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Quest Means Business

Interview With President of European Commission; Interview With Estonia's Prime Minister

Aired February 11, 2010 - 14:00   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: EU to the rescue. Greece is promised a helping hand from its neighbors. We hear from the president of the European Commission.

Turbulence in the Euro club. We ask Estonia's prime minister, why do you want to join?

And tonight, the chief executives of United Airlines, Alcatel, Lucent and Statoil, they are all on this program.

As you can see, I'm Richard Quest, and I mean business.

Good evening.

All for one and one for all. European Union leaders promised to stand by Greece and offered to take every necessary action to ensure the block stability. This is the statement that came from heads of state and government.

"Euro members will take determined, coordinated action, if needed. The Greek government has not requested any financial support."

So, there was no need to commit any actual money right now. Greece, perhaps, might be able to manage on its own. Tonight, on this program, we hear from the European Commission President Jose Manuel Barroso on the deal reached in Brussels. Whether it is good enough and what it tells us abut European economic growth.

All, overall, it is the reassurance the markets had been craving but necessarily didn't receive. EU leaders stand ready to throw Greece that lifeline, even though the country says it doesn't need one yet. The EU President Herman Von Rompuy, says the Euro Zone nations will not risk seeing Greece go under for fear it will take the whole ship down with it.

EU leaders, including the French President Nicolas Sarkozy, met in Brussels and they committed themselves to safeguarding their financial stability and this is the key word, "of the Euro area as a whole". But they haven't said how.

President Van Rompuy praised Greece's commitment to do whatever it takes to fix its shaky finances. He urged the Greek government to be rigorous in its effort to slash its budget deficit. What the EU hasn't announced today is what we used to call confidence building measures. The question is, is it enough? I asked President Barroso.

(BEGIN VIDEOTAPE)

JOSE MANUEL BARROSO, PRESIDENT OF EUROPEAN COMMISSION: I think it was very important to common statement by all heads of the state in the European Union, together with the European Commission, and also with the European central bank. What we say, basically, that we are ready to support Greece, but Greece also says that they are ready to implement all the necessary measures in terms of rigor. So on the side of Greece's rigor and transparency, on the side of all us, solidarity with Greece.

So, it is in fact that heads of state and government have all the most important you could have, in terms of confidence. And, of course, we are going to take afterwards concrete operational measures at the level of finance ministers next Monday and next Tuesday.

QUEST: Was this sort of crisis inevitable at some point within the Euro Zone?

BARROSO: Look, in fact, we should have avoided it. But, you know, some of the countries could not respect all the limits that are in fact imposed on some of the targets, namely in terms the deficit. But what is important to note is that we have the instruments in the Euro area, we have the instruments of surveillance, necessary to make it work. And to make all of member states respect the conditions they have to meet to be members of Euro area to have this common currency in Europe.

QUEST: Let's talk about what happens next, when we talk about growth, when we talk about the shift from recession into growth and getting Europe moving again and your plan to do that. Mr. President, you are at the helm of the bureaucracy, a large bureaucracy, that has got to do something and move things forward.

BARROSO: We don't consider it a bureaucracy. It is a very important administration, certainly it is the central administration of the European Union, but I don't consider myself at the head of a bureaucracy. I have just elected by the European parliament, with a strong backing of the parliament. So, we are the European Commission is a political body, that represents the European Union's general interest.

But of course, a head of a very important administration and that is why today I have presented some proposals for a European strategy for growth and job sustainable growth, and jobs. I believe it is important for all of us in the world, in the face of this crisis, to combine short-term measures with medium-longer term objectives. And we have presented the priorities in terms of knowledge and innovation, in terms of reforms in employment, labor markets, and also in terms of a greener growth. And I believe it is with those new drivers, new sources of growth that we can come back to the faster growth in Europe.

QUEST: Yes, your plan is extremely ambitious. Your plan is certainly the sort of plan that will take Europe into the future, but can you get it implemented? Can you get not only national governments but European parliament to go along with you on this?

BARROSO: Yes, I think so. I think now there is a very important awareness, here in Europe, of the need to act together. So, the crisis in a way, was a wake up call to all European leaders and now they are determined to do some reforms, internally, but also to act together, to recognize the interdependence of our economy. Certainly it is ambitious, but it is with ambition that we can change the situation. We are all suffering the impact of this financial crisis, but it is with coordination, with reinforced governance (ph), and with ambition, then we can restore the higher levels of growth that now, in Europe, as in other parts of the world we are not seeing.

(END VIDEOTAPE)

QUEST: President Barroso, with his plan for reform. The markets, if you look at the markets, and how they actually interpreted what was announced by the European leaders, well, there you get a very different view. The confidence building measures haven't necessarily shored up that much support. For instance, on the hand, Greek bonds rose for the third day. That suggested things had actually got better. But the euro, well, the pressure on the euro, the euro lost ground. As the pledge to bailout, that gave few clues.

Look to equity markets and a mixed bag. London was the only major market that was higher. Mining stocks were the gainers. However, Rio Tinto (ph), along with that, Xetra DAX down, CAC currant, also down, as well.

To discuss this, Jim, you and I have talked now several times. Oh, that is a very sage nod that you are giving me there.

JIM BOULDEN, CNN INT'L. CORRESPONDENT: Do you know at one point the euro fell a full percent, at 4:10 p.m., London time, the Euro fell a full percent like that. Because they didn't hear what they wanted to hear in the markets.

QUEST: What did they want to hear?

BOULDEN: This is the thing, half the analysts say, we don't want a bail out. Because if we give Greece this money they won't take the measure they need to take and other governments will follow on, and that is bad for the euro long-term. But it seems short term they really wanted to hear stronger confidence measures. I mean there is a very strong statement, I think, honestly.

QUEST: Just read it.

(CROSS TALK)

BOULDEN: No, I like that part where he said, "determined and coordinated action-

QUEST: "Determined and coordinated action, if needed"-if needed.

BOULDEN: Yes.

QUEST: But this is the bit I found most interesting. It says, "to safe guard financial stability in the Euro area as a whole." In other words, any single country can go-

BOULDEN: "As long as it doesn't hurt the whole euro."

QUEST: As long as it doesn't hurt the whole.

BOULDEN: But, you know, we should also hear, I think, from Mr. Van Rumpuy, the president of the EU, because he made a statement. I listened to the press conference and he said some things that I thought was quite interesting and here is one of the things.

(BEGIN VIDEO CLIP)

HERMAN VAN RUMPUY, EU PRESIDENT (through translator): This critical message a responsibility dimension to it, the Greek government is taking on responsibility in terms of recovery, public finances, which also reflects a political commitment to make sure of solidarity if the need were to arise. It is not necessary today.

(END VIDEO CLIP)

BOULDEN: So, not necessary today. So, there are no more statements coming out, that is it. We got what we got. We have to see how the markets react to this. You saw the European markets were mixed.

QUEST: European markets were mixed. Greek bonds rose, so from Greece's point of view things all right now. Everybody can be happy about Greece. The worry is not Greece now, the worry is the Euro Zone.

BOULDEN: Yes, and we saw the euro do a little bit better the last couple of days, but it is the long-term hit is quite severe. Now, other analysts will say, too, it is very good that we have a weak euro, we all know why. It is good for Germany, it is good for France, so they can continue to exports themselves out of this recession. And so some people don't want to see a strong euro too soon.

QUEST: Jim, you have followed this with distressing closeness, over the past few days, is this crisis over tonight?

BOULDEN: No. No, we have to see if Greece makes-it

QUEST: That's long term, long term.

BOULDEN: No, no, they have-they-I think it was Sarkozy who came out today and said we are going to monitor Greece on a monthly basis. So, every month it is almost like the kid going to the principal, right?

QUEST: Yes, yes.

BOULDEN: Every month we are going to say, Greece, you are doing well, you are not doing well. So, we will be getting these kinds of updates. And the markets will react to those updates.

QUEST: Right, Jim Boulden. Many thanks, indeed. You realize you have months and months of this now?

(LAUGHTER)

Many thanks.

Now, what is at stake? The stake is the stability of the Euro Zone; 60 nations, 329 million people, united, of course, by that common currency. The euro only began life 11 years ago and this is its most severe test so far. There are, however-that is the Euro Zone, and of course, you will be familiar with the countries because that are not members. There are countries that still want to join. Estonia is one of those countries. Right at the top, top right, of the screen. It wants to become the 70th member of Euro are next year. Poland is due to join in 2012. Romania in 2015.

Andrus Ansip is the prime minister of Estonia and was in Brussels for the meeting, we have been telling you about. I asked the prime minister since Estonia has a low budget deficit, it has a low debt to GDP ratio, the lowest of any country in the European Union. I asked him about today's developments.

(BEGIN VIDEO CLIP)

ANDRUS ANSIP, PRIME MINISTER OF ESTONIA: We believe in strong monetary union and it is necessary to follow the rules. In Estonia we have surpluses in our annual budget in the years 2002, 2007, and during those years we collected quite remarkable reserves to our country and we still have approximately 10 percent from our GDP as governmental sector reserves in Estonia. During those years we paid back governmental sector loans and now the level of governmental sector loans is the lowest one in the European Union, in my country, in Estonia.

So, we don't have that kind of problems that they had today in Greece. But I am absolutely sure that Greece will be able to solve those problems that they have today in their country.

QUEST: Do you fear that for countries like Estonia, that are about to join the Euro Zone next year, the rules may be changed. It may become harder for you to get into the zone?

ANSIP: Joining the Euro Zone, it is, according to my understanding, a question about conditionality. If candidates will fulfill the criteria set they will be in, but if not, they have to try once again. In Estonia, where we would like to fulfill all the criteria and so we don't want to ask for any exemptions because would to join the strong Euro Zone. If candidates which will be not so well prepared for membership will join Euro Zone, the euro will not be so strong anymore.

QUEST: But the actual Euro Zone, itself, because of these crisis, it appears at least, that the thing is creaking, some might even say heading almost to collapse.

ANSIP: Oh, I don't think the system will collapse. In Estonia we believe that the euro will support trade with other EU members; 70 percent of our exports are going EU member states and the euro is definitely supporting trade with other EU member states. In Estonia, we believe that the euro will make our country more attractive for foreign direct investments. And of course, euro will help our ordinary people also. They don't have the waste of their money on currency changes.

QUEST: There is one thing, of course, when you look at the Estonian economy you are actually in one of the best positions of all the European Union members coming out of the recession.

ANSIP: It is not so simple. Because our growth rate is negative in Estonia just by the fourth quarter last year comparing with the third quarter there was growth, plus 2.6 percent, but unemployment rate is high today and crisis is creating complications. There are a lot of problems in all the EU members states, including in Estonia.

(END VIDEOTAPE)

QUEST: The prime minister of Estonia talking to me from the meeting in Brussels. We'll have more, of course, on the Greece decision later the program.

The market that is open at the moment, is doing remarkably well at 97 points, exactly 1.97, 10,135. A roaring performance on the Dow, despite the fact that a lot of people, a lot of traders will not be at-will be having more difficulties as a result of the bad weather in the Northeast United States. Better up than down, if you are long in the market.

As United Airlines goes, so goes the rest of the industry. That is one analyst had to say. Time to find out whether rumors of a recovery in the sector are premature, we talk to the chief executive of United.

(COMMERCIAL BREAK)

QUEST: Shares in U.S. airlines soared this week after one of the largest carriers, United Airlines, reported sharply higher traffic numbers for January. United's share price rose 15 percent. American Airlines was also higher by some 9 percent earlier in the week. United said its passenger load factor has actually increased and was now showing healthy increases month for month, year on year. In an exclusive television interview, I spoke to the chief executive of United, Glen Tilton. And I asked him if the stock market was right to react the way it did to United's numbers.

(BEGIN VIDEOTAPE)

GLEN TILTON, CEO, UAL CORP.: I think in the context of what the market has seen for the past 12 months, Richard, the market was right and that there is improvement on the horizon.

QUEST: But it is on the horizon? We are still bumping along the bottom?

TILTON: One month, a year doesn't make, right? But it was a good solid reflection of improvement over the same period of the prior year.

QUEST: And with that, has any pricing ability come back into the market. Because the last attempt, domestically, in the U.S., failed.

TILTON: Yes. I think, Richard, what is coming back into the market is the willingness of business to travel and to travel long distances for the purpose of generating commercial success themselves. So, we are seeing business come back. And as our business clients, our corporate accounts come back, then they're buying is premium buying, as you would know.

QUEST: As that comes back, and so, the importance of international versus U.S. domestic, and how do you now rate the two?

TILTON: Well, our franchise is an international long-haul, network franchise. The Pacific is of particular importance to us, Richard. And the Pacific, in the years of 2007, 2008, was quite strong. When we suffered the financial crisis, it fell further than the Atlantic or Latin America. So, when it comes back, as it will, the China routes, the Japan routes, the Korean routes, route to Australia, those long-haul business routes, it will be disproportionately beneficial to us, because the nature of our network.

QUEST: With that in mind, let's talk about how an industry becomes competitive. It seems to be that it doesn't matter which crisis you talk on, the airline industry gets hammered. Is it inevitable?

TILTON: Well, it is inevitable to the extent that we are a reflection of our business clients and their fortunes. So, as business goes, whether it is financial services, whether it is manufacturing, other industrial concerns, oil and gas companies, as they go, and their willingness to commit resources to travel, is decided upon, then clearly it has an affect on us.

But what has happened, I think, in the course of 2009 is the industry has matched supply or our product, to the market, relative to demand better than ever before.

(END VIDEOTAPE)

QUEST: The chief executive of United Airlines, Glen Tilton, speaking to me earlier today. My "Profitable Moment" concerns his speech. That will be later, at the end of this program.

The news headlines, now, perhaps a moment or two late, but Max Foster will forgive us.

(NEWSBREAK)

QUEST: As we were talking about, that change in South Africa, as the country celebrates 20 years since a monumental moment in the country's history. Nelson Mandela's walk to freedom, we'll take a look at the troubles and triumphs in post apartheid South Africa.

(COMMERCIAL BREAK)

QUEST: Twenty years ago today, the world's most famous political prisoner walked out of jail, and of course, into our history. Nelson Mandela's release after nearly three decades heralded the beginning of a new South Africa. He went on to be elected the country's first black president, that was in 1994.

Today, there were celebrations in parliament and on the streets of South Africa. Tributes to Mr. Mandela who is now 91. The current president, Jacob Zuma, told parliament the country must pursue the ideal of a democratic and free society for which Mr. Mandela fought his entire life.

Mr. Zuma's government faces a number of serious economic challenges. The country emerged from brief recession late last year, after an extraordinary period of growth. Unemployment, though-well, look at that, right at 24.3 percent, a quarter of the workforce is without a job. And that is the official number, let alone the pay that people may get for those jobs.

Extreme inequalities, it is one of the world's most unequal societies. On average whites earn around five times more than black people. South Africa also has one of the highest rates of HIV infection in the world. Crime rate is amongst the highest. In the last year the government has invested heavily in making sure the country is ready to host the football World Cup in June.

So, that is to some extent the balancing act in the South African economy. To Johannesburg now, and our correspondent, Nkepile Mabuse.

Nkepile, as we-you know, we can't necessarily divorce Mandela from any aspect of the South African economy, but at the same time he is still revered for what he did in those early days.

NKEPILE MABUSE, CNN INT'L. CORRESPONDENT: Exactly, Richard. I mean the focus of the Mandela era, if we can call it that, from 1994 to 1999, was reconciling a divided country and then it was his successors who really had to deal the day-to-day problems of the country, that included, unemployment, inequality, as you mentioned. You know, since 1994 until now, the poorer have become poorer in South Africa. Unemployment has increased, and as you said, crime has also increased.

And many South Africans are getting very, very impatient with the ANC government because they see them not delivering on the promises that they made when they wanted their vote. The ANC did say that it was going to create more jobs, it was going to improve the lives of the poor. And many people have not seen that, Richard. So, people are angry. We have seen across the country that there have been uprising, of people really getting involved in violent protests, saying that they want services, basic services, Richard.

QUEST: Do people in South Africa feel that the two presidents, so far-and I do understand it, obviously President Zuma is very new or relatively new in office-but if you look at Mbeki, do they feel that the Mandela promises, the legacy, has not been rewarded properly. They have not lived up to-the men following have not managed to stand in the shoes?

MABUSE: Definitely. Many South Africans do believe that the Mandela legacy of a better life, you know, Mandela said he wanted to give South Africans their dignity, because that is what apartheid took away from them. But people still don't have dignity today, Richard. If you don't have a job, if you don't have food on the table, how can you have your dignity? That is what people are asking. And you know people are saying the ANC has been in power for nearly 16 years, so whether it was Mbeki or Zuma, now, it has been the ANC for 16 years. So, they are looking to the party for answers, Richard.

QUEST: OK, briefly, and as we come to the end here. Is there a feeling, recession is over, things might just be getting better now?

MABUSE: You know, President Zuma did say in his speech that it looks like the economy will turn, but he didn't want to make any promises. In his last state of the nation speech in May, he promised half a million jobs, he could not achieve that. Of course, because of the recession that shed 900,000 jobs. So, he has not put a figure to the jobs that this economy can create. And that will be seen as a sign of him not wanting to commit himself to anything, because joblessness is a huge problem here and a hot potato, Richard.

QUEST: Nkepile, many thanks indeed, in Johannesburg tonight.

Many thanks, indeed. Now, as we continue our look around the economic world, it was an interesting choice of words, but was it what the shareholders wanted to hear? We are on track to become a normal company. Which chief executive said it? You will hear him, in his own words, in a moment.

(COMMERCIAL BREAK)

QUEST: Good evening.

I'm Richard Quest, QUEST MEANS BUSINESS.

This is CNN.

If your company had existed for more than three years and you've just announced your first ever profit, you'd be feeling pretty pleased with yourself. Alcatel-Lucent, which makes hardware for telecom companies said today that it had broke into the black for the first time since the merger in 2006. Oh, dear, what a pity. The shares had one of their worst days, closing down more than 11 percent.

The company earned just $63 million in Q4 following a loss of more than $5 billion in the previous year. Don't forget, there was big write- offs. It's not quite parry pursue (ph).

But it also reported a drop in revenue of about 20 percent. And that is what really has the market rattled.

I spoke to the chief executive, Ben Verwaayen, who joined me from Paris.

I asked Ben about the forecast for 2011 and whether it's going to be better for business.

(BEGIN VIDEOTAPE)

BEN VERWAAYEN, CEO, ALCATEL-LUCENT: We're actually saying 2010 already will be better and 2009 wasn't too bad. That's what we're saying. I'm not sure that everybody in the market agrees with it. But if you look to cash, if you look to our margins, they improved dramatically in 2009, which is good.

I think we have a strong balance sheet. We'll do better in 2010. And by 2011, you should measure us as any other company in the world.

QUEST: The -- that measurement on margins is the fascinating bit, because that's the bit, in many ways, that hammered you in the market today, isn't it, the shares down -- I know you don't necessarily take one day's share price, but 6, 7, 8 percent on the margins.

VERWAAYEN: Well, I don't think it went down on the margins, although I think there was a disappointing top line for some, which I understand. And the top line is important. We think that it will grow, the market will grow next year and we think we'll grow with the market. And I've learned over a long time ago that probably CEOs should not comment on share prices.

QUEST: Let's talk about the general -- the other side of the story, the battle for telecoms' equipment is simply ferocious now, isn't it?

Are you seeing and do you think that cap expenditure by operators and by companies is coming back?

VERWAAYEN: I'm pretty optimistic that there will be a better market going forward for three reasons. The first reason is in emerging markets, hundreds of millions of people join all of us using networks and communicate. Hundreds of millions of new customers every year.

Second, you and I, we do very different things with our mobile phones. It's no longer to say hello to somebody. It's about watching a match, of doing something with e-mails and, at the same time, having capabilities with all kinds of video activities.

So there is a different world now out there and as, according to what I think is very important, is that people really demand a very different interaction with their computer and all of their computer services.

QUEST: But can traditional companies compete with the upstarts and the emerging market companies in those markets?

VERWAAYEN: We won the LTE contract with AT&T two days ago. We are very, very active in very different markets. I think we can compete. It is interesting. It is good to see that you get new players and old players in a very different focus than we had in the past. I think we can compete.

QUEST: Ben, I could ask many more questions. I'm going to take pity on you. The snow is now starting to fall and it must be very cold.

Lovely to see you, as always.

VERWAAYEN: Thank you.

Thank you.

(END VIDEO TAPE)

QUEST: I assure you, it didn't look that cold, but if you look very closely, there were certainly snow flurries and the poor man, I think, must have been freezing without a hat.

Norway's largest energy company enjoyed a solid close to its fiscal year. A bit cautious looking forward, Statoil saw fourth quarter net profits more than triple to nearly $1.25 billion. Higher oil prices, lower tax rate -- well, it's all made a big difference.

But it is trimming production targets for 2012 and expecting output of around 2.1 million barrels a day -- Statoil says the uncertainty in the future, weak demand and a slump in gas prices.

Investors, at least on Thursday, were focused on the positive, and like maybe with Alcatel-Lucent, Statoil's shares, they actually rose some 1.5 percent.

There was an interesting split between what has happened with oil prices so far and the company's outlook, as I heard from Statoil's chief executive, Helge Lund, about where he stood.

(BEGIN VIDEOTAPE)

HELGE LUND, CEO, STATOIL: Well, I think you have seen many years of increased demand for oil and gas resources and due to the economic crisis the last 18 months, we have seen a decline in -- in demand. That has impacted prices on the short-term.

My view is that it will continue to be volatile for the next couple of years but longer-term, we are confident on the development both on oil prices as well as gas prices.

QUEST: But are you saying that Statoil's future and your future profitability rests on that volatility of the price of oil?

LUND: It rests, of course, partly on...

QUEST: Partly...

LUND: -- on the...

QUEST: -- not completely...

LUND: -- on the prices of oil and gas. But it also equally much...

QUEST: Well, it...

LUND: -- of our performance is related to how we operate the business.

QUEST: And that is where this -- this story splits, in many ways, isn't it?

LUND: In 2009, Statoil delivered on all of the operational metrics that we have given our investors. And in that sense, 2009 was a very strong year for -- for Statoil despite the fact that the product prices declined significantly.

QUEST: Do you find that dealing with that discrepancy between the product prices and the ability to perform has become more difficult now?

LUND: I think this is all -- always been the nature of a cyclical business. You have to focus your organization on performing, doing things better everyday. And then when the prices are high, you will make more profit.

QUEST: Yes, but that -- that doesn't -- that's -- that's a given, that the prices will lead to the profit. But in terms of what you are turning in Statoil around into?

LUND: Clearly, we have had our history only on the Norwegian Continental Shelf and now we are turning Statoil into a more global oil and gas company, operating in several parts of the world.

QUEST: That is creating the challenge, because to do that, yes, to do that at a time of high oil prices is advantageous in the profitability side, but to do it in the teeth of the greatest recession since the Great Depression is, of course, one of the greatest challenges of all.

LUND: Absolutely. And that is also, I think, illustrated by how hard is -- it is for the oil and gas industry to access new resources around the world. We are operating in the most difficult political areas in the world. And we're also dealing with technically very demanding resources like heavy oil, deep water, Arctic environments and so on and so forth.

QUEST: And into this whole porridge mess becomes the latest worries about peak oil.

Where do you stand on peak oil?

LUND: Well, I think we have seen in the past that people have speculated that peak oil will soon arrive and all the time I think the industry has proved, through new technology, new resources and new ways of bringing forward oil and gas resources. And I think that will still continue.

But eventually, we are working with a -- a finite restructure.

QUEST: And eventually, peak oil may just -- the date of peak oil may just move further down, as it becomes more profitable to go into deeper water and to go into more challenging areas.

LUND: Yes, and not at least because I think the industry will continue to develop advanced technology -- technologies that will give new opportunities and take down the cost -- cost of developing these resources.

QUEST: Many thanks, indeed, sir.

Thank you very much.

LUND: Thank you.

(END VIDEO TAPE)

QUEST: When we come back in just a moment, we return to the issue of Greece. Just a few moments ago, I was speaking to the prime minister of Estonia, one country that can't wait to join the Eurozone. We hear from his finance minister, who tells us that E.U. membership certainly has its privileges.

(COMMERCIAL BREAK)

QUEST: We return to our top story and the E.U.'s agreement to support Greece through its current debt crisis. So far, Greece hasn't actually asked for financial help. That much is clear from the statement by E.U. heads of state and government.

European leaders who met earlier aren't going into any detail about what they would provide in the event that Greece did ask for help. E.U. President Herman van Rompuy says they stand ready to safeguard the Euro Zone's financial stability and the president of the commission, Jose Manuel Barroso says it's all academic since Greece is doing fine by itself.

(BEGIN VIDEOTAPE)

BARROSO: The Greek government has not requested any financial support, which means the Greek government believes they do not need this financial support. That is why I think we should not now speculate about scenarios that, so far, are present.

(END VIDEO CLIP)

QUEST: As we consider the full ramifications of this, it's worth looking at some of the European Union's smaller countries and even those outside the Euro Zone. Estonia is not part of the currency area. If all goes according to plan, this time next year, it will be a full member -- E. Zone.

Earlier, I spoke to the finance minister, Jurgen Ligi, and I asked him why he wants Estonia to join the Euro.

(BEGIN VIDEOTAPE)

JURGEN LIGI, FINANCE MINISTER, ESTONIA: It gives us some additional reliability and we are not taken seriously enough. We -- most of the markets do not know how well Estonia is doing, actually, or how stable our monetary and financial policy is. And we are taking a small and risky or at least unknown (INAUDIBLE). It's better to be connected with a bigger currency area for us anyway, you know, despite what is the rate -- the exchange rate of Euro Zone, the dollar or the yen, for example.

QUEST: If you were part of the group, I mean should countries like Greece, should they be, ultimately, bailed out by individual members or, indeed, collectively, the Euro Zone and the Union?

LIGI: I believe they can manage to -- to do necessary decisions themselves. We have examples that it's possible. Estonia is one example. We have been consolidating our -- our budget position by 13 percent within two years -- 13 percent of GDP, not of the budget. And -- and Latvia is also doing much better than Crete half a year ago.

(END VIDEO TAPE)

QUEST: The finance minister of Estonia.

Now to some breaking news coming into us at CNN.

A suicide bomb attack on a United States base in Afghanistan.

Our correspondent, Frederik Pleitgen, joins us now from Kabul with more -- do we know, Frederik, the extent of the injuries?

FREDERIK PLEITGEN, CNN CORRESPONDENT: Hi, Richard.

Yes, five U.S. Soldiers were wounded in that attack in Eastern Afghanistan, in Paktika Province. And the thing that really makes this attack so very disturbing is that apparently the suicide attacker was able to get onto an American base in Paktika Province in Eastern Afghanistan.

What we're hearing from the local Afghan authority is that he blew himself up in the, quote, "sleeping quarters" of that base. Of course, that is something that's registering.

And also what's very disturbing for U.S. Soldiers here in Afghanistan, Richard, is the fact that he was apparently wearing a uniform of the Afghan border police. Now, as you know, there has been some incidents in the past weeks and months where suicide bombers have dressed themselves either up, as Afghan police wore -- or Afghan police themselves have turned into suicide bombers, have attacked U.S. Soldiers in other ways.

This is something that's of major concern as American and NATO forces start working more closely together with the Afghan security forces. They have to trust these Afghan security forces more, go into battle with them.

So certainly this is a major blow to that trust. And, of course, primarily right now, just a major incident. As I said, five U.S. soldiers were wounded. We are still trying to find out the extent of the damage done, how severe those wounds are -- Richard.

QUEST: If -- if the facts do transpire as we believe them to be now, then this is a -- a very serious development in so far as protecting the integrity within the actual camps.

PLEITGEN: Yes, it certainly is. I mean we've had some incidents in the past couple of weeks where suicide bombers have been able to infiltrate camps like this. And one thing, of course, that American soldiers and NATO soldiers in general here in Afghanistan have to do is they have to be able to trust the Afghans that they work with.

In the past week, we had an incident where a translator opened fire on American soldiers. We, of course, had that major incident, also in Eastern Afghanistan, where a trusted source went onto a base and blew himself up, killing seven employees of the CIA.

So certainly this is something that's of major concern, especially as the U.S. and its allies shift their focus in Afghanistan toward more of a training mission, toward working more closely together with the Afghan security forces. And it is a situation where they have to be able to trust the people whom they work with and who are armed next to them. And certainly, this is one thing there's going to be of great concern -- Richard.

QUEST: Frederik Pleitgen joining us from Kabul.

Many thanks.

Now, we'll be back with more QUEST MEANS BUSINESS in just a moment.

(COMMERCIAL BREAK)

QUEST: Well, the major story tonight, the fashion world is mourning the passing of one of its largest names. A few hours ago, the British designer, Alexander McQueen, was found dead at his home in London. The police say there were no suspicious circumstances.

Now, Alexander McQueen -- you will have seen his clothes on the catwalks, on the red carpets and on many of the world's pop stars. Alexander McQueen was a young talent who started as a tailor's apprentice in Saville Row. He learned the art of making clothes quite literally the old-fashioned way.

But that's where he really caught the eye of the fashion world. His entire graduate show from Central Saint Martin's College, was bought by Isabella Blow, a leading style icon at the time.

Put this into perspective. Within just a couple of years of leaving art school or fashion school, Alexander McQueen had basically become the head designer at Givenchy and thereafter brand McQueen had become something of its own name.

Alexander McQueen's company, Gucci, now owns 51 percent of the label.

So it was this magnificent dichotomy between the enfant terribles or the hooligan of fashion, his company being owned by one of the most conservative names in the industry.

Global recognition for Alexander McQueen came quite clearly by stores in New York, London, Milan and, of course, in Los Angeles. He won numerous awards -- the British Designer Award four times. And he was named International Designer of the Year by the Council of Fashion Designers of America.

There are many ways that we can take our coverage of Alexander McQueen's death this evening. I had the privilege of speaking to Alexander McQueen back in 2007. We spoke about his unique and sometimes controversial vision of design.

(BEGIN VIDEOTAPE)

ALEXANDER MCQUEEN, FASHION DESIGNER: The rules are supposed to be broken. In his heady fashion world, there's sometimes no reality whatsoever around it. And it's good to make people face up to these things that happen in life. I try to do my best to promote the good and the bad in the world through my work, and just doing the show, not here in the text that you see in the showroom, but, you know, it is essential commentary on what -- the time I live today.

QUEST: Do you aspire to a collection that is going to be regarded as stylish or is going to be regarded as making a statement?

Because at one end of that stream we have the little black dress which, you know, universally regarded as an epitome of style.

MCQUEEN: I try my best to get away from the little black dress, because fashions have to change and times change and we live in different circumstances.

At McQueen, we try to reflect the changing circumstances in which we live. But it's not always about commerce at McQueen. You know, sometimes it's about the avant-garde or, as a designer, you -- you -- you are able to push fashion forward. There's nothing more stunning than someone who understands what style is, someone -- or what goes with what and the proportion. It's something you can only try to teach people. But they can take the right length of dress and then have the most stupidest hairdo and, you know, destroy the whole look anyway.

So it's -- I think, unless the designer actually lives with the customer and dresses her every morning, that there's nothing you can do about that.

QUEST: What happens inside Alexander McQueen when you see somebody who's got the style to actually wear the clothes that you've designed properly and with style?

MCQUEEN: It's amazing, isn't it, I mean because it's translated from the runway onto the street properly. And you try to make it as easy as possible for people who, look, don't find it easy. But you can only do so much. I'm not a plastic surgeon.

QUEST: What percentage, do you believe, of the population, has natural style?

MCQUEEN: Ten percent.

QUEST: Really?

Am I a lost cause?

MCQUEEN: The lapels are a bit wide and the buttons are a bit garish. But the tie is OK. The bracers (ph) are a cool touch.

QUEST: Does it offend you that they are snaps not buttons?

Is that cheap?

MCQUEEN: Yes. See, that's where it comes to style, isn't it?

QUEST: I haven't got it, have I?

MCQUEEN: I would say you're 60 percent of the way. It's nothing personal, by the way.

QUEST: Thank you very much.

MCQUEEN: Thank you.

(END VIDEO TAPE)

QUEST: Alexander McQueen, who died today.

I'll have a Profitable Moment after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's Profitable Moment.

Earlier we heard from Glenn Tilton of United Airlines. He said the industry had to be more competitive. Earlier, in a speech he gave at lunchtime to the U.K. Aviation Club, he bemoaned the fact that the industry is constrained by an anachronistic rules and regulations and made notes on the back of a menu.

Protectionist barriers, extreme taxation, inadequate infrastructure and laws written decades ago -- they've all conspired to put airlines in today's mess.

Glenn Tilton is not a lone voice calling for rules to be changed, but it's unlikely that it's going to happen any time soon, certainly not as long as airlines are treated as flight carriers and sacred cows. Glenn Tilton is an optimist when he said all of this. But it's a global industry. It's time that governments treat it like any other global business -- his words. Good luck, Mr. Tilton.

And that's QUEST MEANS BUSINESS for tonight.

I'm Richard Quest in London.

Whatever you're up to in the hours ahead, I hope it's profitable.

"AMANPOUR" is next.

END