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QUEST MEANS BUSINESS
Thailand Rocked by 11 Bombs in One Day; Tourism Minister Responds to Thai Terror Attacks; Clinton Releases 2015 Tax Returns; Tax Returns Shows Clintons Paid 30.6 Percent Rate; Phelps Breaks 2000-Year-Old Olympic Record; U.S. Women's Football Team Knocked Out; Eurozone Growth Slows in Second Quarter; Ukraine Troops on High Alert Amid Russian Tensions; U.S. Ratings for Rio Games Struggle; Daily Beast Pulls Olympic Article After Backlash; Brazilian Rugby Star Accepts On-Field Proposal
Aired August 12, 2016 - 16:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN ANCHOR: the closing bell is about to ring on Wall Street. Push the button. Thank you. The Dow Jones is up to 38
points. Girls on the Run is the organization who are ringing the closing bell tonight on Wall Street. The end of a hot and humid week. Yes, come
on, you can do it, let's have a robust, firm gavel. There we go. A strong gavel that brings trading to a close. It is Friday. It's August the 12th.
Tonight, a series of terror attacks in Thailand. On this program you're going to hear the country's tourism minister, who joins me live.
Hillary Clinton uses her tax returns to bait Donald Trump.
And Oscar De La Hoya, he joins me to tell me how to grow your gold medal after you've won it. I'm Richard Quest. It may be a Friday, but of course
I still mean business.
Good evening. Police in Thailand say they do not suspect international terrorism in a wave of bombings that has rocked tourist areas over the past
24 hours. At least four people are dead, 30 are injured, and two people have been detained by the authorities. So far no one has claimed
responsibility for the atrocities. Thailand has been copying with political turmoil since Sunday's constitutional referendum. Friday is a
public holiday. It's the national Mother's Day. A short time ago the prime minister called for calm and for vigilance.
(BEGIN VIDEO CLIP)
PRAYUT CHAN-O-CHA, THAI PRIME MINISTER (through translator): This incident will remind all Thais that there are still ill-intended in the country.
There are people who tried to stir up the situation before the referendum day and on the important day for all Thais.
(END VIDEO CLIP)
QUEST: Our correspondent Ivan Watson is in Thailand and a short while ago filed this dispatch.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): A busy street in a popular tourist resort transformed into a crime scene Thursday
night after a deadly bomb blast. The bomb just one of a series of explosions that erupted across five provinces in Thailand over the course
of 24 hours. The targets mostly major tourist destination popular with locals and foreigners alike. The coastal city resort city of Hua Hin
sustained the most casualties after two explosions Thursday evening, followed by another twin bombing Friday morning. Two explosions also hit a
popular holiday spot Phuket. One at a dolphin park on the beach and another at Bangala street. Another two bombs hit Surat Thani city which
was a transit point for tourists going to Ko Samui and the other islands that Thailand is famous for. Thai police say the attacks don't appear
related to international terrorism.
PIYAPAN PINGMUANG, DEPUTY POLICE SPOKESMAN: What we know for sure is that the incidents do not link directly with any kind of terrorism. It's in
fact, they say the local sabotage by which we are trying to identify those suspects who are behind it. So it's too soon to jump to any conclusion.
WATSON: Authorities tightened security across Thailand but many tourists are clearly rattled. CNN spoke to one foreign witness of Thursday night's
attack, Shane Brett, has been to Hua Hin six times already, but says this may be his last trip.
SHANE BRETT, EYEWITNESS: I love it here. Beautiful scenery, a lot of foreigners here that just want a nice quiet vacation. But after this
visit, and I've heard about other bombings in other areas of Thailand, it's very unsettling. I might be looking at other places in Southeast Asia to
WATSON: If others feel the same way, it could seriously hurt Thailand's economy, which depends heavily on tourism. Ivan Watson, CNN, Hua Hin,
QUEST: Let's put this into exact perspective. Thailand is set to host World Tourism Day in September. The U.N. World Tourism Organization has
condemned the attacks. The Secretary General, Taleb Rifai, says, "More than ever we need to work together to make a great success after the
celebrations of the World Tourism Day, this will be, the best expression of support and union against these hideous acts."
Unfortunately, last August, tourists were among 22 people killed in an explosion at a popular Hindu shrine in Bangkok. Now, the reality is
tourism is exceptionally important for Thailand's economy. It's around 20 to 21, 22 percent of GDP in the widest measure. This year, Thailand's on
course for a record 32 million expected.
[16:05:00] And the government will take in $61 billion from tourism. Just look at those numbers and you will understand the significance and the
worry that threat of this action and this terrorist activity has for the economy. Which is why were pleased that Thailand's minister of tourism has
agreed to get up in the middle of the night and speak to us live on the program tonight on the phone. Minister, thanks for joining us. Obviously
our concern and commiserations at what is taking place. But, you know, on a professional level, we have to ask you, minister, what are you going to
do about it?
KOBKARN WATTANAVRANGKUL, THAILAND TOURISM MINISTER: Thank you so much, Richard. I think Thailand, similar to many countries around the world, we
face many difficulties, ups and downs, throughout the period of time. But we learn the lesson. I think one of the good things about Thailand is we
are very flexible and learn fast. Therefore, the incident that you have mentioned from a year ago at Ratchaprasong intersection in Bangkok. And it
took us about two months to recover. Our sector of Thailand, the public and private sector, we work closely together, learning how to cope with the
situation, how to solve the crisis.
QUEST: Right. But fundamentally, at the end of the day, you have to convince tourists that Thailand is safe. Now, look, I'm not sort of
putting you on the spot, Paris as the same issue, Brussels has the same issue, London has the same issue. You all have to provide evidence to the
tourists that it is safe to visit your cities, don't you?
WATTANAVRANGKUL: Yes. Yes. And so therefore we are now, for example, immediately, this time, all parts join hands in order to see what else we
can do more in order to make the village, the little communities that each of us are taking care of, is more protected. For example, at Hua Hin,
because I guess, we are here. I visited the tourists at the hospitals, and the hotel association there, and the families living there together, the
local police, they are talking and already taking countermeasures in order to survey every corners and streets. How to help the community watch in
order to make it safer.
QUEST: OK, Minister, your country is on track. I was in Thailand just two weeks ago, ten days ago, and you and I had a meeting, when you were able to
announce half-year numbers showing that your country is on track for a record number of tourists. So clearly people still want to visit Thailand
despite political difficulties, and now security questions. So really, it's really up to the government, now, isn't it, to prove things are safe.
WATTANAVRANGKUL: Yes, the government. But it doesn't mean that only the government. With this kind of crisis, similar to the previous time, we get
together more. We feel it is the time that we have to unite more and learn the lesson, because tourism is not only in terms of revenue-making, but
it's something very dear to the heart of the Thai people. Because tourism covers international including the Thai domestic travelers. So we need to
take care of each other. And the local lives everywhere. So therefore coming to this, we believe that we will find more measurements in order so
solve this. And now the government is working very hard in order to find the reason of the situation.
QUEST: Thank you, minister. We are grateful that you got up in the middle of the night, it is what, 3:00 in the morning in Thailand. Perhaps that in
itself that your speaking to us is an indication of the seriousness with which you take these developments. Thank you, minister, for joining us.
[16:10:00] I've written about Thailand tonight in the newsletter. In the issues of course, it is not just a question Thailand, it is many other
countries, but obviously Thai's economy does rests on this so much. You can join the newsletter team, CNNmoney.com/quest, where you can subscribe.
Here it is, a long document. There's a prurience to reading this document. It's a voyeurism as one reads Hillary and William Clinton's tax return.
Well, now she's thrown down the gauntlet to Donald Trump and released her 2015 tax details. It shows the Clintons earned more than $10 million last
year. They paid around 30 percent of income tax, Federal tax after deductions. And still no sign of Donald Trump's own tax return.
Joe Johns is our senior Washington correspondent. He's with us now. You know, all things considered, Joe, it's a very simple return. The money --
I mean, the big bucks came from their speaking engagements. His pension as President. Whatever she made from any pensions. And that's really about
it. But it's the significance of the release that's important.
JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: That's absolutely right, Richard. The Clinton campaign is releasing these returns with a big public
flourish, and they put out a new web ad today featuring prominent Republican voices like Mitt Romney, Ted Cruz, saying Donald Trump should
release his tax returns. It's pretty clear then that the Clinton campaign is making a big push today to pressure Trump to release his returns, even
though he says he won't do it, because he's dealing with an ongoing audit.
Just to run through those numbers row fast. Hillary Clinton's 2015 return, this is a joint tax return between she and the former president. The top
line number of $10.6 million they raked in last year, a significant decrease from the year before, when they made $28 million. According to
the return, they paid 3.24 million in Federal Income Taxes. So one of the big questions that's always asked, what was their effective tax rate, in
other words what kind of a tax burden did they have. The people at CNN Money calculate it's about 30.6 percent based on their adjusted gross
income, pretty close to what they were paying in 2014, the year before Hillary Clinton started running for president, by the way. Important to
say that the campaign reported the Clintons' effective tax rate was 34 percent. I know this is getting into the weeds. That includes more than
$300,000 the couple played in self-employment taxes, in other words payroll tax which is Social Security and Medicare.
QUEST: And of course if we add in, just to prove that the weeds are deep, state and local taxes, you can get up to a nominal tax rate of about 40
percent. But the U.S. tax authorities allow vast deductions. So really you do have to do it in a fairly basic way. Look, Joe, what is -- Donald
Trump has not released his return. He says he's under audit. The Democrats basically believe or fear -- not fear, they think that there's
something smelly in his tax affairs.
JOHNS: That's right. And I think the conventional wisdom from a lot of tax experts that we have talked to suggest that he's not precluded from
releasing his tax returns, quite frankly. Many Republicans have questioned whether, for example, Donald Trump really is not giving as much money to
charity as he has suggested he does, or that his income or that his net worth is much less. So there are some questions, and perhaps if he ever
releases it, we'll find out those answers.
QUEST: But in a sentence, Joe, this has rumbled on for months. All right, it's got a new lease on life because the Clintons have released their
returns. However, is it likely to damage Donald Trump in this, or is the public -- for months he's refused to. Is there any evidence that this
refusal is damaging him?
JOHNS: Difficult to say. But there is always that question of truthfulness or the lack thereof if Donald Trump says he gives a bunch of
money to charity and it turns out he didn't, or says he has an income that he really doesn't have, then it starts to, you know, build into a picture
of untruthfulness. And that's a problem Hillary Clinton as well. So this, in the United States right now, this race is a race to the bottom, and
anything that affects your credibility can only hurt you more.
QUEST: Good to see you, sir, thank you.
JOHNS: You bet.
QUEST: I freely admit there's something deliciously voyeuristic about reading somebody else's tax return.
[16:15:00] It's been a stormy start to the track and field events in Rio. This is not the kind of weather in which you want to compete. But of
course it is winter in the southern hemisphere. So why are we not surprised? But Copacabana Beach is beautiful nonetheless. That's where we
will be with Don Riddell after the break.
QUEST: Ah, for 2,000 years his name was etched in Olympic history, Leonidas of Rhodes, the greatest athlete of ancient Greece. Between 164
and 152 BC. His 12 Olympic titles became the stuff of legends. Now move over, Leonidas. Michael Phelps has arrived. With his victory in Thursday
200-meters medley, Phelps won his 13th individual Olympic gold. Leonidas finishes second for once. A 2 millennia record suddenly booted out of the
way in the swimming pool. And Phelps isn't even done competing yet. CNN's don Riddell is on Copacabana Beach. It looks like it's cheered up a little
bit, Mr. Riddle, looks a bit more pleasant, the weather. Nice to see you're doing duty on the beach in the sand.
DON RIDDELL, CNN WORLD SPORT: Yes, absolutely. It's a beautiful day here, Richard. It started off not quite so nice this morning. But look at this
amazing sunset. We're on the beach. We're on the sand. It's 5:50 local time It's beer o'clock around me. So as usual people having a good time.
And you always take a bit of a risk when we broadcast live from the beach itself. Were kind of down amongst the masses. So expect the unexpected.
But let's try to do in Olympic update shall we?
QUEST: Bearing in mind the scantily-clad, I think our viewers would be delighted if something unexpected comes along, that could certainly boost
the ratings. OK, Phelps has kicked Leonidas off his perch. He is the greatest Olympian. What's the quality of the day's events we've seen so
RIDDELL: All eyes on the pool, as has been the case every night for the Olympics so far, Richard. There have been so many amazing storylines. So
many rivalries born and continued here at the games. But Phelps tonight, if you're a Phelps fan, a swimming fan, just in Olympic history fan, I
guess, this is the race to watch. Because this is his penultimate Olympic appearance. And it is going to be his final individual race.
He's up against his rival, Chad le Clos from South Africa in the 100-meter butterfly. Le Clos disappointing in the 200 meter. So you would expect
Phelps to do it again, but we'll see. You know, Phelps was kind of disappointing in London four years ago, as if he didn't really want to be
there. But he's back with a vengeance. This time four gold already, 22 in total. And I would expect he's probably going to carry on in that kind of
[16:20:03] QUEST: So what happened, Don, to the women's U.S. soccer team? World champions a few years ago. Knocked out by Sweden. I mean, anybody
can get knocked out, but did Sweden play well or did the U.S. play badly?
RIDDELL: Well, I mean, they went out on penalties, Richard. Anybody can lose on penalties. I can tell you that the United States will be bitterly,
bitterly disappointed, not just to not win but not to get anywhere near the medals. As you say, they were world champions. They are three-time
defending Olympic champions going out in the quarter finals. That was not a script that anybody expected to be written here in Rio. I'm sure
questions will be asked about the performance of the team. These things happen. But it's over for team USA.
QUEST: Finally, Don, is there -- you know, it's halfway through the Olympics. Is there a real Olympics feel now in Rio? I mean, the sport is
superb. The records have been falling, both in the gymnasium and the swimming pool. What's the mood on the beach?
RIDDELL: The mood on the beach is always great. But I guess the mood amongst the Olympics is a different question. I mean, we knew coming into
these games that the locals weren't necessarily as supportive of this Olympiad as they've been in other years for many years, and there are many
reasons for that. The economy being one of them. But we're starting to get a real sense of how much they are or are not into it. And that was
because the track and field events started the day. That's the marquee event. It dominates the second week. And the stadium looked kind of half
Now, the authorities are saying that 58 to 65 percent of tickets were sold for these sessions. They are guaranteeing us that the final events in the
athletics are sold out. But I was a bit curious about this comment, he said all the finals are sold out, especially the 100-meter final. Well, if
they're all sold out, you can't be more sold out than something that is already sold out. So will wait and see. I think that was maybe providing
a bit more information there. But we will see. You're right, the events have been great, it looks fantastic on television. The sport has been
amazing. But I think it's quite clear that the locals aren't quite as into this Olympics as they have been in past years.
QUEST: They're not quite into it as Don Riddell is on the beach in Copacabana. Safe in the knowledge that every one of his colleagues, every
one of your colleagues, has got a very nasty retort for you for when you get back. You'll be doing overnight duty for the foreseeable future, Mr.
Riddle. Thank you.
RIDDELL: Is that right?
Don Riddell on the beach. It's actually Copacabana Beach is one of the most phenomenal beaches in the world.
Oscar De La Hoya has a message for gold medal winners in Rio. Plan your next steps wisely. The Olympics can secure your financial future. When he
was a 19-year-old amateur boxer, De La Hoya had sprung to fame as the darling of the 1992 Barcelona Games. You remember the picture as well.
Then after taking gold in the lightweight division, he got the nickname the "Golden Boy" and it has stuck with him ever since. De La Hoya used his
Olympics and that name, by the way, the "Golden Boy" as a springboard to a sparkling professional career in boxing. And now runs his own highly
successful promotion company, Golden Boy. I spoke to him last week from Los Angeles. Now, were not talking about Michael Phelps in this, who
obviously has won more gold than most. And has an entire army of advisers around him. But for those newbies who are winning their first gold medal,
he told me after all the titles and all the money, it's the gold medal that he cherishes the most.
OSCAR DE LA HOYA, RETIRED PROFESSIONAL BOXER: By far, it's the number one prized possession that I will always cherish for the rest of my life. You
know, winning a world title in professional boxing is great. I was a ten- time world champion. I lost world titles, I won world titles in professional boxing. But winning that gold medal, nobody takes it away
from you. That gold medal is dear to my heart. It's the most special trophy I will ever, ever have in my life.
QUEST: You're saying that winning streak or that winning drive is different in the Olympics than it might be for say, a fight where there may
be hundreds of thousands of dollars at stake.
DE LA HOYA: It is, because you're fighting for -- you're fighting for pride. You're fighting for your country. You're fighting for not a purse,
not a prize money. You're fighting for something that is dear to your heart, that is dear to your country. You know that the whole world is
watching. You know that this is your one opportunity to shine.
[16:25:01] This is the one stage, international stage where the whole world is watching. And you must perform. It is different. But the emotions are
different. And the feeling is different. The energy is different. So yes, you're right, you are fighting with a different passion.
QUEST: You, sir, have been remarkably successful at taking the amateur success of Olympics with the professional success of boxing and marrying it
into financial success for a long term gain. How did you do it? Very few people are that successful.
DE LA HOYA: It all started with a gold medal in 1992. And I formed a very smart team around me. I was capable enough to surround myself with great
people, knowledgeable people. People that had nothing to do with the sport of boxing. People that knew business, that knew numbers. People that knew
financial strategies, estate planning, you name it. I mean, I formed such a great team because after 1992, Barcelona, winning the gold medal, I was
the commodity. So how can I build on my strategy? How can I build on that gold medal? And therefore I had to surround myself with very smart people.
QUEST: Many youngsters winning their first bronze, silver, or gold, what would your advice be, not on the business front, since we're a business
program, what would your advice be to those experiencing medal wins and now want to know what to do next to make it into something more?
DE LA HOYA: I believe once you win the gold medal, whether it's in swimming, basketball, whether it's boxing, what you have to do is first
think about forming your team. A lot of money is going to be thrown at you and you have to be careful on how you manage that money. Where you
strategically place that money. And most importantly, I tell all these athletes every single day, do not buy the cars. Do not buy the homes. Do
not buy the jewelry. Just save your money, accumulate that wealth, and live happily ever after. Because everything is going to come at you really
fast. The Olympic Games is such a platform where you can build a wonderful nest egg for the future if you know how to play your cards right.
QUEST: Remarkably sensible financial advice from Oscar De La Hoya. Forget the jewelry, forget the cars, forget the big homes, save the money, young
man and all will be well in the future. I think there's a Dickensian quote somewhere in there.
There's at least one event in Rio that's being hidden from you. The city is going head-to-head vying to host the games in 2024. Remember, Tokyo is
and 2020. So you've got representatives from Los Angeles, Paris, Budapest, and Rome. They're in Rio, and they're learning the art, and they're
getting ready to pitch their bid. It's a multistage process. And they're at stage 1 or 2 at the moment.
Many cities have dropped out along the way because of high cost. For example, Hamburg was in the final five selected by the IOC, but after a
referendum on the matter said they didn't want the games. These are the four that are going for it.
Victor Matheson is a professor at the Department of Economics and Accounting, Holy Cross. He studies the Olympics and economics. Good to
see you, sir. It is a bit of a sort of a poisoned chalice, isn't it? Are you surprised that there are even cities of the quality of Paris and Los
Angeles that are even in for it this time?
VICTOR MATHESON, PROFESSOR OF ECONOMICS AND ACCOUNTING, HOLY CROSS: Well, so Los Angeles, we have no surprise there, they're one of the actual
success stories in the last couple of decades. When they hosted back in 1984, they kept the cost down and made a nice profit on it. Since then
though, the Olympics has certainly been a pretty risky proposition for host cities.
QUEST: OK, so Paris lost out to London and has lost out a few times. Budapest has lost out a few times. Rome has had it before. Los Angeles
would be a three-timer. Where do you think they're going to go?
MATHESON: I think the best bet is probably with Los Angeles. First of all, again, there's big pressure on the IOC to choose a city here that's
not going to break the bank. They've gotten a lot of criticism here, and they've had a hard time attracting new candidates to host these games. On
the winter side, everyone dropped out in the last bidding except for Beijing and Almaty. Two cities, two countries not necessarily known for
their democratic ideals. And I think the IOC would really like to see a situation where the Olympics are a better bet.
[16:30:08] QUEST: So London's games were expensive. But they were done properly. Rio's are expensive but they're under way. What attracts cities
like Budapest, Rome, particularly Paris? It doesn't need the publicity of an Olympics. What attracts them still in this day and age, do you think?
MATHESON: Well, certainly one thing is that it gives an opportunity for the city to have a great party. It's not necessarily a big deal to spend a
lot of money in order to make your people happy and in order to have a great event that's an amenity for the people. But it is a big mistake to
host one of these if you think you're going to make a lot of money on them, especially if you have to put in 10, 15 $20 billion of investment to host
QUEST: Victor, good to see you. I promise you, sir, I know the results comes out in September 2017. I will not hold you to your prediction of Los
Angeles, at least not more than 25 times between now and then. Thank you for talking to us, sir.
QUEST: The Eurozone growth is feeling the pain. The recent terrorist attacks, the expected fallout from Brexit. Mohamed El-Erian will be with
us after the break. He's going to talk about the European problems and what does he think of the Olympics. I'm sure he watched them very closely.
QUEST MEANS BUSINESS.
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in a moment. Ukraine's finance minister is on the program. He's going to tell
us the countries is prepared to spend in order to defend itself from Russia.
Those TV ratings from Rio are not as golden as you might have expected. Apparently the time zone isn't to blame. We'll discuss that with Brian
And before we go any further, you need to know this is CNN and of course on this network the news always comes first.
At least four people have died and more than 30 were injured after a wave of bombings rocked tourist areas in Thailand over the last 24 hours. The
country's tourism minister speaking on this program said her country will learn from these atrocious attacks.
(BEGIN VIDEO CLIP)
KOBKARN WATTANAVRANGKUL, THAILAND TOURISM MINISTER: Thailand, similar to many countries around the world, we face many difficulties, ups and downs,
throughout the period of time. But we learn the lesson. I think one of the good things about Thailand is we are very flexible and learn fast.
(END VIDEO CLIP
[16:35:00] QUEST: U.S. Democratic presidential candidate, Hillary Clinton, released her tax return for 2015 and is challenging Donald Trump to do the
same. The documents show that Mr. and Mrs. Clinton earned $10.6 million last year and paid an effective tax rate of 30.6 percent.
The mayor of Cannes has ordered a ban on overtly religious outfits on the French cities beaches. The temporary ban will inhibit burqas worn by some
Muslim women when they visit the beach. The mayor says the outfits could lead to a security risk. The president of the French Human Rights League
has calls the ban a publicity stunt.
Ok, enough Olympics for the moment. Economic growth in the 19 nations that make up the Eurozone slowed in the second quarter. If they were in the
Olympics, the question would be would they even qualify for the finals, never mind let alone get a metal. The Eurozone expand by just a third of 1
percent from April to June, the slowest pace since the middle of 2015. Look at German GDP numbers, that's Q1, .7, down to .6, .4. You've got to
go to Q4, `15. Clearly the robustness that we've seen at the beginning of the year has evaporated.
The region has been rocked by a series of terror attacks and concerns over Brexit. Germany's growth slipped better than expected. Take the totality
of the picture, you'll see we've color coded it. This is the rates of growth that you can see. Look at the countries growing more than half of 1
percentage point. We're really just talking about Germany, Austria, and the eastern side just over there -- into the middle of the continent.
Putting it into perspective, Italy has no growth and more debt. Greece is out of recession, which of course is a blessing for Greece after the
horrific nature of the recession. But the growth is still painfully slow. Joining me is Mohamed El-Erian, the chief economic adviser at Allianz.
Glad to see, sir, in the middle of the summer. Glad to see your still doing duty looking at these economic numbers. Look, GDP in Europe is very
disappointing number, but is the prospect that it will get better?
MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISOR, ALLIANZ: It's a good question. It is what you expect, 1.5 to 2 percent economy. There's two issues. They
go beyond economics, Richard. They talk to politics and institution. One this painfully slow growth, as you put it, is not strong enough for us to
sleep at night, with Brexit headwinds ahead of us. So simply there isn't enough momentum right now. Second, composition matters a great deal. And
you have countries like Italy that are flat, and they have a referendum coming up in October. And that could add to the uncertainty on the
continent. So the growth is simply not strong enough.
QUEST: I know, sir, because we've talked about this, that you're going to tell me long term structural reform is the answer, if you like, to Europe
and Eurozone's woes. But that's a long term measure. In the short term, what gets these laggards back to something approaching real growth?
EL-ERIAN: So they need to move on four things. Yes, structural reforms take long time. But they can move on the fiscal side. Because after all,
monetary policy is running out of bullets. They also need to be much more serious about completing the architecture. The Eurozone is supposed to be
a chair with four legs, and it has 1 1/2 legs, no wonder it's so unstable. And finally, they have to deal with excessive debt, particularly in
countries like Greece. They can do this. This is not an economic engineering problem. This is a political will issue.
QUEST: Right. On that very point, though, you've touched the third rail of the Eurozone's problems, as the Americans would say. Firstly, Italy.
The reluctance to let them restructure or recapitalize the banks out of central government funds. Secondly, Greece, the total reluctance to
monetize the debt, if you like, and distribute it around the rest of the Union. If they don't deal with those problems, then they're never going to
EL-ERIAN: Oh, and they're going to have big political issues. What we're seeing is the growth of the antiestablishment movements throughout. What
Britain has told us is that that can complicate economic management in a major way. So they've got to get their act together quickly, otherwise
it's not the economics that's going to overwhelm them. It's the politics that's going to overwhelm them.
QUEST: If you are on economic grounds -- play along with me for a moment. If you were on economic grounds at the moment, with the Olympics, who would
you give the gold medal to?
[16:40:00] Would it be the United States at the moment?
EL-ERIAN: That's a great question. It's a relative game. The U.S. is the best performer out there. It's solid. It's not doing great, but it's
doing well. You've got other small countries. Romania is doing really well. A few eastern European economies are doing well. The one thing
you've got to think about, I'll give you the class analogy. You're the teacher, right? You don't worry about who's doing well, you worry about
the trouble makers in the back. Keep an eye on countries like Italy, like Russia, like Brazil. They could be the troublemakers. And they're the
ones who are going to decide whether the class as a whole ends up doing relatively well or ends up having issues.
QUEST: Have a lovely weekend, enjoy the summer. Good to see you, sir.
EL-ERIAN: Thank you.
QUEST: Tensions are erupting in Crimea. NATO says it's worried. Ukraine's finance minister tells me why he's looking ahead. He has big
plans for the country. And as you'll hear him tell us in just a moment, in two years, he says, Ukraine will be able to stand on its own. You'll hear
the minister after the break. QUEST MEANS BUSINESS.
QUEST: Ukraine has ordered its troops to be on the highest level of combat readiness. It follows Russia's accusation that Ukraine launched an attack
on critical infrastructure. The U.S. Defense Department is urging both sides to avoid actions that could escalate the situation. Oleksandr
Danylyuk, you're looking at the Ukrainian finance minister. This morning he joined me on the line and told me what he thinks of Moscow's actions in
OLEKSANDR DANYLYUK, UKRAINIAN FINANCE MINISTER: and the annexation of Crimea is such a precedent, that it's such a dangerous precedent for the
whole world that I don't believe that this issue will be neglected. And will be always on a political agenda that will be very high. And this
actuation will eventually will get resolved. At least Ukrainian position is such. And we will always, always keep it at the top of our agenda.
Because as I said, precedent is very important. And what happened in the - - as a precedent, and what happened in Crimea is absolutely unacceptable and very dangerous for the rest of the world.
QUEST: The Ukrainian government is spending more on defense and security. Is that because the situation is getting worse?
DANYLYUK: It's our obligation to spend money to build up our security, our military forces, to protect the country.
QUEST: When we look at the IMF, and the IMF has not disbursed any money to Ukraine for some months now, what is the reason for that? Why have you
been unable to satisfy the IMF?
[16:45:06] DANYLYUK: We're working with IMF not for money. We're working as a partner, as two partners that implement very important reform agenda
in the country. That is what is important. Because we need to think about how Ukraine will work after IMF, which will be in a two years. And that
will be the country that will be supported by own economy, by investors coming, investing into Ukraine. And this is what we need to think about
this. And for that we need to implement a very radical and effective reform agenda.
QUEST: On that point, are you saying, sir, are you saying that the reform program is on track so that the Ukraine will be able to stand on its own
two feet in two years' time?
DANYLYUK: What I can tell you is that the reforms we're planning in the health care, in education, in social protection, investor protection, it's
-- you know, they're very radical and they are effective. We'll find resources to support them.
QUEST: That's Ukraine's finance minister. We'll take a break and afterwards talk about the Rio Olympics again, and those numbers, those
television numbers. Look, it may not just be low numbers, but there's something structural going on. Brian Stelter will bring us that. But
first, "MAKE, CREATE, INNOVATE."
QUEST: Despite all the rivalries and the world records, the ratings of television viewing for this year's Olympics are way down in the United
States. Now, NBC, which has the exclusive rights here, are playing catch- up with previous games. I want to show you the rates. We need to make a few adjustments to the screen to understand. The water has to be green.
Have you been following this? Please, stay with us on this. It's Rio, we need green water. So on your marks, get set, go. Beijing, NBC's ratings
have been weak since the beginning of the opening ceremony. Rio's ratings are behind London's and others. So ratings even smaller than the Beijing
games where were mostly in the middle of the night. NBC has averaged 28 million viewers a night, even streaming included, ratings are still behind
London. ten percent, 20 percent better for Beijing. Twenty percent better for London, 28.1 million for Rio. But Brian Stelter believes there's more
to this than mere time zones. Because Rio's got a quite close time zone. Let's face it, London is five hours ahead. Beijing, 12 hours ahead. But
you think there's more to it.
[16:50:00] BRIAN STELTER, CNN MONEY SENIOR MEDIA CORRESPONDENT: For the U.S., it's advantageous to be in Rio, swimming was live on NBC last night.
Great swimming competition, but the ratings are still down from London and Beijing. What's going on? These are structural changes in television that
are happening. Younger people in particular, aren't willing to wait for hours to watch these events live, especially when they can watch five
minutes of the highlights on their phones later.
QUEST: If that's right, I mean, streaming, obviously people can stream. It's still, your access to streaming is still via the rights holder. It's
not as if anybody else can just suddenly -- much as I would like to have to show all the best things, I can't.
STELTER: Yes, that's right, NBC controls the rights. They decide what shows up on the web and what doesn't. I think what's amazing about this
data, Richard, is that people are still watching the old fashioned way. It's not as if everybody is flocking to the web instead, live streaming
games instead. The vast majority, almost 98 percent of the viewers of the Olympics in the United States, it's happening the old fashioned way, on TV.
It's just not happening as much as did in the past.
QUEST: so that people are watching on TV still, but they're also watching the highlights afterwards.
STELTER: Exactly. And that's cutting into the ratings. I think poor also seeing --
QUEST: doesn't matter, oh, I suppose it does. Of course the advertisers are paying for the rating on television, not by streaming it elsewhere.
STELTER: Oh, yes, and NBC will all advertisers what are called MIT goods. When you have a lower rating than expected you have to give them free ads
to compensate. You have to make good for the loss of ratings. So that will be happening in the coming weeks at NBC. You know, we don't have
ratings for other countries the way we do here in the United States. But I think we'll probably see similar trends elsewhere when it comes to the
Olympics. There's just so much competition now. Why watch Olympics when you can watch Netflix?
QUEST: So this is structural rather than -- now stay with me a second. Another story we're following, "The Daily Beast" has removed an article
about dating in the Olympic village from its website after claims it may have accidentally outed some of the gay athletes. The article was
criticized for describing athletes who use apps like Grindr. We don't usually talk about Grindr on QUEST MEANS BUSINESS, there you are just shows
you. "The Daily Beast" removed it before pulling it all together. The editor said, "Our initial reaction was the entire removal of the piece was
not necessary. We were wrong. We're sorry." So it's not the first such issue here on this, but what do you make of it?
STELTER: There's always intrigue about sexual relations at the games. You have lots of athletes in their prime. There's always stories about condom
use at the games. But this was different. This was "The Daily Beast," with a straight, married writer trying to go and meet gay athletes and in
many cases he came close to outing these athletes by describing them in his article. That's why there was such an outcry. That's why they initially
removed the identifying information. But that didn't go far enough, the editors realized they had to go a step further and take the entire article
down, which they've never done before.
QUEST: and as you said, I think it was you who said, whoever thought it was a good idea in the first place.
STELTER: It was idiotic. The editors now know that. They're not saying anything further about whether any reports or editors will be let go as a
result of this embarrassment.
QUEST: Excellent. Thanks for joining us.
STELTER: You too,
QUEST: There are a record number of openly gay athletes at this year's Olympics. Few will have as many memorable games as Isabella Cerullo. She
had just finished competing for Brazil's Rugby Sevens team. Was watching the final between Australia and New Zealand and after the final whistle,
her girlfriend Marjorie, a manager at the stadium, took her onto the pitch and asked her to marry her. Well, I don't need to give you the suspense.
Isadora said yes. And she joins us from Rio now.
First of all, congratulations on the forthcoming nuptials between yourself and your wife. Is anybody in Rio talking about this "Daily Beast" story
and the Grindr? Is anybody even looking at and thinking, nasty business?
ISABELLA CERULLO, BRAZIL OLYMPIC RUGBY SEVENS TEAM: So I guess fortunately I haven't heard anyone talking about the "Daily Beast" article. But I
unfortunately stumbled upon just the headline and all of the controversy around it. So I'm really happy it got taken off. When I first found out
about it, I had only heard that the identifying pieces of information had been taken out. So I'm really happy the whole article has been redacted
and hopefully nothing like this gets written again.
QUEST: Right. We can move on to more happy matters. We have a phrase in Britain, gob-smacked. How gob-smacked where you when your girlfriend -- I
mean, did you have any idea what was about to come your way?
CERULLO: So at that moment I did not have any idea. Someone told me I had to stay after the medal ceremony to do an interview, a filmed interview on
the pitch after everyone had cleared out. So I was waiting there, hungry, as athletes always are. My whole team was in on it. We went out onto the
pitch, it was really beautiful, one last farewell to that stadium on the pitch. And then someone handed a microphone to Marjorie and she started a
really powerful for me.
[16:55:02] Powerful speech about how the Olympics could be the end of the line, a climax, as you wish, for a career, the endpoint, the highest point
for a career, but it could also be a beginning point. And for her she wanted it to be a beginning point with someone important to her. And for
everyone to know that this really is the Olympic spirit. So she proposed and I said yes. And I was crying. My whole team. I don't know how the
balloons got there, but there were balloons too, and everyone started cheering.
QUEST: One of the most heartening parts about this of course is that you have athletes from countries which now have marriage equality, you have
athletes there from countries that have -- where same sex relationships are still illegal, and where in some cases it is punishable by death. This
must make for a remarkable atmosphere for people like yourself to be seen as a role model.
CERULLO: Yes, so the wonderful thing about the Olympics is that it is this really tolerant space and promoting the ideals of respect and diversity.
So inside the Olympic Village, inside the venues, inside this Olympic atmosphere, we really do have the privilege to live out this idea of
everyone being equal and being accepted. So -- and I guess I do recognize that Marjorie and I have this privilege of being embraced by our families,
by our country. So we just hope that this kind of puts a little more emphasis, maybe a little pressure, who knows, on this to be more normal,
more normalized and definitely not criminalized in any way in the future.
QUEST: We are so honored and delighted and privileged that you took time out this evening to join us on QUEST MEANS BUSINESS. Thank you. We
appreciate it. Good luck. We look forward to seeing the wedding photographs.
CERULLO: Thank you so much, Richard.
QUEST: We'll continue with a Profitable Moment. Plenty of gold, after the break.
QUEST: Tonight's Profitable Moment. What we're going to show you tonight is the various ways in which the Olympics affects us in more than just
sport. The financial aspect for the cities involved. Who bids, who manages to make it work without going into bankruptcy. The structural, the
networks, how we are viewing sport and television differently, and how you're seeing the results of it in this year's Olympics. And the societal,
the gay and lesbian athletes who are performing at a time when in so many countries, homosexuality is either illegal, in some cases punishable by
death. The Olympics is more than just sport. It tells us something about society. That's why we spent so much time talking about it tonight. That
is QUEST MEANS BUSINESS" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable. We'll be
together again on Monday.