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WORLD RIGHT NOW WITH HALA GORANI

Alexander Van Der Bellen Wins Austrian Election; Italy's President Asks Prime Minister To Delay Resignation; Italian Voters Rejected Reform Proposal; Trump Lashes Out At China On Twitter; Trump's Taiwan Call Breaches Decades Of Protocol; Police: Fake News Story Motivated Gunman; Trump Meets With Al Gore On Climate Change; Bill On Legalizing West Bank Outposts Passes First Test; Aleppo Peace Plan Vetoed at Security Council; Independent Candidate Wins Austrian Presidency; The E.U. in Populist Roller Coaster; Manuel Valls Announces Presidential Bid. Aired 3-4p ET

Aired December 5, 2016 - 15:00   ET

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


HALA GORANI, CNN INTERNATIONAL ANCHOR: Hello, everyone. It is 9 p.m. here in Vienna, Austria. I'm Hala Gorani. Thanks for being with us. This is

THE WORLD RIGHT NOW.

Well, 2016 has been a year of political shock and intrigue with populous forces bringing surprise victories on both sides of the Atlantic, however

it didn't happen here in Austria. That is because the far right candidate, Norbert Hofer, was beaten and beaten soundly by left leaning, Alexander Van

der Bellen, who ran on a pro-Europe platform.

Over the Alps in Italy, though, it was a very different story. Matteo Renzi has offered his resignation after voters overwhelmingly rejected his

plans for constitutional reform. And in a new twist, the president has asked Matteo Renzi to wait until a budget is passed by parliament.

Let's start in Austria. We'll get to Italy live in a moment and bring in Thomas Hofer. He is a political analyst and he joins me here in Vienna.

Wow, what a day, the past couple of days, the polls were predicting a close outcome, but no, it wasn't the case. The far right candidate was soundly

defeated, what happened?

THOMAS HOFER, AUSTRIAN POLITICAL ANALYST: Yes. I think the Freedom Party was beaten at their own game. That was the real principal of the story

here. You know the Greens were very apt to create emotions, jazzing up the whole game, and you know they created fears when it comes to what might

have happened if Hofer was taking over the presidency here.

GORANI: So they succeeded in filling in the electorate here a fear of what might happen if -- how did they succeed where others have failed?

HOFER: Yes, because I think they really -- you know, they just spurred the emotions out there, and they used Brexit for example, created fears that

Austria might also leave the European Union.

GORANI: Because they're quite pro-European (inaudible)?

HOFER: Well, yes, you know, we are Euro skeptical, but still people don't want to leave the union. I think they know that it might harm this

country. And what you have seen in Great Britain was a great example of what not to do.

A second thing was, you know, the party boss, Mr. (inaudible), was talking about civil war. This was a mistake on the Freedom Party side. And then

also I think Trump's victory in the United States was also one of the pillar stones for the Greens to warn what might happen with Hofer.

GORANI: So you're telling me that Austria essentially is saying we reject this far right populist fever. That's it. We won't let it engulf us or

not because there are elections in a year and a half. What might happen next?

HOFER: Again, you should not make a mistake about it, they still have more than 46 percent of the votes. If you have told me that a year ago, I would

have said that is a tremendous success for the Freedom Party because guess what, just a couple months ago, their limit was about 35 percent of the

votes.

So they enlarged their base and this is of course a success for the Freedom Party. They can go into the next year with maybe early elections on the

general level and really trying to profit from that.

GORANI: Well, if Brexit and the Trump victory have taught us anything, it's not to predict anything with any degree of certainly.

Let me -- I want our viewers to listen to a quick chat that I had with the campaign manager for Alexander Van der Bellen, who is, of course, the

independent Green Party-backed candidate who won the presidential election. Listen.

(BEGIN VIDEO CLIP)

LOTHAR LOCKL, VAN DER BELLEN'S CAMPAIGN MANAGER (through translator): Today I'm really relieved. It's a great pleasure. We have been fighting

for over a year, almost like in America, and we're really happy for such a clear outcome.

GORANI: Do you feel that with this victory the spread or this far-right populist fever has been stopped with your candidate?

LOCKL (through translator): It was probably the case that some of the voters didn't want to vote for the other candidate, but most of Austrians

voted for Van der Bellen.

[15:05:07]We send a signal of unity and confidence to the world and to Europe. It was good that Van der Bellen was doing the pro-European

campaign and got a great majority because of it.

(END VIDEO CLIP)

GORANI: There you have the campaign manager for Alexander Van der Bellen saying, well, we ran a positive campaign. He even said we ran an Obama-

type campaign.

HOFER: More of Obama in 2012. He was running a Mitt Romney, too, right. It wasn't the 2008 style. Of course, he is trying to get a positive note

in there. However, you have to say that the central motive for Van der Bellen voters was to avoid Hofer. This was the strongest motive there was

and you know, they played it wisely.

GORANI: All right, well, they certainly did. They won the election more decisively certainly than they did in May. Thank you very much, Thomas

Hofer, for joining us. We appreciate it.

Let's talk about Italy now. Of course, Prime Minister Matteo Renzi is down but not out yet. The Italian president has asked him to delay his

resignation until the country's budget is passed later this month. Mr. Renzi suffered a huge defeat in Sunday's referendum and as he prepares to

step down, others are working hard to swoop in. Ben Wedeman has our story from Rome.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Matteo Renzi risked it all on his constitutional referendum and when he lost, he

lost it all, including his job. Almost 60 percent of Italian voters said no, many more than the polls projected.

Renzi's stunning defeat was a dramatic victory for the anti- establishment. Five Star Movement led by the raucous former comedian, Beppe Grillo.

The movement is the second largest block in parliament and spearheaded in that campaign. The Five Star Movement was born in 2009 and quickly shot to

prominence with its withering critique of politics as usual. But its leaders don't identify with the man waiting to move into the White House,

says parliament member, Manlo Di Stefano.

MANLO DI STEFANO, FIVE STAR MOVEMENT MP: He is not an establishment guy. I mean, he is a billionaire.

WEDEMAN: Above all now, Sunday's referendum result was a rejection of Matteo Renzi, a 41-year-old dynamo who wanted to challenge the

establishment, but quickly became part of it says Professor Giovanni Orsina.

GIOVANNI ORSINA, PROFESSOR, LUISS UNIVERSITY ROME: The crucial element is that Renzi was perceived as the monument of the status quo, which for a

young prime minister that has been in government only two and a half years is a remarkable achievement indeed.

WEDEMAN: Opposition to the constitutional changes united Italian voters Sunday, but that's where it ends. The electorate is as divided as ever and

if the early elections are called within the coming months, it will be another free for all. The only certainty uncertainty.

(END VIDEOTAPE)

GORANI: Well, Ben Wedeman has more from the Italian capital, Rome. Ben, when we say that this referendum defeat for Matteo Renzi is somehow a

threat to European Union -- to European unity, what is meant by that exactly?

WEDEMAN: Well, it goes along the following scenario, Hala, that early elections will be called and they are being demanded by the Fire Star

Movement as well as the Lega Nord, the Northern League, which is very anti- migrant, very anti-E.U.

Now if, for instance, the Five Star Movement does, in fact, gain a majority and is able to form a government and that is frankly a long shot, they have

said that they want to call a nonbinding referendum on Italy's keeping with the Euro zone not the E.U.

And of course, if a majority of Italians reject membership in the Euro zone, the euro could collapse and soon afterwards the E.U. itself could

collapse, but that is a bit of a long shot at this point.

As we see right now, Matteo Renzi has been given a few more days to get the budget passed. After that, we don't know what president will do, if he is

going to call for a caretaker government or a go-to the Partido Democratico of Matteo Renzi and asked of one its members to form a government. So as I

said before, the only certainty is uncertainty -- Hala.

GORANI: I know. It seems to be the main them and so many of the stories we've covered this year. Let me ask you about the banks, because there

were predictions that the banks, stocks, would collapse, that the euro would dip, that the Milan index would take a dive, none of that happened,

why not?

[15:10:13]WEDEMAN: The sky has not fallen, Hala, and many, for instance, I was speaking with one Member of Parliament from the Five Star Movement. He

told me that Matteo Renzi and the yes camp really pushed this scenario, the darkest possible picture of a no victory.

That all of those things would happen and they in fact didn't. And to those that supported a no-vote, they pointed to Britain, for instance, and

said yes, Brexit passed, but Britain still stands.

They point to the United States, Donald Trump was elected president, and the stock market has actually done surprisingly well, and they said you can

expect the same when it comes to Italy.

Now of course the story is not over. Those eight banks in Italy on the brink of bankruptcy are still teetering on the brink of bankruptcy, but

they have been doing that for quite some time.

And it was expected. The markets expected that the no vote would win and it won. By more than expected, but it wasn't a surprise unlike Brexit,

unlike the election of Donald Trump -- Hala.

GORANI: All right, possibly priced into the expectation. Thanks very much. Our senior international correspondent, Ben Wedeman, live in Rome.

Now what started out as a conspiracy theory motivated a man to bring a gun to this pizza shop in Washington, D.C., how a fake news story online could

be responsible. We'll be right back.

(COMMERCIAL BREAK)

GORANI: The U.S. president-elect is taking fresh aim at China, once again lashing out on Twitter, this time over the country's currency and military

policies.

Donald Trump tweeted this late Sunday, "Did China ask U.S. if it is OK to devalue their currency making it hard for our companies to compete, heavily

tax our products going into their country. The U.S. doesn't tax them, by the way, or to build a massive military complex in the middle of the South

China Sea? I don't think so."

Now that was a tweet by Donald Trump. Those comments come after a controversial phone call with Taiwan's president, which sparked major

concerns in Beijing.

Right now let's bring in former U.S. Ambassador Christopher Hill. He is now the dean of the Joseph Korbel School of International Studies at the

University of Denver. Ambassador Hill joins us now.

Talk to us a little about the possible implications, the impact of Donald Trump speaking directly to the president of Taiwan. Regionally, what

impacts could that have?

[15:15:02]CHRISTOPHER HILL, FORMER U.S. AMBASSADOR: Well, on the one hand if it is just understood as a sort of early season gaffe, I think people

will get over it. If on the other hand, the president-elect decides to double down on it and say that he really did mean to speak to them and he

feels that the policy is wrong, then he is changing something that is almost 40 years old, the Taiwan's relations act and the one China policy.

And then people think to themselves, but what else is he going to change, what does it mean? There used to be a lot of resistance to the idea of

one-China policy. But certainly in recent decades, it worked out fine.

It's one of these problems that, you know, there is no problem there. It's not broke, no need to fix it, and so people are wondering why is he taking

on this issue when there are a lot of other issues such as North Korea's nuclear program to take on. So there's a lot of concern that if he starts

changing things like this, what else is he going to do?

GORANI: Well, also precisely I was going to ask you about North Korea because the U.S. really needs China's cooperation on containing North

Korea, which in the end is a rogue state with potentially nuclear capabilities so what kind of an impact could it have on that front?

HILL: Well, it is likely within the term of President Trump in the next four years, North Korea will have a deliverable nuclear weapon. I'm not

suggesting this problem could be solved by outsourcing it to China, we need China's cooperation in trying to address this. This is an issue of direct

American security. It's very important for us to direct this.

So if the Chinese see that we are not working with them on long standing agreements, the incentive for them to reach agreements with us is

compromised. You know, I think there is a view among any incoming administration that while they will think outside of the box, but this is

an example of why the box is there in the first place.

GORANI: You're right. And by the way, Josh Earnest, the press secretary today was asked specifically about Donald Trump's conversation with the

president of Taiwan and this is what he said.

(BEGIN VIDEO CLIP)

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: This is a policy that has been in place for nearly 40 years. It has been focused on promoting and

preserving peace and stability in the straight. The adherence to and commitment to this policy has advanced the ability of the United States to

make progress in our relationship with China, and of course, has benefitted the people of Taiwan.

GORANI: But Ambassador Hill, those who support Donald Trump would say why not? Just try to shake things up. You know, kind of make China a little

bit uneasy about certain things in the region especially when it comes to trade or devaluing their currency according to Donald Trump. Why not use

that as a method?

HILL: Well, first of all, it is something that we agreed on with the Chinese and though, it does look a little odd that we can sell billions of

dollars' worth of weapons to Taiwan based on the Taiwan relations act, these things have been going on for some time.

And basically the issue is it's not an issue. It works. It is not among the list of kind of terrible problems we have in East Asia. So the issue

is we have a president-elect who's come here to Washington to say we're going to drain the swap, but this was an issue on high and dry ground.

There is no problem here. So if we start going after things that are not a problem, I think that some of these problems that we have, for which we

need a U.S.-China pattern of cooperation, if you will, we are going to find it tougher and tougher to work with the Chinese.

And it is true the Chinese need us, but we also need them and I think the sooner this incoming administration understands that and understands that

sometimes you have to meet people halfway, the better.

GORANI: There was reports that this was in fact not spontaneous. That it was actually pretty well thought out and planned. That is the idea of

talking directly to the president of Taiwan. What do you think the motivations is of the president-elect at this stage to do this now?

HILL: Well, I think we have a president-elect who will often double down on an issue. He will say something, there will be this human cry and then

he will say wait a minute, we need to change this. This doesn't make a lot of sense.

So there's this tendency to sort of double down on the issue. I'm sure there are some people who would like to see changes in how we deal with

Taiwan and China, but this system that we've had has served our interests and frankly as Josh Earnest said served the Taiwanese interests.

When it started in '78, they were by no means a democracy. They are a thriving democracy. I visited there myself. It's an amazing country and

things have worked very well.

[15:20:07]And so to start stepping into this and to put this to reopen this question when really this does not post an issue for us in 40 years is in

the view I think of many people in the region a little worrisome because what other issues will suddenly get opened up?

And it's not as if there are no real problems in the region. We have South China Sea. We have issues of North Korea. There are a lot of problems so

why find additional problems. So that is why a lot of people are wondering about his judgment here.

GORANI: All right, Ambassador Christopher Hill, thanks very much, with a lot of diplomatic experience in that part of the world and elsewhere.

Thanks for joining us on CNN. We appreciate your time.

In the United States, a gunshot Sunday showed how a false and baseless theory can lead to actual violence. Families were at this Washington

pizzeria when a man came in brandishing an assault rifle.

They say he came to shop after reading a ludicrous theory online. The fake story says the pizzeria is the site of a child sex ring operated by Hillary

Clinton and her staffers.

Let's take a closer look at the rise of fake news and how in the real world, it maybe fake news, but in the real world, it had a measurable

impact. Our senior media correspondent, Brian Stelter is in New York. So what happened next after this man burst into this pizzeria?

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: The people inside the restaurant fled. He fired at least one shot from his gun, possibly at the

ground, he thankfully did not wound anyone. Later when he was taken into custody, he admitted he was there, came all of the way from North Carolina

to investigate this "pizzagate" idea.

This is the kind of thing we would be joking about, it's so ludicrous, if not for the life consequences. Even today, I'm getting lots of messages

from people telling me this is all a hoax.

That this incident is real life act of violence. This man brining weapons to the pizza place. That is was all part of a hoax to cover up the truth

about this child sex trafficking ring.

I mean, this is stuff that it's utter worldly and yet we're seeing a rise in fake news from people who want to believe it. There are some people,

Hala, who are not going to believe this segment, but thankfully, I think the vast majority of people do stay grounded to reality. They don't buy

into the online conspiracy theories.

Unfortunately, it only takes a few people and we have seen even people close to Donald Trump, President-elect Donald Trump propagating these

theories. A few weeks ago or before the election, Trump's choice for national security advisor, former General Michael Flynn posted a tweet

linking to a version of this conspiracy theory, not quite, pizzagate, but a version of this theory that was total nonsense.

He was telling people "you decide," and then sharing nonsensical fake news. Just overnight and into today, his son, Michael Flynn Jr. is also sharing

this pizzagate idea saying it is real. In fact he says right here, "Until It's proven to be false, it will remain a story."

So just an example here of -- and even people in Trump's orbit who buy into these kind of nonsensical stories.

GORANI: And of course, it is impossible to prove a negative, I mean, you can't say until you prove that it is not true. I have also seen on Twitter

that there is still some support for the story. So you could have people acting on these false stories again in the future if they believe that

there is a horrible child sex ring hiding behind the counter in a pizza shop or something similar.

STELTER: Exactly. That's actually the concern now. The local businesses nearby have been getting threats, threatening phone calls. Hopefully this

is a kind of thing where a majority of people's goodwill can overpower this minority that believes this fake stories.

I'm actually will be in that neighborhood in D.C. later in the week, that same block. I'm glad I can go to the pizza place and hopefully get a slice

of pizza. You know, it's that kind of thing that maybe helps a little bit, but what we're seeing in the United States increasingly is what we have

already seen in other countries.

This breakdown of beliefs in a shared set of facts. This was happening before Donald Trump's election, but it's happening quite clearly right now.

People choosing to live in their own versions of reality, and of course, the internet, which is the greatest trove of truth the world has ever

known, is also a giant echo chamber for these kinds of lies.

GORANI: Certainly. Thanks very much. It is really a new era. We are navigating unchartered waters for sure. Thanks very much, Brian Stelter,

as always joining us live from New York.

You may have heard Donald Trump has been skeptical of climate change. He even called climate change a hoax.

[15:25:06]But just hours ago, he sat down with a very vocal advocate of climate change, Al Gore. The former American vice president first met with

Trump's daughter, Ivanka on climate issues, before sitting down with the president-elect at Trump Tower. There he is walking in to Trump Tower

today. Gore said the two had a, quote, "very productive session."

(BEGIN VIDEO CLIP)

AL GORE, FORMER U.S. VICE PRESIDENT: The bulk of the time was with President-elect Donald Trump. I found it extremely interesting

conversation and to be continued. I will leave it at that.

(END VIDEO CLIP)

GORANI: All right, it's quite the scene there in the entrance of Trump Tower on a daily basis. People walking in and out. We want to bring you

this before we get back to the vote here Austria and the latest on the controversies surrounding Donald Trump.

A controversial bill on legalizing settlements in the West Bank has just passed its first hurdle in Israel's parliament. CNN's Ian Lee is following

the developments from Jerusalem and he joins us now live from there. First of all, talk to us what is this bill and what is its tangible impact on the

ground.

IAN LEE, CNN CORRESPONDENT: Well, Hala, what this bill does is it paves the way for the legalization of more than 50 outposts in the occupied West

Bank. Outpost being small Israeli settlements that are deemed illegal by the Israeli government.

Now proponents of this bill mainly coming from the right wing Jewish Home Party. This is a member of the coalition of Prime Minister Benjamin

Netanyahu. They believe this is just another step towards annexing the entire West Bank.

Now opponents of this bill, I need to point out, Prime Minister Netanyahu has not used those words when describing this bill, but opponents this bill

mainly coming from members of the Israeli government and also the international community as well as the Palestinians.

They see it as creating -- carving up more parts of the West Bank, which will make it increasingly difficult for the viability of a future

Palestinian state and as you know that has been the corner stone, the bedrock of the conflict here is the creation of a two-state solution.

So if this bill passes, and it still has a few more readings and a few more votes, it could be a couple of weeks. There could be strong international

condemnation and a lot of questions about whether Israel has signed on to the notion of a two-state solution is really serious about that -- Hala.

GORANI: All right, Ian Lee in Jerusalem, thanks very much. We'll be right back. We'll have a lot more from right here in Austria. Latest from the

United States as well. Stay with CNN. We'll be right back.

(COMMERCIAL BREAK)

[15:30:35] GORANI: Welcome back, everybody. We are live in Vienna, Austria. Thanks for being with us.

All right. Let's get you up to date on some of our top stories this hour, and we start with what's happening in Italy. The Italian President has

asked the Prime Minister Matteo Renzi to delay his resignation in that country until the country's budget is passed. In fact, that would be just

before Christmas so he has a few more days left as Prime Minister. Mr. Renzi suffered a huge defeat in Sunday's referendum when voters rejected

constitutional reforms that he spearheaded.

Also, among the top stories we're following, at least 36 people -- 36, a huge toll -- now known to have died in Oakland, California after a fire

tore through a warehouse where a party was happening Friday. Many parts of the warehouse is yet to be searched, and authorities say the death toll

will, sadly, almost certainly, rise.

Russia and China have vetoed a U.N. Security Council resolution calling for the halting of attacks in Aleppo. Once again, the resolution proposed a

seven-day peace plan. Right before that, representatives from the U.S. and Russia verbally faced off. That as an aid group says aerial attacks and

artillery shelling has killed at least 32 people in Aleppo.

Our Fred Pleitgen filed this report from the war-torn city.

(BEGIN VIDEOTAPE)

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Driving through a destroyed wasteland that, until recently, was one of the

main battlegrounds in Syria. Aleppo's Hanano district was in rebel hands until last week when government forces moved in with crushing fire power.

Thirteen-year-old Uday where a rocket landed next to his house and describes the fear he felt (inaudible) raged.

"We were very, very frightened," Uday says.

UDAY, ALEPPO RESIDENT (through translator): Normally, we would hide in the basement, but luckily, that night, we slept in the first floor because

that's when two rockets hit right over here.

Uday's little brother, Abdul Kareem (ph) is clearly traumatized by the horrors he's witnessed and still weak from living under siege for weeks

with almost no food and water available much of the time.

As the rebels lost their grip on this place, many residents fled, trying those escape with their lives and not much more. Now, they're coming back.

Some haven't seen their houses for years.

Khaled Chobello left in 2012 when the rebels took this district. Now, he's trying to salvage any belongings in what's left of his apartment. "I am

very sad because everything is either destroyed or ransacked," he says.

KHALED CHOBELLO, ALEPPO RESIDENT (through translator): We found these pictures under the rubble. Even the walls are destroyed, but we will come

back here and rebuild.

PLEITGEN (voice-over): The battle for Aleppo is far from over, but Syrian government forces clearly have the upper hand, taking about half the

rebel's territory in the past week alone and continuing to push their offensive with massive fire power.

PLEITGEN (on camera): Like in so many districts that have been taken back by the Syrian military, there is massive destruction in this part of

eastern Aleppo, but there's no denying the shift in momentum in favor of the Syrian military and also the boost in morale that many of their

soldiers have gotten.

Troops loyal to Syrian President Bashar al-Assad they believe they could capture all of Aleppo, Syria's most important battleground very soon.

"The rebel headquarters was right here," he says.

UNIDENTIFIED MALE: So the loss of this district was a big blow to them. You can see how our shelling is pounding them, and that shows that they're

morale is collapsing.

PLEITGEN (voice-over): Rebels left behind a makeshift cannon when they fled here last week. So far, the opposition hasn't found a way to shore up

their defenses in the face of this massive and possibly decisive Syrian government offensive.

Fred Pleitgen, CNN, Aleppo.

(END VIDEOTAPE)

GORANI: Well, we return now to the election hear in Austria where the population's desire to remain a part of the E.U. apparently outweighed a

populist agenda from the far-right. The left-leaning Alexander Van der Bellen said he would be pro-European President who is open to the world.

E.U. leaders must have breathed a sigh of relief as the man he defeated was the anti-immigrant and Euro skeptic Norbert Hofer.

[15:35:04] The Secretary General of the Austrian People's Party, Werner Amon, is here in Vienna with me.

Thanks for being with us, sir.

WERNER AMON, SECRETARY GENERAL, AUSTRIAN PEOPLE'S PARTY: My pleasure.

GORANI: Just your initial reaction when you learned of the results of the vote on Sunday, was what?

AMON: Actually, I believe that it's quite a good signal to the Austrians and to the world that we decided to elect a president who is open to the

world, who is pro-European. He is pro-European Union. And this is, from my point of view, a good result.

GORANI: So you were happy with the result. However, I want to say 47 percent, just about, of Austrians voted for Norbert Hofer. The Freedom

Party is quite popular in opinion polls. There are elections in 2018. This isn't finished, isn't it?

AMON: This is true. I mean, polls are one hand and real elections are the other hand. And with this real election, we saw there is at least now a

difference from about 8 percentage and this is quite a good result, I guess.

GORANI: There's still a degree of dissatisfaction among Austrians. Unemployment is low compared to other western European countries or, I

should say, compared to western European countries like France, Italy, or Spain, but it's still higher than Austrians would like. There is still

dissatisfaction with the number of refugees that this country let in. How will things need to change, do you think, in order for Austrians to sort of

feel a little bit happier with their government?

AMON: Actually, the government has to do more constructive positions and deliver more good results to the people. As you know, we do have a

coalition government with Social Democrats and the conservative People Party, and it's not that easy. The one come more from the center left and

the other came from the center right, so it is not always that easy to bring all the positions together.

GORANI: Yes.

AMON: On the other hand, you a tendency all over the western industrialized world that the people are not that satisfied, I guess, with

the establishment, with the so-called establishment.

GORANI: Clearly, the parties that are currently in charge of the government, neither of those produced the presidential candidates, one of

whom ended up winning. What's going on there? Why such a rejection of establishment parties? Where has the failure been from them?

AMON: This is a very difficult question. If it were that --

GORANI: But it's the only question.

AMON: Yes, but it's not that easy to answer that question.

GORANI: Yes.

AMON: From my point of view, it has to do that we really have reached a very high level of social security, and present governments cannot really

promise anymore that we get something on the top on this very high level that we already have reached in social security, especially here in central

Europe.

GORANI: OK. I've got to ask you one last question about the E.U. You saw what happened in Italy. There was a rejection of Matteo Renzi's reform

proposals. You saw what happened with Brexit and all this anti- establishment far-right candidates from Marine Le Pen all the way to Nigel Farage saying, you know, that they want Austria to go in that direction

against Europe? Are you concerned for Europe as it projects?

AMON: Actually --

GORANI: Will it survive?

AMON: We should not concern too much. We should be brave, I guess. And I guess we should force the European Union and its institution to concentrate

on the things, what should be really done on this multilateral level, not to focus on, you know, tiny things, what they're going to go regulate in

each country, for example. So I really believe that the European Union has a future if the Union is concentrating --

GORANI: It will survive? Will it survive?

AMON: Definitely, there's no doubt about it.

GORANI: OK. Thanks very much, Werner Amon, the Secretary General of the Austrian People's Party, for joining us on CNN. We appreciate it. Thank

you.

AMON: Thank you.

GORANI: Well, the result in the Austrian presidential elections gave a rare glimmer of hope to the leaders of the European Union. We were just

discussing that. However, just hours later, Italy's pro-E.U. Prime Minister Renzi said he would resign after losing a referendum on his

country's constitution. The move sparked fears, once again, over the rise of populism, this time in the Euro zone's third largest economy.

Nic Robertson takes a look at all of Europe's political turmoil.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Italy's Prime Minister resigns. Europe's roller coaster relationship with the E.U. takes a dive.

Trump-type populism shaking up Europe's politics.

Hours earlier, Austria elected a new president. Europe leaders rejoiced. Austrians rejected the nationalist candidate with Nazi connections.

France's President declaring the Austrian people have chosen Europe. What they Austrians chose, though, was no mainstream politician.

Alexander Van der Bellen is Western Europe's first ever Green Party president, is pro-E.U. But this is the first time neither of Austria's two

principal political parties have not held the presidency.

[15:40:13] In Italy, Renzi, who tried to reform the country bloated bureaucracy and boost the economy, is victim of leftists and nationalists

who won out of the European Union.

France's hard right nationalist, Marine Le Pen, who is running for president next year, was quick to grab gains for her own campaign from

Renzi's losses. She tweeted, "The Italians have moved away from Renzi and the E.U. We must listen to this thirst for freedom and protection of

nations."

At E.U. H.Q. in Brussels, finance ministers dismiss worries of a hit on the Euro, but Italy's struggling banks may yet need Brussel's help bailing them

out. And for Italy's populace, that's a contentious issue.

Meanwhile, here in London, more discord. The Supreme Court is deciding whether or not British lawmakers could potentially block Brexit. It'll add

to the growing uncertainty about the future of the European Union.

Passions here, for and against Brexit, are high and every indication now, similar sentiments are spreading.

Nic Robertson, CNN, London.

(END VIDEOTAPE)

GORANI: Well, the populist sentiments that are spreading across the West that Nic Robertson was speaking about continue to bring uncertainty to the

global economy, among other things. Ian Bremmer is an expert on how political changes affect market and he joins me from New York.

First of all, I want to ask you about, there was really just two different scenarios that played themselves out in Europe. On the one hand, Italy

with the rejection of Matteo Renzi's proposed reforms. But on the other hand, Austria, pretty decisively, rejecting the far-right candidate. What

did you make of both results?

IAN BREMMER, PRESIDENT AND FOUNDER, EURASIA GROUP: Well, I guess, I'd spin them a little differently. I'd say in Austria, with the first presidential

elections several months ago, you'd already had the rejection of the two main establishment parties. This was populist either way, frankly. They

didn't go at the extreme far-right candidate, but they certainly rejected the establishment. And you have an independent former Green that now has

that post in Austria.

In the case of Italy, you know, frankly, it's not usual that we can rely in history on a strong decisive Italian leader. We got one with the former

Mayor of Florence and Matteo Renzi, but, you know, his ability to maintain strong populist support for a decisive set of political and economic

reforms would have been extraordinary at any time in Italy, never mind the time now when you have such strong populism.

He tied it to his own popularity. He lost. Now, Italy's going back to a caretaker government. You're going to have a status quo ante of a series

of very weak Italian coalition governments. So I do think the headlines are a little bit misleading on this one.

GORANI: OK. But let me ask you about the reaction, though, because there were predictions, dire predictions, that a "no" win in Italy would lead to,

you know, bank stocks tanking, to the Milan Index taking a dive, to the Euro, this and that and the other. It didn't happen at all. In the same

way, markets didn't necessarily react negatively to a Donald Trump win last November. Initially, they did but then they quickly recovered and now,

they're again record territory. What's going on there? Investors don't seem concerned.

BREMMER: No, no, no. I mean, investors are very near term. Investors don't mind that Donald Trump might be subverting U.S. leadership and the

world are having problems with global trade or the U.S.-China relationship. That's later. Investors don't mind that, in several years' time, you have

could have a disaster from the actual Brexit conversation. For now, things are OK.

The Italian banks, you're going to have a government that will be able to recapitalize if they for individual problems. So, I mean, there's nothing

imminent and urgent that I think the stocks need to react to.

And certainly, in the case of the United States where we're hitting this record highs, domestically, the economic team for Trump can walk and chew

gum, maybe not simultaneously, but at least one after the other. And, you know, they are very pro-market and pro-industry, so I don't think we should

be surprised that the markets are up. The question is, what's the longer- term trajectory and sustainability of the government policies that we see as a consequence? And you don't look to the markets for that. You have to

look to the livelihood of the people.

[15:45:00] GORANI: Let's talk a little about the long-term outlook for the U.S. I mean, we're seeing the President-elect already break every single

diplomatic rule, not least with his conversation on the phone with the President of Taiwan very much angering China, tweeting out attacks against

the press, and threatening U.S. companies with 35 percent tariffs on their goods if they move their factories overseas. Looking just at the first few

days of post-President-elect Trump victory, what should we expect in the future?

BREMMER: So in the same way that the expectations are reasonably positive, at least short term, on the economic side, when you look at international

relations, you have to be unnerved and there, go around the world. If you talk to the foreign ministers and the heads of state of American allies,

they're deeply concerned that they can't count on the United States, and particularly a United States lead by President Trump.

They were worried about this under President Obama. Those worries have grown, certainly in terms of international trade, certainly in terms of his

calls for America first and that allies need to do more or the U.S. isn't going to be there, and now also in terms of potentially picking a fight

with the single most important bilateral relationship in the world, that of the United States with China.

And while it's pretty clear that Trump didn't really know what he was doing when he spoke to the Taiwanese President, because Kellyanne walked it back,

his senior adviser, and said he wasn't trying to make policy, but still the tweets that came on the back of that saying, hey, these guys are

manipulating currency, you know, so they're putting taxes on our products, and they're expanding their military.

I mean, everything that we've seen from Trump, not just on the campaign but since he's become the President-elect, seems to be goading to pick a fight

with these guys before he has either Asia's strategy, American allies in the region on his side, or a Secretary of State designee, I would say

that's giving a lot of people great cause for concern.

GORANI: All right. Ian Bremmer, as always, a pleasure having you on the show.

BREMMER: You're welcome.

GORANI: Thanks so much for your analysis.

BREMMER: You're welcome.

GORANI: All right. To France now and we were talking about important elections. We had the referendum in Italy and, of course, here in the

Austrian presidential election where there's a big important event on the calendar next year, and that is the presidential election in France.

The Prime Minister there says he is ready to become the country's next president. Manuel Valls has announced his bid to become the Socialist

Party's candidate in the general election. He'll first face off with the members of his own party in a January primary. And this all comes days

after President Francois Hollande announced he would not seek a new term. Valls has a tough task ahead. He needs to unite his party after Hollande's

unpopular administration.

Now, remember, Hollande's popularity rating, at one point, dipped to 4 percent, a record low. Now, he listed, Manuel Valls, what he wants to see

in France's future. Listen.

(BEGIN VIDEO CLIP)

MANUEL VALLS, PRIME MINISTER OF FRANCE (through translator): I want an independent France. Independent, inflexible on its values when facing the

China of Xi Jinping, the Russia of Vladimir Putin, the America of Donald Trump, and the Turkey of Recep Erdogan.

(END VIDEO CLIP)

GORANI: All right. Positioning himself internationally there, Manuel Valls.

Don't forget to check out our Facebook page, facebook.com/holagoranivienna, and for some of the show's best content. We'll take a quick break, and

when we come back, we have more live from Vienna. Stay with us.

(COMMERCIAL BREAK)

[15:50:51] GORANI: Welcome back, everybody. We continue to broadcast live from Vienna, Austria where this country had a very important presidential

election that led to the victory of the Green Party-backed independent candidate, Alexander Van der Bellen.

We want to take you now, though, to the U.S. city of Chicago for this week's edition of "AROUND THE WORLD." One local performer and artist finds

inspiration in the city's unique culture. He takes us on a tour of some of Chicago's more colorful attractions if you ever visit that city. Take a

look.

(BEGIN VIDEOTAPE)

MATTHEW ADAMCZYK, COMPANY MEMBER, JOFFREY BALLET: My name is Matthew Adamczyk. I'm a dancer with the Joffrey Ballet as well as a painter. I

want to show you some of our favorite spots in Chicago. I want to take you to Tweet. It's where I usually come before a show to get a hearty healthy

breakfast.

When I came in, I noticed that they were offering a gluten-free option and a regular option. What brought that about?

MICHELLE FIRE, OWNER, TWEET: Demand.

ADAMCZYK: Really?

FIRE: People really are very conscious of how they eat these days. They want it gluten-free and we said we can do it.

ADAMCZYK: We're at the Art Institute of Chicago in the sculpture court. I love to come here and see the human form depicted. It really inspires me

to create art both on stage and on canvas. Chicago offers some great venues for live music, so tonight, I want to take you to one of my

favorite, The Green Mill.

Nicole, this place obviously has a great history, and I understand we're sitting in the actual Capone booth?

NICOLE HENRY, JAZZ VOCALIST, THE GREEN MILL COCKTAIL LOUNGE: Yes, this is where Al Capone would sit when he came in. The rumor is that if you were

here when he came in, you could drink for free, but no one was allowed to leave. That's how he stayed alive, being paranoid and controlling.

ADAMCZYK: So now, you've seen what I love about Chicago. Come visit me. See you soon.

(END VIDEOTAPE)

GORANI: There you have it. Now, coming up, it's normally a time of coming together, but this Christmas, Austria is a pretty divided nation. We'll

have final thoughts this hour as we continue to come to you live from Vienna coming up after a quick break. Stay with us.

(COMMERCIAL BREAK)

GORANI: In a country that gave the world Mozart and Schubert, we've just seen an election with as much drama as one of their finest concertos.

Between the markets and mulled wine, Christmas time here in Austria is usually more about the battle between Santa Claus and the local villain,

Krampus, but this year it was the political stage which had people gripped. Atika Shubert has been covering here in Vienna, Austria as well.

[15:55:03] And you were here over the weekend when that result came down, Atika, because the lead was insurmountable for Norbert Hofer, the Freedom

Party candidate and at that point, essentially, he had to concede.

ATIKA SHUBERT, CNN CORRESPONDENT: Yes. I mean, there was a lot of drama here. People were amazed at really how nasty the campaign got, especially

that last debate. There was a lot of mudslinging and people are comparing it to sort of a playground fight, you know. So I think, for many people,

they're sort of relieved that the election is finally over, that can't election as that, and that it cannot be disputed. I mean, 53 percent to 47

percent, that's it. You know, he numbers are there, so.

GORANI: In May, Alexander Van der Bellen won with 31,000 votes. There were these reports of irregularities. They had to kind of hold another

election. Then there was an issue with the glue on the envelopes of absentee ballots in October. Finally, third time is a charm and we have a

winner.

SHUBERT: Yes. And I think many Austrians were also embarrassed by this, especially the glue part. It was sort of like, listen, if we're going to

do this over again, let's try to get it done right. And there was a lot of concern about the vote counting, and they had said, you know, this could

take a while because we don't want to do go through this process all over again.

GORANI: So what's the impact, I mean, longer-term, of this win? Because neither of these -- sure, the candidate who won is a pro-Europe. You know,

he was the antithesis of the Freedom Party candidate, Norbert Hofer, but he's not an establishment candidate. So either way you look at it, this

was anti-establishment race between two candidates that aren't from the main parties.

SHUBERT: Absolutely. I mean, the main take away here is neither was from a mainstream centrist party, so it was still a protest vote no matter which

way you look at it. But many Austrians are saying, we still want to stay the course. We want to maintain that open Europe.

But the story is not over yet because the FPO, the Freedom Party, is still very strong. It could do very well in elections, in parliamentary

elections, and those could happen as soon as next year. And, of course, we have all the other elections happening next year, the Netherlands, Germany,

and France. So this could still go on for a while, but for the moment, Austria and Europe can breathe a sigh of relief of sort of stability, if

you will.

GORANI: All right. Well, it's been very interesting covering this very briefly for 24 hours and also getting the opportunity to speak to sort of

ordinary Austrians about what their country has gone through. And as you mentioned, so many more important contests coming up next year.

Atika Shubert, thanks very much.

And thanks to all of you for watching this special edition. I'll see you tomorrow. I won't say same place, but same time from London. I'm Hala

Gorani from the team here. We'll see you again. "QUEST MEANS BUSINESS" is up next.

END