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Quest Means Business

Osborne: Greek Standoff Biggest Threat; DSK Aggravated Pimping Trial Begins; Obama Seeks Corporate Tax Reform; Greek FinMin Proposes Debt Swap; Nationwide Stands behind "Sad" Ad; Profitable Moment

Aired February 02, 2015 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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RICHARD QUEST, CNN HOST (voice-over): Shell rings the closing bell. Even though oil prices are at an all-time low, the Dow has been on the absolute

topsy-turvy sort of session but did manage to eke out again the best part of 1 percent, three hits on the gavel brings trading to a close when the

Dow rose 194 points on Monday. It's the 2nd of February.

Tonight, competence or chaos? The British chancellor says Europe has a stark choice with the new Greek government and there are new proposals

tonight.

Also, DSK on trial. Proceedings begin on charges of aggravated pimping.

And the Super Bowl buzzkill: my exclusive look at how this little boy certainly didn't have people smiling. It was the most talked-about

commercial. I'm Richard Quest. We start a new week together and I mean business.

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QUEST: Good evening. Tonight, with the United Kingdom is warning a potential chaos even as the new Greek government is striking a softer tone

on debt negotiations. The Chancellor of the Exchequer George Osborne says the standoff between Greece and its creditors is the biggest threat to the

global economy. It's a view the Greek finance minister agrees with. Yanis Varoufakis says he and George Osborne share a common goal.

(BEGIN VIDEO CLIP)

YANIS VAROUFAKIS, GREEK FINANCE MINISTER: A determination to put an end to the extended prevent cycle, which has rendered Greece a festering wound on

the side of the Eurozone, which even for Britain, which is also a member of the Eurozone, is of great concern because the deflationary crisis in Europe

is certainly -- doesn't -- certainly doesn't augur well for the future of the British economy.

(END VIDEO CLIP)

QUEST: Now in the last 20 minutes or so, we've been getting reports, both from Reuters and elsewhere of new proposals to take the 300 billion euro

debt that the Greek government has. According to the proposals, the finance minister, who you heard just then, finance minister Varoufakis, is

proposing some of the bonds. The ECB and official sector debt will be swapped for growth-linked and perpetual bonds.

Well, that's the way the situation is at the moment. We're waiting for more details on that.

While we wait for those details, you can clearly see, of course, the prime minister and finance minister both have the job of rallying support for

their various anti-austerity stances and the proposals that they are hoping to do.

Now to get that support, if you join me at the root map, they are dropping in on European leaders to press their cases. The red line is where the

prime minister's going; the turquoise line is where the finance minister's going.

Now starting with the PM, he goes from Athens, where the first stop is in Nicosia. Imagine, he's on this trip. He'll send a postcard and the

postcard might look something like this.

"Dear Yanis, the Cypriot economy, which of course is in deep problems itself, because of austerity imposed from the troika, Europe in crisis,"

says the prime minister. But he has ruled out any aid from Russia.

Now the prime minister goes from Nicosia up to Rome, Rome onto Paris, Paris onto Brussels later this week.

However, the finance minister starts in Athens; he goes immediately to Paris and there, of course, he meets Michel Sapin, the finance minister and

he says he gets support. This is the postcard, "Dear Alexis, Sapin says Greece needs time. But still no question of canceling debt."

In other words, support from the French but the French will not go, pardon the phrase, "all the way."

From Paris it's up to London, that meeting with George Osborne and George Osborne says he wants a deal with Brussels but the standoff threatens the

world. And as far as George Osborne is concerned, well, there's an agreement to be made; the question is the terms.

(BEGIN VIDEO CLIP)

GEORGE OSBORNE, CHANCELLOR OF THE EXCHEQUER: Well, we had a constructive discussion and it's clear that this standoff between Greece and the

Eurozone is the greatest risk to the global economy. It's also a rising threat to the British economy here.

And we've got to make sure that in Europe, as in Britain, we choose competence over chaos. Now I said to the Greek finance minister that all

sides have to act responsibly. But we also need to see the Eurozone come forward with a better plan for jobs and growth. We had that plan in

Britain. We need to go on working through this plan, especially in these uncertain times.

(END VIDEO CLIP)

QUEST: All right. So remember the PM has gone from Athens to Nicosia to Rome to Paris to Brussels. The finance minister's gone to London. They

will all end up eventually -- the Greek finance minister says he wants to hold talks in Berlin and Frankfurt. There won't be a holiday; the German

leaders have refused any debt relief.

Put this together.

Joining me now from Athens, Elena Panaritis has served in the Greek parliament, was economic adviser to the former prime minister, George

Papandreou.

Thank you for joining us.

Is it any clearer in Greece tonight what this plan is for a debt swap, for a bonds swap?

Do you know what they're talking about?

ELENA PANARITIS, FORMER PAPANDREOU ECONOMIC ADVISER: Yes, of course I do. These are structures that have been used historically with high indebted

countries or countries that have been engaged, unfortunately, in debt traps.

Traps have been used to handle indebted countries in Latin America over and over. And that was one of the ways Latin America was able to get through a

growth path, many of these countries, and enjoy today rates of growth close to 10 percent.

The situation in Greece has become really unbearable and the solution is really are we going to be able to get out of that trap?

Or are we going to stay in the debt trap with unfortunate possibility of default?

QUEST: So the plan, as I understand it, that's been presented is that some form of swap is proposed for this debt for some form of growth linked or

other form of bonds.

But there would not be cancellation of debt.

Is that your understanding as well?

PANARITIS: Well, yes, there is no report of debt cancellation. But swapping the actual nominal value of debt with a new type of debt that will

be linked to GDP growth and will be linked, of course, to debt reduction because of GDP growth. So the ratio will be favorable.

QUEST: But the nominal total amount, the 300 and whatever billion, I mean it's significant if the Europeans, if the Germans are not being asked to

write off the debt.

PANARITIS: They're not being asked to write off the debt, yes.

QUEST: The support that the prime minister and the finance minister are getting, do you think Europe's going to go along with this?

Or is this the moment to face down the issue of reform in Greece?

PANARITIS: OK. There is something called an economic logic right now and this was always in the cards; even Germany and the other European

countries, the European Union, the commission, the ECB, were talking about a way of restructuring the Greek debt so that the Greek economy would be

able to restructure its productive capacity.

You see, unfortunately, the country suffered from a solvency crisis, a productivity reduction crisis and not a liquidity crisis, to which the

inappropriate solution of austerity made the productivity crisis even worse and the solvency crisis even worse.

At this point, therefore, either we handle this -- and we have to look at Greece as the canary in the coal mine. It's a small country. It's an easy

country to deal with and therefore avoid any possible problems that may occur in the remaining of the European Union.

QUEST: So I know blame is an invidious tool. But at the end of the day, a Greek government signed up to these terms; the troika may have imposed

them. So where do you put the blame if such there be that this -- I mean, let's face it. Let's be blunt, ma'am. This happened in the last six

years. We were all involved and we all watched.

Who did it?

PANARITIS: I'm the last one to be involved in the blame game; however, this is so clear and it's so crystal clear. It didn't happen in the last

six years; it happened -- we got into this trouble because of bad policies that were not managing the Greek economy very nicely and very well. We got

in the euro without really having the actual structural reforms following our involvement.

And unfortunately, we have a lot of structural problems very similar to structural problems that exist in other country; only it happens that

because we're less productive, it shows stronger to us first.

So in -- six years ago we got confronted with that tsunami effect. However, the parties that were confronted with that tsunami effect were

unfortunately the same parties that were ruling this country before and it's unusual that a crisis is being finally resolved by the same parties

that had created the crisis.

So it's a bit of a good and a bad piece of news, right?

QUEST: All right. But we shall have to leave it there for this evening. As this debt continues or as this issue continues, we look forward to

talking to you more about it in the future. Thank you for joining me tonight from Athens. I appreciate it.

To markets: now you'll be aware that the European stocks have been extremely volatile as a result of the potential of what's happening and you

can see that volatility. The Greek shares rose very sharply, up 4.5 percent-plus after the prime minister said he wouldn't act unilaterally on

a debt deal. And that's exactly what we're seeing at the moment.

Also the rising crude prices push oil company shares higher. Maybe that's why they were smiling at Shell when they rang the closing bell at the New

York Stock Exchange, a good gain in Germany at 1.25.

The new Greek leaders already have a very powerful supporter and they haven't even needed to pay him a visit. Speaking to CNN's Fareed Zakaria,

the U.S. president has warned that squeezing Greece won't lead to growth.

(BEGIN VIDEOTAPE)

FAREED ZAKARIA, CNN HOST: The new prime minister of Greece says that austerity has not worked.

Would you agree?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think what is true is that you cannot keep on squeezing countries that are in the midst of depression.

At some point, there has to be a growth strategy in order for them to pay off their debts, to eliminate some of their deficits.

And there's no doubt that that the Greek economy was in dire need of reform, tax collection in Greece was famously terrible. I think that there

-- in order for Greece to compete in the world markets that they had to initiate a series of changes.

But it's very hard to initiate those changes if people's standard of livings are dropping by 25 percent over time; eventually the political

system, the society can't sustain it.

So my hope is that Greece can remain in the Eurozone. I think that will require compromise on all sides. When the financial crisis in Greece first

flared up several years ago, we were very active in trying to arrive at some sort of accommodation.

I think there's a recognition on the part of Germany and others that it would be better for Greece to stay in the Eurozone than be outside of it.

And the market's obviously going to be skittish about this.

But more broadly I'm concerned about growth in Europe and fiscal prudence is important. Structural reforms are necessary in many of these countries.

But what we've learned in the U.S. experience -- and this is an argument obviously I had for a long time with my Republican friends in Congress --

is that the best way to reduce deficits and to restore fiscal soundness is to grow.

And when you have an economy that is in a freefall, there has to be a growth strategy and not simply the effort to squeeze more and more out of a

population that is hurting worse and worse.

(END VIDEOTAPE)

QUEST: I wonder if Mr. Tsipras realizes he has such a supporter in the White House.

Our next man that we're going to be talking about used to be the world most powerful economist and tonight Dominique Strauss-Kahn is in court. He's

accused of pimping on an international scale. The latest from France after the break. QUEST MEANS BUSINESS.

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(COMMERCIAL BREAK)

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QUEST (voice-over): Dominique Strauss-Kahn is on trial today in France.

(BEGIN VIDEO CLIP)

QUEST (voice-over): The former head of the International Monetary Fund is charged with aggravated pimping -- I never thought I'd be saying that on

QUEST MEANS BUSINESS.

He allegedly engaged in group sex with prostitutes during soirees organized with the help of a businessman hoping that he would get favors when he

became president of France.

It has got sleaze written all over it and we have only just begun with the trial.

I asked our senior international correspondent, Jim Bittermann, who joined me from Paris, what happened in court.

(BEGIN VIDEOTAPE)

JIM BITTERMANN, CNN SR. INTL. CORRESPONDENT: One of the first things that happened was that the lawyers for a number of those people involved in this

trial asked that the trial take place behind closed doors and the first thing that the court did was decide that that is not going to be the case.

This is going to be an open court and we're going to hear all of the lurid testimony come out, 14 accused; among them, Dominique Strauss-Kahn. The

four prostitutes were in court today and basically the charge against Strauss-Kahn and the others is that they organized sex parties, debauchery;

Strauss-Kahn does not deny that he took part in these parties but that he says that he didn't know that these were prostitutes that were involved.

And that's where the legal case is going to be billed.

The fact is that his defense is that if he doesn't know that they're prostitutes, if they're just parties and he was participating, he has done

nothing illegal. But if he in any way encouraged the parties to take place, then he may be guilty of what they're saying -- Richard.

QUEST: Now he's not accused of organizing the parties, is he?

He's accused of -- or he attended them.

BITTERMANN: Well, he attended, but he's accused of organizing them. He's accused of encouraging them. And to what extent he encouraged them,

whether he told his friends he'd like to have a wild night or something like that, that's what the case is going to be founded on because that,

under the definition of law in France for aggravated pimping, that qualifies as aggravated pimping.

The fact is, though, that -- why he's a little ambiguous on this and it's one of the things that'll come in this trial, I think -- Richard.

QUEST: Right, Jim, I'm sure you've studied this law in some detail in preparation for this case.

But are the French public, is the French public as -- watching this as closely and with as much voyeurism as maybe the international media?

BITTERMANN: I think they -- this time around they are, Richard. I think mainly because of the fact that they've seen someone who had risen to such

heights now sitting on the bank of the -- bench of the accused along with people like Dodo la Saumure, who's -- makes no bones about the fact that he

runs houses of prostitution in Belgium and a number of other sort of nefarious characters that are right there along with Strauss-Kahn.

So I think they're watching it in a -- and it's kind of fascination to have seen the depths to which someone who was flying so high, who -- you'll

remember, Richard -- was the leading candidate, the leading socialist candidate for president, might well have been elected president if all this

had not come out first in New York and now here.

QUEST: Jim Bittermann in Paris; the trial continues in France. We'll follow it closely.

President Obama says why should the rich keep getting richer while the middle class Americans lose ground? He's got a $4 trillion budget and a

proposal to do something about it. And you'll hear it after the break.

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QUEST (voice-over): It's time to end mindless austerity. Now it may sound like a call to action you'd hear in Europe, and you've heard already

President Obama basically say exactly that in relation to Greece.

He's also saying something very similar in relation to the United States. It's part of President Obama's proposal for the U.S. And the president

says it makes no sense to continue with budget cuts that came into effect by the sequester two years ago, because those were largely due to political

gridlock and now the president wants a budget that will help the middle class.

(BEGIN VIDEO CLIP)

OBAMA: That's why I want to work with Congress to replace mindless austerity with smart investments that strengthen American. And we can do

so in a way that is fiscally responsible.

(END VIDEO CLIP)

QUEST: So the budget has been printed; it's actually been published. But it is the opening bid in what could be a lengthy budget negotiations

between the White House and the Republican-led Congress.

Michelle Kosinski's in Washington for us.

Nobody thinks this budget has much chance of life in its current form, do they?

MICHELLE KOSINSKI, CNN CORRESPONDENT: Right. I mean, it never really does, especially with the situation now with both houses of Congress

controlled by Republicans.

What is this for really? I mean, some look at this in the presentation that was done over the president's budget today and they look at it as more

of a show, more of a statement; this is what the president wants to get done and of course in this case, the president has been getting some of

those goals met but through executive action. Republicans say bypassing Congress. And that's really the crux of this anger that's been fomenting

(sic) between the White House and congressional Republicans.

So would this go anywhere? Anyway, it usually doesn't. It's usually a back-and-forth. But because of that enmity that's been there for more than

a year now, it's doubtful that there will be much of a negotiation on some of these points.

The White House today stresses there are some areas where Republicans do agree, at least to some extent; they always point out lately that some of

these ideas that the president puts out there, like more affordable child care, have been Republican proposals maybe legislatively at one time or

another.

The problem is the way the president has been presenting these, some through executive action, which we mentioned and also he wants to pay for

these by raising taxes on the wealthiest individuals and corporations -- Richard.

QUEST: And that we're going to talk about in a moment.

Michelle, thank you very much indeed, joining us from the White House, a breezy day in Washington; maybe the breeze blowing through the political

wind is taking place.

But a new study of incomes says inequality's increasing in almost every state across the U.S. And one way that the president wants to change it is

by getting American companies to pay more taxes rather than stashing the money abroad.

Now here's the problem. At the moment, corporations don't pay taxes on overseas profits until the money is brought home. In other words, keep it

offshore and you don't pay any tax. The moment you bring it inside, tax, thank you very much.

Well, the amounts at stake are huge and the companies with the biggest foreign holdings -- look at them -- these are General Electric, $110

billion; Microsoft, $76 billion; Pfizer, the drug company, $69 billion; Merck, a drug company, $57 billion and Apple -- look at old Apple over

there -- $54 billion. Keep the graphic up as we come over to talk to Randall Kroszner to put this into perspective.

How good to see you, sir.

RANDALL KROSZNER, UNIVERSITY OF CHICAGO BOOTH SCHOOL OF BUSINESS: Great to see you.

(CROSSTALK)

QUEST: -- talking to you from the University of Chicago Booth School on a satellite. Now we're here.

KROSZNER: Now you've just as much snow here in New York as in Chicago.

QUEST: Well, not quite.

A look at those numbers, the president wants quite a large tax take on these. He wants a one-off to begin and a 14 percent thereafter. He's not

going to get it.

KROSZNER: I don't think he's going to get exactly that from the Republican Congress. But it's the beginning of a negotiation. This is certainly not

the end. And so I think they're going to be going back and forth because I think everyone agrees that the tax system that discourages corporations

from being able to invest in the U.S. doesn't make any sense.

QUEST: When do they pay tax on that? When they bring the money back or when they report it in the -- because the money is reported in the results.

KROSZNER: For sure. And so it depends on exactly where it is, if it comes back on, if it is repatriated, then it would be subject to tax. And most

other countries have a different kind of tax system. They don't have the same kind of differentiation between where it's held and where they pay

tax.

QUEST: There's also, besides the overseas earnings tax, he's got a whole raft of proposals for higher income tax (INAUDIBLE) --

(CROSSTALK)

QUEST: -- doesn't he?

All in all, the Republicans will paint this as a typical liberal Democrat soak the rich whilst the Democrats paint it as the Republicans just want

more giveaways for big corporations.

Do we gain anything from this debate?

KROSZNER: Well, as I said, I think these are all just starting points. And so hopefully we can find some common elements. I think as I said both

sides agree that there need to be some fundamental changes in corporate taxes. And so we try to get improvements in economic growth; I think

everybody wants that, to be able to generate more jobs.

But they have very different views of how to get that.

What's the best way to get more investment going?

And one of the key ways is to try to get a pro-growth tax system.

QUEST: Let's talk about this pro-growth because you put it as pro-growth; the president put it as anti-austerity.

We've been talking a lot about Greece tonight. You're obviously familiar with the situation.

KROSZNER: Oh, yes.

QUEST: Is it your view, Randall, that actually Prime Minister Tsipras has a valid point, that the amount of debt that Greece has been lumbered with,

even President Obama says it's iniquitous.

KROSZNER: Well, certainly they've already had some writedowns before. So they've gotten reduction of debt from where they were before. The key

thing is to figure out how to move forward from here.

The bailout program needs to be renewed sometime in the next few months. And so given where the progress that Greece has made -- because they have

made some progress -- the economy seems to be stabilizing, what do they need to go forward to restore that growth?

QUEST: Is Greece, in a word -- it's not Greece.

Is the Eurozone a threat to the U.S. economic recovery?

KROSZNER: They are -- unfortunately, they're trying to become a threat. It's becoming very difficult for them to get agreements and they are just

starting to fight the deflation they're facing. So they really need to do a lot more.

QUEST: Good to see you, sir.

KROSZNER: Great to see you.

QUEST: Keep warm in the snow.

U.S. stock markets, they climbed on Monday. I have no idea why. But the Dow rallied more than 195 points. I mean, look at that. Who can make sense

of a market that was down, then up, then down, then up, then down, then up?

The S&P 500 rose 1.3 percent; oil prices were higher on the news. The U.S. companies may be cutting back on drilling. West Texas neared $50 a barrel.

Honestly, when you see a market like that, it's best not to try and interpret what was actually happening.

When we continue, Greek leaders are rallying support for a new debt deal. We'll hear from the man who helped broker the last big haircut. QUEST

MEANS BUSINESS.

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QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in a moment, when we'll talk about the advert that's described as "depressing,"

"a buzzkill" and "the worst Super Bowl ad ever." An exclusive look behind the scenes at the commercial that everyone's talking about today.

Also we'll be live with Charles Dallara on what happens next with Greece's debt.

Before all of that, this is CNN and, on this network, the news always comes first.

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QUEST (voice-over): A pro-Russian rebel leader in Eastern Ukraine has vowed to recruit an army of 100,000 people. The threat comes as violence

intensifies between separatists and the Ukrainian military. Heavy shelling is taking place across Ukraine's Donetsk region.

The Australian journalist Peter Greste says he's relieved to be free after spending 400 days in an Egyptian jail. Mr. Greste's seen in the center

here, was convicted of supporting the Muslim Brotherhood. His Al Jazeera colleagues, Mohamed Fahmy and Baher Mohammed, remain in Egypt behind bars.

The British chancellor says the standoff between Greece and its creditors is the biggest threat to the global economy. Chancellor of the Exchequer

George Osborne met the Greek finance minister, Yanis Varoufakis, earlier. The group minister says in the Greek government says it wants to reduce the

country's debt burden and renegotiate the terms of its bailout.

The former IMF chief Dominique Strauss-Kahn's come on trial in France, accused of pimping. The man who hoped to run to be France's president was

charged with procuring sex workers for a prostitution ring. Mr. Strauss- Kahn admits taking part in orgies but says he did not know the women were being paid for sex.

(MUSIC PLAYING)

QUEST: There really was a strong, robust reaction in the Athens stock market, which rose 4.5 percent on Monday after the new prime minister said

he's not looking for a fight with the country's creditors.

Prime Minister Alexis Tsipras says it was never his intention to unilaterally act on Greek debt -- no unilateral action there you were, the

keywords, which set the market higher. He says -- and these are his words -- that Athens will fulfill its obligations to the ECB and the IMF. But

there will be no more austerity. One could arguably say is there a contradiction in that since those are the terms of the bailout deals?

Tsipras says he needs time to implement reforms that can lead to growth. Medium term recover program is the phrase being used.

The Nobel Prize winning economist Joseph Stieglitz says Greece needs a second chance just like Germany got after World War II.

(BEGIN VIDEO CLIP)

JOSEPH STIEGLITZ, ECONOMIST: The fundamental principle of capitalism is when you make a mistake, you need at some point to get a fresh start. The

West gave -- the Allies gave a fresh start to Germany after World War II. We forgave their debt; not only did we forgive their debt, we gave them

Marshall aid. Not only did we give them Marshall aid, by having troops stationed in Germany, we stimulated their economy.

So we had a growth package for Germany after World War II; what we need now is a growth package for Greece.

(END VIDEO CLIP)

QUEST: Charles Dallara helped broker the last Greek debt deal in 2012. He's a former managing director of the Institute of International Finance.

Today he's an executive vice president at the private equity firm Partners Group. He joins me now from Paris.

Charles, good to see you.

Is it your understanding tonight the framework of a deal which involves swapping existing bombs for some form of index linked growth bonds in the

future?

CHARLES DALLARA, PARTNERS GROUP: Well, Richard, good afternoon. It's good to be with you again. There is, I understand, a new proposal on the table,

which proposes some debt swaps for growth linked bonds. Of course this is a technique that we used in the debt restructuring three years ago. And it

could provide one part moving toward a solution.

It's encouraging to see at least the dialogue moving in a more constructive direction, Richard.

QUEST: The deal that you did some years ago -- it's involved debt swap but it also involved debt cancellation. It involved the private sector taking

a haircut. Now in this situation the view seems to be from Berlin and others that there will be no reduction in debt, even if you finagle the

maturities and the nature of it.

DALLARA: Richard, we did take a huge haircut. We eliminated and wrote off on one day over $100 billion worth of outstanding exposure to Greece.

It was necessary at the time. But to paraphrase Graham Greene, debt this time, in my view, is not the heart of the matter.

I believe that some extension of debt maturities, some reductions of interest rates by Europe -- and, I would add, by the IMF -- would be in

order.

But I think the key is to loosen the fiscal grip on the Greek economy to stabilize the fiscal position and to launch and intensify structural

reforms, Richard; at the same time it's important that politicians from both Greece and throughout Europe recognize the confrontational language

takes energy that Greece cannot spare, takes energy out of the Greek economy.

We need cooperation. We need to stabilize the banking system there and we need a reform plan that does allow Greece -- and this is where I agree with

the prime minister -- does allow some breathing space.

QUEST: How on Earth -- bearing in mind that this is only five or six years old -- I mean, since Greece got into trouble and just went bust, you did

the first deal, the loans were given.

How on Earth does the troika get -- and all the politicians get it so dreadfully wrong that they saddle a country in a situation with a ticking

time bomb that, frankly, Charles, everybody knew was going to explode?

DALLARA: Well, Richard, I cannot disagree with you on that point. We saw it coming during the course of the negotiations over the private debt

restructuring. I'm not trying to suggest that we had 20-20 hindsight as we stand here today. But the reality is the program has been poorly designed

from the start.

Too much emphasis on repeated rounds of tax increases which only took more and more out of the Greek -- out of the Greek economy and let it further

into recession.

Look at where we are. Imagine restructure over $200 billion of debt over $100 billion written off and the other $100 billion stretched out to up to

40 years with concessional rates and still the debt burden is higher today than it was three years ago when our deal was completed.

QUEST: Charles, a final question and we're so grateful that you've come in tonight to put this in perspective. But finally, ultimately is -- and

you've sat at the table and you know the politicians and you know the thinking.

Have they failed to grasp this fundamental view that north must subsidize south in certain situations and that it has to be all for one and one for

all and really what they're playing at at the moment is this still idea of individual countries, you do this, I'll do that and we might muddle

through?

DALLARA: Well, you know, Richard, since the global financial crisis erupted in 2008, there has been a lot of retreat into nationalism, not just

in Europe, but in the United States and the U.K. and elsewhere around the world.

And I think that it is high time that leaders of Europe recognize that if eventual integration of European economies, that further building of the

European vision is really their goal, then it's time that they put aside introverted views of how to deal with economics and look at the region as a

whole.

And the region as a whole suggests very clearly that the adjusting countries need additional support. It doesn't need -- they don't need

massive support. An additional 15 billion euro this year could enable Greece to run a less tight fiscal surplus and enable them to get growth

back on track.

You know, Greece was destined for a 2.5-3 percent growth rate this year and I think it's incumbent upon everyone not to steal victory from the jaws of

defeat and to make sure, not to steal defeat from the jaws of victory and to make sure, Richard, that confidence is rebuilt, that reforms are

advanced and that does include, by the way, privatization and that the support for job creation in Greece can get back on course.

QUEST: Charles, as a man who's sat and done the negotiations, yours is a view we're grateful to have tonight. Thank you for joining us from Paris.

Enjoy the evening.

DALLARA: Thank you, Richard.

QUEST: One advert from the big game has been called a big buzzkill. And the company that paid for it said it wasn't even meant to drive business.

We're going to go behind the scenes of "The Boy Who Couldn't Grow Up" after the break. This is QUEST MEANS BUSINESS.

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(COMMERCIAL BREAK)

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QUEST (voice-over): The number is out and it is startling, according to NBC. The Super Bowl drew 114.4 million viewers and that number, it was the

biggest audience in U.S. television history, 114.4 million.

Well, the Super Bowl may be over and congratulations go to Budweiser, whose advert was the most popular with viewers on the Super Bowl and for the

second year in a row.

(VIDEO CLIP)

QUEST (voice-over): Aww, that's called playing it safe. The puppy that finds its way back home.

Other advertisers dared to be more controversial.

(VIDEO CLIP)

QUEST (voice-over): That was by far and away the most controversial Super Bowl advert. I couldn't grow up because I died from an accident.

The ad was from Nationwide Insurance and it featured the boy describing all the experiences he would never have because of the accident that basically

killed him.

Reaction online was swift.

The comedian Patton Oswalt tweeted, "The second I see a kid in one of these commercials, I immediately assume they're going to die? Thanks,

Nationwide."

And there was plenty more where that came from.

The ad was so jarring a change in the tone in the middle of the Super Bowl where stress is normally having fun that Nationwide says they were trying

to raise awareness about preventable accidents.

Well, they certainly succeeded in producing one of Sunday's most talked about ads. In a television exclusive, I met the man in charge of marketing

at Nationwide. We went behind the scenes to look at how the ad, that ad which everybody says was a buzzkill, was made.

(BEGIN VIDEOTAPE)

(MUSIC PLAYING)

ADAM TUCKER, PRESIDENT, OGILVY & MATHER: I think what we're purposefully trying to do is disrupt the normal Super Bowl advertising.

QUEST (voice-over): It's 10 weeks to the Super Bowl and the final creative meeting for a very unusual commercial.

TUCKER: This is a very hard-hitting message, right, and it's very serious in tone.

QUEST (voice-over): It's not just serious; it's downright upsetting. The ad is designed to raise awareness that preventable accidents are the

biggest killer of children in the United States.

MATT JAUCHIUS, CMO, NATIONWIDE: This spot is not intended to sell insurance. It's intended to save children's lives. And therefore the

decision that we made, which is strategic, is to stage an intervention because you have to grab people by the scruff of the neck and say, listen,

this is the number one killer of children. And we want to do something about it, really.

UNIDENTIFIED FEMALE: I think that's what we'll have to decide in this session.

QUEST (voice-over): Today is critical. It's the final decision on which commercial to make. The boy who couldn't grow up, a thankful approach with

a sad ending or learn from us, a series of harrowing, real-life stories also pretty grim.

UNIDENTIFIED MALE: My judgment, which I think matches all of yours, is that boy balances that edge of being interventionist, to get attention but

it's approachable enough not to turn people off from the Super Bowl.

QUEST (voice-over): He can't afford to get it wrong.

QUEST: Now your marketing budget is what?

JAUCHIUS: We have measured media of about $350 million a year. It's all in the United States.

QUEST: So you burned quite a good percentage, a couple of percentage of your media purchase in this?

JAUCHIUS: We invested a good amount of money.

(MUSIC PLAYING)

UNIDENTIFIED MALE: Are the cams on, Sound Department?

QUEST (voice-over): Less than a minute of air time requires two full days of filming on location. Every detail is closely scrutinized.

UNIDENTIFIED MALE: I think the nicest thing here --

UNIDENTIFIED FEMALE: See how you just do (INAUDIBLE)?

(CROSSTALK)

UNIDENTIFIED MALE: We don't have a frenetic move on all the toys.

UNIDENTIFIED MALE: Is he always going to be in that spot?

Is he ever going to be up from the.?

(CROSSTALK)

UNIDENTIFIED MALE: I think he's going to be -- he's going to stand there.

QUEST (voice-over): Worthy cause or not, this like any Super Bowl ad is about protecting a brand.

JAUCHIUS: We're more than a business but we are a business. And we measure all of this rigorously and we hold it up against the investment

because we still have to make sure we spent the money in an effective way to get that message out.

UNIDENTIFIED MALE: It's beautiful.

UNIDENTIFIED MALE: In 60 seconds we can probably bring more awareness and attention and action around this issue than we have in 60 years.

UNIDENTIFIED MALE: That's right.

UNIDENTIFIED MALE: Let's roll, please. Keep it locked.

(VIDEO CLIP)

QUEST: It's an eye-watering amount of money.

JAUCHIUS: You reach an eye-watering number of people who are singularly engaged on your message.

UNIDENTIFIED FEMALE (voice-over): At Nationwide, we believe in protecting what matters most -- your kids.

(END VIDEOTAPE)

QUEST: Now within minutes of the ad hitting the airwaves, Nationwide put out a statement. It said, "The sole purpose of this message was to start a

conversation, not to sell insurance. While some did not care for the ad, we hoped it served to begin a dialogue."

"The New York Times" columnist Michael Bechsler (ph) tweeted his criticism, "When a Super Bowl ad sponsor has to make a statement after it airs,

perhaps things did not go well.

Joining me now is John Kottmann, the North American director of strategy for DDB Worldwide, behind campaigns for McDonald's and created an ad for

Skittles candy in Sunday's Super Bowl.

All right. I'm going to be invidious here. I'm going to invite you to comment on a competitor.

JOHN KOTTMAN, DDB WORLDWIDE: Yes, indeed.

QUEST: Was it a mistake?

KOTTMANN: Well, I wouldn't characterize it as a mistake. I thought it was clearly a very provocative ad on a very important topic.

QUEST: Well, no one's divines that. But was it a mistake to enter it in the Super Bowl? I mean, at the end of the day, you know, the phrase like

"buzzkill," "poor choice," et cetera, for an advertising man like yourself, what do you do when you hear that -- those sort of words afterwards?

KOTTMANN: I'm not sure that's necessarily the commentary that matters most, Richard. What matters most is raising the awareness for them around

this important issue.

One of the questions I would have, though, is was there enough connection towards the end of this piece of communication that would link it somewhat

back to Nationwide? Now I'm sure they'll be testing this; they'll be doing tracking studies with a lot of --

QUEST: You see, they said that didn't matter. They said this was not about selling insurance and if they never saw on extra piece of insurance

as a result of it, they were happy with that.

Do you believe them?

KOTTMANN: It's not whether I believe them or not. I think it's great to have a purpose like that. One of the things that's happening in marketing

more broadly right now is that brands are not just looking to sell things and be very commercial in their advertising always. They're also looking

to have a purpose behind what the company does and some conviction behind what the company does.

QUEST: Now that's brilliant if it works; but if you don't also damage yourself at the same time, I mean, some of the messages I saw suggested not

only did they not promote necessarily the (INAUDIBLE), but they may actually have cost themselves some business.

KOTTMANN: I don't know if they cost themselves some business; I think, again, one of the things they would want to do -- they have a program, I

think, called Make Safe Happen. Perhaps some teasing to the public in advance of this piece of communication, because it was quite a quick hit,

wasn't it? Forty-five seconds and it's gone; you didn't see it coming at you.

So if they want to sell the issue -- I'm not going to debate with them on that -- but wouldn't they want some connection to Make Safe Happen?

So again, I think that they'll be doing different types of research to make sure that they're doing that.

QUEST: We're all familiar with the old adage that it doesn't matter what they say as long as they're talking about you. Good or -- I think we all

subscribe to in some sort of odd way.

Would you subscribe to it here, that at the end of the day, the fact that the only story about last night's Super Bowl commercials was the Nationwide

ad shows they succeeded?

KOTTMANN: Look, I think if one child's life is saved as a result of something that may be off-putting to some people, that that means may

justify the end in this case.

QUEST: Good of you to join us tonight, sir.

Thank you very much indeed.

KOTTMANN: Thank you very much.

QUEST: I appreciate it.

We'll be back. It's QUEST MEANS BUSINESS in a moment.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

QUEST: It was one of those extraordinary days on the market, opened up, then went down, then went up, then went down, then went up, then went down,

up, down, up, down and a very robust rally right at the close, first session of the day, Dow Jones closing up 196 points, a gain of 1 percent.

The S&P also rose very sharply. No particular reason other than a general feeling that things are looking better.

European markets, they all rose with the best gains being seen in Athens, 4.5 percent. We'll have a "Profitable Moment" on Greece after the break.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

QUEST: Tonight's "Profitable Moment" or maybe it's not going to be very profitable when all's said and done, the thing I find most disturbing about

the whole issue with Greece at the moment is that all of this has happened in recent history. The men and women who put together the deal that is now

being questioned, the bailouts which are now being said are too onerous, it all happened in the last two or three years.

And as Charles Dallara said on this program, it was all pretty much foreseeable. It raises the very real issue, what the troika were thinking

when they put on the ground those detailed and what the Greek government at the time was thinking when they signed up for it.

After all, put this in perspective: we are talking about a bailout that has only just been done and already everyone says it's simply too much.

And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable.

And we'll get together tomorrow.

(MUSIC PLAYING)

END