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QUEST MEANS BUSINESS
Renzi Gets Reprieve from Italian President; Uncertain Outlook for Italian Banks After "No" Vote; Trump Attacks China on Twitter; Italians Vote "No" in Referendum; Ivanka Trump Plans Move to Washington; Indians are Turning to Mobile Payments. Aired 4-5p ET
Aired December 5, 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: Blue Man Group ringing the closing bell. Blue at the Stock Exchange, green for the markets. It's at a
record. Let's see how they do. I think we're over. I can honestly say we never had a closing bell quite like that at the New York Stock Exchange.
The poor man doesn't know what to do. As trading come to an end, it is Monday. It is December the 5th. Tonight, down but not out. Matteo Renzi
will stay on as Italian Prime Minister at least for a few more days.
Italy's banks face an uncertain future. A rescue plan could be in the works. And Donald Trump sends a direct message to China. Now Beijing
responds, tweets the President-elect. I'm Richard Quest and back in New York with you and of course I mean business.
Good evening, apologies if I sound a bit croaky and a bit under the weather tonight. All from me travels, but delighted to be with you back here in
New York as I tell you about populism, which tonight is shaking the Eurozone's third-largest economy. In the last hour, Italy's Prime
Minister, Matteo Renzi, the president has asked to delay his resignation until Parliament can pass a crucial budget bill. Then Mr. Renzi will make
good on his promise to step aside after voters overwhelmingly rejected his plan for constitutional reform.
The numbers, of course, 60 percent of Italians voted against changing the country's constitution. They said no to weakening the countries Senate and
no to speeding up the way that laws are made. The chief executive of Deutsche Bank is warning the results in his words are, a harbinger of
renewed turbulence. Speaking earlier, Prime Minister Renzi appeared dejected.
(BEGIN VIDEO CLIP)
MATTEO RENZI, ITALIAN PRIME MINISTER (through translator): I lost and I say it loud and clear, even if I have a lump in my throat. Because we are
not robots. I wasn't able to win. I beg you to believe that I did everything that I thought was possible at this stage.
(END VIDEO CLIP)
QUEST: That's Matteo Renzi the outgoing prime minister, at least days there for the time being. But it is what happens over the next few weeks
that are critical and crucial for Italy. So, Renzi is resigning and a new government needs to be appointed. The issue of course, there is whether or
not it is a caretaker government, a technocrat Prime Minister or indeed is there a chance of early elections? The key date is December the 23rd.
That is the target date for the 2017 budget bill. And what Matteo Renzi said today, he will stay as Prime Minister, even though the president is
accepting his resignation. He will stay until the budget bill has been approved.
There's also, a banking rescue that's under way at the moment. And this is really what it's rescue is about from Monte dei Pashi, which is the world's
oldest bank and needs at least five billion euros. And the deadline for that is December the 6th on, in other words, tomorrow, for a decision on
rescuing this particular bank. The Eurogroup President, Jeroen Dijsselbloem, has now played down any systemic risks coming from the vote
on the banks.
(BEGIN VIDEO CLIP)
JEROEN DIJSSELBLOEM, EUROGROUP PRESIDENT: We took note of the outcome, and it of course up to the Italian president now to take the decision on the
democratic process. Because this is what it is. It's a democratic process. And it doesn't really change the situation economically in Italy
or in the Italian banks. The problems we have today are the problems we had yesterday and they still have to be dealt with and that process will
continue as far as I'm concerned. So, let's wait for the outcome of the political process.
(END VIDEO CLIP)
QUEST: Joining me from Rome, is Franco Frattini. He served as Italy's foreign minister and is a former EU justice commissioner. Minister, good
to see you, sir, thank you. There are really three areas that we look at here. There's the political. There's the economic, and then there's the
banks. Let's start with the economic and the banks. The waiting game that now takes place as Italy goes through this process. How damaging do you
think, for the economy?
[16:05:00] FRANCO FRATTINI, FORMER ITALIAN FOREIGN MINISTER: Well, I don't think there will be an Italian nightmare after the no. The no was a
political decision taken by the Italian people because of some mistakes made by the government. By personalizing the constitutional vote that
should have been considered as a constitutional vote. Not a political vote. Not a referendum on the Prime Minister or against the Prime
Minister. That was a political mistake.
With that said, I don't think, for example, the European Central Bank shield will be diminished. The Central Bank shield will be kept. So, the
European Union will continue to monitor over the Italian banks. I don't see a catastrophe as a consequence of the no. I see a very urgent need to
adopt the budget law in the Italian Parliament and I think it should be done before Christmas.
QUEST: OK, so if you get a budget law before Christmas, you do have the very real problem of the next government and whether that will be a
populist government, and how electoral law can be changed to prevent, in what some would see, would be a catastrophic result.
FRATTINI: I tend to exclude a populist government in the future of Italy. I tend to believe the next electoral low would be, I would say, rather
proportionate low. I have in mind a model that is quite close to the German one. A proportional model. But of course, what is now in the
Italicum, the existing electoral law has to be changed, simply because we don't have a system to vote in the senate. So, we have to change
completely the electoral law and tendency is to have a rather proportional law system.
QUEST: Throughout all of this, this month, the budget process, and into next year when those elections take place, ultimately Italy it growing too
slowly. Unemployment remains too high. There is a banking crisis on the precipice and the edge. Any one of those issues could be disastrous.
FRATTINI: No, there is unfortunately a long-standing tradition of low growth in Italy. There is a long-standing tradition, a very high public
debt. But that said, the no to the referendum does not change dramatically, things on economy. A budget law will be adopted, I'm sure.
Electoral law will be proposed by the incoming government. I would exclude a technocrat government. I think we are in very good hands of President
Mattarella. President Mattarella will be managing the situation, but I don't see another government Monte, another technocratic government after
Prime Minister Renzi. I would rather consider the president of Italians in need, or the minister of economy maybe, but not a technocrat leading Italy
after the Renzi government.
QUEST: Sir, we're very grateful that you came tonight to talk to us and helped us understand some of things going on in Italy. Thank you very much
Now, the European markets ended the day higher. All of the markets higher except Italy. Take a look at the numbers. The Milan market was down, just
really, off 1 percent at the start of trading. The day began down, but then Renzi's quick decision helped the markets recover, and also much talk
in there in all of this throughout -- it would behave itself. The far right defeated in Austria also calmed investors. In Italy, the banks were
the biggest losers.
[16:10:00] One more chance if I can show you, the markets there. Push the right buttons eventually and all will work. You see the FTSE was up, the
best gains of the day perhaps because of the Austrian decision. More than what was seen in Italy. The XETRA DAX which is up 1.6 percent. The
business community in Italy is nervous about what the next few days and weeks will hold as Nina dos Santos reports from Iran.
NINA DOS SANTOS, CNNMONEY EUROPE EDITOR: In Rome, the president might be looking for new Prime Minister after Matteo Renzi's resignation. Here in
Milan bankers are desperately trying to find some cash down the back of the sofa. They need to sure up a whole host of banks across this country,
which is currently at the epi-center of Europe's latest crisis. And key that crisis is the oldest institution across this country. It is Monti dei
Pashci di Siena, a Tuscan based lender, which saw its shares fall already another 4.25 today. Adding to the 80 percent plus decline that they've
suffered so far, this year.
This is an institution like so many other imperiled finance houses across Italy has to find extra cash to sure up its balance sheet quickly. The
business community across Malan was always backing Matteo Renzi in this particular constitutional vote. It was the only place across Italy, the
only big city that voted in favor of its constitutional reform. Now want to see a system of leadership, or at least a caretaker government, maybe
even a technocratic government of economists and not politicians to keep this country taking over until elections are called possibly in 2018. Nina
dos Santos, CNNMoney, Milan in Italy.
QUEST: Well, we've looked at the political. You've heard the financial. Now what about the actual business community. What do business leaders
want? Last week, Andrea Illy, the chairman of the coffee company Illycaffe, told us on this program, why the stakes were so high. Why he
was voting yes in the referendum.
(BEGIN VIDEO CLIP)
ANDREA ILLY, CHAIRMAN, ILLYCAFFE: We're leaving a very difficult moment in the society, a moment when we have a systemic on sustainability in the
economy, in the social life, social civil society in the environment.
(END VIDEO CLIP)
QUEST: Those are the reasons why he favored a yes. Today of course, with the no vote ringing in our ears, when I spoke to Mr. Illy, he told me after
no, Italians can't complain any more about what is happening in their country.
ILLY: Italians decided to vote against reforms. How can they complain now if there are too many taxes? How can they complain about the bureaucracy?
How can they complain against unemployment? How can they complain against Europe? If they are against reforms, this is a completely paradoxical, I
would say schizophrenic decision from Italians.
QUEST: Why do you think so my Italians were against these reforms?
ILLY: This referendum has been heavily politicized and personalized in the person of the premier. So, instead of voting, you have only one reason to
vote yes, which is the consent of the reforms, which by the way, is before politics. Because these are the constitutions, which comes before
political parties. And you have as many possible reasons why to vote no in the very first political reason these two, you know vote against the
premier. It has been an extreme consequence that, you know, a bunch of people decided to vote against Renzi, rather than voting yes or no to the
reform that was already decided in the Parliament.
QUEST: Do you see yesterday's vote as a continuation, in a way, of Brexit, Donald Trump's election, and now Renzi's defeat?
ILLY: I don't know, what I can tell you is that there is only one possible destination of the European Union, which is the United States of Europe.
In order to do so, countries need to transfer sovereignty to Europe. This is a very painful attack.
[16:15:00] The only way to mitigate and also negotiate the way you transfer sovereignty to Brussels is to have a stronger government. And a strong
economy, and to give a voice in Brussels. And for sure, now with this referendum there are no conditions to have a strong government. And to
have a strong voice in Brussels.
QUEST: The Italian banks have borne the brunt today on the market. Do you think that Italy could be now facing a full-scale banking crisis?
ILLY: Maybe. It will be difficult to raise the equity required for fixing these banks. If this equity will be found it will be very expensive.
There needs to be completely changing the business models, you know, changing the retail points and unfortunately firing hundreds of thousands
of people. It will be a very difficult journey in such a condition.
QUEST: Andrea Illy talking to me earlier from Italy.
Stocks on Wall Street, took Europe's elections in their stride. It's a record high, a record closing high on the Dow up 45 points, 19,216. The
NASDAQ and the S&P also closed higher as well.
Donald Trump has increased the temperature and volume -- if that's not mixing my metaphors completely -- when it comes to dealing with China.
After the break.
QUEST: China's finance ministry says it is crucial for China and the United States to work together in order to maintain the current economic
relationship between the two nations. Comments came after President-elect Donald Trump accused China of manipulating its currencies amongst other
things. In a response to China's opposition to him taking the call from the president of Taiwan, he says, "Did China asked us if it was OK to
devalue their currency, heavily tax our products going into their country or to build a massive military complex in the middle of the South China
Sea? I don't think so!" Donald Trump's and his blatant gaming ship from China, reality is far more nuanced. And our Asia-Pacific editor, Andrew
ANDREW STEVENS, CNNMONEY ASIA-PACIFIC EDITOR: Richard, it's an accusation that President-elect Trump returns to time and again. China is a currency
manipulator. It devalues its currency to make exports cheaper, which hurts U.S. business. But is that what China is doing right now? The answer
appears to be no. There is no doubt China can manipulate its currency, because its value is controlled by the government, unlike the greenback,
whose value floats on the open markets.
[16:20:00] But China its managing its currency more to the advantage of the U.S. than anything else. Since Donald Trump won the election, virtually
every currency in the world has fallen against the greenback. Take a look at the exchange rates here. The Yen on the bottom of your screen, now down
nearly 10 percent since the election. Against the dollar, the euro is down 4.5 percent. The Chinese yuan though, less than 2 percent down.
Now if the yuan was freely floating, experts say, it would be much lower than it is. So, in effect the Chinese government is propping up the yuan.
So, that's hardly manipulation against the U.S. China for its part has played down the latest Trump comments on currency manipulation. Beijing's
hope is that Trump, once he is president, will take a much more pragmatic view of the relationships between the world's two biggest economies. But
with five weeks to go before the inauguration, there doesn't seem to be any sign of that happening, Richard.
QUEST: Andrew Stevens. Joining me now is the former Australian prime minister and the president of the Asia Society, Kevin Rudd. Good to see
KEVIN RUDD, PRESIDENT, ASIA SOCIETY: Good to be here in New York.
QUEST: Now you have negotiated with the Chinese face to face. What will they be saying in Beijing about the shenanigans coming from the tweets?
RUDD: One important caveat here is that I have not been president of the United States, which puts you in an entire different league. I think, the
Chinese have got two or three different views of President Trump. One, they really don't like strategic uncertainty. The Chinese prefer to know
what's the framework? How are we working this? And what's the process? Number two group in China have seen, until at least the last few days, some
strategic opportunities. The end of Transpacific Partnership, et cetera. Maybe walking away by the United States from climate change compacts.
Destabilization of alliances by saying, do more or that's the end, both in Asia and in Europe.
But there is a third group and I think these guys may be gaining in the ascendancy, and their the strategic pessimists. They say, let's look
carefully at what candidate Trump's been saying about the economy, and what he's now saying is transition Trump on his way to becoming administration
Trump and that's what concerning them.
QUEST: Right, if that is the concern, will there be people also saying listen, Trump is just trying to knock us off of our stride? He's being
contrarian. He's been bellicose. Don't rise to this bait?
RUDD: To be fair to the Chinese response, they haven't risen to it. If you look at the response from Chinese foreign minister Wang Yi, is very
measured. Very almost flat, in fact he said this was the Taiwanese just seeking to find a tactical opportunity. And so, if they're going to
respond, there are more likely to respond to the Taiwanese then to the United States. So, I think their game plan is strategic patience.
QUEST: You're the perfect man to have here today, because not only can you tell me about China then, but as an Australian Prime Minister whose
negotiated with the United States, one of your closest country allies, what will they be making of it in Cambra? There will be a certain -- and a
smile on your face tells me they'll already be saying how much of this does he mean? What is he likely to do in reality?
RUDD: As I've said to our Chinese friends recently, John McLaren, comrades, because the rest of the world is trying to work out exactly where
this new presidency will go. And so, I think we're in for at least a couple months of general uncertainty. As you know, Richard, the teams been
formed, et cetera, how much will translate from prelection into post- election Trump to the presidency, we don't know. But the Chinese response still is, this is a shake down period. Perhaps, President Trump, is
pushing us and probing us. Perhaps see seeking to obtain some negotiating chips for a way to negotiation. But we're not going to rise to the bait.
QUEST: But on the trade front though, for Australia, losing the TPP, where political capital was expended to get it through. I think it in other
countries, is quite damaging for the American and Australian relationship.
RUDD: I don't think so. The reason being is the Transpacific Partnership was frankly a big win for the Japanese, a big win for the Vietnamese. In
terms of opening up those economies more. We've done that with the Americans with a bilateral FTA some years ago. The bottom line is that the
Chinese, going back to the optimist camp in Beijing, have seen the end of the Transpacific Partnership as a big win. As you know -- f
QUEST: The RCEP.
RUDD: That's right, what you call, RCEP, the regional comprehensive economic, blah, blah, blah, blah, with the rest of the region. But I think
look, if I was just saying to both sides of the equation, now one simple thing, some strategic patience. Let's not proclaim cataclysm on the basis
of a tweeter two or four or six.
[16:25:00] Let's allow --
QUEST: How damaging are these tweets? In a world where you look for -- there is obviously tension in the negotiation, but you don't expect the
other side to go maverick or to suddenly play -- if you're doing the fox trot they suddenly start doing a tango. You don't expect this divergence
of diplomatic norms, do you?
RUDD: Well, President Trump, as Henry Kissinger said the other day, is a unique president. He has his own particular style. I've described what I
think the Chinese approach, which is strategic patience. What's my sense of President Trump strategic approach? He actually said this in the
campaign, Richard, he said, there's a virtue in being unpredictable. Not just being permanently predictable. My ears pricked up when I heard that
during the campaign, never believe you need actually become president. And then he did. So, I think what he is doing in his own way is probing and
pushing and trying to identify where exactly China's parameters are. How this is going to sort out on the wash on the big questions of the economy.
Is he serious about 45 percent on tariffs? Is he serious about the declaration of currency manipulation? And what's it going it be like on
the core strategic question, which is North Korea. That is where the rubble will hit the road on those two big ones.
QUEST: We're grateful, Sir. Thank you very much.
RUDD: Good to see you, Richard.
QUEST: You're looking in remarkably good health.
RUDD: Good to be in New York and good to be head of the Asia Policy Institute.
QUEST: Well, as in both of those capacities, were looking forward to having you in that seat a little more often.
RUDD: I appreciate the hospitality. Thank you.
QUEST: I'll take it as a yes. Thank you.
After Brexit and Trump, another domino falls. Next up, Italy's no vote. In the future of populism in Europe. In an interview with EU's home
affairs commissioner. As QUEST MEANS BUSINESS continue live in New York.
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment.
The EU Migration Commissioner joins me as right-wing leaders are celebrating the Italian referendum result. We'll put that in some form of
And Ivanka Trump's transition to government, as an advisor, it is almost complete and she is going house hunting in Washington. And for all of that
this is CNN, and on this network the news always come first.
Italian prime minister, Matteo Renzi, isn't quitting just yet. He arrived at the presidential palace late on Monday to deliver his resignation. The
president has asked him to stay on until Parliament OK's next year's budget. Mr. Renzi is resigning after his crushing defeat in this Sunday's
referendum. Some expected that might trigger a major economic crisis. So far, there's no evidence that that that is going to happen.
[16:30:00] The French Prime Minister, Manuel Valls running for president, and is facing members of his own Socialist Party in a primary next January.
It all comes days after President Francois Hollande announced he would not be seeking a second term. Valls told supporters the issues he'll focus on
as France's President.
(BEGIN VIDEO CLIP)
MANUEL VALLS, FRENCH PRIME MINISTER (through translator): I will be a candidate for presidency because France needs to bring up of their weight
in a world that is no longer what is used to be at all. Terrorism, climate change, globalization's negative consequences, the weakening of Europe, and
the rise of the far right. I want an independent France. Independent, inflectional on their values when facing the China of Xi Jinping, the
Russia of Vladimir Putin, the America of Donald Trump, and a Turkey of Recep Erdogan.
(END VIDEO CLIP)
QUEST: The U.S. State of South Carolina, a judge has declared a mistrial in the case of a fatal police shooting of Charleston police officer Michael
Slager, who is accused of killing an unarmed black man during a traffic stop. The jury deliberated for 22 hours during three days and could not
reach a verdict. It's not clear if prosecutors are going to seek a retrial.
A search has resumed in Oakland, California for more victims after a warehouse fire. A wall has been shored up after it was about to collapse
So far, at least 36 people were burned alive during a dance party on Friday night. Thirty percent of the building has not yet been searched and
firefighters are expecting to find more victims.
Indians are mourning the death of one of the country's most popular politicians. Jayaram Jayalalithaa died on Monday after suffering a heart
attack, known affectionately as "Amma", which means mother. The former film star was elected chief minister of Tamil Nadu State four times. She
was 68 years old.
Donald Trump is added another name to his cabinet. He's chosen Dr. Ben Carson to his Secretary of Housing and Urban Development. Carson and Trump
faced off in the Republican race to be president. It's a position that the U.S. state has to confirm
The Italian referendum result was interesting one because it was a vote against change in the constitution. But actually, what it was, of course,
was a vote against the establishment candidate of Matteo Renzi, who had made the referendum all about his Prime Minister-ship. Now, far-right
leader across Europe are celebrating the no vote that took place Geert Wilders, for example, the Dutch far right leader, tweeted his
congratulations to Italy after the results became clear. "Congratulations Italia," from right wing Wilders.
And UKIP's Nigel Farage said, "This vote looks more to be about the Euro than constitutional change." Which is what I was just eluding to. At the
end of the day it was about Renzi. It was about Italy's role rather than the very dry issue of the Constitution. Now Europe's populists are wanting
to see more dominoes that keep falling. And let's just remember, exactly the ones that have fallen. It began in June with Brexit. And as the
dominoes fall they continue to raise this question of how far the populist movement was moving.
In August, Donald Trump said they will soon be calling me Mr. Brexit. Inspired by improbable Brexit itself. That is exactly what happened. The
dominoes fell after he was elected last month. And now the latest domino, Italy, where the big winners will be the anti-EU Five-Star Movement and the
far-right Northern League. Which all moves forward into 2017 where there are election that's take place in the Netherlands in March. And then you
get to the really big ones, for example, in April, France picks its new president. And Francois Hollande has already said he won't run.
[16:35:00] the conservative candidate Francois Fillon could face the far- right leader Marine Le Pen in the runoff. All of those lead you ultimately to Germany, where the vote takes place in autumn of next year. Chancellor
Merkel is seeking a fourth term. Jeroen Dijsselbloem has said, that with all of these domino's falling, quite clearly, this is a time of
uncertainty. I actually talking next and I wasn't even close.
(BEGIN VIDEO CLIP)
JEROEN DIJSSELBLOEM, DUTCH FINANCE MINISTER: Everyone who is sure about the outcome of the election in the Netherlands, Germany and France will
probably be wrong. It is very hard to predict. The only thing we know is that voters are much more on the move as they were some years ago. And of
course, they are critical for the situation. We're coming out of a deep crisis. It has taken a long time. It has effected the lives of many, and
people are concerned about that and will express their concern at election time.
(END VIDEO CLIP)
QUEST: European Commissioner for Migration and Home Affairs and Citizenship joins me now from Washington D.C. Mr. Commissioner, thank you
for joining us. There is no easy way to paint this -- yes, there was the Austrian result yesterday, but last night's vote in Italy was a responding
defeat for those in Europe of the establishment point of view, wasn't it?
DIMITRIS AVRAMOPOULOS, EU COMMISSIONER FOR MIGRATION, HOME AFFAIRS AND CITIZENSHIP: Thank you, Richard, for having me. Let me start by telling
you that the referendum in Italy, the outcome of the referendum in Italy was not a no to Europe. It has as you very correctly said, to do with
domestic political developments. The problem is that all of these referenda that have become very fashionable in Europe give food and fuel to
the reactionary populist. And unfortunately, populism, all along with nationalism are gaining ground. And is detrimental to the European cause.
The real threat does not come from the reaction of the people, but from the ones who exploit the referenda in order to promote their anti-European
ideas. And me as a European, I can tell you, I can't imagine my generation to be the one will be held accountable in the future for the destruction of
QUEST: But you would clearly, surely, Commissioner, say that it can't be business as usual. That the commission and the institutions of the EU
cannot just majestically move on as if none of this was happening.
AVRAMOPOULOS: Of course, and we do not intend to remain inactive, idle in front of the situation. Because as I said before, right now giving all of
these developments, the European project in general is in doubt, it is in danger. And you mentioned some names before, I go beyond names because,
all countries have their domestic and political issues, but for us, it is very important, and very on the top of our priorities of how to safeguard
and uphold Europe.
That's why. President Juncker, from the very first moment he said, that this commission is a political commission, and ready to address all of this
issues. So, what is the next step that we have to follow? First of all is to sensitize the European public opinion about the danger of risking to see
the European project collapsing. Richard, we belong to a generation, and let me be frank with you. That we enjoy freedom, democracy, and stability
for the last 60 years. We were granted this gift from history and we have to do our best to maintain and reinforce it in the future. Don't take it
for granted. I'm not addressing it to you but the ones that are listening right now.
QUEST: But in that case, that raises questions of countries like Hungary where there are legitimate concerns about the rule of law. Changes, for
example, in Poland where there are also some legitimate concerns, for example, about changes to press freedoms. How does Europe respond to those
challenges where right-wing nationalism is being whipped up?
AVRAMOPOULOS: You said it. Right now, this far right going nationalist by articulating their populist verb. They confronting and they are against
the basic European values. Europe today stands on a system of principles and values. So, this is the problem that we are confronted with nowadays.
[16:40:00] And leadership of these countries, I don't want to get deeper into their domestic affairs, but I will tell you something about the
symbol, do you think it is political irresponsible to transfer the responsibility of making a decision on a big issue like migration for
example, or security on the shoulders of the people through a referendum. Why are you elected? You are elected in order to implement your policy of
QUEST: Nobody was saying that about Hungary at the time of the referendum. There was nobody in Europe questioning why Ader were allowing the
referendum to take place, and then trying to get a constitutional reform once he failed.
AVRAMOPOULOS: The European Union cannot interfere in the domestic and political developments in the affairs of every country. We show respect
for what their citizens decide. The problem is domestic, but at the same time, it is becoming European because as I said at the beginning, it is
exploited by populists. And populists Right now, undermine the European project. They are responsible for the vanishing of the European idea.
Yes, we are confronted with problems, economic crisis, social crisis. Yes, Europe has taken the lead. We move forward, but we want to convince their
governments in the leadership of Europe, to be fully aligned with the European policy. It's not an easy thing. I'm in Washington right now.
And if you know the difference between the United States and Europe. Europe is not a federal system --
AVRAMOPOULOS: Yet, very correctly said, and this should be our target in the future. At least to adopt federal functions in specific domains and
QUEST: Commissioner, we could talk for much longer. Next time you're in New York, I insist, Commissioner, you come join me here.
AVRAMOPOULOS: I promise, I will be with you, because you are my favorite.
QUEST: You're very kind, thank you for joining me.
AVRAMOPOULOS: Thank you for having me.
QUEST: Now, Ivanka Trump's latest business dealings are raising concerns. As she looks for a new house in the U.S. capital. One wonders, what is her
role going to be? Will it be part of the administration? She says not. Will she be running her father's businesses? It all makes for a
fascinating affair. We'll talk about it after the break. QUEST MEANS BUSINESS.
QUEST: So, CNN's learned that Ivanka Trump and her husband, Jared Kushner, are house hunting in Washington D.C. is one of the clearest signs yet that
Donald Trump daughter and son-in-law intend to be heavily involved with his administration. Ivanka met earlier today with Al Gore to talk about
climate change, and the former vice president then later met with the President-elect. Ivanka Trump's involvement in her father's administration
is really raising concerns about the whole question of conflicts of interest, as Cristina Alesci reports.
CRISTINA ALESCI, CNNMONEY CORRESPONDENT (voice-over): New details about Ivanka Trump's own business deal have complicated Donald Trump's efforts to
address conflicts of interest. Ivanka's company confirmed it's in the final stages of signing a lucrative licensing deal in Japan for her
clothing line. The problem? Her company was negotiating the terms when President-elect Trump included Ivanka in a face-to-face meeting with the
country's Prime Minister, Shinzo Abe.
[16:45:00] MICHAEL O'HANLON, SENIOR FELLOW, BROOKING'S FOREIGN POLICY PROGRAM: To be in official meetings with foreign leaders does, little bit
too close to the possibility of people seeing her as advancing her own business interests through the mechanism, through the vehicle of the
ALESCI: Now Ivanka, along with her husband, Jared Kushner, are house hunting in Washington. Adding to speculation that Jared might land a spot
in the White House and that Ivanka might advise her father's administration. All this makes for weak, so-called wall, between the
President-elect and his family business. And Donald Trump's informal discussions with foreign leaders is not helping. The President-elect made
history by speaking to the president of Taiwan.
O'HANLON: No American president or President-elect is known to have spoken directly with the leader of Taiwan since 1979.
ALESCI: Almost immediately, reports surfaced about the Trump organization's potential deals there. That left the transition team
scrambling to make clear the organization isn't planning any new projects there. But those aren't the only places where potential conflicts loom.
In the Philippines, home to a Trump tower, newly elected leader Rodrigo Duterte, has been criticized for encouraging widespread executions of
supposed drug offenders.
RODRIGO DUTERTE, PHILIPPINE PRESIDENT: If the criminals are killed by the thousands, it's not my problem.
ALESCI: The State Department has condemned the killings.
JOHN KIRBY, SPOKESMAN, U.S. STATE DEPARTMENT: We continue to be deeply concerned by reports of extrajudicial killings by or at the behest of
government authorities in the Philippines.
ALESCI: But Trump hasn't condemned them. The two men recently spoke. According to a statement from the Philippine government, Trump praised
Duterte for tackling the drug problem "the right way" and invited him to visit Washington.
ALESCI: Cristina Alesci, CNNMoney, New York.
QUEST: India's crackdown on cash has an unexpected gain. Is digital economy is getting even faster. We'll talk about after we have had a
moment to think about things. Why not, after all we all need to MAKE, CREATE, AND INNOVATE.
QUEST: Out of crisis comes an opportunity, whatever the phrase was, never miss the opportunity -- well, you know what the phrase I'm talking about.
I'll think of it while we're talking.
More Indians are turning to mobile payments as India struggles with a shortage of cash. The crisis started about a month ago, when the
government abruptly pulled the two largest rupee notes from circulation. It was the 500 and the 1,000 rupees. They account for 86 percent of all
cash in the country. Harold Montgomery is the chief executive of MoneyOnMobile, one of India's biggest mobile payment companies. Good to
see you, Sir.
HAROLD MONTGOMERY, CHAIRMAN, MONEYONMOBILE: Thank you, Richard. It's great to be here.
QUEST: How much of a disaster was this policy, not in its intent, but in execution?
[16:50:00] MONTGOMERY: This is a very difficult moment for India. People throughout the country are struggling with substituting their old cash for
new cash. Let me give you a sense of the scale of the problem. There is 1.2 billion people in India. Every single one of them is affected by this
policy decision simultaneously. That's a very rare in human history. We're talking about 23 billion bank notes that have to be exchanged, 8
billion, 15th and 15 billion 500s and 8 billion one hundred. It's a huge, huge task. Farmers can't get their crops to market. There could be food
shortages later. Commerce has really come to a halt in many cases.
QUEST: Are you accepting those notes for people to charge on their mobile accounts?
MONTGOMERY: Only banks are allowed to accept old currency for new currency. So, our audience is at the lower end of the pyramid. There are
mostly dealing with 100s and 50s anyway. So, this problem isn't as exaggerated where my company operates. We're dealing with the un-banked.
But for many, many people this is really a constraint on commerce and everyday life.
QUEST: Where do you see the cashless society of India, which is so much based, as you just pointed out on small denominations, ordinary traders,
ordinary people, frankly, putting money in a sock under the bed in most cases. Where do you see the growth potential?
MONTGOMERY: Almost everyone in India has a reservoir of cash in the home that they're trying to exchange for new currency. But what the governments
trying to do is to force everyone into the banking system, at even the elementary or entry-level and to force digital transactions. There's a lot
of reasons for it. Stopping black money is one, as you mentioned. But stopping counterfeit is another. I have seen estimations of five to eight
percent of the notes in circulation in India are actually count counterfeit. That's a huge problem.
QUEST: So, the volume of transactions that you are now seeing as a result of this policy -- this change, how would you characterize it?
MONTGOMERY: It's growing exponentially. Were seen transactions across the board at all digital payments companies moving forward. I was in India for
the policy change. The next day, you could not buy a cup of coffee with cash if it was a 500 or 1,000, you had to use a digital payment method.
People who didn't have them yesterday are getting them today. Smart phone sales are growing, because they enable digital payments more easily.
QUEST: So, when I say this misfortune is your good fortune. I mean, I'm not being nasty.
MONTGOMERY: It's an extraordinary stochastic market opportunity for my company and others similarly situated.
QUEST: I admire your honesty, sir. Thank you very much indeed.
MONTGOMERY: Thank you, Richard, thanks for having me.
QUEST: Smart phone apps. I don't need to tell you it changes about every aspect of your life. In Amsterdam, there is a new generation of office
buildings. They are not only smart, they are sustainable and some would say they're almost alive in this edition of "Europe 2020" we meet "The
QUEST (voice-over): It is morning in Amsterdam, and "The Edge" is ready and waiting for the hundreds of people making their way to work. The Edge
is more than a building, it's like a living, breathing structure that has thought about you before you even set foot through the front door.
COEN VAN OOSTROM, FOUNDER & CEO, OVG REAL ESTATE: We have an app where we, in the morning, can say, hey, I'm going to the building today. I want to
work in the morning, having my own desk in the afternoon. Then working in a team, and then a suddenly we have the possibility of really getting the
workplace we need at the moment that we need it.
QUEST: Need to find your college? Ask "The Edge" and its app? Booking a room? Want to adjust the blinds? The Edge and the app are your friends.
This is the future of smart buildings. At the heart is a system of technology that drives connectivity and efficiency. And obviously, can
deploy a robot to patrol the grounds. It all makes "The Edge" the world's greenest and the world's smartest office space.
OOSTROM: We ended up coming up with new innovations that not only made this building really sustainable, but more importantly made it smart.
QUEST: Take the lighting. There are no electric cables here. Instead LEDs are powered by an invisible digital ceiling with computer cables
rigged up to thousands of sensors.
DEREK WRIGHT, PHILIPS LIGHTING: The levels of saving are around about 80 percent in terms of to a conventional lighting system. And about 40
percent of a building's usage is normally about the lighting usage. So, the savings become huge in comparison.
QUEST: It all adds to the sense that this building is alive. Solar panels are its skin. Providing power for phones, laptops, and cars. The heating
system becomes the blood stream regulating the temperature by pumping hot and cold water straight out of the ground.
[16:55:00] Using the data gather from its human friends, "The Edge" facilitates a new way of working for those within. Employees here are
encouraged to hot desk, finding a work space based on their schedule and activity.
OOSTROM: A company renting in this space can have double as many people on the floor per square meter then we had in the old type.
QUEST: For its commitment to improving the way people live and work, Amsterdam and projects like "The Edge" have earned the city the title,
European Capital of Innovation for 2016. It sets an example for Europe and the world.
OOSTROM: What we find really interesting right now, is that there will be a new generation of buildings. We used to have dumb buildings, then we
went into the world of sustainable buildings, and we now move into the world of smart buildings. I have no doubt that five years from now the new
buildings in the world will be smart buildings.
QUEST: As "The Edge" has learn about our habits at work, we have learned from "The Edge" in designing better buildings and ultimately a better way
QUEST: We'll have a Profitable Moment after the break.
QUEST: Tonight's Profitable Moment, the no vote and referendum win in Italy, is by no means the catastrophe that many people of thought. First
of all, it had been expected that there would be a no vote. Secondly, it means the status quo continues. So, the worst in many ways of it all, is
that Italians remain hidebound to sclerotic slow economic growth and no reforms to the constitutional morass within which they live. Worst of all
though is the banking system. Where of course, major banks need billions of euros in recapitalization finance.
[17:00:00] That money will now cost more to find if indeed it can be achieved. Put it all together, European leaders are right tonight to say
that the Italian vote is not a crisis, but they'd be very wrong if they took it as a moment of complacency and do nothing on the back of Brexit and
Donald Trump. And that's QUEST MEANS BUSINESS for tonight. I'm Richard quest in New York. Whatever you're up to in the hours ahead, I hope it is
profitable. I'll see you tomorrow.