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Pay Up or Deal With Debt Default for Greece; New York Prison Escapee Details His Three Weeks on the Run; Tunisia Terror Attack, a Possible Link to Libya. Aired Midnight-1a ET

Aired June 30, 2015 - 00:00   ET

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

[00:00:00]

GEORGE HOWELL, CNN ANCHOR: The time has come to either pay up or deal with debt default for Greece. Wold markets are watching closely.

ZAIN ASHER, CNN ANCHOR: And the talking from his hospital bed, the now captured New York prisoner escapee details his three weeks on the run.

HOWELL: And there are arrests in Tunisia terror attack, a possible link to Libya, a new video of the heroic efforts to stop the killer.

Welcome to our viewers here in the United States and around the world, I'm George Howell.

ASHER: And I'm Zain Asher, glad to be with you. This is CNN NEWSROOM.

We start with our main story that's just gone 7:00 in the morning in Greece. And today, the country owes its creditors $1.7 billion. The Greek economy minister tells CNN, it will be impossible -- literally impossible to make that payment.

HOWELL: It's a lot of money. We saw tens of thousands of people rally outside -- in Greece against austerity, in support of the government in Athens. The country's prime minister, Alexis Tsipras asked European leaders for an extension to the deadline this day, the answer no. Mr. Tsipras called for a referendum on the bailout this Sunday.

(BEGIN VIDEO CLIP)

ALEXIS TSIPRAS, GREEK PRIME MINISTER (through translator): We will survive. We'll stand on our feet, we'll be alive, and we'll go and practice our right to vote. And we decide as people what will be our future.

UNIDENTIFIED MALE: One thing should be very clear, if someone says that the government will have a stronger negotiating position with the no vote, it is simply not true. I am afraid that with such a result of the referendum there will be even less space for negotiations.

(END VIDEO CLIP) HOWELL: There is a great deal of uncertainty to say the least and, you know, what does the average Greek person think about this? Our Issa Suarez has more on the move (ph) of the streets of Athens.

(BEGIN VIDEO CLIP)

ISSA SUAREZ, CNN CORRESPONDENT: In the harsh light of day Greeks take shelter from their new reality, having the queue for daily sum of 60 Euros. Across Athens these are now the scenes of despair.

MARIA, TEACHER: It's been one of the worst days as long as I remember. This is the worst in Greece. Last night was the most dramatic night. There was never such a thing as, you know, no money in the ATMs or anything. And, people are very confused about what to do.

SUAREZ: It's this confusion that has many running to ATMs, fearing that they may soon run out of cash. This is after all a country that relies more on cash than cards.

Despite the rain Greece continue to queue that queue going further down, many people sheltering from the rain.

[00:05:00] The majority of people we've seen have been able to take out the limit of 60 Euros. But, we spoken to several pensioners who said they have not been able to count, not even a single Euro. And while today people maybe somewhat optimistic the reality of the crisis may set in, in the next couple of days.

Eltithia has been queuing here for sometime, as she tries and fails time and time again to get some of her pension money withdrawn.

How frustrated are you with what's happening?

(FOREIGN LANGUAGE)

I've tried 10 times in two different ATMs, and both of them I got nothing back she says. I will now barrow money from a friend to survive for the day.

Those who need more than 60 Euros are searching every cubby-hole and travel bag for dollars British Sterling or any cash from their last holidays.

UNIDENTIFIED FEMALE: Greeks like I said, they want to trade their leftover foreign exchange that they have had at hope or whatever to get Euros, because they are in need or Euros right now.

SUAREZ: For those not yet in the state of panic, there is a reminder in every corner of the referdandom, and a call by the government for "oxi" (ph), no the E.U. proposals. For some though, any vote now is just too little too late.

(FOREIGN LANGUAGE)

I don't trust anyone, nothing, everything is over for us tells me Sylvia (ph), we pay taxes, we have gone bankrupt, everything we own is gone she says. In the upcoming referendum, Greeks still have a choice, choosing between extremely bad or extremely worse.

(END VIDEO CLIP)

HOWELL: Let's get straight to CNN's Issa Suarez live there in Athens, Issa good to have you with us.

The piece that you just filed, you know, it really tells the story, there was a point where you pointed out that Greeks are optimistic but you say perhaps the reality has not yet quite set in. And we've seen these, these big anti-austerity rallies. So, what is the mood?

SUAREZ: You know, George, I went to that rally yesterday, and it was a pro-government, anti-austerity rally. And it's more of a party misled (ph) than anything else. And people are extremely defined, even the face of this challenges they are facing, the facts that they may leave the Euro, the fact they have a referdandom, the fact they can only 60 Euros a day -- out a day, withdraw from their ATM. But many was saying to me, when I asked them why you're here, and these is all different age group if I may just point out frankly for our audience.

When I say to them why you're here, why you're backing this proposal, they were basically saying to me, well it's the least of two evils. We much rather stay, we much rather back a government that we believe will not make matter worse for us, but at least will keep a dignity and we feel at the moment that Europe has tied our hands and we do not have the voice. And that's what people have been saying.

Having said that, on the other side of the coin, today we are going to see a rally outside in Syntagma Square for another day now on anti -- against the government, pro anti-government and anti-civics (ph) government. So it will be interesting to see what's taken is, this is a country, a nation pretty divided. When day George that the IMF deadline expires -- on the day the bailout expires. So, a lot playing out, the next coming days, these people struggle once more, keep struggling perhaps by Sunday, that will hit home and perhaps that may influence the outcome of the referendum. George.

HOWELL: So Issa you pointed out, so anti-austerity and supporting the government, but the question, you know, do people want to stay in the E.U., I mean how do you square the circle there?

SUAREZ: Yes, look, it's -- the majority of people when you ask them, do you want to stay in E.U., 75 percent say yes they do. When you ask them again, do you want more Austerity that drops to 55 percent. So people do see the benefit, I was talking to a young man yesterday called Mike (ph), and he was basically -- I said to him, why are you backing, why are you backing the government, why you're here. And he said, you know, I have to back it, we got no dignity whatsoever and I said what happened if you go to the (inaudible) does that worry you?

Does it worry you that you might not even be able to travel within the European Union if you're out of E.U., he goes of course that worries me, that is a huge concern but we cannot -- no longer go on living like this. And the fact he was saying, you know, that every -- majority of people here -- 50 percent of people here George live off -- 50 percent of a pension wage only. As unemployment is so high, youth unemployment is over 50 percent. So, it might not make sense for a lot of international audience to say why would you choose between being in and out?

[00:10:00] Clearly, majority of people want to be in the Euro. But the reality is, these people have gone for five years of hard, hard recession and austerity and they clearly have had enough George.

HOWELL: It has been a difficult time here for Greeks and now facing a very difficult decision. Our Issa Suarez live in Athens, Issa thank you so much for you reporting there.

ASHER: 60 Euros a day, just incredible, badly enough to live on.

Now for more on the impact of this Crisis, I'm joined now by Nicholas Economides, he's a professor of economics -- economics, excuse me, at the Stern School of Business at New York University. So, thank you so much for being with us. First of all, in the eventuality of Greece leaving the Eurozone, what safeguards have been put in place to limit financial contagion?

NICHOLAS ECONOMIDES, ECONOMICS PROFESSOR: Well, I mean, the problem of Greeks, I mean right now Greece, is that if it goes to exit (ph), it's going to be a total disaster mode. What you see today with just lines outside the ATMs is nothing. There will be no money at in the banks if there is aggression (ph), if people vote according to the government's wishes by the way.

The government says no, OK, suppose the majority vote no, then there will be no money, nothing. And, the government has not even made plans for an alternative currency. It's the most irresponsible government I have seen in Greece in decades. There is no concern about contagion in other countries. The problem is that Greece cannot even deal itself, with its own problems. Not to mention, you know, worrying about other countries.

ASHER: And I'm just curious as to whether or not Greeks actually know and understand the real consequences of voting on in that referendum. But I do want to ask you, I mean you mentioned about, you know, no issue with contagion but, realistically how vulnerable are places like Portugal, like Spain, like Italy, other countries that have had issues with debt in the past?

ECONOMIDES: Well, there is a big of contagion, I mean we saw a bit of the, you know, the 10 year bonds of Portugal and Italy wind up a bit, but not much. You know, the -- just having the, you know, the interest rate of them go from 2.5 to 2.6. I mean, what's the big deal, it's nothing. A weak (ph) interest rate went from 10 percent to 15 percent for singular bonds today. And the other guys weren't impacted by one-tenth of a percent. What's the big deal? I mean it's nothing really.

So, I think that -- the Greek, the full dram, the disaster is going to be in Greece and the rest of the European Union. Nevertheless, the present government keeps feeding these people that you see in the demonstration today the idea that if Greece falls apart so does the whole Europe and therefore Europe is going to rescue Greece. It's -- what I can say, it's a total lie. And unfortunately, people want to believe in the lie, because they wanted to feel important. They want to say, well we are important, we are the cornerstone of Europe, we have a great history and so on and so on. And if something goes wrong with us, they have to rescue us. They're the big daddy, they're going to rescue us. This is not the case.

ASHER: Yeah, I mean -- sadly it is going to be a doomsday scenario in Greece if the worse happens and -- I mean, I'm just curious what the people of Greece will end up thinking of Alexis Tsipras especially because he promised his people so much. Unfortunately that's all we have time for Mr. Economides, thank you so much, we appreciate that.

HOWELL: Big situation for Greece and a big situation that could have implications around the world, a story the world is watching and you can find out more about it at CNN.com including information about Greek's turning to the bit coin and hopes that they can access digital money while the banks are closed at their ATMs as you saw in Issa's story.

Now, to another big story that played out here in the United States, a convicted killer who escaped and has been on the run for three weeks has been captured. David Sweat is recovering from gun shot wounds at a New York hospital. And now he's talking to police about his escape.

ASHER: Yes, New York's governor says Sweat and Richard Matt planned to go to Mexico but had to improvise after the prison tailor Joyce Mitchell accused -- was accused of helping them after she backed out. They headed north instead, Sweat was caught Sunday just shy -- about two miles shy of the Canadian border. He says he left Matt behind because last week -- behind last week, because the older fugitive Richard Matt was indeed slowing him down.

HOWELL: And, there is also focus on this person, prison guard Gene Palmer, he's accused of giving Matt the frozen meat containing power tools that were used to cut through those prison walls.

[00:15:00] According to the county prosecutors Sweat says Palmer did not help the inmates to break out of prison. Palmer appeared in court Monday but did not enter a plea.

ASHER: The FBI is also looking into possible corruption and drug trafficking at the prison as well. Law enforcement official say employees have told investigators about inmates using heroine. Officials are also focusing on whether Matt and Sweat had greater freedoms inside the prison because they were apparently involved with illegal activity with the guards. There are certainly a lot of questions surrounding the fugitive's three weeks on the run including how they survived. And of course everyone is wondering how they managed to elude police for so long.

HOWELL: That is a question that will continue to be asked. Brian Todd looks into the trail of evidence that finally lead police to Matt and Sweat. (BEGIN VIDEO CLIP)

BRIAN TODD, CNN CORRESPONDENT: The tale of two takedowns begins last Wednesday. That's when David Sweat says he decided to break off with Richard Matt, because Matt was slowing him down.

One law-enforcement source tells CNN there's evidence Matt was sick, possibly from contaminated food or water. Underwear with Matt's DNA on it had been found near an old outhouse.

12:20 Friday afternoon, a key clue. Cabin owner Bob Willett gets a call from his son, who'd just checked on the cabin near Duane, New York.

BOB WILLETT, CABIN OWNER: When I was talking to him on the phone, there was a gunshot then, at 12:20.

TODD: Those gunshots near Willett's cabin might have been fired at those fired at a passing camper. When Willett checks the cabin with his son, he immediately notices something out of place.

WILLETT: Just the bottle of gin that had moved off one counter to another, and it was spilled. There was a ring; it was wet. The cap was on the floor.

TODD: Authorities later could smell alcohol on Matt's body from a few feet away, according to a law enforcement source. Another clue, when responding officers are inside Willett's cabin, they smell gun powder in the air. They step outside.

SUPERINTENDENT JOSEPH D'AMICO, NEW YORK STATE POLICE: There was movement detected by officers on the ground, what they believed to be coughs (ph).

TODD: 3:45 p.m. Friday, a tactical team comes face to face with Richard Matt. He's shot three times in the head. Shortly after Matt's death, investigators find a camp near Route 41 in Malone, New York. They discover another important clue, DNA from discarded material that matches David Sweat.

D'AMICO: Picnic style pepper shakers, and we believe that possibly these two males were using pepper to throw the scent off of the dogs that were tracking them.

TODD: 3:20 p.m. Sunday, almost 48 hours after Matt was killed, a state police sergeant notices David Sweat jogging down a road near Constable, New York. Sweat is shot and captured.

A law enforcement official now says Richard Matt and David Sweat had been gathering their own clues for almost a year, from conversations with guards at Clinton about hunting cabins and fields in the area.

Jeff Dumas is a former corrections officer at Clinton.

JEFF DUMAS, FORMER CORRECTIONS OFFICER AT CLINTON: They gathered information. They had a pretty good layout of the surrounding areas of hunting camps, what could be in them as far as maps, knives, weapons that are left there.

Jeff Dumas says a lot of corrections officers at Clinton have hunting cabins in that area, that they often talk out loud about the cabins and the supplies they need for them. And he says inmates listen to every world.

Now, according to a law enforcement official, guards at Clinton are being questioned by investigators about the friendly conversations they have had with inmates, the two escapees and others. Brian Todd CNN, Washington.

(END VIDEO CLIP)

HOWELL: You are watching CNN NEWSROOM. The deadly attack out of Tunisian beach resort caught on camera.

We well have more of this video showing the frantic chase after that gunman.

ASHER: Also ahead, temperature are reaching record highs as heat waves filled across Europe, we'll have details just ahead.

HOWELL: And, fast-moving fires tearing through the land in Northwestern United States, the latest on how much is burned.

(COMMERCIAL BREAK)

[00:20:00]

PEDRAM JAVAHERI, CNN METEOROLOGIST: The heat continues to bake portions of bake portions of western and northwestern Europe. Massive ridge, very easy to find in place. Good day to you meteorologist Pedram Javaheri.

Look at the perspective here, we have high pressure and large in chart here, as storm systems literally getting lifted up in over a portions of the U.K. and you kind of see the steering currents here, the storm is kind of meandering offshore.

Kick up some winds by say Wednesday afternoon into Thursday, you can see some isolated storms, you can kind of see again stuck out there but notice a few impulses do try to pick up as we head towards Wednesday afternoon around Scotland. So cooling, certainly we'll get there but before then temperatures will warm up as you see the contours push up towards London, even on to Scotland as well. The temperature is getting up to 34 degrees, the warmest since 2012 for a lot of these areas. The warmest since 2003 for Paris, 39 degrees, incredible heat taking place even out towards Madrid.

The temperature trend, if you tuned across Europe, thank you for doing so in Berlin, will give you most of these sunny skies. Not too bad, about 25 degrees, Kiev into the 20s, how about Athens? Some showers, how about 29 degrees. And the heat across Southwest Asia, Tehran, some of the highest temperatures I've seen in recent memory at 44. That is one of the hot spots across Southwest Asia. (Inaudible) will make up to 40 across Western Africa, from Sudan to (inaudible) to the south, some showers possible (ph).

(COMMERCIAL BREAK)

HOWELL: Welcome back to CNN NEWSROOM, the man who shot and killed 38 people at a beach resort in Tunisia last week had a connection to a Libyan terror group. That is word from the country's interior ministry. But it is unclear whether Seifeddine Rezgui had ever traveled to Libya. We're told police recovered the gunman's cellphone, also that his three roommates are now under investigation. A group of suspects has also been arrested.

ASHER: In the meantime the British parliament observed one minute of silence Monday in honor of the victims who died. The U.K. will also hold a national minute of silence in Friday as well. Now, the number of British people killed in this attach has risen 18. But officials are warning that the death toll, the final death toll will likely be higher.

Now we have some new videos, some chilling video I should say. It's showing the gunman as he carried out his attack in Sousse.

HOWELL: These were just terrifying moments.

ASHER: Absolutely.

HOWELL: This video was recorded by a worker at the hotel. One of several people who chased after the gunman. Senior Internal Correspondent Nick Paton Walsh walks us through this terrifying video.

(BEGIN VIDEO CLIP)

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: They are unarmed, but still they run towards a gunman who's already killed guests at the hotel where they work.

Towards the pool, many guests already fled.

That last blast, perhaps a sound grenade, one of several Seifeddine Rezgui detonated, equipment that might be a lead to any backers.

He's gone into the hotel lobby, it appears.

(FOREIGN LANGUAGE)

But perhaps found no more victims.

He heads back towards the beach, this cafe near the sands.

[00:25:00] The cameraman runs again, towards him, yet pauses at the bar. He's seen something. Gun on his shoulder, Rezgui is strolling back towards the beach.

There we see the victims. Their bodies too gruesome to show.

The cameraman keeps low.

(FOREIGN LANGUAGE)

"Why, why," he exclaims.

(FOREIGN LANGUAGE)

Lives and livelihoods taken here in these golden tourist sands.

No longer firing. Is he out of bullets or targets? Unwilling to shoot Tunisian workers?

Still, it's those workers who give chase, a head long rush toward possible death.

The cameraman sees him throw his phone into the sea.

(SPEAKING FOREIGN)

They follow him back to the streets.

Those bullets heading towards the cameraman.

Perhaps from police. Some very close.

It's on this road that Rezgui met his death.

Was he running towards an accomplice who drove him there? Was he seeking another hotel to continue his rampage? He took those secrets to his grave, yet his last moments captured by one of the many Tunisians who risked their lives for foreigners they barely have know.

Nick Paton Walsh, CNN Sousse, Tunisia.

(END VIDEO CLIP)

HOWELL: And when you think about people who are there, people who are just there on the beach, maybe on vacation, found themselves in the middle of this terrible, terrible and tragic situation.

ASHER: Yes, and remarkable that a lot of people actually choose to stay and finish out their vacation instead of leaving like the majority of people.

HOWELL: Switching over now to weather. Spain is hitting record temperatures as stiffening heat wave builds in Europe. These pictures ware taken in Cordoba where people were desperate to get cool, by midweek the heat is expected to spread to Paris and London where it will impact the Wimbledon tennis tournament.

ASHER: And more heat, a wildfire is raging in the Northwest United States, it started Sunday outside (inaudible) which is a town more than just two hours east of Seattle. Of course the fire is unknown at this point, the temperatures have been high and rainfall sadly has been scarce.

HOWELL: I've covered fires in Wenatchee and I tell you when the fire gets started it's hard to stop those fires. Our meteorologist Pedram Javaheri is here. Pedram, you know, you and I used to live and work in that part of the world.

JAVAHERI: Yeah.

HOWELL: When these fires happen, just talk to us about it, I mean it's a bid deal because homes are in danger.

JAVAHERI: Yeah. Especially this part of Washington, it's in the eastern side of the Cascade Mountain Range...

HOWELL: Right.

JAVAHERI: ... so moisture doesn't get there. So, we know this particular fire, actually ember was kicked up into the air and went down into the city itself and recycling -- cardboard recycling center went up in flames.

HOWELL: Wow.

JAVAHERI: The worst case scenario, right? You get that into a recycling center that houses paper and cardboard and -- yes, a lot of flames. So, you know, a lot of people impacted by this.

HOWELL: Yeah.

JAVAHERI: I just want to show you the graphic here because it shows exactly what we're touching on when it comes to that dry pocket on the eastern side of this, U.S. state of Washington. And the perspective over the next 24 to 48 hours in bringing the humidities, look at this bone dry. 25 percent humidity class seven, Wenatchee, Washington fall back towards the Olympia, Seattle generally to the 50 percentile, still pretty dry. And the heat of course has been major concern.

If you look at the temperatures, as of one in the 1:00 in the morning, the forecaster Wenatchee is into the 90s before it cools off into the 70s. The forecast in the coming couple of days, it will be blustery, 0 percent chance of rains and then cracks the 100 degree mark as we head in towards Wednesday and onto Thursday. And the heat continues really, much of the big cities are on the Northwestern U.S., temps into the 90s.

Back over to the Southwest portions of that Europe, extreme heat also in play. Southerly flow here, so we're getting that hot air coming right out of Africa in proportion of Spain. Madrid we have the hottest temperature ever observed in May, back on the 30th of May, about 37 degrees celsius, that's 100 Fahrenheit. On Monday we reached 40 Celsius, 104 Fahrenheit in Madrid. And the heat expands on into Paris, look at these temperatures get up to 39 degree celsius which again is about 103 or so degrees Fahrenheit.

That will be the single hottest temperature Paris is seeing in 12 summers. And recall in summer of 2003, 75,000 people died across Europe on expands (ph) of heat wave. So the last time it was that hot as back them. Yes.

ASHER: Thank you Pedram.

HOWELL: Pedram, thank you so much.

JAVAHERI: Yes.

ASHER: OK, up next, new security concerns in United States as millions of people get ready to celebrate a national holiday.

[00:30:00] HOWELL: We will have details on a group making threats as this broadcast continues worldwide on CNN International and CNN USA.

(COMMERCIAL BREAK)

HOWELL: Welcome back to our viewers here in the United States and around the world you are watching CNN NEWSROOM, I'm George Howell.

ASHER: And I'm Zain Asher let's give you headlines. Captured convict Davis Sweat is talking to police about on the escape from a New York prison. He was shoot and captured Sunday after three weeks on the run. Sweat and fellow escapee Richard Matt apparently had plans to go to Mexico but switched to Canada when their ride Joyce Mitchell backed out.

HOWELL: Tunisia's interior ministry tells CNN the man who gun down 38 people at a beach resort last week had a connection to a Libyan terror group but it is still unclear whether Seifeddine Rezgui had ever traveled to Libya. We're told police have recovered the gunman's cellphone and that his three roommates are also under investigation.

ASHER: It appears the U.S. and Iran won't reach a deal on Iran's nuclear program by today's deadline but negotiators are still working on it. Sources say if deal can't be reached both sides they keep the interim agreement in effect for a period of time and continue negotiations.

HOWELL: Returning now here to our top story, Greece's loan payment to the IMF it is now due it is time to pay up but Greek leaders and their European creditors appear no closer to an agreement to avoid a default.

Tens of thousands of Greeks rallied in support of their countries' rejection of austerity measures in exchange for a bailout.

ASHER: Now referendum on the bailout is set for Sunday and Prime Minister Alexis Tsipras indicated if the public supports the bail out his going to be resigning, he's going to be giving up his job.

[00:35:10] Now, Richard Quest has been talking to Greeks about how they feel at this point.

(BEGIN VIDEO CLIP)

RICAHRD QUEST, CNN INTERNATIONAL CORRESPONDENT: What people are telling me is that they'd had enough. They are angry, they are resentful, they are felling very, very badly done to by the Europeans who they feel want to humiliate and they want to drive Greece further down. Now, whether that's right or wrong I don't know and the European say it's not true anyway. But the reality is, though it was beautifully summed up Aaron by one newspaper seller who said to me, do we want a sudden death or do we want death by a thousand cuts and that's the position that Greece is now facing.

The Europeans have said until now, yeah we'll lend you more money but its going to cost you and they'll be more austerity the Greek people are now going to have vote on Sunday about whether they want to join or not.

(END VIDEO CLIP)

ASHER: So what's likely happens if Greece exits the Euro -- certainly a scenario that nobody wants to see play out but, John Defterios had some inspective on the potential impact.

(BEGIN VIDEO CLIP)

JOHN DEFTERIOS, CNN EMERGING MARKETING EDITOR: Greece represents only 2 percent of the European economy and only 0.3 percent of the global economy, but this country could have an oversized impact on global financial markets, potentially defaulting on $382 billion of debt. The key questions right now if Greece cannot make its debt payment, would it default then would it exit the single European currency in Europe after 13 years as a number.

It is the equivalent of say a state of the union deciding to opt out of the U.S dollar and that of course would be shock. But what does it mean to you? Greece is a member of the European Union and a key tourist destination, around the half a million Americans head there on vacation every year and if you're planning your summer holiday there you could face some issues. You may not be able to get your spending money out of ATMs, you could stumble across protests on the streets and strike action if the country leaves a Euro. If you're heading to one of the country's fabled islands you may not be able to get your fairy back to the mainland due to a lack of fuel.

Analysts are even saying the country may not have enough money to ride jet fuel for planes on the ground as well. So after six years of struggling to keep Greece in the Euro a huge question mark remains over the future of the country and potentially the single European currency.

ASHER: And that was John Defterios there. Now Greece believe it or not is actually not alone in approaching default. Yes, Puerto Rico's governor is demanding the U.S. government allow the commonwealth to declare bankruptcy, currently only cities, towns and other municipalities are able to declare bankruptcy.

HOWELL: A lot of people maybe surprised by that the island awe $73 billion that it cannot pay. The first hurdle comes Wednesday when the government-run energy company has a debt payment due. The company is expected to default.

ASHER: I water park in Taiwan will remain close while investigators try to determine what caused a devastating fire that injured nearly 500 people and killed one woman. HOWELL: If you've seen that video that that's just, you know, really traumatic video there. The incident happened Saturday when a colored powder that was sprayed over the crowd it ignited. A 20-year-old woman is the first person to die in that disaster, hospital official says she had burns over 90 percent of her body.

ASHER: Now CNN correspondent Kathy Novak is joining me live in Taipei in Taiwan. So, Kathy we know that as I mentioned one 20-year-old woman has died, I know that her younger brother is also in intensive care. But from what I understand hospitals do not have enough space in their specialized burn unit so are the victims in this incident really getting the care they need?

KATHY NOVAK, CNN CORRESPONDENT: Well it is an effort across Taiwan Zain, to make sure that everyone is put in the bed they need to be and to get that specialized care. There are more than 200 people in intensive care at the moment and they were told that there are enough intensive care units. The issue is about making sure they get that special burn treatment.

And as you mentioned one of the people who remained in intensive care is actually the younger brother of the woman who passed away. He is only 12-years-old and like his older sister he had burns to 90 percent of his body. So as you can imagine their parents are absolutely inconsolable and this is the case for so many young people who attended this party. I was speaking to one of the doctors at the hospital treating these patients yesterday. And he was telling me that the major concern is they simply lost so much skin and that means that they are facing fluid loss, they have high of risks (inaudible) when it comes to secondary inspections just because they're so exposed and their immunity system is compromised.

[00:40:05] So, grave for more than 200 of people Zain, and they're just the people who are in critical condition, almost 500 in total were injured.

ASHER: And it's just incredible just sort of thinking about how this accident could have happened, I mean this colored powder throw into the air, how on earth did it catch fire? Now we're hearing there's a possibility that a cigarette butt could have caused this. What do we know about that?

NOVAK: Well the park remains closed as you mentioned earlier, that is because the investigations are continuing. And, what the fire authorities have been telling us is, that they are blaming the powder itself and that in small quantities, it was handed out to the people who went to this party in little bags. And in those quantities, it should have been harmless but what happened in this case it seems is that large amount of the powder was sprayed by the people who were organizing this party into the crowd and something as you say has ignited it.

And that's what they're looking into. Whether it might have been as cigarette, whether it might has been faulty wiring, whether it might has been the high temperature from lighting. So, that's making part of the investigations that are ongoing, Zain ASHER: Yes, so many questions that certainly needs to be answered. And we know that two men, the organizer of the party and the person who is in charge of lighting and hardware were being questioned by police. They were arrested and then they were released on bail. What have they been telling investigators about all this and could they be facing lawsuits?

NOVAK: Well, we have been speaking to the prosecutor's office and as you can imagine because the investigation is ongoing. They're reluctant to give us specific details about what the organizer and what the hardware manager have been telling but they have been arrested there out on bail and they have not yet been charged but if they are charged, the investigations are into whether they can be held accountable for charges of negligence now causing death, that would carry a penalty of about up to five years in prison and that is because, as we mention, we have had this first death of a 20-year-old woman. Zain.

ASHER: All right, Kathy Novak. We can only wish those victims all the best during their recovery. Kathy Novak, live for us there in Taipei. Thank you, we appreciate that.

HOWELL: You are watching CNN Newsroom. The United States is on alert.

ASHER: That's right, there are new potential attacks threatening the country's Fourth of July Festivities, we'll have all the details coming up next.

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[00:45:00]

ASHER: Welcome back everyone. Tunisia has made its first arrest in connection with Friday's terror attack at a beach resort.

HOWELL: That country is still coming to terms with the shootings which killed mostly tourists. CNN's, Phil Black spoke with a couple who survived the attack and decided to stay.

(BEGIN VIDEO CLIP)

PHIL BLACK, CNN REPRESENTATVE: Sousse's long coastline is misleading. It doesn't look like the scene of a massacre. There is still many tourists enjoying this holiday playground, but not here, the beach front of the Imperial Marhaba hotel. This where most of the 38 victims were killed as the gunman first opened fire on a crowd of people lying in the sun.

This patch of sand in front of the hotel is now a somber place, but what's really striking is, how contained it is. The gunman would have had a clear field of view and the people, once they realize what was going on, had almost no where to run. Few options for escape, just that narrow gate at the back and those who were lucky enough to make it through were followed by the shooter. That gate is now chained, locked and guarded. But we're allowed inside the grounds of the Imperial Marhaba to meet British couple David and Jean Rapetti in Tunisia to celebrate their 55th wedding anniversary. They live through the attack and decided to stay.

DAVID RAPPETI, SHOOTING SURVIVOR: We're probably about 30 yards, 30 meters away from the gunman which was near enough anyhow. And, I was frightened.

BLACK: What do you remember most, most clearly about the gunman?

RAPETTI: All I saw him doing was firing, I saw three people lying on the floor, I have no idea now whether they were dead.

BLACK: They survived by running from this courtyard and hiding in a small room. They know many others weren't so fortunate. David says his hardest moment since the attack was visiting the beach.

RAPETTI: Never having seen people in such a terrible emotional turmoil -- it wasn't us that were suffering it was other people that was suffering. And, to come to terms with their terror and their grief has taken us a lot of time.

BLACK: The Rapetti say, staying on feels right. The hotel is now a crime scene but it's also a place where survivors are trying to make sense of what happened here. Phil Black, CNN, Sousse, Tunisia.

(END VIDEO CLIP)

HOWELL: So, the recent attack there in Tunisia and also in Kuwait and France is fueling concerns here in the United States as this country prepares to celebrate its Independence Day weekend.

ASHER: That's right, there's a nerves. Jim Sciutto has more as report that the ISIS has made an open call to attack the West.

(BEGIN VIDEO CLIP)

JIM SCIUTTO, CNN CORRESPONDENT: The most deadly ISIS-inspired attack on Westerners to date as it happened, gunfire ringing out at a Tunisian resort Friday, leaving at least 38 foreign tourists dead, most of them British.

UNIDENTIFIED FEMALE: This lady was bleeding so heavily, I was laying in her blood, trying to keep her awake. It was dreadful. I have never witnessed anything like it.

SCIUTTO: All of these from what is proving to be a lethal weapon for the terror group, the lone wolf attacker, in this case a radicalized Tunisian university student, seen here running away from the resort after the attack, and moments later shot dead by police after he stopped to pray.

And now, with the July 4th holiday approaching here in the U.S., U.S. law enforcement is, a senior counterterror official tells CNN, definitely on a heightened state of alert based on ISIS' call to conduct attacks on the West.

REP. MICHAEL MCCAUL, (R) TEXAS: There's a great deal of chatter, a high volume, if you will. We're being on the cautious side here to warn the public to remain vigilant.

SCIUTTO: ISIS-inspired recruits are answering the group's call to attack anywhere anyhow during the Muslim holy month of Ramadan, spokesman and senior leader Abu Muhammad al-Adnani promising 10 times the rewards in heaven.

In a single day, Friday, a gunman stormed a beach resort in Tunisia, a suicide bomber attacked a mosque in Kuwait, killing 27 worshipers, and another assailant beheaded a man in Southern France and attempted to blow up a U.S.-owned factory.

[00:50:10] SETH JONES, SENIOR POLITICAL SCIENTIST, RAND CORPORATION: ISIS is able and willing to inspire people to conduct attacks across multiple continents. And they're willing to do relatively easy attacks to pull off, armed assault-style attacks, which are not that difficult to do.

SCIUTTO: A fear of such attacks on the July 4th weekend prompting the FBI to issue a bulletin urging both law enforcement and the public to be vigilant.

(END VIDEO CLIP)

HOWELL: That was CNN's Jim Sciutto reporting.

You're watching CNN Newsroom. NBC to Donald Trump: You're fired. Probably two words to Donald has never heard said to him before.

USHER: That's right.

HOWELL: Coming up, his response after being damped by the network over immigration remarks.

USHER: Plus, it's the face only a mother or owner could love. You'll meet the newly crowned world's ugliest dog. That's coming up.

HOWELL: Is it really that ugly though?

(COMMERCIAL BREAK)

HOWELL: Donald Trump just got dumped. NBC Universal cut all ties to the billionaire businessmen and presidential candidate over these immigration remarks that he made two weeks ago. Listen.

[00:55:04]

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENTIAL CANDIDATE: They're sending people that have lots of problem, and they're bringing those problems with us. They're bringing drugs. They're bringing crime. They're rapist. And some, I assume are good people. (END VIDEO CLIP)

USHER: He was talking about Mexican immigrants there.

The Miss USA pageant which until Monday was jointly owned by Trump and NBC will not air on the network next month as planned. Now, Spanish language network Univision (ph) which was also broadcasting the pageant canceled it last week as well. Trump tells CNN he may sue NBC. The network has not commented on that.

HOWELL: But the Donald has doubled down on those comments calling NBC weak. The network already has plans to replace Trump as the host of the hit show "Apprentice" because of his White House bid.

USHER: 12 ugliest dog has just been crowned, and let just say George, she is quite to looker don't you think?

HOWELL: Is a dog really that ugly? I mean, we'll have to take a look. OK. The dog's name though, you'll love this, Quasimodo. OK. And she was dog by fans -- yes I said dog by fans, who snapped photos as she took a victory lap around New York.

CNN's Jeanne Moos has details.

(BEGIN VIDEO CLIP)

JEANNE MOSS, CNN CORRESPONDENT: She is the bell of the big apple. The winner of the ugliest dog contest can still be called bell.

UNIDENTIFIED FEMALE: What? That is not the ugliest dog.

MOSS: Oh yes, she has the blue ribbon from the Sonoma-Marin Fair. One of the judges referred to her as...

UNIDENTIFIED MALE: Half a dog.

MOSS: Named after the hunchback of Notre Dame Quasimodo. The 10- year-old had a rare birth defect called short spine syndrome.

UNIDENTIFIED FEMALE: But she's not in pain?

UNIDENTIFIED MALE: No. No, she's very healthy. She runs, jumps, plays. No problems or whatsoever.

MOSS: Owner Virginia Sayer is a Florida vet who adopted Quasimodo from a shelter.

UNIDENTIFIED FEMALE: Precious. That's awesome.

UNIDENTIFIED MALE: Good dog. Oh, I love you.

MOSS: Quasimodo spent the day looking bored with T.V. appearances and placidly posing for photos on the street, she took a marble hotel lobby in stride not to mention the adoring public acting like paparazzi, even pedaling backwards into other pedestrians. These two stopped to pet her on their way to City Hall to get married. UNIDENTIFIED FEMALE: She can be my maid of honor.

MOSS: Her owner shrugged off critics will say there's something mean about all these.

UNIDENTIFIED MALE: Well you got a sense of humor to go to an ugly dog contest.

MOSS: Now she joins the immortals. Give Winston Churchill.

UNIDENTIFIED MALE: Winston Churchill, you got to make her sit.

MOSS: All Quasimodo was missing is the cigar. She's even scheduled to appear in Jimmy Kimmel.

UNIDENTIFIED FEMALE: He's going to do makeover, I guess he's going try to make ugly into a beautiful dog.

MOSS: She'll be styled by none other than Carson Kressley who styled many of straight guy with similar issues.

UNIDENTIFIED FEMALE: Very, very hairy.

UNIDENTIFIED FEMALE: Look, she's looking at herself.

MOSS: Even the world's ugliest dog couldn't resist her own reflection on 57th Street.

UNIDENTIFIED FEMALE: Mirror, mirror on the wall, who's the ugliest dog of them all?

UNIDENTIFIED MALE: Quasi.

UNIDENTIFIED FEMALE: I know right.

UNIDENTIFIED MALE: Quasimodo.

MOSS: Jeanne Moss, CNN New York.

(END VIDEO CLIP)

ASHER: Maybe just a tad bit hash but, thank you so much for watching everyone. I'm Zain Asher.

HOWELL: And I'm George Howell. More news from around the world after the break.

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[01:00:00]

HOWELL: Deadline day, time to pay up but it's looking like Greece won't pay its debts. We look at what happens next if that happens.

A live report ahead from Tunisia. As there are new details on the man who shot and killed tourists at a beach resort. And a billionaire gets dumped, Donald Tramp reacting after a major T.V. network cuts ties with him.

Welcome to our viewers in the United States and around the world. I'm George Howell. This is CNN NEWSROOM.

And good day to you. We begin this hour in Greece. Today is the day. The deadline for that country to make a $1.7 billion loan payment to the European creditors or the country will face default. Greece's economic ministry says payment will be impossible. The prospect of the Greek default has sent financial markets in the United States and Europe into a tailspin.

In New York, the Dow Jones industrial average saw its worst day of the year. It fell 350 points on Monday. European markets won't open for another 24 hours. They also finished in negative territory on Monday.

Tens of thousands of Greeks rallied in Athens against that idea of more austerity. Prime Minister Alexis Tsipras asked European leaders for an extension to the deadline. Their answer, no. Mr. Alexis Tsipras has called for referendum for people to vote on the bailout this Sunday. He says there is no way Greece will be forced out of the Eurozone.