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Greek Debt Crisis Latest; Greek Foreign Minister Resigns; US Women Win World Cup; Pope Francis Visits Latin America; Terror Bombings in Nigeria; Turks Attack Chinese Tourists over Uyghur Treatment; Britain's Princess Charlotte Christened. Aired 3-4a ET

Aired July 05, 2015 - 03:00   ET

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

[03:00:00] (COMMERCIAL BREAK)

ZAIN ASHER, CNN ANCHOR: Hello everyone, I'm Zain Asher a warm welcome to our viewers in the United States and around the world.

MAX FOSTER: I'm Max Foster. Thank you for joining us on "CNN Newsroom."

ASHER: OK. We are following breaking news from Greece. The country is facing an uncertain financial future. With the resignation of its Finance Minister that just happened and an overwhelming rejection of the latest offer for bailout.

FOSTER: Greek-Australian, Yanis Varoufakis, he announced his decision to resign online a short time ago. In a blog post he said his departure could help the prime minister negotiate a way out of the country's debt crisis. He said he would wear the European creditors loathing with pride.

ASHER: Earlier, thousands of people celebrated in Athens central square, you see them here cheering, they are waving flags and setting off fire crackers as well. Now, the no vote is certainly unprecedented for a year in the country and it could send Greece on an exit path.

FOSTER: The Greek government is reacting to the Finance Minister's resignation. The spokesman said, Yanis Varoufakis played a key role or a leading role in the negotiations as the Finance Minister since the first day of the government. The Prime Minister feels a need to thank him for his unremitting efforts to promote the government's positions and interests to the Greek people and - under very difficult conditions. After the counsel of political leaders his replacement will be announced and that meeting is happening as we speak.

ASHER: Right. And Elinda Labropoulou joins us from Athens with the latest developments. So Elinda, I mean, we're, we're hopefully going to be hearing from Alexis Tsipras any moment now. He's apparently meeting - he's apparently meeting - he's probably going to come out and discuss a possible replacement for Yanis Varoufakis. Do we have any idea who that replacement might be?

ELINDA LABROPOULOU, JOURNALIST: Well, at the time being, what we do know is from the statement that was made on the Greek media where he says that the negotiating team is going to be a pro-European, more moderate team or at least that's what he seems to have indicated. There are a number of the current negotiators who could possibly be replacing Mr. Varoufakis. But it will all depend on what Mr. Tsipras decides to do. Will he choose a newcomer, somebody who is less known to the creditors or will be choose someone that he believes is on good terms with the creditors or better terms than Mr. Varoufakis has been.

I mean, Mr. Varoufakis has been a choice that has been drawing a lot of attention and his, his wording has been very strong, there's been very strong rhetoric from Greece against its creditors in many ways. And I think this is something that the prime minister is now going to try and tone down. But we will have the announcement of the name after this meeting that is currently underway. Another significant issue about this meeting is, we have to remember that the main opposition leader resigned last night.

So it, it seems to be the case that we're, we're going to have a lot of political new faces, new, new people coming in to the Greek political sphere possibly in the next 24 hours.

ASHER: And it's interesting because both Alexis Tsipras and Yanis Varoufakis both said that if it turned out to be a yes vote that one - that they would both resign but interestingly enough, they got a no vote and Yanis Varoufakis ended up having to resign anyway.

But I just want to talk about the week going forward because Alexis Tsipras has argued that a no vote would put him in a better negotiating position. Do we know if that's true yet?

LABROPOULOU: It's difficult to say at the moment. Because we're not quite sure how Europe really is going to react. We have an EU summit tomorrow. We have a Euro group tomorrow as well. The first indications for the vote for the no vote so far at least from the Euro group, Jeroen Dijsselbloem, he has not seen this as, as, as a step to making discussions with Greece any easier.

And I think what Greece is trying to do is by changing some of the key players to maybe be able to back down in its positions when of half the creditors listen in more closely again. But you know, while this is taking place we're looking at a country where the banks remain shut and without a very clear picture of when the banks are likely to reopen.

Just earlier today we spoke to Wolf Piccoli, he is the managing director of Teneo Intelligence. Let's listen to what he had to say about the banks.

[03:05:00] WOLF PICCOLI, MANAGING DIRECTOR, TENEO INTELLIGENCE: To provide more liquidity until the Euro, Euro summit as you mentioned takes place tomorrow depending on which kind of green light they get there. If they get one, they might be able to do something. But until now, tomorrow these banks will run out of money and we'll see on Wednesday where they can actually reopen.

LABROPOULOU: Are Europeans likely to listen to Mr. Tsipras's request for debt relief? They haven't done so until now. We have seen some pressure from the IMF come in for this.

PICCOLI: Right.

LABROPOULOU: Is Europe likely to give way?

PICCOLI: They will start the negotiation. They will be talking about that. But debt relief comes as always in exchange for conditionality, for more reforms, for more spending caps and for more taxes. So it's part of a bigger deal here.

LABROPOULOU: And I guess what remains to be seen is whether this big deal will take place and when. Of course, the time is very much essence.

PICCOLI: Absolutely. Time is essence and it will take certainly weeks, not days as the government has indicated and suggested that to the, to the Voters until yesterday.

LABROPOULOU: So whether you're looking at weeks ahead you are looking at a very tough time for the Greek people who are already queuing at ATMs and have been doing so for a week and where the economy has been frozen for that amount of time. And may I say, this comes at the height of the tourism season, this is the many concerns about how the tourism industry will fare as a result of it.

ASHER: Yes. Absolutely, because there could be problems of course, with tourists taking money out from banks. But I want to ask you if we go back a bit before the referendum, EU leaders has actually said that a no vote would essentially be mean the Greek people basically rejecting the Euro. It would mean saying no to the Euro. Do we think now that the Troika was indeed bluffing?

LABROPOULOU: I can assure you that this is not the position that the Greek government has been taking. They are saying that this is nothing to do with the Euro, this is about specific proposal and specific bailout. And we also know that is not really possible for our country to just leave the Eurozone, it cannot get account of the Eurozone, a country we have to leave the European Union in order to leave the Eurozone as well. So it's not an easy thing to happen.

Obviously, if Greece runs out of money and it has to print a new currency or something, you know, like that which would take a little bit of time before we find out whether this is going to happen or not. Then Grexit would become more and more possible of - from the Greek side we have reassurances that this is not the case. But whether Greece's creditors see it that way. At the moment, most statistics seem to show that in fact, they do think, a Grexit is a lot more likely than before the referendum was held.

ASHER: All right. El - Elinda Labropoulou, all eyes are on the Greek banks to see if they open - reopen tomorrow, Tuesday. We'll see if that happens. Elinda Labropoulou live for us there in Athens where it is just 10:00 in the morning. Thank you so much.

Max? FOSTER: 8:00 in London and the European markets are opening and we're

going to get a first sense of any possible contagion. We have been warned it might happen on these European markets. We can have the - we can cause the - actually, Nina has got the markets behind her. Takes us through it, Nina.

NINA DOS SANTOS, CNN CORRESPONDENT: Yes. But of course, a sea of red. But mind you, I might put out these losses aren't quite as pronounced as some people might have feared. Just a couple of minutes ago, before we got the first settling figures of these markets, because I remember it only had been opened eight minutes and 20 seconds.

We did have both the key Eurozone markets in France and Germany down in excess of 2.5 percent. But as you can see here, they sort of settled only down around 1.6 to 1.8 percent. That is not as much as some people might have expected. Why? Well, it may be because of this decision by the Finance Minister, Yanis Varoufakis to step down as well as hope in some of these markets here that, that could help to alleviate some of the tensions. Because remember apparently he had also be the source of a lot of the very difficult rhetoric that had been marring the ongoing difficult negotiations have been taking place in Brussels.

And, but when you talk about contagion, Max, this kind of markets that we should be looking at in Southern Europe too I want to show you this chart, I want to point out the Ibex over there in Madrid is actually the number that we saw on Friday. Because it often takes a long time for that particular market days to feed. So that isn't today's numbers. You can see it fell on Friday. But the real reaction is coming from the...

FOSTER: I'm just going to interrupt for a moment. You know, we're going to come back to you. But Alexis Tsipras, the Prime Minister going into a key meeting right now where he will be discussing who will be the next finance minister. We'll wait to hear who that is going to be. There is obviously some names in the frame. But a big moment for him.

We see he had the referendum yesterday, he is without his finance minister, he was very much his wingman in getting into all these negotiations. And he is meeting with the council of ministers right now to try to decide what to do next. So they have really thrown the ball into the court of the Euro group and the European Central Bank in particular saying you know, what are they going to do about saving the Greek banks?

[03:10:00] We're going to find out about it later on from the European Central Bank what their language is going to be. Sure, they'll fire it back towards the Greeks as well but this is high politics in place right now and a key position in the Greek government sitting vacant today from the very charismatic incumbent who has stepped down announcing that he was going to do that on the Internet, on Twitter, no less.

ASHER: He has essentially saying that he has been forced out by the Troika and that the Troika didn't really want to -

FOSTER: Yes.

ASHER: - negotiate with him anymore. And also mentioning that the opposition leader in Greece also stepped down on Sunday as well.

FOSTER: There's a leadership issue at this point in Greece.

ASHER: Right.

FOSTER: So, Nina, as far as countries outside Greece are concerned in the markets, what other language are you looking for from the ECB today to reassure the markets?

DOS SANTOS: Well, we're are just going to have to wait and see here. But that is the big question that a lot of the people on these markets will have. At the moment as you both mentioned earlier on when you were speaking to Elinda in Athens, technically, those Greek banks are set to reopen tomorrow, reopen after more than a week long of being shuttered with people only being able to get out about 60 Euros a day. That's about $67 per person and then of course, we heard reports of this dirt of 20 Euro bank notes which means that they are only limited to smaller amounts because they can't get multiples of 20 Euros.

So the big question is for some of these Southern European markets that I was pointing out look at the first here on Milan already down by 2.5 of 1 percent is how can the ECB to limit the contagion. Because remember Greece is one of 19 members inside the single currency union and repeatedly what we've heard from Europe politicians is yes, the ECB is independent as any good and decent central bank should be but it shouldn't be going on in propping up in solvent countries forever.

And their banking systems if indeed Greek banks can't reopen this week yet again and that can't reopen after, the big fear is that when they do eventually open, is that people take so much money out of them that there won't be enough in the offers and the ECB will have to recalculate and that could in term precipitate a disorderly exit at this country from the Eurozone.

So the ECB radius is key to this but again, it has a to see that very fine line between politics, economics and to cherishing its independence for the safety of the other countries that use the euro as their single currency.

FOSTER: As we speak to you Nina, we've got these live pictures of the Tsipras meeting where he is going to be discussing you know, what to do next. But we prioritize is to get a new finance minister. There are few names in the frame in this but at least we see some sort of continuity. It doesn't - in terms of keeping the economy going, what does Tsipras need from the lenders to at least keep it going for the next few days?

DOS SANTOS: The big thing that we will hopefully see over the next few months or so according to this government is some plan to help Greece grow from here. Remember, this is a country that has been in a depression for the best part of eight years.

The most precipitous fall in living standards in many generation, not just across Greece but across whole of the European union is what we're talking about now. The stakes really couldn't be higher. And what the Greek government has been adamant to see and indeed the IMS is being in agreement with them about this is that, they just don't have a hope in paying back all the debt that this country is saddled with.

So the issue of so-called debt relief is something that this government will be lobbying for very, very harshly. But of course, a lot of people saying that those talks with creditors even if Mr. Tsipras reckons he has going to have a stronger negotiating hand after this resounding no vote referendum yesterday.

Max, a lot of people are saying it is going to be tougher getting to the negotiating table. Why? Because the Greek economy is now shrinking since before they came to power. It was growing before the elections that took place at the early parts of this year.

So we may well see more demands but upped austerity paradoxically rather than sort of an easing off of the conditions from the creditors which is exactly what he wants. But further down the line, the issue really will be debt relief, how to write down a portion of Greece's debt.

FOSTER: Just to reassure people outside Greece that there is not going to be too much contagion. I was reading report earlier suggesting that you know, the ECB does have quantitative easing at its disposal and if it needs it, it got a pile of money offers to do that. So if there does seem to be any sense of contagion it will be sort of chucking cash into the markets to help them out, wouldn't it?

DOS SANTOS: It will, but remember when the ECB did decide to eventually engage incomes of easing, long time that it had been coming, Max. It decided to exclude Greece from that particular proposal at the moment. And this is you know, another bone of contention here.

So the Greek banking system only has access to the emergency liquidity funding it doesn't have access to the normal liquidity at cheaper levels. And so Greece has for many a year, in fact since the start of this year since the government came to power and of course, we saw that very sort difficult rhetoric come to the fore, between this country and its creditors.

[03:15:00] Greek hasn't actually had access to all of the machinery of the ECB that other Eurozone countries have had and that is a bone of contention. So not only do we have that key meeting taking place where the ECB will be revising the ELA, the Emergency Liquidity Assistance to the Greek banks yet again today digesting the outcome of the vote. We should also remember that the next deadline, Max, does involves the ECB.

On the 20th of July Greece is the country that has to repay around $6.5 billion to the ECB. Forget the fact they already defaulted on the IMF debt last week of about 1.5 billion they have got much, much more to pay back to the European central bank. And who knows that the banks shuttered and if they don't get a deal on the table whether they are going to be able to find some common ground with the ECB because the ECB has been coming under increasing pressure as before to not to continue supporting an insolvent country.

FOSTER: Lots of pressure. Thank you very much indeed, Nina. We'll be back with Nina checking on the European markets later this hour to see if they are going to go down. They are look for that information, that leadership really from politicians -

ASHER: Right. Right.

FOSTER: - and policy markets to reassure the markets outside Greece that they are going to be OK.

ASHER: Yes. The big question is who is Alexis Tsipras going to pick?

Meantime the pope is in South America and the excitement has been steadily building.

Up next, how the faithful are showing their love and why this trip could be crucial to the Catholic church.

FOSTER: That's the Pope Mobil.

Plus, a record-breaking women's world cup final. Highlights from the exciting match-up between team U.S.A. and Japan straight ahead.

[03:20:00] (COMMERCIAL BREAK)

FOSTER: What a moment.

ASHER: They are so excited.

FOSTER: It's amazing. Well deserved. Fantastic. So many people watching around the world. The 2015 women's world cup coming to a thrilling close with team USA taking home the gold trophy. The U.S. battled Japan beating defending champions 5-2 in. And what was the highest scoring women's world cup final ever.

ASHER: Go USA The Sunday's game was actually a rematch between the two teams who met on the pitch in the 2011 world cup as well. The U.S. is actually now the first country to win three world cup titles.

With a hat trick in Sunday's match-up it was midfield and team captain Carli Lloyd, she is the star right now who led USA to world cup victory. Well forth, Kate Riley has more.

KATE RILEY, CNN WORLD SPORT: The United States have won their third world cup crown. This, their third title in 16 years. Japan has a perfect tournament going into this match although they found themselves 4-0 down after 16 minutes. Carli Lloyd scoring the first ever hat trick at a women's world cup final.