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QUEST MEANS BUSINESS
Second Powerful Quake Hits Japan; Interview with the British Chancellor of the Exchequer; Interview with the OECD Chief; Interview with Nigeria's Finance Minister; Major Earthquake Hits Japan's Kyushu Island; Major 7.0 Earthquake Strikes Southern Japan; Belgian Transport Minister Resigns Over Airport Security; E.U. Clamped Down on Belgium Tax Scheme; U.K. to Hold E.U. Referendum on June 23. Aired 4-4:30p ET
Aired April 15, 2016 - 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: I'm Richard Quest at the IMF in Washington, D.C., QUEST MEANS BUSINESS follows in just a moment. But we begin with the
breaking news in Japan, where day is about to break, the new day arriving.
As they come to terms with the overnight earthquake, now all tsunami warnings and advisories have been lifted after a new, powerful quake struck
Kyushu Island just a few hours ago. But even though the tsunami and the warnings have been lifted, we don't know the extent of any casualties or
There's considerable reason for concern. Not only was there a quake yesterday, and a very powerful 7.0 quake near Kumamoto in the south, it was
really shallow and that gives a greater potential for causing destruction.
An earlier quake today previously left nine people dead. And as we wait for details and we hear stories of a certain amount of chaos and panic in
the region, well, we're obviously waiting to find out the extent what's taken place.
The journalist, Mike Fern (ph) is in Tokyo. He spoke earlier to CNN's Robyn Curnow.
(BEGIN VIDEO CLIP)
ROBYN CURNOW, CNN CORRESPONDENT: Tell us, you felt it in Tokyo?
MIKE FERN (PH), JOURNALIST: Yes, the building shook. It wasn't a violent shaking but it was a very slow side-to-side movement which continued for
about one or two minutes. And a lot of cracking of the walls and the fixtures as they then moved around.
And Tokyo's 900 kilometers away from Kumamoto. So it's quite surprising that we could feel the quake from here. But I was in Tokyo in March 2011,
when the magnitude 9.0 quake struck, that was a much more violent and a much longer shaking than this 7.1 or 7.0 intensity quake.
CURNOW: And you also said that there was an earthquake warning. Tell us about what media said.
FERN (PH): Well, there's basically a warning alert that is broadcast on all the TV channels and certain melody which is also broadcast on people's
mobile phones, which gives people some advanced warning. It seemed to be about two or three minutes' warning here.
But obviously the quake would have taken more time to be felt in Tokyo than directly at the epicenter. So it did come in time in Tokyo for people to
get under a doorway or get under a table. I think in Kumamoto they probably would have had less than 30 seconds' warning. Certainly a big
surprise to the (INAUDIBLE) as it is from the quakes and aftershocks (INAUDIBLE) Thursday.
CURNOW: And tell us about the nuclear power plants in the area of Kyushu Island.
FERN (PH): I haven't got any more information on any effects of the quake but they have been operating normally. The Sendai quake -- sorry; the
Sendai nuclear plant has two reactors, which are the only two that are operational in Japan. They continued after the quake on Thursday and after
the aftershocks with no adverse effect.
(END VIDEO CLIP)
QUEST: Now the meteorologist, CNN's meteorologist, Karen Maginnis, joins me from the CNN World Weather Center.
Karen, let's begin with the question of the tsunami warnings and the aftereffects, if you like.
Do we now know what the current situation is?
KAREN MAGINNIS, AMS METEOROLOGIST: There are no tsunami warnings or alert. Initially, there were because of the concern because of the depths of this
earthquake. The depth being that it was so shallow. That's why we've paid so much attention to this particular earthquake.
It also was recorded to be a little bit stronger than what has finally been settled on as a 7.0 magnitude earthquake.
But something has developed as we take a look at the earthquake map, something has developed here over last half-hour or so. Here's Tokyo. We
zoom down towards the epicenter. Here is Kumamoto. That's where the epicenter was. We zoom in a little bit more. Something we really did not
see even about 45 minutes ago, we saw primarily orange.
What does orange mean?
That means you could see very strong to severe shaking. That would be observed.
Also, resistant structures, moderate to heavy damage. Structures that are not up to code, of the very strict building codes in that area, could see
But now we're seeing that at red. That means we could see violent shaking, heavy damage to very heavy damage of unreinforced buildings. So this is a
much broader area as we take a look at it. Just in that Kumamoto area, there are just under 1 million people.
MAGINNIS: But you spread this out and now we're looking at perhaps even more significant population that will be affected by this.
And just to give you another perspective, there you can see some of these bars. That's not really buildings but that's people, the density of
people. So where you see these taller bars, that's where we're looking at a higher density of people who would have felt that violent shaking.
And indeed, it would have been violent. Now we're getting an update on this, but 7.0, shallow magnitude. And this comes within days of that 9.0
earthquake, that at Fukushima, that was a little bit deeper. But this one, because it was so shallow, Richard, that's why we're so concerned about the
magnitude of this and its impact on what would be fairly soft ground, not like the mountains.
But they build this on this soft earth so you're going to feel that much more violently. Back to you.
QUEST: Karen Maginnis, Karen, as we go through our hour, please, when you get more information, either on warnings or on more details about the
shaking, please come back to us so we can go live to you once again and bring people -- bring our viewers up to date.
Karen Maginnis at the World Weather Center.
As we await more information and we get more pictures from Tokyo and from Japan, let us return to our business agenda.
The world's top names in finance at the IMF at the spring meetings. And at this hour, throughout the hour, you're going to hear from Nigeria's finance
minister, who tells me every action is being taken to find hundreds of girls abducted two years ago.
The OECD secretary-general, Angel Gurria, is calling on Panama to be more transparent about its finances even after what they said yesterday.
A top Spanish official resigns. And that dealt another blow to the country's battered government. The finance minister, Luis de Gringos (ph),
will join me live. And the Belgium finance minister will be here during the course of the hour. We'll put to him the current crisis in the Belgian
The campaign has officially begun and British voters are already being bombarded with ads and leaflets telling them to vote for or against a
Brexit, that is to stay or leave the European Union. The referendum date is June the 23rd.
The campaign is mired in controversy after the U.K. government spent around $12 million of taxpayers' money on pro-Europe leaflets.
The British finance minister, the Chancellor of the Exchequer, is George Osborne. He believes a Brexit will cause a severe economic shock in
Britain and beyond. The IMF, in its world economic outlook, the WEO, specifically referred to the Brexit referendum as being one of the risks in
the global economy.
So here at the IMF, I asked Mr. Osborne what he's being told.
(BEGIN VIDEO CLIP)
GEORGE OSBORNE, CHANCELLOR OF THE EXCHEQUER: The message you get here is that Britain should remain in the E.U. and should remain in the E.U. not
just because it would enhance our economic security but also it's important for national security and the strength of the alliance of democratic
nations in the world.
So the message you're getting from the IMF is pretty clear to the British voters but ultimately, of course, it's the British people who are going to
QUEST: It is the British people that decide but also finance ministers are now starting to -- they're starting to realize or suggest that there is a
global dimension to this vote which is, of course, a British vote.
OSBORNE: Yes. The British people are going to decide. It's a big democratic exercise. And I think we've got the prospect of removing the
uncertainty that has hung over Britain and its relationship with Europe. And, of course, we've achieved real reforms now in Europe as a part of this
I'm now arguing, having done that, the British people should remain. And I think it helps the debate if British voters here or others know what
QUEST: How are you telling them here that, if the vote goes against you, and I know you don't wish to go down that road, but you do have to tell
them here that, if the vote goes against you, that the U.K. economy will still survive?
OSBORNE: Well, the very clear message we're getting from the central bank governors here, international organizations like the IMF, is that, first of
all, there would be a short-term and severe economic shock.
And the second thing is that there will be a long-term economic consequence, a knock to growth in the long term. And they wouldn't just
affect us -- although, of course, we would be at the epicenter of it. It would also impact on the European economy as well.
So, you know, one shouldn't underestimate the consequences. And I think the British people, the more they understand those consequences and, of
course, what they're asking for at the moment is information as this campaign begins, I think the more they'll see the benefits of remaining in.
QUEST: What preparations are you making for that shock?
And the reason I ask, I mean --
QUEST: -- it's not sufficient to be able to sort of say we believe that we're going to win. But because in three months or less than, that vote
happens and you have to have a preparation for January -- for June the 24th.
What preps are being made?
OSBORNE: Yes, look, first of all, I'm confident that the British people, when they hear all the arguments, will vote to remain in.
If the British people vote to leave, then we will trigger a process that is there in the constitution of the E.U., in the treaties of the E.U., a
circle to Article 50 process that allows Britain to exit. That's a two- year window of negotiation.
In terms of the immediate financial stability concerns, well, the Bank of England, of course, has that as a primary responsibility. And they've
already, for example, created some more auctions out there to deal with any liquidity challenges that might arise around the date.
So, you know, we've got the preparations in place but I don't want to make an -- you know, underestimate but, of course, it would be an economic
shock. And that's one of the factors that's going to weigh in this referendum.
(END VIDEO CLIP)
QUEST: George Osborne, the U.K. Chancellor of the Exchequer.
The leader of the U.K. Independence Party says that the IMF is playing a game, in their words, with its Brexit warning. Nigel Farage, whose party
wants to leave Europe, says the IMF is simply helping out their mate, the prime minister, David Cameron. CNN's Nic Robertson asked Mr. Farage why he
doesn't take the IMF seriously.
(BEGIN VIDEO CLIP)
NIGEL FARAGE, INDEPENDENCE PARTY: It is big governments, bigger the government organizations, rallying behind a mate, looking after Dave,
trying to help Dave win this referendum. And I don't -- I don't believe it convinces anybody.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: But doesn't it perturb you that the U.S. president would come here and mix it up in
FARAGE: Well, mercifully, this American president, who is the most anti- British American president has ever been, won't be in office for much longer and I hope will be replaced by somebody rather more sensible when it
comes to trading relationships with this country.
ROBERTSON: You've come today with the government's prospectus on why we should remain in.
ROBERTSON: What's wrong with what they've laid out here?
FARAGE: Two things: firstly, there is legislation, there are rules for this referendum and the spending limits kick in today to try and ensure
that it is a free and fair referendum.
What the government did was play fast and lose with the rules and spend nearly 10 million pounds delivering this to every household in the country
last week so I object to taxpayers; money being used to tell us what we should think. It isn't as if the government doesn't get a chance to put
its case on television every day, putting its case.
So, one, I think they really have, as the electoral commission themselves have said, broken the spirit of the rules.
But secondly, it's the content that leaves me less than happy.
ROBERTSON: Three million jobs dependent on the European Union, is that wrong?
FARAGE: No, absolutely not. There are 3 million people working in this country involved with trade, selling goods to the European Union.
And there are 5 million people in France and Germany whose livelihoods depend on selling champagne and BMW motorcars in this country.
The point is, nowhere else in the world do we have the pretense that you need to have a political union to do business with each other. Look at
NAFTA. NAFTA is a group of countries that removed tariff barriers but they -- you know, people don't pay a massive membership fee. There isn't the
free movement of people.
And you don't get legislation that overrides your own national parliament's government and courts.
(END VIDEO CLIP)
QUEST: Nigel Farage, talking to Nic Robertson. And obviously the vote is on June the 23rd. And we'll be watching it every step of the way.
We're at the IMF and World Bank. It's the spring meetings that are taking place. The build we are in at the moment is HQ 2. This is where most of
the G20 takes place. It's where the G8 or the G7 meets. In the major meetings all taking place. And we will hear about the Panama Papers with
Angel Gurria at the OECD in a moment. QUEST MEANS BUSINESS.
QUEST: What a glorious day it is in Washington. Spring has definitely sprung. The Jefferson Memorial. It's warm, it's sunny and most pleasant.
The G20 has rejected or at least refused to accept necessarily the latest promises from the Panamanians and are now threatening penalties against the
country and against tax havens.
It comes after the so-called Panama Papers leaks provoked a global uproar over tax evasion. On this program yesterday, Panama's deputy economy
minister said that Panama would clean up its act.
(BEGIN VIDEO CLIP)
PANAMA'S DEPUTY ECONOMY MINISTER: What worries me the most is the reputational factor, not the direct factor of GDP but the reputational
factor of people saying, well, if Panama is not behaving well as a global citizen, we shouldn't go there. So we're going to do whatever is in our
power to make that -- to comply with international standards.
(END VIDEO CLIP)
QUEST: Now the OECD and other ministers say Panama is not going far enough or fast enough. The G20 says it will work with the OECD to require the
exchange of information on account holders.
It's considered to be a priority not only to have the so-called common reporting standards but also to know the beneficial ownership, who owns the
various companies that are now being put offshore.
I spoke to Angel Gurria, the OECD chief, here at the IMF and I started by asking if he thinks Panama can and will get its act together.
(BEGIN VIDEO CLIP)
ANGEL GURRIA, OECD CHIEF: We hope that there's a silver lining in this issue of the Panama Papers, that is that there will be a pre-Panama Papers
and a post-Panama Papers, if you will and that post means everybody's on board, including Panama, which has not joined the international community
in the fight for transparency.
OK. Now even Nahru Manwatu (ph) are on board so in a way Panama is the last man out. Now what we're saying is join because --
QUEST: They said he was going to join. Standing where you are, he said he's going to join.
GURRIA: Well, we hope they do. And we hope that the quality of the contribution is good and that will be a very good result of this crisis.
QUEST: Are you saying that that which has been promised so far is not good enough?
GURRIA: What we've been saying is that there have been a number of expressions over the years about joining and -- well, the proof of the pie
is in the eating.
QUEST: All right, so far, you've not eaten it?
GURRIA: Well, let's say it's only yesterday that they said in your program. So let's, you know, let's stay tuned.
QUEST: Are we heading to a state -- and I'm thinking now about the U.S. rules on tax inversion for corporate tax inversion.
Are we heading to a state where legitimate, aggressive tax avoidance is not acceptable?
GURRIA: Yes, because the word "aggressive" means that you go to an extreme and you use the rules to your benefit. But basically the rules allow it.
It's not -- it may not be illegal, what you got to do, if it result.
And somebody paying 2 percent instead of paying 20 percent or 25 percent, it means you got to change the rules. This is what is being attempted now.
This is what is going to happen now actually and that is you're going to have a fairer, you know, more level playing field.
QUEST: I want to talk about Brexit. Today is the day when the starting gun is fired in the U.K. And you're quite clear on this, aren't you, that,
from OECD's point of view and from your point of view, it would be a retrograde step for the U.K. to vote to leave?
GURRIA: Absolutely. It would be bad for the U.K.; it would be bad for Europe; it would be bad for the world. It would introduce an element of
uncertainty at a time when we are precisely trying to go for a strengthening of the framework.
And we are going to come out, in the next few days, with a detailed analysis, you know, with numbers and with a number of simulations. But
basically we believe that it is bad for everybody involved to see the U.K. leaving and, you know --
GURRIA: -- we're going to do everything that we can in order to avoid it.
(END VIDEO CLIP)
QUEST: Nigeria's Senate has voted unanimously to demand an update on the missing Chibok girls after a proof of life video showing them has aired on
Now we aired the video two years after the mass kidnapping by Boko Haram. The video shows 15 of the girls and ends with one of them asking the
government to take action to free them.
A Nigerian senator tells CNN the video offers a new dimension to the search. He says security agency chiefs are expected to brief the Senate
early next week. I asked Nigeria's finance minister if every possible action is now being taken to find these girls.
(BEGIN VIDEO CLIP)
NIGERIA'S FINANCE MINISTER: The answer to what has been done is everything. Everything possible is being done at the highest level. And
I'm not one of the -- part of the security team so I obviously don't have the details.
But I will tell you that, in terms of financial releases, in terms of cooperation with countries in the borders, in terms of just having all the
surveillance equipment and things that we need, everything is being done.
QUEST: The Panama Papers. Not necessarily linked directly to it but what efforts -- and we hear at (INAUDIBLE) you're now just sort of busy going
around the world trying to recoup.
You've been to Dubai. You've been to Dubai to get money back. Obviously, you have a vested great interest in Panama telling you who's got money,
your money, in their bank accounts, haven't you?
MINISTER: Yes, absolutely. Absolutely. And I think -- I mean, I think the Panama Papers are beyond Nigeria. It's about fairness. And I think
that's the reaction of everybody. And that's the reaction of the Nigerian government.
The sense of fairness, you know, whose money is it, why are you hiding it, if you pay tax on it, then, I mean, having tax management strategies is not
illegal but it's where the funds themselves are illegal. Then of course we're interested.
QUEST: But have you been looking for your money around the world?
MINISTER: Oh, absolutely. Everywhere our money is, we -- look, we're facing a fairly serious infrastructure challenge. And we need to spend
money on the things that we get the Nigerian economy going: rail, road, power. And we're borrowing.
So rather than borrow, it makes sense to go and retrieve stolen funds anywhere in the world that we can locate them. And we're working very hard
to do so.
QUEST: Have you found any?
QUEST: Have you got it back yet?
MINISTER: Well, you see, this is the problem because when it's within country, it's easier to get back. When it's outside country, then it takes
long. I mean, we are --
QUEST: Have you been to Dubai?
Did you get any money back?
MINISTER: Well, let me tell you this. A batch of money, which was stolen 18 years ago, we are still talking to the Swiss about getting it back.
That's how long it takes. So it's very sad because we need this money and now we're -- we have to go, of course, we understand you have to go through
a judicial process. You have to prove that it was stolen.
But 18 years is a long time.
QUEST: On the Nigerian economic situation, you've gone for a deficit budget.
QUEST: For all the reasons that you've talked about. You talk about trosset (ph) Keynesian economics and a spending basis. But you're doing
that at a time when your number one commodity is still low. So deficits for the foreseeable future.
MINISTER: Manage deficits to grow the economy. The debt-to-GDP ratio at the moment is low so we don't owe much. But we don't have any
infrastructure, either, that can grow the economy. So it's actually forced economy. So what we're doing is we're borrowing. But it's targeted
borrowing. It's borrowing to support our infrastructure, particularly power.
We're getting rail moving again. We haven't had any rail investments since the colonial days. We're getting the rails moving again. We're getting
power sorted out. We're getting housing sorted out. We're getting roads sorted out.
These are the things that will grow the economy. These are the things that will create jobs and opportunities. And Nigeria's a vast country. We've
got huge opportunity. But in most cases, we're uncompetitive because it's so expensive to transport, it's so expensive to manufacture.
(END VIDEO CLIP)
QUEST: That's Nigeria's relatively new finance minister on the issues not only of the Chibok girls but also the Panama Papers and the issues
affecting the economy.
Nigeria expected to have a deficit on the budget, both this year and next.
The markets and after what was a fairly robust start to the week with some good triple-digit gains, by the time we got to Friday, just look at that,
down 28, the best part of 29 points.
The market down at the open; the losses accelerate after lunch and just pared towards the close. It was oil prices which tumbled. Now those oil
prices falling hit energy prices. And as we've seen, the sort of rather odd nature of the market, which seems to go perversely in opposite
directions, the more one might expect, falling oil prices taking the market down with it.
There's also a report that --
QUEST: -- Iran's oil minister will skip this weekend's meeting of key oil producers in Doha.
That might not be so much of a surprise, bearing in mind one of the reasons it will be Russia, it will be Saudi Arabia and they will be talking about
potential freezes of production, let alone cutting further.
As we continue on QUEST MEANS BUSINESS, which comes live from the IMF and World Bank, spring meetings, Belgium's transport minister is out. It has
nothing to do with the Panama Papers. It's a row over Belgian security. The new conversation on tax evasion and Brexit. I've got plenty to talk
about with the Belgian finance minister, who joins me after the break. QUEST MEANS BUSINESS in Washington, D.C.
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS live from Washington in just a moment, when Belgium's finance minister is going
to be joining me live. As questions mount over the country's handling of its airport security. And the fallout of the Panama Papers. It's the
Spanish cabinet. We'll have the Spanish finance minister to talk about that.
Before all of that, this is CNN and, on this network, the news always comes first.
[16:30:00] QUEST: An earthquake has struck Southern Japan for the second day in a row. A powerful 7.0 quake near Kumamoto.
So, let's go to the latest from Japan. As we were talking earlier. The journalist Mike Fern is in Tokyo. He joins me now on the line live. A
sort of morning arrives. What are you now experiencing? What do we now know is the latest position either on casualties and damage?
MIKE FIRN, JOURNALIST, TOKYO (via telephone): Well, we've just heard from the region that disaster management saying that one person has been
confirmed dead in Saturday's quake. NHK television reporting a further 400 injuries. That's on top of nine killed and as many as 1,000 injured in the
Thursday night quake. There have been blazes around Kumamoto city and a nearby town. Firefighters working through the night to tackle them. A
tough job because the main water supply was actually cut on 9:00 p.m. Friday night to repair damaged pipes. It's now back on 7:00 in the
morning. We've also got the problem that after this magnitude 7.0 quake, there's been a series of strong aftershocks, more than 40 so far. Also
heavy rain forecast later today, which is further hampering rescue work.
QUEST: Now, Mike, help me understand. There was a quake yesterday. Then we got the latest quake. Do we believe what happened last night is an
aftershock or is this a new quake, if you like, or is this just semantics?
FIRN: Well, some seismologists are saying that the 6.2 quake on Thursday was actually a pre-shock and we were building up to the 7.0 magnitude
quake, but it's anyone's guess really whether this is going to be the biggest one or there's going further quakes even bigger than that. We have
had that in the past in Japan, but there have been some strong tremors and then an even bigger quake hits. And also, you know, we're getting very
strong aftershocks. Intensity of level 6.6 occurring pretty much every hour. So this has been an ongoing problem in the island of Kyushu. These
quakes not likely to subside according to the meteorological office for several more days.
QUEST: Give me a feeling, if you will, please, Mike, for what they -- I realize it's the early morning, and it's the morning after the night
before, but give me a feeling for the mood. From those you've spoken to. Are people out and about on the streets? Are people sort of worried?
Telephone calls being made? Are you safe? What's going to happen? Is there a feeling of mounting concern?
FIRN: Well, a lot of people will be contacting relative with texting, whether they're okay. Also, contacting the regional office to get
emergency information from them. They've been good with updating that information throughout the night. We've got thousands of people spending
the night in shelters at schools and government buildings in Kumamoto. The power has been restored, that went back on at midnight. But other said
water is out and water being rationed there. So a very miserable time for them and also, you know, a concern, it's very difficult to get in touch
with people because everybody overloading the mobile system and try to send messages at the same time. Communication is very tough. We also have
travel pretty restrictive with a lot of the rail times, the roads in the area are down and flights being disrupted as well and there's the regional
QUEST: Mike, we know that the core infrastructure in Japan, the tall buildings, the roads, the overpasses, are built to withstand some of the
worst excesses of earthquakes. Is there a feeling that in these instances we're hearing now, with the exception of the tower on Thursday, that the
system is working as it should?
FIRN: Well, you've got to remember, when we talk about the high-tech buildings, the buildings that have rubber dampers, the buildings that have
internal pendulums or set on rubber mounts, but a lot of these buildings are being built in the big cities in Tokyo. Also, there's very strong
earthquakes, but over in Kyushu there are still a lot of old wooden buildings a lot of very sufficient old buildings, and that's been the
problem that a lot of those are the ones that collapsed. Although we did see one of these, the local town hall, partially caved in. You would
expect a better standards of construction of the government building.
[16:35:08] QUEST: Mike Firn, joining us, It is early morning by my reckoning it is sort of the early hours of the morning on Saturday. Thank
you, sir, for joining us.
Belgium's transport minister has resigned over issues of airport security Jacqueline Galant, announced her resignation a short time ago. She's
accused of ignoring an E.U. report that warned of poor security at Belgian's airports. That report was in Galant's office a year before last
month's attacks in Brussels by ISIS suicide bombers. Thirty-two people were killed.
(BEGIN VIDEO CLIP)
JACQUELINE GALANT, BELGIAN TRANSPORT MINISTER (through translator): This mix-up that aims at saying that I was lax by not paying enough attention to
security issues deeply affects me. Indeed, if there is one area to which I always paid attention, it is this one.
(END VIDEO CLIP)
QUEST: Belgium is the Eurozone sixth largest economy. The Finance Minister, Johann Van Overtveldt, is attending the IMF spring meetings and
joins me now. One of your colleagues resigns. She sort of says she didn't do anything wrong. Why did she go, do you think?
JOHAN VAN OVERTVELDT, BELGIAN FINANCE MINISTER: Well, there's been some unfortunate communication with respect to the E.U. reports on airport
security and she decided to step aside due to this unfortunate communication. I don't think she's to blame for anything. She did a great
job and communication came out a little bit on the wrong side of her side and that inspired her to take this decision, together with the Prime
QUEST: OK, so with that in mind, I should take a look on this. How deep, how great is that sense of crisis now in Belgium's government? Because at
the time of course, there was that issue of whether or not, you know, the Interior Minister would go, or Justice Minister go. What is the stability
and the sense of government there?
VAN OVERTVELDT: I think the government is very stable. I think we are very much aware we have to deal with this issue thoroughly. The terrorist
ring has brought to prison almost -- as far as we know today in its totality. And we're working further on this. It's very intense sense of
urgency trying to solve this issue. But I think, in terms of the stability of the government, there is no doubt whatsoever at this point in time.
QUEST: On the greater question now, let's talk about the economic -- and I talk about economic effect with respect, realizing the awfulness of the
death and murder that took place. But how serious are you expecting the economy to be hurt by these attacks, by even the fear post-Paris?
VAN OVERTVELDT: Yes, there's always an element of uncertainty, of fearfulness of people, which will be negative for the economy. We're
trying to do everything with the government to try this period as short as possible and to get everything back to normal as soon as possible. And I
think we can succeed in that. We're working on that fully.
QUEST: What's it going to take to get things back? Obviously, you have a tourism effect. You have a business effect. You have basically a slowdown
in the economy as a result of what's happened.
VAN OVERTVELDT: Yes, of course, that's undeniable. We see that, for example, in terms of the occupation rate of hotels and things like that,
related to that restaurant, the tourist business, like you say yourself, but I'm pretty confident with the way the government is handling this issue
now that we will get back to normal quite soon. And that we will get confidence not only of our own people but also the potential visitors to
QUEST: I want to just finally discuss with you the issue that has just launched today, the campaign for the U.K. referendum that is clearly going
to build up steam. The one thing I'm hearing here at the IMF, more and more people are starting to say, hang on, this could be very serious if the
Brits decide to leave. Is that your feeling as well?
VAN OVERTVELDT: Well it's of course a major issue for the European community. And certainly also for the European economy because why do we
see the dismal growth rate we see today in Europe all over the place. It's because there's a lot of uncertainty. One of the major elements of that
uncertainty is the Brexit issue. The sooner we get this solved, the better. But it's certainly a very major issue for the European Union and
QUEST: The vote on June 23rd, Minister, good to see you as always, sir.
VAN OVERTVELDT: Thank you.
QUEST: Thank you very much indeed. Now as we continue our coverage here at the IMF and World Bank. We're going to be discussing the Democratic
candidates and their call to break up the big banks. As QUEST MEANS BUSINESS live from Washington.
[16:40:00] (COMMERCIAL BREAK)
QUEST: Welcome back to Washington. And the last debate before the crucial state of New York votes next week. The Democratic presidential hopefuls
faced off in Brooklyn within sights of New York's financial district. Hillary Clinton and Bernie Sanders both called for big banks to be broken
up and then each criticized the other's plans on how to do it.
(BEGIN VIDEO CLIP)
BERNIE SANDERS, U.S. DEMOCRATIC PRESIDENTIAL CANDIDATE: When the greed and recklessness and illegal behavior of Wall Street brought this country into
the worst economic downturn since the great recession -- great depression of the '30s, when millions of people lost their jobs and their homes and
their life savings. The obvious response is that you got a bunch of fraudulent operators and that they have got to be broken up. That was my
view way back. And I introduced legislation to do that. Now, Secretary Clinton was busy giving speeches to Goldman Sachs for $225,000 a speech.
HILLARY CLINTON, U.S. DEMOCRATIC PRESIDENTIAL CANDIDATE: I believe strongly that executives of any of these organizations should be
financially penalized if there is a settlement, they should have to pay up through compensation or bonuses because we have to go after not just the
big giant institution, we've got to go after the people making the decisions in the institutions and hold them accountable as well.
(END VIDEO CLIP)
QUEST: Clinton and Sanders. Greg Valliere is the chief strategy at more Horizon Investments he joins me from Washington D.C. Greg, on the very
week that we have the big banks failing their living wills tests, surely both those candidates have a strong point.
GREG VALLIERE, CHIEF STRATEGIST, HORIZON INVESTMENTS: Oh, this is a very, very toxic environment for the big Wall Street firms, Richard. But at the
same time, I would argue that despite the rhetoric, the solutions sound really easy and seductive. Despite all of this, I don't see anything
happening because none of the legislation could get through the house.
QUEST: OK. None of it could get through. But there's a certain amount of risk and danger that exists. And I will put it to you this way. Because
those living wills were all intended to specifically prevent another Lehman Brothers type of situation. But that hasn't happened.
VALLIERE: No, it has not. And I think that candidates need to come up with incendiary rhetoric to win elections. And it's not just Hillary and
Bernie Sanders. It's Donald Trump as well. Maybe even Ted Cruz. I think this very populous rhetoric is warranted based on what you say. As an
analyst, a longtime Washington analyst, I have to ask the question, what could get enacted into law? And that question I think produces an answer,
QUEST: OK, so -- but every candidate knows Sanders, Clinton, Trump, Cruz, every candidate knows that they are on safe ground by bashing the banks or
even bashing big companies. Because I listened to both Immelt and Verizon's CEO and I heard Sanders maintaining his possession and I'm still
not sure who's right.
[16:45:00] VALLIERE: Yes, but I do think that all of the candidates realize that they can get votes, they can win support by sounding very
populous and very partisan towards Wall Street and these big companies. So that's going to continue. I just think that if you look at the committees
on the Hill, I don't see a transaction tax on Wall Street passing. I don't even see the carried interest tax break being eliminated. I certainly
don't see the big banks being broken up. There's one thing though, Richard, that I would worry about, and that is this harsh rhetoric towards
the Federal Reserve. Cruz engaged in that today in an interview. I think the Federal Reserve is also a whipping boy and that's not a good thing.
QUEST: OK. But, Greg, I want to focus finally if we may, just on this anti-capitalist, anti-big company view. I mean, you have Sanders
attacking, Immelt returns, Verizon comes in for a second bash and still, you know, are there votes in beating up GE?
VALLIERE: Yes, but I would say this and the movie, and the book, "The Big Short." There are all of these things now that make it very fashionable to
attack these companies. But I would argue at the end of the day, it's more smoke than fire.
QUEST: Greg Valliere with the smoke and fire on a beautiful day in Washington. It's good to see you, sir, thank you.
VALLIERE: Nice to see you.
QUEST: On a day when a Spanish minister fell on his metaphorical sword over Panama Papers. I'll be speaking live to the country's economy
minister about those issues, Spain's political problems. Oh, yes, and there's Brexit. We're at the IMF and World Bank in the atrium of a
building. I think they call IMF 2 or HQ 2 or building 2 or number 2 or somewhere 2. It's very big.
QUEST: Another political casualty of the Panama Papers. This time it Spain's Industry Minister who has resigned, Jos, Manuel Soria was embroiled
in a scandal after he's named in the papers over alleged links to offshore dealings. He denies any wrongdoing. The resignation, though, comes at a
time when Spain faces possible second general election in June. Businesses are getting a break from record low interest rates in the euro. I want to
bring in the Spanish Economy Minister, Luiz de Guindos. Good to see you, sir.
LUIS DE GUINDOS, SPANISH ECONOMY MINISTER: Good to see you again.
QUEST: So, you've lost a minister. Why did he go?
DE GUINDOS: Well, I think it's an act of responsibility. I think that the minister is sorry -- he was director of a company, domiciled in Jersey 20
years ago. And despite the fact there is not any wrongdoing at all, he has decided to step down.
QUEST: I mean is Panama Papers, in your honest opinion, is Panama Papers now just sweeping up anyone and everyone?
DE GUINDOS: No, I don't think so. I think that, you know, we have to look forward and we have to learn from previous failures and I think that --
what we have to do is minimize the spaces of impunity and capacity.
[16:50:00] And I think we are doing that. Yesterday, for instance, the EU5 ministers, we decided, you know, a proposal to have automatic exchange of
information about the real ownership of shell companies everywhere.
QUEST: How long now has Spain had a Catalian government?
DE GUINDOS: I think it is 110 days, if my memory does not fail.
QUEST: So at some point, you know, enough is enough. You obviously cannot get a governing coalition together, either side. Therefore, it's time to
go back to the country.
DE GUINDOS: Well, we have a very clear line. If nobody's able to form a government before May 2nd, immediately fresh elections will be called
automatically. So the elections will take place on June 26.
QUEST: As my grandmother used to say, that's no way to run a railroad. And arguably, you could say it's no way to run a country. For some months
at such a crucial time in the economic cycle to be having -- particularly for Spain basically be rudderless.
DE GUINDOS: But you have to be reminded, for instance, we are approved to the 2016, so we have a very important instrument in our hands in order to
continue -- to continue taking measures. And simultaneously, while the evolution in the performance of the Spanish economy has been quite
remarkable. The data we have available in the first quarter of this year is that the Spanish economy has continued growing fastly and that we are
outperforming our fears.
QUEST: One ventures to suggest, you are outperforming in spite of the government, not because of it.
DE GUINDOS: Well, this is a possibility. But I cannot -- you know, the importance of the Spanish economy is due to the reforms that we have taken
over the last few years.
QUEST: Today the official campaign began on Brexit. It sort of crept up on anybody, the seriousness of this issue, but now you're all having to get
to grips with it. How worried are you?
DE GUINDOS: well, I think first of all, this is up to the British people. But I think that the British people they know perfectly the consequences of
Brexit. And I am totally sure they will continue being members of the union. So I am fully convinced that's a mature society. They will vote
for keeping Britain in the union.
QUEST: But bearing in mind the very close commercial relationships between Spain and the United Kingdom, are you getting ready for a potential plan B?
DE GUINDOS: No. We do not have a plan B. I think we have only one plan A. That is that Britain will continue to be a member of the union. I
think that Brexit will be surely detrimental to everybody, to the U.K. and to continental Europe, and so I am sure that they are not going to leave.
QUEST: Good to see you, sir. And if there are elections, they will be June?
DE GUINDOS: June 26.
QUEST: June 26, just three days after Brexit.
DE GUINDOS: After Brexit, that's right.
QUEST: I'll see you in Spain, thank you.
The war of words between IMF and Greece is intensifying. The Greek Prime Minister Alexis Tsipras, says the IMF should stop tinkering with the
countries latest bailout. It all comes amongst fears that the IMF may pull out of the deal all together. Earlier today the IMF had said the deal
requires realistic targets.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, MANAGING DIRECTOR, IMF: Equally, I think we've always been very consistent in saying that the objective is stability,
sustainability, sovereignty of Greece ultimately, and to reach those objectives, there has to be real and realistic numbers and sustainable
(END VIDEO CLIP)
QUEST: The Europe Commissioner for Economic Affairs says good progress is being made on negotiations for a Greek rescue package. Commissioner Pierre
Moscovici, told me earlier that he wants resolution on the Greek question as soon as possible.
PIERRE MOSCOVICI, EUROPEAN COMMISSIONER OF ECONOMIC AND FINANCIAL AFFAIRS: We need to work on this with really cool blood and very clear mind. We
need to have an agreement in order to conclude the review and we need it fast. The negotiations going on, they're just been confronted for those
meetings. There is opposed of those negotiations, but there are good progress. What I hope and what I expect really, is that we can conclude as
fast as possible this review and then move on to other items. I want Greece to come back to confidence. I want the investors to go back to
Greece. I want growth there. I want employment there. Again, our common interest. So let's be cool tempered. But let's also be detail mind to
find a solution and I think that's possible. We need to avoid any kind of new crisis. I don't want to hear again any more talking about Grexit in
any kind of meeting of the Euro group.
[16:55:00] That should be over. There's been such progress made since last summer. Yes, obviously, it's possible.
QUEST: Nobody really wants to touch Brexit with a ten-foot pole, but you have to.
MOSCOVICI: Well, it's very hard for us to talk about that because it's a matter of sovereignty and it's up to Mr. Cameron and the political forces
in Great Britain to lead the campaign, but opposition is very clear. We want a United Kingdom and a united Europe. That's the way Europe has
always been built. And obviously common interest as well for the Brits and for the rest of the Europeans, that we stick together.
Good lord, we've got Grexit, we've got Brexit, and we'll have a Profitable Moment after the break. QUEST MEANS BUSINESS at the IMF.
QUEST: Tonight's Profitable Moment. In the salons, in the corners, in the corridors, they darkly talk about Brexit. It's suddenly dawned on
everybody that the U.K. is going to have a vote on the 23rd of June and the results will go against them. Now people are openly saying what the
effects of an E.U. without the U.K. would look like, the short term shocks, the long term effects. But they have to do it delicately here. They don't
want to be seen to be scaring the horses. Nothing more likely to get the Brits up in anger than being told what to do. Brexit is well and truly on
the global economic agenda. And it's going to happen, or at least the vote, on June 23rd. And that's QUEST MEANS BUSINESS for this Friday night.
I'm Richard Quest at the IMF in Washington, D.C. whatever you're up to in the hours ahead, I hope it's profitable. We're back in New York next week,