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QUEST MEANS BUSINESS
Computer Glitch Halts NYSE Trading; Chinese Stock Rout Spreads; Greece Asks for Third Bailout; "Black Scenarios" of No Agreement with Greece. Aired 4-4:30p ET
Aired July 8, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN HOST: The bell is ringing at the moment it's due at the New York Stock Exchange. Trading comes to an end on a troublesome,
difficult and truculent day with where, of course, it was halted for several hours because of problems.
Trading is over and it's a Wednesday in July.
QUEST (voice-over): Tonight: trading in New York, a computer glitch halts the heart of the financial system. Trading is halted in China as the
selloff spreads in Asia. And the trading is still halted in Greece as the economic crisis enters its end game.
I'm Richard Quest and we're open for business and I mean business.
QUEST: Good evening. There are so many problems in the financial world tonight with crises on two continents and major technical failures in
the United States. It was a raucous day, one full of nerves and tensions and investors not surprisingly certainly in the U.S. decided it was time to
head for the door.
We begin with Europe, where the Greek government has applied now for a third bailout and the capital controls and the bank closure has been
extended through to the end of the week. There will be two full weeks where the banks have been closed.
To China, dramatic action from the Chinese government hasn't been enough to stop a market selloff that's now spreading across Asia.
And in the heart of capitalism, on Wall Street, a triple-digit losses, 250-odd points for the Dow Jones as a technical glitch halted trading on
the floor of the New York Stock Exchange for more than three hours.
The exchange and the federal government insists it was a computer problem, not a cyber attack. Either way, confusion and gridlock in the
mother of global markets.
All trading was suspended for more than 3.5 hours because of the problem. And the usually frenetic pace of the floor crawled to a halt when
officially trading was stopped.
Stocks were down. Trading was suspended. And when it resumed, the Dow Jones kept falling. It eventually closed off 259 points. We'll be
live at the exchange in just a few moments. But what was most worrying during the course of the Wall Street suspension was it wasn't the only
entity, company, whatever you want, hit with a technical issue.
It led to real speculation that the problems were not coincidental but that actually nefarious acts were behind some form of hacking.
United Airlines passengers had blank screens at the airports. All the flights, more than 4,000, were grounded worldwide for more than an hour
because of a computer problem.
And "The Wall Street Journal's" home page also crashed. This was the error message that showed up -- "Oops, 504!" -- at the same time as the
exchange started having problems.
You can see why there was such consternation.
Was there a connection between United's grounded planes, "The Journal's" white screen and the exchange's lack of trading?
CNN's Laurie Segall on these seemingly unrelated incidents.
LAURIE SEGALL, CNN CORRESPONDENT: Digital glitches, one after the next.
UNIDENTIFIED FEMALE: We're continuing to follow breaking news right now. United Airlines has grounded planes nationwide.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Right now here is the New York Stock Exchange, trading has suddenly been halted.
ASHLEIGH BANFIELD, CNN HOST: This is what you see when you try to go to "The Wall Street Journal" website.
SEGALL (voice-over): First, United Airlines grounding its fleet worldwide. Planes at a standstill for more than an hour due a computer
Next, at 11:32 am, trading halted at the New York Stock Exchange.
KOSIK: Business has stopped here at the New York Stock Exchange.
SEGALL (voice-over): The epicenter of the financial universe issuing a statement, "We're currently experiencing a technical issue that we're
working to resolve as quickly as possible. By noon, the "The Wall Street Journal" online had a problem, a 504 error message greeted visitors to "The
Journal's" home page.
So were they all connected?
It doesn't look that way.
ALEX MCGEORGE, SECURITY RESEARCHER: At the present moment we have no indication that any of these glitches are connected other than it just
being a very bad day.
SEGALL (voice-over): The Department of Homeland Security tells CNN there are no signs of malicious activity. At least when it comes to NYSE
and United Airlines.
SEGALL (voice-over): United says it was a failure of equipment, a router that went bad. It fixed the router and things got back to normal --
if you can call it that.
Airline experts say this morning's glitch is causing backups that could ripple into tomorrow. The NYSE says the trading halt was a technical
issue, not a cyber breach. But it raised serious questions about the system's vulnerability.
Just like 2010's "flash crash," which pushed $1 trillion in equity into a freefall in a matter of seconds before rebounding moments later.
MCGEORGE: I would imagine people are trying to affect these systems constantly. What these glitches kind of illustrate is that their
technology is not in fact bulletproof.
The New York Stock Exchange and United Airlines and other carriers or operators of this caliber are going to be vulnerable to anyone who's
willing to spend enough money to get vulnerabilities that will affect them.
SEGALL (voice-over): Even if these technical glitches are just that, the cost of doing business in the modern era, the public's trust is at
stake -- Laurie Segall, CNNMoney, New York.
QUEST: Alison Kosik joins us from the exchange.
Alison, has the exchange come up yet with any understanding or reason as to why this happened?
KOSIK: No official word yet as to why this happened except for what the New York Stock Exchange said earlier today, that this was a technical
glitch. You know, Richard, we had some indication from traders that something was awry before even the opening bell, one trader telling me he
was having connectivity issues.
Also another trader telling me that the New York Stock Exchange rolled out some new software last night and that once it was put into action
today, that something may have gone wrong. There was also an indication when the New York Stock Exchange sent out an email alert to the traders
here on the floor of the exchange, saying that there was a connectivity issue with about 220 ticker symbols, the 220 stocks.
But that problem was resolved earlier this morning, but then an hour after that issue was resolved, work stopped here on the New York Stock
Exchange floor -- Richard.
QUEST: Alison, the exchange has some fairly robust technology but it certainly has very strict rules about when these sort of incidents happen.
So really, you almost go back to year zero. You go back to set opposition, don't you, so that people don't lose out as a result.
KOSIK: Meaning the confidence issues that you're talking about?
QUEST: Those transactions that were in play for those investors that were actually doing deals at the time.
KOSIK: Right, right. Well, any deals that were done at the time those were -- how should I say this -- those were closed out.
When the New York Stock Exchange went online about 40 minutes ago, there was a decision that the New York Stock Exchange had to make. Once it
was at opening be like a fresh opening or would this be a resumption of trading?
So what happened about 40 minutes ago was a resumption of trading. So the fact of the matter is, trading has been going on all day, (INAUDIBLE)
stocks here at the New York Stock Exchange, other exchanges have been trading as normal. So what the New York Stock Exchange basically did was
jump on the train of already moving and resumed trade -- Richard.
QUEST: I am indeed, Alison. Thank you.
You were talking to a trader earlier who was dealing with all of this and who gave perspective of what it was like.
(BEGIN VIDEO CLIP)
KEITH BLISS, TRADER: There was absolutely nothing that would indicate that we're going to come to a screeching halt in trading. We were trading
normally, handling customer orders, representing them in the market, executing stocks, coming back with fills, reporting on what we did in the
KOSIK: And then suddenly just the computers stopped?
BLISS: The music just stopped. It just stopped, yes.
(END VIDEO CLIP)
QUEST: "The music just stopped." Alison Kosik at the New York Stock Exchange, Alison, thank you.
Now if the music just stopped at the New York Stock Exchange, the band went home in China. The alarming selloff in China has deepened and it's
now spilling over into other countries. And that's a great worry.
The Shanghai composite fell 8 percent at the open Wednesday. It closed down nearly 6 percent. And as we spoke about last night, many of
the stocks listed fell 10 percent, which is the maximum allowed before they are -- there's a halting.
Chinese regulators, they used this phrase. They talked about a mood of panic that was causing irrational dumping of shares. Irrational
exuberance or irrational dumping, it's the same thing. Hong Kong was down almost 6 percent. This is the contagion; Japan down 3 percent --
QUEST: -- Australia down 2 percent while Seoul is down more than 1 percent.
Beijing's throwing everything it can at the crisis and that includes heavy-handed intervention in the market, literally instructing state-owned
entities to go and buy their shares, although that's being put on hold to somewhat.
There's frantic efforts to boost the economy. These are some of the measures. There are new rules on big shareholders of companies. It's
tougher to sell shares for the next six months, that's one of them.
Then there's lending of $42 billion to the brokerage firms to buy blue chip stocks. When that was tried during the Wall Street crash it lasted
for about a week and then it all went horribly wrong.
And on the economic side, a new $40 billion plan to boost growth.
Patrick Chovanec is the chief strategist at Silvercrest Asset Management.
Patrick's in New York and joins me now.
The worry here, look, Patrick, is this, isn't it, Patrick? First of all, good evening. The worry is that the Chinese stock market is
incidental in the sense that it's private; it's not as rooted into the economy. But if it creates a crisis of confidence, then that will spill
into the wider economy.
PATRICK CHOVANEC, CHIEF STRATEGIST, SILVERCREST ASSET MANAGEMENT: That's right. And in many ways, the Chinese government has upped the
stakes itself by essentially pledging to keep the market from falling.
Back in 2007, there was a bubble in the Chinese stock market. It went up; it tripled and then it fell back down near where it started. And the
Chinese government did not make such a big deal out of it and it didn't cause that many ripple effects. People weren't happy that they lost their
money but it didn't cause as many ripple effects as we're seeing now.
It's that they have really pledged to stop the market from correcting that the put the government's credibility on the line . And the problem is
it doesn't seem to be working.
QUEST: Now is it inevitable that it won't work? It's a nascent market; it's using a lot of technology but even in mature markets with deep
liquidity, like New York and London, it's almost impossible to stop a rout. You can slow it down, but you can't stop it.
CHOVANEC: If the problem is just investor panic, then sometimes intervention and just getting people to hold their breath -- catch their
breath and gain their composure and look at the fundamentals, that might be useful.
But if you're talking about a market that's fundamentally overvalued - - and I think that that is -- has been true of the Chinese market -- then trying to intervene to keep P/E ratios up above 50, that's not going to
work as soon as sentiment is changed and people want to sell.
QUEST: All right. Now if we assume for the purposes of this question that those in government are not total fools and they've obviously got
experts advising them, they will know that you can't hold back the tide.
So what's your feeling for why they're doing it?
Why -- I mean, I'm thinking back to the Wall Street crash in the 1920s and you've got pictures of Pierpont and Morgan and you've got pictures of
Rockefeller going onto the floor of the exchange, buying stocks, it lasted for a matter of weeks if not months before the trend just wiped it all out
CHOVANEC: Well, so people in the past have felt that they could do -- that they could hold up the market and often they failed and I think the
Chinese government certainly never lacks conviction in its own powers to set outcomes. And I think they may be finding the limitations of that.
But look, at the end of the day, why are they doing this?
It's a question mark.
Why are they staking their credibility in this way?
One possibility is because they needed this as a narrative, given the direction that the Chinese economy has been taking, which has been very
negative. Maybe they wanted this story. And then also maybe there's some systemic risk there for margin lending and they want to contain that.
But the better way of dealing with that would be trying to fix institutions that are at risk instead of trying to hold the whole market
QUEST: Very, very strong, good point, Patrick, thank you for that. Absolutely. We'll talk more about it as the days move on.
We've dealt with the two crises; we've dealt with the U.S. and the market closing down; the China crisis, we turn our attention to Greece
after the break. The prime minister needs their help and he's still not backing down. It was a defiant tone from Alexis Tsipras as he asks for
money and he went to the heart of the E.U. to do it.
QUEST: Greece has made it official: the government has formally applied for a ESM third bailout and it's facing a hard deadline, irate
creditors and if it fails to get a deal, well, we know Grexit and economic collapse.
The country's calling for a three-year rescue package and in exchange, Prime Minister Alexis Tsipras has promised credible reforms. The
government hinted it's looking for debt relief from earlier bailouts, underscoring the precarious situation. Greek officials have confirmed to
CNN the banks will stay shut until Monday.
(BEGIN VIDEO CLIP)
QUEST (voice-over): It was a very interesting mixture of some boos and lots of cheers as the European parliament greeted the Greek prime
minister as he arrived, Alexis Tsipras told assembled members the austerity experiment has failed.
(BEGIN VIDEO CLIP)
TSIPRAS (through translator): It is not -- it's no exaggeration to say that my country has, over the past five years, been transformed into an
austerity laboratory. However, this experiment, I think, all of us have to accept, has not been a success.
QUEST (voice-over): Donald Tusk, the president of the European Council, told the chamber, morality means paying the debts you owe to
others. However, he also offered the Greek prime minister a crumb of sympathy. And you can see that Alexis Tsipras appreciated it.
DONALD TUSK, EUROPEAN COUNCIL PRESIDENT: If you want to help your friend in need, do not humiliate him. Today, we need unity, not because
unity is a beautiful idea, but because it is indispensable in order to take concrete decisions.
Without unity on Greece, we will wake up in four days in a different Europe. This is really and truly the final wake-up call for Greece but
also for us, our last chance.
(END VIDEO CLIP)
QUEST: Guy Verhofstadt, who you saw on this program on Monday, calling for action from the prime minister, gave one of the most passionate
speeches of the day. The footage has already been shared more than 19,000 times on Facebook and for good reason. It was brutal.
(BEGIN VIDEO CLIP)
GUY VERHOFSTADT, FORMER PRIME MINISTER OF BELGIUM: But I have to tell you, and you started and you said and it's true what you said, you said the
Greeks did enormous effort and that's true. But the problem is not there, it's that the Greek political class didn't do enough themselves in the case
of Greece. That is the problem today.
And I'm angry, I have to tell you. I'm angry because you are talking about reforms, but we never see concrete proposals of reforms.
(END VIDEO CLIP)
QUEST: With me now is Kyriakos Mitsotakis, a member of the parliament for New Democracy opposition here.
Well, what's your understanding tonight about when they are going to present the reform or the report or their proposals tomorrow?
KYRIAKOS MITSOTAKIS, NEW DEMOCRACY PARTY: Well, the proposals need to be presented by tomorrow morning so there isn't much time left. And I do
hope that the prime minister is fully aware that he does not have the mandate to take Greece out of the euro.
MITSOTAKIS: So I do hope that at the last moment he will put the country above the party, come up with a reasonable compromise that will
allow Greece some breathing space.
QUEST: From what you've heard -- I don't know if you've heard anything about the proposal or know anything about it, but is this
government capable of giving what the Europeans -- because last night Juncker was brutal -- and Tusk were brutal. If they -- this is crunch
time. This is it.
MITSOTAKIS: Well, we know that there's not going to be another day after Sunday if there is no deal. So if all this has been a big bluffing
game, this is the time to step up to the plate and deliver.
As you know, Richard, there's been a breakdown in trust between Greece and European partners and it will take a lot of effort to restore this
trust. A first good step is to present a set of credible proposals. I hope the prime minister's going to do that tomorrow.
QUEST: Yes, it doesn't help if you call the people who you're hoping to bail you out "terrorists."
MITSOTAKIS: No, it doesn't and I need --
QUEST: That was really offensive --
MITSOTAKIS: -- it was also offensive to us and it was a statement made by Mr. Varoufakis, who, thank God, is gone. I think he has done a lot
of damage to the country's credibility. And I do hope that the new team that has been put in place is going to be more efficient and more discreet
in its expressions.
QUEST: The problem with the new team is it's the same team, minus the man at the top. I mean, it's exactly the same. You did the negotiations
beforehand. So it's not as if suddenly a new broom has arrived. All that's happened is it's the same broom with a different handle.
MITSOTAKIS: No, you're probably right to point that out. Having said that, the man at the top has done considerable damage. So I'm personally
happy to see him go. He probably should have left some time ago.
QUEST: Hang on, because I need to ask you about what you're hearing about the state of the real economy because we can talk about what's
happening in Brussels until the cows come home. But people are out of money; companies are closed. I'm sure you've got many friends and people
that you're aware of -- family, maybe, even -- who are out of jobs or at least have been told don't bother coming to work.
MITSOTAKIS: This is a disaster in the making. I think if this crisis continues, we'll be posting negative recession of 3 percent for the year.
And this is probably a best-case scenario. So I think the Tsipras government needs to understand that a lot of damage is done to the real
economy. We cannot keep on going with banks shut. It is completely absurd situation.
So the government has 48 hours to deliver basically, that's it. And we will support them in this effort, even if it means Mr. Tsipras picking a
fight with these more radical elements. If we're here, if he needs our votes, we're here to deliver them.
QUEST: Sir, thank you very much.
MITSOTAKIS: Thank you.
QUEST: You're right to point it out, the issue of a Grexit.
As Greece vies for another bailout, European officials have promised Sunday is the final deadline. When the dust settles on Monday morning,
we're looking at the scenarios that we'll be facing -- or the Greek people will be facing.
QUEST: The president of the European Council, Donald Tusk, says that we can't rule out what he's calling the "black scenarios" of no agreement
with Greece. The Greeks must deliver detailed rescue proposals by Thursday midnight. We believe it's that time. All 28 E.U. leaders will then
consider it an emergency summit on Sunday. The final deadline is for negotiations.
So if a deal is reached, this is what it might look like and it won't be -- they won't have dotted the I's and crossed the T's on the deal.
QUEST: It'll be a three-year bailout plan. The ECB will start supplying the banks with money. The banks will reopen, which then brings
them through in a cash crunch. And then Greece makes good on arrears back from the brink.
If it's not reached, Greece goes bankrupt. It'll miss the massive July 20th payment to the ECB. A euro exit is a certainty and some form of
printing of own cash will then begin.
Joining me now is Anastasios Economou, He's the founder of the international investment holding company Igroup.
Good to see you, sir.
ANASTASIOS ECONOMOU, IGROUP FOUNDER: Pleasure.
QUEST: What are you hearing that might be offered tomorrow?
ECONOMOU: Well, what I'm hearing is that really the real economy's suffering. The message is we may be able to make it until Sunday. The
economy, the real economy, is running on fumes and I guess that's Greece's only hope, that it sees sense and a deal is worked out, agreed and Monday
the economy can go back to working.
QUEST: Ah, but here's the point. There's no way that they can agree by Monday, the full ESM, $55 billion -- I mean, because there's got to be a
study; there's got to be a reform percentage. The commission has to do it. There's a whole load of things they have to do.
So the best that can happen is confidence that they all agree it's worth keeping going.
ECONOMOU: Well, confidence and the other thing, the ELA not being withdrawn. See, what is at stake here is the ELA at $90 billion could be
withdrawn as early as Monday if there's no agreement. There's about $120 billion in cash in the banks. You remove the ELA of $90 billion and you're
looking at an explosion.
So there is actually a scenario that is a lot worse than perhaps some people have understood.
QUEST: Well, that may be true but there's this 20th of July deadline. Now whatever they come up with, they then have to come up with a temporary
funding position that allows -- I mean, it is the ultimate of paying Peter to pay Paul (sic). The money will come in from the Eurogroup to go out to
It's almost perverse.
ECONOMOU: Correct. So the best-case scenario is really what you just mentioned, an interim solution that basically makes sure that Greece has
not defaulted to the ECB by the 20th, that allows perhaps 2-2.5 months at a minimum that it will take to hammer out all the details of a new mega
QUEST: And that's the real difficulty here because you're talking about two things, a short-term package -- which, frankly, is large in its
own right. I think that amount that's to be paid is about $3.5-4 billion on the 20th --
ECONOMOU: A bit more than that.
QUEST: -- so you're talking about $3 billion and $4 billion there. You've still got a billion that's got to go back to the IMF. So that's $5
billion. There's $450 million that's got to go to the Bank of Greece. So you're getting up towards $6 billion with change and that's just a -- and
that's before you put any ELA into the system to keep the whole thing going.
ECONOMOU: Richard, the situation is very, very difficult. There's no question about that. And that's why the best hope is to start negotiating
quickly; don't argue. Get a deal done. And avoid a potential disaster.
And by the way, just so we're very clear, the disaster's really going to be financially on the side of Greece, not on the side of Europe. Europe
has about $2 trillion between quantitative easing, ELA, TLRTO, ESM if need be. So there is not going to be a huge financial repercussion day one for
the rest of Europe. The danger that Europe is facing and why they're negotiating as much is potentially three, four years down the road, they
have provided for an exit. But to me, that is a weak argument.
Focus on the real economy, getting the deal done, moving on; start performing; reform your economy; start creating growth and then you are
actually in a position to start paying back people.
QUEST: Thank you very much indeed. We'll talk more about this as the times move on.
As we continue, after getting more than $250 billion in bailout, now Greece asks for more.
Jose Manuel Barroso helped craft the first two bailouts. The former president of the commission joins us after the break.
QUEST: Hello. I'm Richard Quest. There's more on Quest Means Business in just a moment. When the chairman of Barclays tells us why he
decided to sack the chief executive and the British Finance Minister, George Osborne's right-hand man tells me why the U.K. is introducing a new
Before all of that, this is CNN and on this network the news always comes first.
Trading of the New York Stock Exchange was interrupted by a major computer failure. All trading was holding for more than three hours. By
the time they resumed an hour ago, the Dow had fallen 200 points plus. The exchange had an internal technical issue is to blame.
The Department of Homelands Security in the U.S. said there was no sign of malicious activity. The White House Press Secretary said President
Obama had been regularly briefed on the situation.
(BEGIN VIDEO CLIP)
JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: As he told Ms. Monaco and Mr. Macdonald that he wanted to continue be updated on the situation over
the course of event. Up to this point, there is no indication of malicious actors that were involved in these technology issues.
(END VIDEO CLIP)
QUEST: A separate computer problem caused all United Airlines flights to be temporarily grounded worldwide. Almost 5,000 flights were affected.
United's calling it "a network connectivity issue".
Again, the head of U.S. Homeland Security System was not related to the stock exchange problems and an official airline said there was no
Greek banks will remain closed until the weekend as the country officially asks for third bailout from the European Union. Greece has been
told it must agree a bailout by next week. U.S. Treasury Secretary, Jack Lew says, "Europe's playing a dangerous game."
(BEGIN VIDEO CLIP)
JACK LEW, U.S. TREASURY SECRETARY: I have continued to believe that isn't the best interest of all parties to find a resolution. Greece needs
to have a path towards a sustainable debt path and towards a growth path on your future, and a good agreement would give them a better shot at that. I
think it's a mistake for European economy, the global economy to take the risks that are involved with a non-controlled crisis increased.
(END VIDEO CLIP)
QUEST: The New York Stock continues for the Chinese market. The Benchmark Shanghai Composite for nearly 6 percent on Wednesday. The Index
lost a third of its value since June the 12th. Other Asian markets also suffered (inaudible) closed down more than 3 percent.
Pope Francis is due to arrive in Bolivia any time now. It's the second land of his South American tour. The Pope visited a nursing home in
Quito earlier on Wednesday. He met a group of children in the Ecuadorian capital. They even managed to grab a selfie. It seems Popes are not
immune of a selfie.
Jose Manuel Barroso understands the challenges facing Greece and creditors. But in almost anyone else, he served as president of the
European Commission for 10 years, he help craft (ph) two Greek bailout. The former president of the commission joins me now from Lisbon and as
QUEST: Mr. President, it is very good to see you and we thank you for giving us time and joining us.
JOSE MANUEL BARROSO, FMR PRESIDENT, EUROPEAN COMMISSION: My pleasure.
QUEST: Now, to jump straight in here and well obviously I know you hope for the best. And obviously I know you want them to be a solution and
But tonight, all you -- can you see a way out or do you think that we're just looking into their best and Greece won't come up with the goods.
BARROSO: I've like to avoid the Grexit. I like that to be possible. But frankly, now the possibilities are minor and now there is a very
important probability that Grexit happens unless, the government of Greece finally comes with something that is considered credible by the Euro
Trust has been lost, but I believe there is still a possibility. I think the statement of the associative government of the Eurozone was
clear. It's very, very clear, they need to come with credible proposals and with strict conditionality, it can still...
BARROSO: ... exist, have cancel other (ph) program, and let's see what happens. But now, I really believe it's the end of the game to use
the word game I don't like to use, but it's the end of the game with some moment of truth until next Sunday. The final critical decision one way or
the other is going to be taken.
QUEST: All right. Do you think the Greek government, the Greek prime minister will turn up with the goods?
BARROSO: I think it's to me it seems his interest. I mean, if all players here are rationale, a gratitude of be avoidance because it will be
got us traffic for Greece. I have no doubts about it. For the Greek people, if there is a generalize default and if there is a Greeks, it will
be a disaster for the weak economy and for the Greek citizens but also it too lot to be good for Europe and for Euro area, let's face it.
Because it's present that he set for the future. So far the markets have been relatively calm but it cannot be good if Greece leaves the Euro, so
from a rationale point of view, everybody should now work for a solution but in fact rationality has been in short supply, namely in Athens. But I
believe that if the prime minister, if he wants to avoid the disaster for his country, yes has duty to come with some see incredible yet the other
partners may affect.
QUEST: Donald Tusk last night, I've -- I mean, you've obviously beating up many of this late night meetings, I've to listen to many of this
late night meetings. But I'm never really heard anyone say, "Anyone who's got any idea that there's no deadline is wrong. This is a deadline".
But here's the question, Mr. Barroso, the credibility of the union, and the Eurozone, and the council is on the line, once you start saying
this is a hard deadline. If they flinch from that, then they all seen as weak.
BARROSO: It's true, that's why a solution has to be taken, but let's face also the reality. Today, we have in Greece government that is
completely different from the others.
It's an anti-system government. It's a first time we have this kind of challenge because in the other countries of Europe from their rights to
the center even to the left, let's say the traditional left, nobody is supporting this very strange position of the Greek government that wants to
stay in Europe but does not want the obligation of staying in Europe.
So it's a complete new challenge, so I will not say that that the ends the credibility at stake is the credibility of Europe but it's basically
the credibility of Greece.
BARROSO: And I hope that they will now change course really.
QUEST: Would you have been as offended as your successor, President Juncker was, by the phrase being used "terrorism" to describe the way the
Euro group had behaved. He was -- he already said, he feels betrayed and now he says, you know, who are you to call us terrorists?
BARROSO: Well, that's the point. You know, in negotiating, we need the trusts. We can't have different positions. And as you've said,
Richard, I've been so many, so many of these meetings, but at the end we could always find an agreement, because he want an agreement and there was
meaning of him of trust between the different participants.
The problem today is that, that trust was broken. The prime minister of Greece the same day, he was writing to the partners saying that was
ready to accept the program. He was as saying in Greece television that the partners were blackmailing him. This is not the way to build trust.
That's why I hope that there is a fundamental change now, by the way, the prime minister got...
QUEST: Right. But...
BARROSO: ... victory at home, now we should not have a defeat abroad. And there still a possibility and I think that (inaudible) Mrs. Merkel, it
will be a rule.
We all know that she is a great German and she has been a great German leader. Will she be a great European leader? I think if the Greeks come
with some substantial, she has an opportunity that she is also a great European leader.
QUEST: Finally, Mr. Barroso, I hear what you say so and I'm going to push you a little harder. Are you optimistic that they will come with
something. I mean, I know your hoping for the best but can you be optimistic or are you really frankly planning, plotting and realizing its
BARROSO: I'm wanting one of those situations where I would say 50 percent on one side 50 percent on the other one. It's a 50-50 situation.
And I was more optimistic sometime ago. I thought that the probability of Greeks who are not 50 percent. Now, in probability terms I
would say 50 percent. And the ball is on the Greek side, if the Greek scam would some being reasonable, I think it just not going to be easy to
convince all the others. But I think with strong leadership from Angela Merkel and some over this, it still possible to have a deal.
So I'm, sorry. I cannot be more precise but we are dealing with a variable that it's quite difficult to quantify. It's the degree of
commitment of the Greek government to a solution.
QUEST: I'm very grateful to you for joining us this evening and talking us through in this very difficult situation. We'll draw ball (ph),
Mr. President. Thank you so much, sir.
I was seeing report that the ECB decided to give emergency aid going for Greece's banks by the last piece of tape holding the countries of
financial system intact.
The ELA, Emergency Liquidity Assistance program, it was allows its measure, it's merely back up (inaudible) for a system for all and almost
(ph) of the sockets have been broken.
Claire Sebastian deals into ELA.
CLAIRE SEBASTIAN, NEW YORK: Think of the Greek ranking system as a mechanism of circuits, a complex system of funding options. And all those
sockets led back to one central power supply, the European Central Bank.
On February 4th, the ECB sent a jolt through the system then Greek finance minister Yanis Varoufakis had just wrapped up talks with President
Mario Draghi when the ECB made its move.
(BEGIN VIUDEO CLIP)
JEN WEIDMANN, BUNDESBANK PRESIDENT: In the pasts few minutes, the ECB has cut the ability of Greece's banks to borrow.
(END VIDEO CLIP)
SEBASTIAN: Under regular financing operations banks can borrow from the ECB in return for collateral like bonds. With Greeks bonds rated junk,
the ECB had already waved those rules. The final stoke with the new government from a thing go back on the terms of its bailout. The ECB still
no option but to flip the switch.
The February 4th decision essentially cut off the main circuit bringing the ECB operations while lending work had shed across all 19 Euro
members was switch off.
In order to keep the lights on and the Greek banking system power had to be funneled during emergency back-up supply, the Emergency Liquidity
Even with emergency funding frighten Greek's depositors could still stop the remaining powers from the system by taking their money out. As
the Greek banks limited withdrawals to prevent this, the prime minister would quick to blame the ECB.
(BEGIN VIDEO CLIP)
ALEXIS TSIPRAS, GREEK PRIME MINISTER: Thanks of this country, they ended up in this fixation (ph) is unacceptable and that Europe solidarity
(END VIDEO CLIP)
SEBASTIAN: Yet some in Europe believed the emergency funding reduces the incentive for Greece to reform.
(BEGIN VIDEO CLIP)
WEIDMANN: The Eurosystem must not provide breach financing to Greece even in anticipation of related disbursements.
(END VIDEO CLIP)
SEBASTIAN: Well the ECB can turn off its emergency power supply if it sees fit doing so may set of shock well beyond the Greek banking system.
Claire Sebastian, CNN, New York.
QUEST: You have been stocks but declarable trend there was not anymore optimistic closing higher on Wednesdays was out the full straight
days of loses. If you want to get away for the stock market (inaudible) and the questions of Greece and China, a wide open wilderness of Canada
awaits you. And if you don't want to live your desk, we're going to show you how you can enjoy Canada without going far.
QUEST: Oh, what a (inaudible) we have in the travel world. Technical problem that United Airlines needing to delays, a strike on London's Tube
network all of who have you caught up and it might wishing you stayed at home.
Some travel agents were actually encouraging me to do just that. There's the real promise you can have an experience of something new from
the comfort of your sofa. It'll be a great deal cheaper, there will be no long lines of check-in and you can forget about changing any currency.
Samuel Burke, find out how virtual travel could help us all fall in love with the real thing.
(BEGIN VIDEO CLIP)
SAMUEL BURKE, CNN CORRESPONDENT: Something unexpected is happening here. Virtual reality looks perfect for someone who likes to stay seeded.
Now, it's being reprogrammed for people eager to pack their bags and take off.
We used to all go to travel agents to book our trips. Now, we're used to the comfort of our couches. But you can take a pause from flipping
through a travel website and close up your apps because the virtual reality revolution is about to begin.
Headsets like the Oculus Rift go on sale early next year and the travel and tourism industry are early adapters. The goal, visiting your
destination before you even left your couch.
Instead of thumbing through other traveler's reviews and photos, imagine seeing British Columbia with your own eyes before you decide
whether or not to buy the ticket.
UNKNOWN MALE: We're rolling, ready and action.
BURKE: Canada's western most province is among the first destinations working with production teams to create marketing films for virtual reality
UNIDENTIFIED FEMALE: This video give people the opportunity to really get a sense of what its like to be in B.C. and what its like to feel the
powerful nature around you and the wildlife and the wilderness that we have to offer the world here in British Columbia.
BURKE: Far from trying to replace the experience of visiting these exotic locations, tourism boards are hoping that virtual reality films will
entice people into coming in real life.
(END VIDEO CLIP)
QUEST: Samuel Burke with the V.R. travel experience. I guarantee you every airline, every destination, will have a V.R. video before long.
In a moment, the Chairman of Barclays lifts up his name "Mark the Knight" (ph). He cut off the firm's chief executive.
We're going to take to resort James McCollum about a very high profile part.
QUEST: Barclays has fired its Chief Executive Antony Jenkins after just three years in the job.
Barclays report says in their words, a new set of skill is required.
Jenkins at press argument (ph), a major overhaul of the company but reportedly he fell out with the board members of issues on cost cutting and
Barclay shares close the session higher by more than 2 percent.
The new Chairman, John McFarlane, says he'll run the bank as executive chairman until a new CEO is found.
Nina dos Santos asked him the reason behind the firing.
(BEGIN VIDEO CLIP)
JOHN MCFARLANE, CHAIRMAN BARCLAYS: There's a different circumstance now coming up which is delivery of shareholder (ph) value and needs to be
And so, he go back in time, you know, after the global financial crisis, the company need to recover itself. And of course halfway through
that six year period was Bob Diamond resigned and that led to a management crisis in the organization.
And so it was necessary to stabilized the organization. Deal with some of the issues that are arising from that, the conduct issues and the
culture of the organization.
And Antony Jenkins was thrown into a very difficult circumstance. To deal with that need, he did deal with that need. He did it very well. And
we are very glad that he was then, congratulate him on that success.
But as we thought about it and looked at the strategy, we realize that if you look at the stock price for example, our stock price today is
roughly the same as it was six years ago. You know, for that period we really haven't delivered any value.
I often to speak off and then at the same time, the dividends has been relatively low because we have the rights assumed and things. And so, the
need -- there's a break point here which is "Look, OK, we do need to recover but actually we need to get beyond that and we need to deliver that
value relatively soon into the future not needs a big salaries and about strategy in terms of its execution.
NINA DOS SANTOS, ANCHOR, THE BUSINESS VIEW: I want to ask you about the crisis that we're seeing around the world at the moment. This is going
to be a very difficult time for you to take over in the interim and then for you to find a suitable candidate with all of the skill set that you've
We've got Greece. We got the Chinese stock markets completely imploding. How is that going to be affecting whoever is taking over here
because it's a really difficult in terms in time for them to do so?
MCFARLANE: I think offsetting, that is true about China. But I think what is offsetting that is, we're seeing resurgence of activity in the
You know, remember, when the United States rises, everything rises. And so, it's not -- it's not just a story about China. It's a story about
the world of which there are positive forces and negative forces.
So I'm not convinced the disaster is looking right on the corner. It's going to be different and to different parts of the world.
It is a very complex organization and a very complex situation. You know, but actually, if we work through it systematically, it's perfectly
possible to get this done.
You know, we're a world class organization. We need an individual who is the best in the world who is available to us.
Now, fortunately, our name is good. Our brand is good. This is a great job for somebody to have. That's very attractive. In fact, I have
several e-mails this morning of people saying, can I have the job. And I've written back to them saying, that's very nice of you but you know, I
know you're not getting it but, you know, but we will -- oh no, they're not the right individuals. But we will look long and hard.
And I think two things might matter here. There's lots of people have been looking for CEOs. But not lots of people in the U.K. OK. And
therefore, you know, that's one thing.
I think the second thing is that if you were offered the job of the chief executive of Barclays, boy, that's what worth thinking about.
But I found this, you know, believe it or not some people do like working with me. And so that might be attractive to some people and maybe
not to others.
(END VIDEO CLIP)
QUEST: "Mark the Knight" (ph) looking for a chief executive, another profitable moment after the break after I put my C.P. together and send it
in to him.
QUEST: Tonight's profitable moment. Whatever decisions that taken by the Eurozone, the point of no return has probably been and gone for the
great economy which is in a truly awful shape.
I've spoken to bankers, to industrialists, to politicians, and they all tell a tale of terrible work.
The Greece government has stop paying building contractors back in January. Construction everywhere is just about suspended. Imports have
dried up. Factories are closed. Workers are staying at home.
The economy is heading into free fall and the amount of money in the bank is dwindling to nothing unless more comes on the ECB you can imagine.
There are only two areas that remain busy, gas stations and supermarkets. Both to flash with cash but none of that cash is being recycled into the
real economy and both of them may run out of supplies.
The Greek economies on the verge of collapse and whatever politicians may say, time may already have run out which is why the next 48 hours is
And that's Quest Means Business tonight. I'm Richard Quest in Athens. Whatever you're up through in the hours ahead, I hope it's profitable.