNY HARRISON, CNN INTERNATIONAL METEOROLOGIST: Well actually in Belgrade, Richard, to where the minister was talking to us from, the river there has actually yet to peak, so that's one of the main concerns of course is when is this floodwater actually going to begin to go down? Because in some places, it might not have actually reached its peak yet certainly in terms of the river. Now, the last few hours it has been pretty good across the region. Of course that system which brought the rain has moved well off towards the north. This is a before and after.
So this May last year. This is the main river, this is the Sava River. The Danube is to the north of that and this is what it looks like know a year on, so all these areas in blue are where the flooding is very, very visible. So this is before, a year ago and this is as I say what it looks like now. So it really is extremely widespread.
And we've seen the pictures. This is another one to show you because of course I think some of these still images really do show it so clearly. It is so widespread and it has impacted obviously millions of people. So huge concerns as to health and other sort of issues that arise from standing water. But these areas in red -- all these areas -- have been impacted in some way. And this is the main river here, the Sava, and you can see all these other rivers, those which flow into and out of that. So, now some of the problems of course is the 70 rivers and tributaries in this particular area.
When it comes to Belgrade, the highest crest ever recorded. That was back in 2006, so just over 7 and a quarter meters. But this coming Saturday is when we expect this portion of the Sava River to actually peak just over 6 and a quarter meters. So the green line here is showing you the average of that river, how it peaks and troughs of course throughout the year. The redline is historical maximum that's ever been recorded. But this white line is where we are right now and in particular here -- and we're about to go up remember because we haven't reached the peak just yet. So it has never before been this high at this particular time of the year.
Now, that's not the only town of course impacted by far. Again the Sava River, and if we look at Sabac, well in actual fact here it has begun to peak already and is in fact beginning to head down. So that is exactly what we want to see with all of these different rivers, all the different tributaries, but unfortunately Belgrade you can see is forecast to continue to rise in the coming days and really reach its peak this weekend.
Another big concern as well is land mine in this whole region. And in fact it's thought there's more than 120,000 land mines and other explosive devices -- unexploded devices too of course -- in this area contained with the soil. Now when you have flooding like this, for example, this is the sort of thing that happens is some of these land mines are made from plastic. They're very light, so they're likely to come up to the surface and actually float, if you like, in the flood waters. Others are heavier, and so of course once they get carried in these flood waters, then they can move just about anywhere. They're carried on by the currents and then they often -- the spilt (ph) of course suspended in the water as well.
That could actually get caught up in it. Smaller rocks and pebbles traditionally they just sort of bumble along the bottom of a river but also in this situation flooded waters they obviously do the same. They again move in along the base -- the ground where the floodwaters reach the ground -- then any bigger rocks such as this really are tumbled along. These floodwater around can be very, very ferocious. That's a big concern, particularly the number of people who have died since the end of the war in 1995. Over 1,700 people have actually been injured and 600 have been killed in just this year, there have actually been 12 injuries and four people have died because of these landmines.
This is the forecast. There is some more showers and scattered thunderstorms in the mix. It'll be generally later in the day but when it comes to accumulations, nothing particularly heavy in the region. But of course, Richard it is going to take some time -- weeks if not months but certainly weeks -- before those floodwaters begin to really truly recede.
QUEST: Jenny Harrison, please keep a watch on that and of course update us as the week moves on as I know you will in what's going to be a serious and worsening situation. Coming up, a major European bank admitted it helped wealthy U.S. clients avoid paying taxes. Well, they may have admitted it, now they're paying a very large bill themselves. (RINGS BELL)
QUEST: European commissioners charged three banks with colluding to rig interest rates linked to the Euro -- the Euribor -- HSBC, J.P. Morgan and Credit Agricole. Now they face fines of 10 percent of their annual turnover if guilt -- if found guilty. HSBC, J.P. Morgan and Agricole, the banks refused to settle with the E.U. last year. You'll remember of course Barclays, Deutsche, RBS and Societe Generale, they all did a deal. The E.U. Commission vice president says the cases will be examined carefully.
(BEGIN VIDEO CLIP)
JOAQUIN ALMUNIA, VICE PRESIDENT, EUROPEAN COMMISSION: If confirmed, such behavior will be a breach of power anti-trust rules that prohibit anti- competitivity (ph) agreements and are political cartels. The three banks have now -- have now the opportunity to defend themselves. We will look at fully at all their argument before taking any final decision.
(END VIDEO CLIP)
QUEST: For the first time in decades, a major financial institution is pleading guilty in a criminal case. Credit Suisse has admitted it helped some of its U.S. clients evade taxes. Now it's been hit with a $2.6 billion fine. That's an extraordinarily large amount of money even in the world of finance. Two and a half billion. The secret elevator in Zurich Airport that you'll be familiar with -- remember that? We've talked about it -- they went up and down in the elevator which they used to help hide the money. The chief executive Brady Dougan will remain in the job. Speculation is he would quit. He said today it's time for the bank, with $2.6 billion less money in its accounts, to move forward.
(BEGIN VIDEO CLIP)
BRADY DOUGAN, CEO, CREDIT SUISSE: I want to emphasize that we have 46,000 employees around the world who come in everyday and work hard for our clients and shareholders with the highest standards of conduct, professionalism and dedication. We want to thank our clients and employees for their support as we continue to work through this matter and brought it to a conclusion.
(END VIDEO CLIP)
QUEST: Credit Suisse is the first major bank to plead guilty since the 1980s. U.S. attorney general says the case shows there's no such thing as too big to jail.
(BEGIN VIDEO CLIP)
ERIC HOLDER, U.S. ATTORNEY GENERAL: This case shows that no financial institution, no matter its size or global reach, is above the law. When the Department of Justice conducts investigations, we will always follow the law and the facts wherever they may lead us.
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QUEST: Jacob Frenkel is the former SEC enforcement lawyer and a former U.S. criminal prosecutor of corruption and joins me now from Washington. No one's too big to jail, but no one went to jail. A slight -- a slight bit of don't read -- don't look at what I do, look at what I say.
JACOB FRENKEL, FORMER SEC ENFORCEMENT LAWYER: Well, Richard, look at how much I pay.
FRENKEL: The fact is no institution can go to jail, and to your point $2.6 billion is unprecedented. I mean, there's no way the Swiss government is going to extradite anybody in connection with this matter. But also to the attorney general's point, the U.S. government's investigation is going to continue, and to the extent that anybody who is actually directly implicated in misconduct that the U.S. government knows about, if they decide they -- to vacation in the United States, they're going to be greeted by U.S. authorities when they come across the border. We also have, you know, the fundamental which is the allegation is Credit Suisse assisted U.S. taxpayers to avoid their tax obligations. Those taxpayers themselves are under investigation that they have not come forward --
QUEST: All right.
FRENKEL: -- under one of the U.S. programs.
QUEST: Right. Well, all right, but on the same week where Jerome Kerviel -- you'll remember of the Societe Generale -- trader who managed to lose a huge amount of money for Societe Generale. He begins a three-year sentence in France and nobody -- you see the problem is surely, Jacob, -- the problem is sometimes you want to hear the click of the handcuffs in these big corporate cases.
FRENKEL: Richard, that's exactly the issue and that's what the United Congress was clamoring for, and undoubtedly that figured into the analysis here in terms of bringing the case. But the real question is even though people want to hear the click of the handcuffs, there's also a question as to whether this is a good precedent. Remember, we're looking at behind this BNP Paribas which supposedly is in negotiations with the United States government, and the other issue is we're talking about major financial institutions of government that are not the United States. We're not talking about prosecution of U.S. financial institutions. One of the interesting questions that I have is where are these home country governments? Because there are home country interests that also need to be protected here.
QUEST: We have had the most appalling cases of Libor fixing. We've now got Euribor fixing, we've had fines paid in the billions, but I wonder -- I wonder -- culturally has anything changed? Is there a feeling that wrong is wrong and you don't do it? What's your view?
FRENKEL: You know, it really goes to the culture within each institution. The reason that there's one little piece of the Credit Suisse settlement that sort of highlights how this type of cultural change gets imposed. That's the use of what's called a corporate monitor -- the independent monitor to help do what they can to change the culture. But then you go back and look at the HSBC case from I'm going to say was early last year --
FRENKEL: -- where the culture as conveyed in the e-mails was really a thumb their nose at U.S. extratorial jurisdiction, U.S. prosecutorial philosophy. We're talking about almost in many respects a clash of cultures. What is the good governance, the best practices, expectations of the United States government imposed on U.S. but other also institutions doing business in the United States is a Western concept and you know would sort of apply to the United Kingdom as well. But then you have the institutions from other countries where that is not a cultural imperative and I --
QUEST: Ah, but you -- but you know -- you know as well as I do -- who wins the day? Whichever who's got the biggest -- the biggest laws and the most lawyers and is the biggest bully on the block. And in case of the world's financial institutions, it is the United States.
FRENKEL: And, Richard, to your point at the beginning which is, you know, the United States government knows the sledgehammer that is able to hold over them at the same time after the markets collapse --
FRENKEL: -- they understand the impact of the potential of bringing down a bank and that's why ultimately when -- you almost have to use the word negotiation very loosely -- it's about writing the check, making sure that the institution in settling with the United States government achieves its going-forward business objectives because they still want to be able to continue doing business in the United States. For Credit Suisse --
QUEST: All right.
FRENKEL: -- it was about senior management being able to stay in place and still also protecting the identity of their accountholders.
(END VIDEO CLIP)
QUEST: Sir, thank you as always. Good to hear you. Thank you for coming in and talking to us this evening.
FRENKEL: Pleasure, Richard, thank you.
QUEST: Coming up. Coming up, now look, when I talk about two and a half, $2.6 billion in a fine, now look at the faces of the people who live on a dollar a day. And try and square that circle if you can. We'll do it after the break. It's "Quest Means Business." Good evening to you.
QUEST: Welcome back. Now here's a question for you to put into perspective. Here is a cup of Starbucks -- a tall, skim latte. But now imagine that you could only afford that much of it. That was you cup of coffee. Or maybe you could just get a Twix from a vending machine. Because that is roughly the price of a dollar. Now, it might buy you a third of a latte or a Twix, but imagine that one in six people around the world live on one dollar a day or less. Here are four of those people, young and old. They are the faces of poverty from countries like Bolivia and India. They and many others are the subject of a new book "Living on a Dollar a Day: The Lives and Faces of the World's Poor."
The author, Thomas Nazario, is also present of the -- president of the -- Forgotten International -- Forgotten International, I beg your pardon, a non-profit dedicated to alleviating poverty. He joins me now from New York. Thomas, Nazario, I -- when I point out the third of a Starbucks or a packet of Twix, I'm not being facetious in this because as you will be aware, this sort of normality in our life brings home the awfulness in others.
THOMAS NAZARIO, PRESIDENT, THE FORGOTTEN INTERNATIONAL: Well you're absolutely right. No, that's exactly true. One-sixth of the world's population lives on less than $1 a day. If you're looking at $2 a day, then one-third of the world's population lives on less than $2 a day. So we're talking about a very, very large number of people around the world who have absolutely nothing, and they survive from day to day, many of them in fact don't survive and many of the poorest people in the world die relatively young because of poverty. So, --
QUEST: OK, but I have spent a career sort of covering this in some shape or form and I know that the idea is trade not aid. But I question constantly whether the situation is getting that much better.
NAZARIO: Well, I have some good news. I mean, it is getting better. If you look back 30, 35 years, on a given day, about 40,000 children would die from the lack of food, from the lack of immunizations, from the lack of the ability to even reach a doctor when they need a doctor. Today that figure is 19,000 children a day. So, we have made some progress even in countries like Africa where people often turn to in terms of looking at misery and problems. There are more children now in Africa going to school, there are --
NAZARIO : -- more children getting medical care and there are more countries in Africa that at least have something in the way of a government that's more transparent and looks akin to a democracy.
NAZARIO : So we are making progress.
QUEST: In a -- in a -- in a sentence or two, --
NAZARIO : Right.
QUEST: -- I'm going to give you the magic wand. What is it? What's the one policy you want to see introduced?
NAZARIO : Well, my guess is that we have to encourage people who have means to help people who have almost nothing, and in doing that, maybe education might be the best technique for lifting people out of poverty and also of course linking people who have almost nothing to jobs and access to resources that will keep them alive and well.
QUEST: Sir, thank you very much indeed. I appreciate it, an important subject particularly for us to come here, almost even more so in many cases when we're talking about ginormous finds in the financial industry. It fact, it's something we should talk more about, and we will, in the "Profitable Moment" after the break.
QUEST: Tonight's "Profitable Moment." So, in the same show that we tell that Credit Suisse pays $2.6 billion in a fine because rich Americans avoided taxes through Swiss bank accounts, we also tell you that so many people on basically the price of a third of a Starbucks in London. It -- we know that there is an unfairness in the world, but when you look at the facts and they're put so starkly, frankly it just brings out that inner force that makes you want to say something must be done. But if only it was so easy to solve it. And that's "Quest Means Business" for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. I'll see you tomorrow.