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Greece Deeply Divided Ahead Of Referendum; Greeks Crowd Banks After Country Defaults; Tunisia To Deploy Armed Forces In Tourist Zones; Witness Describes Gunman's Final Moments; Death Toll Climbs In Indonesia Plane Crash; Financial Markets React To Greek Default; Eurogroup To Consider New Greek Bailout Request; U.S. And Cuba Resuming Diplomatic Relations; Iran Nuclear Talks Extended. Aired 3-4a ET

Aired June 30, 2015 - 03:00   ET

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


(COMMERCIAL BREAK)

NATALIE ALLEN, CNN ANCHOR: Long lines outside banks in Greece the morning after the country went into default.

Plus we are learning new details about Tunisia's gunman's ties to terror there.

And investigators are on the scene of another church fire in the Southern United States.

And hello to you, welcome to viewers here in the United States and around the world. I'm Natalie Allen and you are watching CNN NEWSROOM.

And we begin again this hour in Greece where the government has failed to make that $1.7 billion payment to the International Monetary Fund. The banks are closed, but that is not stopping Greeks from lining up outside. Look at this scene.

They are trying to get their money. These pictures are from just a short time ago in Athens. European creditors have refused to extend Greece's current bailout, but they say they will start discussing a new plan when they meet in just a few hours.

CNN's emerging markets editor, John Defterios, joins us in a moment from Abu Dhabi, but we want to begin in Athens with CNN's Isa Soares. And Isa, that is certainly not a good scene there outside that bank and what a feeling for people wanting to get their money and told they can't.

ISA SOARES, CNN CORRESPONDENT: Yes, Natalie, highly frustrated, I'm sure a lot of those pensioners because they were told they were going to get paid on Monday and then they were told, they heard from the media, it would be Tuesday and now they are being told it would be today.

Initially it was 60 euros and now they've been told they can get withdrawal of 120 euros. A lot of these pensioners don't have cards. So about 1,000 banks are opening to serve them and service them so they can get their money.

But still nevertheless very heated scenes where a lot of these pensioners, speaking to one pensioner, you know, just a couple of days ago and she was saying that she tried ten times to get her money out.

When I said to her are you voting on Sunday on the referendum, she said yes, but she said how am I going to get to my island? Because I'm registered in an island, I'm not registered in Athens. If I can't get my 60 euros out then I have no idea how am I going to travel to my island to vote in this referendum?

So people confused -- people clearly very angry and what I have seen is a very clear state of anxiety here. Some people clearly are looking forward to their referendum, those in the no campaign, but I've noticed in Athens it's very much a divided city.

(BEGIN VIDEOTAPE)

SOARES (voice-over): From high above, the battle lines are hard to make out, but walk the streets of Athens and the ruptures are easy to spot. This is a city and a nation deeply divided, both politically and ideologically.

In the affluent district of Athens where coffees are sipped endlessly and money speaks volumes, locals tell me they have never been this nervous. This lawyer tells me her concerns have grown in the last few days following the growing support of the no camp.

UNIDENTIFIED FEMALE: Most of them, they believe they want to -- they are for euro. They want to say yes to the referendum. However, many young people, they don't -- they think they don't have anything to lose. So in this, with this argument, with this thought they might vote for no.

SOARES: It's this very thought that has many on edge with the rising number concerned the rest of the country doesn't quite understand the risk that a no vote would bring.

UNIDENTIFIED MALE: Hopefully next Sunday we are going to vote yes because we want to remain in the European Union. That's where we belong.

SOARES (on camera): What I noticed is that Athenians are not talking in one voice. So we are going to drive two kilometers from this affluent area of Athens and to hear from people who are defiantly pushing for a no vote.

[03:05:04] (voice-over): Here in this populous neighborhood, the no campaign is in full swing with posters placed strategically in every corner. Anna tells me, we in this historical area, we are fighting to get our lives and our dignity back so we are finding hope in the fact that the public will make their mark on Sunday.

This defiance is palpable and understandable. This is, after all, a symbolic neighborhood of the left. Alexis Tsipras made this his first stop when he was elected and it seems his rhetoric has shaped this part of Athens.

Angelos tells me the best for him and for his country would be good to leave the Eurozone for good because we have the seen the sides of solidarity inside the Eurozone and it's non-existent, he says. Fighting talk from a deeply divided country, one that now stands at the edge of an economic precipice.

(END VIDEOTAPE)

SOARES: And Natalie, many Athenians will be waking up with more questions than answers this morning. Will this referendum go ahead? What will be the question being put in this referendum given that Alexis Tsipras has now asked Europe for a third bailout. It would its third bailout in six years -- Natalie.

ALLEN: It's unbelievable. They wake up and they have no idea that they just keep coming to a dead end, don't they, there in Greece? Isa Soares for us there in Athens, thanks so much.

Now let's talk to you about another situation that is related to Greece. Greece will be the first developed economy to default on a payment to the IMF. At least three other countries have outstanding loans, Sudan, Somalia and Zimbabwe.

Now back to our emerging markets editor, John Defterios, in Abu Dhabi. I mean, John, that is to say, Sudan, Somalia, Zimbabwe, very poor countries and Greece all in the same boat.

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Who would imagine in 2015 that we have entered unchartered territory with an industrialized country, a member of the OECD unable to make a payment here in technical default?

That's where we are heading right now. The essential thing today is a euro group teleconference between 19 countries, Natalie, that share this currency. Greece is one of those.

But we don't see any real surprises emerging and surprise has been the element that this new government in Greece has been using in the first six months and that's why we are where we are today.

First and foremost, they called this referendum literally planned right after the time they were not going to make a debt payment to the International Monetary Fund. That surprised the euro group and then in the last 24 hours, they've put up a last minute proposal asking for an extension, number one, and number two, a two-year bailout program.

So 2010, 2012 and again, they want one now in this new government for 2015. At the core, their argument seems to make a lot of sense. They are saying that their debt is just too high.

Let's take a look at the big number. That is $351 billion for Greece's debt. That is using a conversion from 317 billion euros, $351 billion. That means that Greece has the highest debt in the euro group, at 177 percent of GDP. It is well above even Italy, which has a high level of 132 and then you see the others who have gone through debt restructuring over the last three and four years, Portugal, Ireland, and Spain.

And here is the problem, Natalie, the euro group doesn't want to discuss cutting the debt pile. They will discuss lowering the interest rates, stretching this out over the next 20 years.

But there is document circulating online with the creditor state suggesting if Greece stayed on this course with lower growth because of all this uncertainty, the debt to GDP by 2030 will still be hovering around 120 percent.

No one thinks that is a good idea, but this is a political problem that has created great economic pain as Isa was reporting there on the ground in Athens.

ALLEN: Right, and where is the way out? There really is no plan "b" right now.

DEFTERIOS: That is the problem. If you look at a plan "b," it doesn't seem to include a Greece within the Eurozone anymore and there is many who are starting to believe that this may have been the plan for Alexis Tsipras and his government all along.

That it would be six months to maybe a year of incredible pain for the Greek people, but maybe they are better off with their own currency and having the flexibility of their own central bank to lower interest rates or take measures.

But many Greek people, at least a majority right now, wants to stay in the Eurozone. The other thing to look at is the political mix. This is a left-leaning government. Some radical left members of their party trying to negotiate with a very large apparatus in Brussels that doesn't have a political union amongst the 28 states and the 19 that share this currency.

[03:10:11] It is not a terrific time and if in fact the Greeks go out, Natalie, after 13 years using this currency, it is, by all accounts, a political failure. You would never see the state of Texas leaving the state of the union or trying to use a different currency. That's what we're facing in 2015 and an industrial country with 26 percent unemployment is quite shocking by any measurement.

ALLEN: I guess, we can't use the word unprecedented and precipice any more than we have already. Thank you so much, John Defterios and Isa Soares for us there in Athens. We'll talk with you again. Thanks.

We want to turn now to the latest in Tunisia where the bodies of some of the victims of the terror attack in Sousse will be flown back to Britain today. Thirty eight people, mostly tourists, were killed when a gunman opened fire at a beach resort on Friday.

U.K. officials say the number of Britons killed in the attack has climbed to 22, but they fear the number could rise to 30. Meantime, Tunisian authorities tell CNN that the gunman trained with those that carried out the attack at the Bardo Museum in Tunis in March, and ISIS has claimed responsibility for both attacks.

Senior international correspondent, Nima Elbagir is live in Sousse, Tunisia with the very latest. It's interesting that the number of dead from the U.K. is still growing and they really don't know how many there may be in the end. There is still uncertainty around this investigation -- Nima.

NIMA ELBAGIR, CNN CORRESPONDENT: Well, that really gives you a sense of the extent of the injuries sustained during that horrifying rampage. There are, of course, still bodies yet to be identified and that is the concern around the death toll.

Those who are in critical state, many of those as you said hoping to fly back to the U.K. today. But also bodies yet to be identified and that's really been the heartache for the families as late as yesterday, families were flying out here, hoping to find some word of those who were missing for many of those the news has not been good.

The latest, the family of the Stockers released a statement yesterday evening asking that their privacy would be respected at this time. Their son had been desperate for any information. He came here. CNN saw him yesterday laying flowers at the memorial at the Imperial Hotel.

Of course, during all of this, the Tunisian authorities have been attempting to ratchet up that investigation because that is really what is needed now. The damage to tourism here to the crucial tourism industry, that damage has been sustained.

But now in an attempt to control that damage, Tunisia needs to be seen exerting some sort of control and any answers about how this happened is going to help.

The minister of interior is briefing at the moment about what they know about the gunman, as you said, details are emerging that lead them to believe that he trained alongside those who carried out the attack in the Tunisian Museum.

They also believe that it is likely probably that he trained in a terror camp in Libya. They also believed that he had communications with the terror group that they haven't yet stated that it is ISIS, but they believe he was in touch with a terror group there.

All of these questions they are hoping to answer in the coming days. For now the big concern is the visibility of their security efforts. They announced that they will be arming tourist police, but we are not really seeing much evidence of that down on the beaches and on the half empty sun lounges down there -- Natalie.

ALLEN: All right, well, we thank you, Nima Elbagir, bringing us the latest from Tunisia. Thank you, Nima.

Tunisia says, as she mentioned, it will deploy armed security forces on the streets in an effort to make tourists feel safe. Our Nick Paton Walsh visited the site of the attack and with a witness who recalled the gunman's final moments. (BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: This is the last time he is seen alive, running away from the beach. But then, gunman, Saif Rezgui seems calmer except in his death perhaps. Fati (ph) was working on this house and threw a brick down at him, which he says hit the gunman, making him drop a grenade and fire up at him.

Then he watched him die. It didn't look like he had time to reload his weapon, he tells us. He shows us the calm way he held that gun and down on the street below the slow jog he made towards four cars of police.

[03:15:02] He only opened fire when he got closer to police who feared he was wearing a bomb. Here, they shot him. He fired back and was finally killed. He was waiting for the bullet to die, Fati tells us, like he'd finished his mission.

And now in a town still telling at its tales of horror, here come the cavalry, beach police standing between Tunisia and stopping the tourists that needs going home.

The security they tell us tomorrow there will be more than this, Sousse will be safe an ant won't be able to get in. Confidence is what beach goers need but also visible protection. We stood meters down the beach from where the attack happened. And over a six-minute period didn't see a single armed policeman. They are around town but it is far from pervasive.

(on camera): It is picturesque but this coastline is wrestling with the hardest question of all. It is lined with luxury hotels, alleyways between them and the sea with jet skis, speedboats anyone can gain access here. How do you provide security without removing any sense of fun?

(voice-over): A question that darkens Sousse's once happy world, as it searches for the answer and peace. Nick Paton Walsh, CNN, Sousse, Tunisia.

(END VIDEOTAPE)

ALLEN: We turn now to a developing story here in the U.S., federal agencies investigating a fire that has destroyed a predominantly black church in South Carolina, the Mt. Zion African Methodist Episcopal Church.

That's an AME church in Greeleyville is just over an hour north of Charleston where nine people were killed at a racially motivated shooting at another AME black church last month. The resilience of that congregation is now inspiring others here at Mt. Zion AME.

(BEGIN VIDEO CLIP)

CEZAR MCKNIGHT, SOUTH CAROLINA LEGISLATURE: I think the Emanuel AME has shown us the way to deal with tragedy and that is to draw strength from the Lord and come together as a community and meet whatever adversary you may have with a spirit of love.

(END VIDEO CLIP)

ALLEN: Well said. This is the second time, though, this church has burned. In 1995, members of the Ku Klux Klan torched the previous building in a series of church fires that swept through the south.

Next here on CNN NEWSROOM, some 1,200 inmates escape from a prison in Yemen, dozens with links to al Qaeda.

Plus more bodies recovered after a plane crashes in a neighborhood in Indonesia. We'll have the latest on the death toll in a live report just ahead.

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[03:21:56]

ALLEN: Yet another disaster in Yemen. Some 1,200 prisoners have been freed after militants stormed a prison in the southern city of Taiz. Defense officials say the majority of the escapees were rebel fighters and dozens have links to al Qaeda. Taiz has been the scene of fierce battles between Yemeni fighters and Houthi rebels who already dominate Yemen's capital.

Reuters is reporting the crew of that Transasia Airways plane that crashed in Taipei in February had shut off the working engine after the other lost power that according to a source with knowledge of a new report in the investigation.

The crash which was captured on dash board videos, compelling, unbelievable video there, killed 43 people on board. The latest report is set to be released on Thursday. Soon after the crash, aviation officials said investigators would examine the possibility the crew had turned off the left engine. Transasia has not commented on this latest finding.

Well, the death toll in Indonesia is rising following the devastating plane crash in a residential neighborhood in Medan. This comes as officials try to figure out what brought the plane down.

CNN's David Molko joins me from Jakarta. David, do they have any more insights into what possibly was the cause?

DAVID MOLKO, CNN CORRESPONDENT: Natalie, a lot of questions at this point, and not a lot of answers about 24 hours after this plane went down in the city of Medan. This could have been a lot worse. This is a city with more than 2 million people.

In some sense the plane came down in a residential neighborhood. There were some buildings under construction with no one in them in the middle of the day. That said, Natalie, the scope of this tragedy continues to grow at this hour.

We are hearing from a Red Cross official at the hospital where these bodies are being taken that there are 135 bodies that have been confirmed to have been recovered from the wreckage either on board the plane or on the ground.

And an additional number about six bags with body parts in them. That is the grim reality. A police official on the ground outside the hospital also saying that there isn't enough cold storage for the bodies while the doctors do their part and the medical examiners work to identify these bodies so they can return them to the families.

It's something we saw with the Airasia crash just six months ago here in Indonesia. It becomes difficult, overwhelming in terms of getting this done, getting bodies identified with dignity in time for them to be returned to --

ALLEN: All right, David, thanks so much. We know you -- covered the other airline crash as well and this one is just devastating. A C- 130, that is a massive airplane.

[03:25:03] All right, we turn now to the other story that we're following closely here, Europe's financial markets are open for the day. We will see how they are reacting to Greece's default as people in Athens line up outside the city's banks trying to get cash.

(COMMERCIAL BREAK)

ALLEN: And welcome back. You are watching CNN NEWSROOM live coverage from our world headquarters in Atlanta. I'm Natalie Allen with the headlines, Greeks lining up outside banks earlier this morning after the country defaulted on its loan from the International Monetary Fund. European leaders have rejected a last-minute appeal from Greece for more time to pay its debt.

The bodies of some of the victims of the terror attack in Tunisia will be flown back to Britain today. Thirty eight people, mostly tourists, died when a gunman opened fire at a beach resort in Sousse on Friday. U.K. officials say 22 British citizens were killed, but they fear that number could rise.

U.S. federal agencies are investigating a fire at a predominantly black church in South Carolina. No word yet on how it started at the Mt. Zion African Methodist Episcopal Church, the AME church there in Greeleyville, but it's just over an hour north of Charleston where nine people were killed in a racially motivated shooting at another AME black church last month.

[03:30:00] We want to take a look at how global markets are responding to Greece's default. Manisha Tank is tracking stocks for us in Asia from Hong Kong.

MANISHA TANK, CNN CORRESPONDENT: We have had a bit of a choppy day's trade in China, Natalie, and we'll get to that in just a second. But I want to start with the other major indexes the Nikkei and the Kospi in Seoul and the ASX 200 in Australia where we've had a fairly decent performance across the board.

In fact, in Japan today, we had some economic data. This is the very well-known Tankan survey that showed that companies in Japan they will increase capital spending at the fastest rate in a decade so that's very positive, isn't it?

And you might expect the market to be even higher today, but what we're seeing generally in Asia is that the sentiment over Greece, this uncertainty that we have over what is going to happen next, whether or not Greece will leave the Eurozone, that's the big question, that could have contagion effect.

That has been the big question over hanging these markets, and perhaps putting a dampener on them and stop them from going even higher. Let's take it, though, to Shanghai, down more than 5 percent right now. Last week on Friday, the composite was down 7.4 percent. This is the intraday chart.

You can see the volatility and now this drop in the last hour or so, quite significant. This has been a market that has been peppered with these very volatile trading days. Let's take a look year to date and remind you that actually the Shanghai composite is up quite significantly more than 30 percent year to date.

But in the last month and we had a high earlier in June. We are now on the first of July and we have had this slide after a volatile week last week. Much of this is coming from home-grown issues and whether or not the government is able to push sentiment back up with headlines in newspapers or any of it policies.

A lot of questions still hanging over that, but there is a lot of cash in these markets. There is also a lot of cash in other parts of the Chinese economy. A lot of people are talking about the bubble and whether the air is coming out now so we'll be watching this one very closely.

But it's still again a lot of questions over whether there will be a contagion effect from Greece. Some analysts that we've, you know, been talking to, a lot of analysts putting out a lot of reports right now trying to do the assessment saying you might see GDP here in Asia curtailed somewhat.

But a third of a percent according to one report that I read so that is a narrow contagion effect but with so much uncertainty is yet to be seen -- Natalie.

ALLEN: It seems like everybody is in a wait and see what happens next mode. Thanks so much, Manisha Tank, for us there with the assessment from Hong Kong.

Let's turn now to Nina Dos Santos in London where Europe's trading day is just beginning and what are you expecting there, Nina. Hello.

NINA DOS SANTOS, CNN CORRESPONDENT: Hello. Good morning, Natalie. We're 32 minutes and 44 seconds into the trading session so far and looking at the figures it's actually turning out to be a healthy trading session.

Look at the Xetra DAX in Frankfurt, one of the most reactive markets to what's going on in Greece largely because Germany has a huge say over whether Greece gets any more money from here. It's up almost 1 percent.

CAC Quarante, the other big European market also up at about 0.8 percent. Even the FTSE 100 in the U.K. which is outside of the single currency area and doesn't have a huge amount of say over these negotiations surrounding Greece and is more protected from that as a result it is up around 0.7 percent despite it was the laggard yesterday.

The big question is why are these markets up if Greece is in arrears on that IMF payment of $1.7 billion? Well, largely the rationale is that at least the sides are still talking.

What we have later on today is that conference call that's going to be taking place between the members of the single currency area, the finance ministers of the single currency area that meet under the heading of the euro group.

Now the head of that organization already told CNN in an exclusive interview this time yesterday that they would be talking and considering this last -- this third request on the Greek government for a new bailout.

But already a lot of finance ministers saying off the record to various newspapers this morning that they are greeting that proposal with a mixture of perplexing and also concern.

So it's by no means certain that Greece will be getting any new money after this Eurozone backed bail out finished today and that IMF payment hasn't been repaid. But for the moment at least, the markets think that you know, it is look positive that they are continuing to talk.

ALLEN: Yes, they are just holding it just quiet for now until we see what, perhaps, disaster unfolds with Greece. Thank you, Nina Dos Santos, as the markets have been open about half an hour. Thanks.

[03:35:02] Well, the euro group will meet in just a few hours to consider the request by Greece for a new bailout plan. But analysts say the country's creditors are losing patience. That could mean a Greek exit from the Eurozone. With more on that Tadgh Enright reports from London.

(BEGIN VIDEOTAPE)

TADHG ENRIGHT, CNN CORRESPONDENT (voice-over): Investors have been pricing in the likelihood that this payment would be missed since markets opened on Monday. Late last week there was still optimism of a deal. Over the weekend, the Greek government chose a different path and the economy minister told CNN's Richard Quest they wouldn't pay.

RICHARD QUEST, CNNI HOST, "QUEST MEANS BUSINESS": You are saying now you will not pay? There is not the money in Greece:

UNIDENTIFIED MALE: Exactly.

ENRIGHT: When does a missed payment become a default? Experts in how the IMF works say that Greece is technically in arrears and default doesn't happen until the fund's board is formally told about the missed payment and the IMF chief, Christine Lagarde, has already warned she won't waste any time.

CHRISTINE LAGARDE, MANAGING DIRECTOR, IMF: There is no grace period or two months delay as I have seen here and there on July 1st, payment has not been made.

ENRIGHT: But she said that when there was no talk of a referendum and pulling the plug on Greece before giving its people a vote in their future would be bad PR. Greeks are due to vote on Sunday to accept or reject the troika's proposal. But as it stands there is nothing to vote on. The troika has taken its proposals off the table.

GEORGE PAPANDREOU, FORMER GREEK PRIME MINISTER: Now we are voting on something we really don't know what it is or what it could be and has become a vote of yes or no to being in the Eurozone.

ENRIGHT: Assuming there is a vote and if the answer is yes expects the government to resign and a new administration to try to restore the status quo. If it is a no vote, Greece is headed for the exit even if Athens has threatened legal action to stay in the euro. It would be a currency crisis the world has never seen before.

MICHAEL JACOBIDES, ASSOCIATE PROFESSOR, LONDON BUSINESS SCHOOL: It is extremely difficult to change the currency even in the best of times. We do not have any example of a country in peacetime that is changing its currency. It's a mess.

ENRIGHT: That's an outcome neither side wants and there are backroom dealings designed to avoid it testing resolve, diplomacy, pragmatism, and patience. Tadgh Enright, CNN, London.

(END VIDEOTAPE)

ALLEN: And as if the developers in Greece and China were not enough, investors were also nervous about Tuesday's so-called leap second when an extra second is added to the day to keep clocks in sync with the earth's rotation. The last time there was a leap second in 2012 several websites and apps crashed. This year, all appeared to go smoothly, happy to tell you that.

Iran and six world powers are going to keep talking as they work through another deadline for a nuclear deal. We'll have a live report from Vienna on what's next.

(COMMERCIAL BREAK)

[03:41:24]

ALLEN: We want to continue to examine the situation in Greece now where there is a lot of uncertainty after the country defaulted on its loan payment to the IMF. Michael Houston is the chief market analyst from CNC Markets. He joins me now live from London. Michael, thanks so much for being with us.

MICHAEL HOUSTON, CHIEF MARKET ANALYST, CNC MARKETS: Good morning, Natalie.

ALLEN: Good morning. With all the uncertainty hanging over Greece why do markets seemed to be shrugging it off for now?

HOUSTON: Well, I don't think it has really been any surprise, Natalie, that Greece was going to default on that payment. I think this is a classic case of uncertainty ahead of the fact. Now the fact is out of the way, the markets are moving on to the next concern, which is the weekend referendum.

We had a significant decline over the past few days and what we are getting now is a relief rally. The sky hasn't fallen in. The euro group is looking to consider a fresh proposal from the Greek prime minister, the Greek government later this morning and the European Central Bank is set to review the emergency lending facility later this morning as well.

I think it's very unlikely they will alter that ahead of the referendum. And I think what markets are focusing on now is the fact that Eurogroup is looking at a fresh proposal from the Greek government. I think there are grounds for optimism, a small amount of optimism I should guess.

ALLEN: Whatever small optimism that they can hold on to, why not? How long do you think they can hold out and how does one trade in such a volatile situation?

HOUSTON: What we found is that a lot of our clients are sitting it out or looking to add to their portfolios on any dips. So essentially I think that's why you are seeing the rally today. As you say, the FTSE 100 has come down from 7,000 to around 6,500. We are now bouncing off that. So essentially I think clients are looking to view these dips as a buying opportunity unless circumstances materially change over the next few days.

ALLEN: And if there is a Greek exit, Michael, what the threat of a ripple effect on other banks in European countries tied to Greece, what kind of mess does that create?

HOUSTON: I think that is a significant concern most definitely. If you look at the amount money that is owed, a lot of the Greek debt is actually owed to Germany and France and their particular banking system.

But at the moment, I think there is a confidence, if you like, the European Central Bank can actually contain that. And when you actually look at where we are now and where we were five years ago, for example, the European banking system is in a lot better shape.

I think any ripple out effects from a potential Greek default out of the euro should be containable. Yes, it's probably going to be volatile, but it should be containable.

ALLEN: Better off than we were five years ago indeed. Thank you so much. We appreciate your expertise and good luck to all of you and your colleague there behind you for holding on. Michael Houston for us live from London.

Well, after more than 50 years of cold war tension, the United States and Cuba are reestablishing diplomatic relations. U.S. President Obama is set to announce plans later today to open an embassy in Havana. Cuba expected to set up its embassy in Washington. President Obama has been pushing to thaw relations with the Caribbean nation since last year. In April, he met with Cuban leader, Raul Castro at a summit in Panama.

[03:45:05] Iran, the U.S. and five world powers are extending their negotiations for another week as they work toward a nuclear deal. Yet another deadline came and went Tuesday with no agreement just yet.

Senior international correspondent, Nic Robertson, joins me from Vienna, Austria where the talks are happening. Nic, are they retaining optimism? They've come very far.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: They are. There is a renewed sense of optimism that seemed to sort of die off at the weekend. But what there is today, as well, and this may sound surprising, I'm always surprised myself.

You have the seven-day extension announced yesterday, but there is a feeling of a lack of a sense of urgency outside the main hotel where most of the meetings take place. There are not any meetings this morning between Secretary Kerry and foreign minister of Iran, Mohammad Javad Zarif.

That is not untypical for the nature of these talks, but you would think given a seven-day extension there would be a real push on to get this done. But the reason for this optimism really began yesterday when Iran's foreign minister said he thought a deal was still possible, but there were conditions that have to happen. This is what he said.

(BEGIN VIDEO CLIP)

MOHAMMAD JAVAD ZARIF, IRANIAN FOREIGN MINISTER (through translator): The only agreement that can last and also be acceptable to the Iranian nation is one that is balanced and one that is fair. I believe that the opposite parties have understood this. Without a good agreement and without the recognition of the rights of the Iranian nation, we will not be able to reach a lasting agreement.

(END VIDEO CLIP)

ROBERTSON: Well, senior State Department officials also believe that there is a possibility to reach an agreement. Both sides have said it would have to be done under the terms that were laid out in Switzerland at a meeting three months ago.

The question is the interpretations both sides have will they coincide? That's what the next seven days are for. Today it's happening behind closed doors without our knowledge at the moment now.

ALLEN: As many of these things have gone behind closed doors. Thank you so much for your reporting, Nic Robertson, for us there in Vienna. Thanks, Nic.

Years of determination and hard work pay off. Up next, one dancer makes history with the American ballet.

(COMMERCIAL BREAK)

[03:50:36]

ALLEN: Sad news from Hollywood, one of the a-list couples is calling it quits. Jennifer Garner and Ben Affleck seen here during happier times say they are filing for divorce. The couple has three children together. They announce the split just one day after their tenth wedding anniversary.

The United States scored a big victory against top-ranked Germany in the women's World Cup semifinals. The U.S. defense held strong not allowing a single goal. Germany kept up a strong defense but not strong enough. The final score, 2-0. Next the U.S. will play the winner of tonight's match between Japan and England.

It's going to be tough for tennis players and fans to keep cool at Wimbledon this week. The temperatures are approaching a tournament record. Meteorologist, Pedram Javaheri joins us with that -- Pedram.

PEDRAM JAVAHERI, AMS METEOROLOGIST: You know, Natalie, on Monday across this area it was 26 degrees. That is about 79 Fahrenheit and they had to treat about 100 people at Wimbledon and they decided to allow fewer people into the venue to increase the amount of shade for the spectators.

The temperatures will be in the 20s Celsius, which is roughly 70 Fahrenheit. They will be in the mid-80s or in 30 Celsius and touching around 90 degrees in London. And it cools off a little bit and warms back up.

In 2013, we had 75 people or so treated for heat exhaustion because of extreme temperature. The temperature trend is there. The warm weather, the steering currents shifted well to the north setting the stage for record heat, some of the warmest weather since 2012.

Some areas will get up to 39. If it gets there that is the warmest since 2003. It cools off and goes back up into the mid-30s possible which puts you in the mid-90s Fahrenheit.

Madrid, they get into the 100s Fahrenheit and it stays there until next week. And they have had historic weather in Madrid. The first six months of the year. The purple is record hottest temperatures ever seen in the month.

We had a 27 that was a record. Last month, 36.5 was a record and 40 was a record. This has been a toasty month in that part of Europe and in the northwest side of the United States.

There are hundreds of fires, 441 or so across portions of the northwest territories and it is shifting the steering currents in the atmosphere to support the smoke from these fires to the southern U.S. states. You have the Dakotas, Tennessee in the bottom center.

The great lakes, Lake Michigan right here and a lot of smoke in the skies. In fact, social media was abuzz because some of these red moon -- blood red moon images even as far east as Virginia because of fires that are 1400 miles away in Canada and the smoke carried by winds aloft into this part of the world.

[03:55:06] ALLEN: It's a shame for that reason, but it's a beautiful moon outside. Thanks, Pedram.

A U.S. ballerina is making history with the American Ballet Theater. Misty Copeland is now the company's first ever African-America female principal dancer. This is the latest achievement in her 14 years with the theatre.

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MISTY COPELAND, PRINCIPAL DANCER, AMERICAN BALLET THEATRE: I had moments of doubting myself and wanting to quit because I didn't know there would be a future for an African-American woman to make it to this level. At the same time it made me so hungry to push through to carry the next generation.

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ALLEN: Copeland's star power extends far beyond the ballet. She has been an outspoken advocate for diversity and has appeared in commercials and advertisements, which also helped her star power. What a great story she has.

You have been watching CNN NEWSROOM. I'm Natalie Allen. Stay with us. EARLY START is next for our viewers here in the United States. And for the rest of you, another CNN NEWSROOM with my colleague, Linda Kinkade right after this.

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