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QUEST MEANS BUSINESS
France Attack Casts Shadow on Election; Trump Signs Financial Executive Orders; Moscovici Says Le Pen Has No Plan for France; Gigaba on South Africa Junk Bond Status
Aired April 21, 2017 - 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] PAULA NEWTON, CNN ANCHOR: Waste Management showing a lot of exuberance today. More exuberance than they showed on the markets all day,
I can assure you. And that's the kind of days been. It's Friday, April 21st.
French election authorities say they knew that the attacker was trying to contact ISIS before the shooting, but didn't have enough to charge him.
Meantime, French voters head to the polls this weekend in a divisive presidential election.
Dodd/Frank under the microscope after U.S. President Donald Trump signs an executive order to renew its regulations -- review, pardon me, its
I'm Paula Newton at the IMF in Washington, the spring meetings. Apparently, lots of forecasts here for it to be a good spring. Apparently
here too they mean business.
Good evening, and welcome to the IMF World Bank spring meetings. It was quite subdued here I'd have to say. That's because most of the action has
usually been going on a few blocks from us at the White House. We will get to absolutely all of that, but the catch word here these days is
protectionism. But we want to get first to an update of course, on what has been going on in France. And we will hear from the finance ministers.
Everyone here reacting to in fact, that terror attack, but first we want to get you an update on what exactly happened on Wednesday night.
Now the suspected gunman named as Karim Cheurfi, is a French national. He was known to authorities and had a long criminal record. A note found in
his pocket, in fact, praised ISIS. He traveled to Algeria earlier this year while he was on bail. The attack will certainly be on the voters'
minds when they cast their ballots on Sunday.
We get a full update now from CNN's Melissa Bell.
MELISSA BELL, CNN PARIS CORRESPONDENT: The time, 9 p.m. and the timing, three days before the presidential elections. On the Champs-Elysees, the
attacker identified as Karim Cheurfi, has just been killed after shooting at a police van with an automatic weapon. One police officer is dead, two
others and a tourist are wounded. Within three hours the Islamic state had claimed responsibility. The following morning raids were carried out in a
number of locations. Three members of Cheurfi's family were taken into custody.
As the investigation gathered pace, the government met to discuss the security ahead of Sunday's vote and the likely political fallout. With
less than 48 hours to go until polls opened France's Prime Minister expressed his fear that one candidate might try to add fuel to the fire.
BERNARD CAZENEUVE, FRENCH PRIME MINISTER (through translator): the candidates of the pro-national like every drama seeks to profit from and to
control the situation to divide. She seeks to benefit from fear for exclusively political ends.
BELL: Marine Le Pen has put the fight against Islam is violence at the heart of her campaign. Controversially she wants all terrorist suspects to
be thrown out of France and the country's borders closed. Within 12 hours of the attack she went on the offensive.
MARINE LE PEN, FRENCH PRESIDENTIAL CANDIDATE, NATIONAL FRONT: I demand that an investigation be open with the objective of dissolving associated
and cultural organizations that promote or finance fundamentalist ideologies.
The hate preachers must be expelled. The Islamic mosques must be closed.
BELL: Le Pen repeated her intention of having all terror suspects, some 10 1/2 thousand people expelled if elected president. Shortly afterwards her
main rival, the independent centrist, Emmanuel Macron, took to the airways with his reply.
EMMANUELLE MACRON, FRENCH PRESIDENTIAL CANDIDATE, EN MARCHE!: Do not give into fear. Do not give into the vision. Do not give into intimidation.
BELL: With the campaign ending at midnight tonight, the only measure of the choice the French have made will be the poll itself. A poll is hard to
call as it is likely to prove decisive.
NEWTON: And Melissa Bell is live for us in Paris tonight. You know, Melissa, already such a controversial election. We've been talking about
how divisive it is and so many people have been talking about the resiliency of Parisians. And the French in general to what has been a long
road to get to any stability and security when it comes to that whole terror controversy. Is there a feeling that this will significantly affect
the outcome of the election?
BELL: I suppose the most worrying thing, Paula, is the timing of this. I mean, really coming as close as it did to the opening of polling stations
on Sunday morning. And it was just three days before. The timing could not have been better or worse, depending on which side of the political
divide you find yourself here in France.
[16:05:00] and as you mentioned, you alluded to it a moment ago, Paula, the divide is extremely great. We were already facing one of the hardest to
call elections that anyone here in France can remember. Potentially one of the most transformative as well. Not for just French society, but for the
French economy, for the French political system. There are 11 candidates that the French will be choosing from on Sunday. And many of them programs
of radical reform a real rupture with all that's gone before.
And what's interesting is that even now at this late stage and given how many weeks and months the French have been hearing from the candidates.
We've had three live debates. So many people still undecided. We've been testing the mood out here on the streets of Paris and were just a stone's
throw from where this attack happened just over 24 hours ago. And still people will tell you, well I'm just waiting to see. I haven't quite made
up my mind. And I think that's possibly one of the most worrying aspects of this election is that there are so many people still waiting to decide
before they going to cast their vote in what is likely to prove a crucial election here in France.
NEWTON: Yes, absolutely, Melissa. And you have been traveling from one side of France to the other. It's so interesting here at these IMF
meetings that everyone from France and Europe who I've spoken to in the last couple of days, quite calm. Saying look, even if Madam Le Pen does
well in the first round there is no way she will become the leader France. What you think. Melissa? I mean, we've been so stunned by so many
political outcomes in the last year.
BELL: I think that's right, Paula. For a start, we've come to distrust the polls. We no longer believe that they can hear the voters. Perhaps
they could before this populist wave started to sweep the Western world. In the belief is here that that might be the case once again. Now how is
that unspoken vote likely to express itself. There is of course the populist vote for Marine Le Pen. Have the pollsters managed to gauge it
properly? Could she managed to reach that crucial 50 percent in the second-round runoff that would lead her to the Elysee Palace. I think at
this stage we simply don't know how great that anger out in France is. It's very difficult to hear as we've seen in previous elections.
What were also hearing -- and this is another interesting thing about this election, which might make it slightly different -- you know, the
mainstream Republican candidate, who this was really to lose, Francois Fillon, when he first took the Republican candidature just a few months
ago. It looked like he had an open road to the Elysee. There was the question of the fact that Socialists had been in power for so long. He was
even incredibly popular. And then his judicial difficulties.
We've been spending time with some of his voters who say, his judicial difficulties didn't mean that his vote simply went away, it just went
underground. So, what they're suggesting is that it is the mainstream vote that the pollsters are having trouble hearing ahead of this particular
Either way, you have this massive uncertainty. You have four leading candidates who are all within about 20 percent of voting intentions going
into the first round. With the possibility that all those undecided people might at the very last minute decide well in fact, they're going to back
this or that candidate because here she looks like they are most likely to take on the candidate that they least favor. There is a lot of tactical
voting. A great deal of uncertainty. And really, we are not going to be any clearer in particular about this particular attack 24 hours ago, just a
stone's throw from here, has played into the narrative in particular of Martine Le Pen, the far-right candidate, until about 8 p.m. local time on
NEWTON: Yes, so much to look out for. We'll continue to stay with you, Melissa, throughout the weekend to get updates. And thanks for indulging
us with those insights, which we can't really give you in a couple of hours, because of French law. So, good thing we got a lot of analysis in
there before we can no longer do it. Melissa, again, thanks so much.
BELL: Just in time.
NEWTON: U.S. President Donald Trump, no he was not left out of this. He's tweeted about the consequences that he thinks the attack in Paris will
have. "The people of France will not take much more of this. Will have a big effect on presidential election!"
The French finance minister, Michel Sapin, has told me he doesn't think it's an endorsement of the far-right candidate, Marine Le Pen. Now Donald
Trump later said to the Associated Press, he said as much, it's not an endorsement, but. And there are many buts, and so I asked Mr. Sapin about
what this attack means for France.
MICHEL SAPIN, FRENCH FINANCE MINISTER (through translator): The terrorist attacks against France, other countries are also affected. But these
terror attacks against France are not against a society or in economy. They're commanded from aboard. They are against a country that fights for
freedom. A country that carries out offensives with its allies in Syria, in Iraq, in northern Africa, in Mali and Niger, to fight terrorists.
We can see that the more the terrorists are weakened on an international level, the more they try to use terrorism on a territory to trouble the
population. I think the French have shown this several times and continue to show this, this time, that they are not shaken by this. They are
touched and moved, but it's not shaking their determination in the fight against terrorism.
NEWTON: And you know that the President tweeted this morning.
NEWTON: That he thinks that the terror attacks will affect the elections.
[16:10:00] SAPIN: I don't think Mr. Trump is the best specialist in French politics. Well I guess everyone can tweet what they want to. But one
thing, don't mistake Mr. Trump and Madame Le Pen. Mr. Trump comes from political life in America. A big political party, the Republican Party.
He has a majority in Congress even if it's a majority with who he has to discuss. Madame Le Pen is not the same thing at all. She doesn't come
from a big democratic party. In France, she is really on the outside. She is from the extreme right. She is not the same as Mr. Trump.
I always tell people to watch out and don't compare the two. It's not very nice for Mr. Trump to be compared to someone who is a racist, xenophobe,
who is against all the values of a democracy.
NEWTON: But President Trump seemed to be supporting her in the tweet today.
SAPIN: I don't think this is the reality. It's not what he thinks.
NEWTON: Because he thinks the terror attack will affect the election.
SAPIN: Maybe, but it doesn't mean he supports Marine Le Pen. I will leave it without commentary. In every case the French people determine
themselves along their own debates, their own interests, and I know that the French people will make their choice for democracy to conform with
their republican values.
NEWTON: Incredibly strong statements there from the French finance minister about the election campaign.
While the eyes of the world on Francis this weekend, Britain is now on that crowded calendar of European elections. Earlier I spoke to the U.K.
finance minister, Philip Hammond. The Chancellor explained why Theresa May took the risk to dissolve Parliament.
PHILIP HAMMOND, BRITISH FINANCE MINISTER: I've been clear for some time, in my own mind, that we would strengthen our hand in our negotiations with
the European Union if we had an early election. And the prime minister got a new mandate and cleared a five-year run with strong stable government
that will allow us to negotiate the deal, exit the EU and implement that deal under Theresa May's leadership.
NEWTON: That's pre-guessing what the voters are going to tell you though. It's still a risk.
HAMMOND: Of course --
NEWTON: A risk the Conservative Party's lost very recently.
HAMMOND: So, every prime minister when they make that decision to go to the Queen and ask her to dissolve parliament is taking a risk. And we
don't take anything for granted. But we have set out very clearly what we see as the way forward with the European Union in the Article 50 letter
that we served. We set out the kind of Brexit that we believe would be good for Britain and good for Britain's future. And were asking the voters
to endorse that vision. As well as our vision for Britain's economy in the future. Our plan for Britain.
NEWTON: And the plan for Britain cannot be Brexit. That can't be the plan. If you're looking at British voters, or indeed, the investors that
you're trying to appeal to hear, what is it? I mean, what kind of vision do you see?
HAMMOND: It's about building Britain's economy to be resilient in the future. It's about addressing our productivity challenges in the U.K.
economy through investments and skills and infrastructure. It's about ensuring that the growth that we've generating is inclusive growth. It
gives everybody a chance to participate in the success of the economy. And that's a big challenge for all developed economies as more and more of our
voters feel that they are being excluded by the growth of the economy.
So, the prime minister has set out her vision of how we need to do this in the U.K. and our circumstances are a bit different from circumstances in
the U.S. or in other countries. So, it's a tailored plan for Britain to get Britain match fit to exploit the opportunities that leaving the
European Union will present to us to make our way in the world as a global Britain. An outward looking Britain, doing trade deals with our partners
around the world. As well as maintaining a close relationship with our European neighbors.
NEWTON: Trade deals, as Madame Lagarde was sitting here warning about protectionism. Here are a few blocks away, President Trump, look like he
might be engaging in a trade war. What makes you think that you have any special relationship with the U.S. government that you'll get a strong
deal. Let's face it, that would be linchpin of any strong and resilient economy that you have a trading economy.
HAMMOND: Of course, it will. And we are a trading economy. And what we're hearing very clearly from the administration, from the President
himself, from both sides of Congress, is that there is an appetite to do a trade deal with Britain. When the president talks about unfair trade, he's
talking about unbalanced trade between countries that have different levels of development, different labor costs.
It doesn't have an imbalance with Canada. He called them. Oh, he's just about to turn the tables on that trade relation.
HAMMOND: We have very well matched economies. We think will be able to do a trade deal between the U.K. and the U.S., which works for both countries.
Recognizing the fact that we're similarly developed economies. Similar labor costs.
NEWTON: There are serious concussive affects to the economy that are incoming. That's what I know your hearing from investors.
HAMMOND: I mean look, clearly if we don't get this negotiation with the European Union right, there will be consequences for the British economy.
We have to get that deal right. That's why we need a strong and determined leadership with a strong hand at the negotiating table. That's why we've
decided to hold an election.
[16:15:00] NEWTON: Don't you think that the door in Britain they're going to ask for more from you than that?
HAMMOND: They're going to judges by our track record. And they're going to look at our opponents and see what they are proposing. Higher taxes, an
extra half a trillion pounds of borrowing. And that's what they have to offer the British people. They're going to see a government here which
over the last seven years has reduced income taxes for ordinary working people, 30 million people have seen their income tax bills lowered. And at
the same time reduce their deficit by two thirds. That's good solid conservative economic management and practice.
NEWTON: And that apparently is the same pitch he is giving to investors here in the United States.
Dodd/Frank is in President Trump sites as he seeks to weaken financial regulation to, he says, boost economic growth. Coming up the latest on the
President's newest executive orders.
NEWTON: President Trump continues to take aim at financial regulation. You are looking at him signing those new executive orders. Right there.
That's just a few blocks from where I am sitting. He aims to reduce regulations like Dodd/Frank, with the expectation that it will end up
boosting economic growth.
He also promised a big tax reform announcement next Wednesday. Maybe. For more on all these executive actions and what they mean, CNN's Jeremy
Diamond joins us. He's now at the White House. Jeremy, look, in terms of Dodd/Frank, the President is in very good company. Fred Greenspan, Edward
Greenspan, just a few booths across from us was saying, look, getting rid of Dodd/Frank is a good idea. The Obama administration would say
otherwise. I mean, is this something that he's bound to get a lot of support for?
JEREMY DIAMOND, CNN WHITE HOUSE REPORTER: Well, that's right, Paula. You know, the President has been taking a series of executive actions in recent
days. Kind of a flurry of activity before this hundred-day mark. And certainly, the executive order that he signed today, which orders the
Treasury Department to conduct a review of various tax regulations in addition to two presidential memoranda. These are very much aimed at his
promises of stimulating economic growth. And also, as he promised on the campaign trail to really go after Dodd/Frank, which the President
highlighted today in his remarks at the Treasury Department.
And what he also said was that these executive actions are a first step toward tax reform. Now that's interesting because the President also today
signaled that next week on Wednesday he's going to release his administration's outlines of a tax reform package and what they would like
to see in that. Of course, it's interesting because next week the White House has also been encouraging activity on health care. There are also
coming up against this deadline to pass a funding bill for next year to prevent a government shutdown.
[16:20:00] So, a lot of activity is going to be happening next week between the White House and Capitol Hill. And the President, obviously, making
clear that tax reform is a priority. But as he said in the past, you know, he needs to pass this health care reform package first to get these
billions of dollars in savings that he can then use to sell his tax reform package. But certainly today, at least the President, not going to
Congress, but doing what he can on his own to start the movement towards a broader tax reform and to start simplifying the tax code as he said and
stimulating the economy. That of course, despite the fact that there is some opposition, including from former Fed chair, Ben Bernanke. Who said
that it would be a mistake to rollback those Dodd/Frank protections, Paula.
NEWTON: I guess he and Mr. Greenspan didn't chat beforehand to get their story straight. Thanks Jeremy for that update from what always is a very
busy White House.
IMF managing director, Christine Lagarde, called for dialogue between nations to protect trade, on Thursday. Now speaking at this Washington
Summit, Lagarde said, the International Monetary Fund believes in, of course, a diplomatic approach. Take a listen.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, IMF MANAGING DIRECTOR: We believe very firmly in this institution in the value and virtues of dialogue, cooperation, reciprocated
assessment, and we will contribute our part where we have competence and where it is our mission. And I think other institutions will also want to
do that as well. In order to make sure that we do not jeopardize the engine of trade.
(END VIDEO CLIP)
NEWTON: Dialogue is easier said than done for many, many nations. With tension between the U.S. and Mexico growing as companies bid on that border
wall that Donald Trump likes talking about. Joining me now for more on this is former Mexican President, Felipe Calderon. You know, President
Calderon, it is so interesting to be here at these IMF World Bank meetings. And you know what I'm talking about. They want to put the best face on it.
And saying that, look, what Donald Trump says is one thing. That doesn't mean he's going to go through with it. In terms of your country's
relations, contentious relations, with this government right now, I mean, what do you think? Do you think everyone should just count on his word?
And even in regard to building that wall from one end to the other.
FELIPE CALDERON, FORMER MEXICAN PRESIDENT: You know very well, Or Pena and I would say that Mexican, of course, opposes to that. But the most
important thing in my opinion is all these should live with trade. And it is important to emphasize that trade is not only good for Mexico but also
very good for the American economy. 1.1 million American workers depend on the export towards Mexico. 6 million of American workers depend on the
trade with Mexico and more millions depend on tourism and agricultural and aggregate level of integration of the economy. We need to keep, as Ms.
Lagarde said, we need to dialogue, yes, it's true. But we need to keep the free flow of merchandise which means economic growth for both economies.
And the wall is going to take time. And of course, Mexico is not going to pay. But I think it's not the main issue we need to discuss.
NEWTON: But Mr. Calderon, you know, I have literally heard word for word what you have just said probably 10 times in the last two days. It does
not seem like anyone at the White House is listening. Are you not afraid that it can trigger, if not a full trade war, but trade irritants? Which
the IMF says itself can drag down growth substantially.
CALDERON: Of course, there is a global concern about the rights of these protections in France that could hurt a lot of the global economy, but also
the American economy as well. It is impossible to stop the flow of the trade around the globe. In any intention to do that will damage a lot.
The global economy and this local economy, I am trying to believe that somebody in the White House is listening. And there are people, smart
people enough to understand the importance of trade for the economy. There could be other people that really don't understand and what can we do with
that. But I hope that the people in the administration could take the right decision and try to understand that campaigns is one thing and to be
in office is different.
When you are a candidate you can be -- you haven't. But when you are in office you are in the really solid earth, so it's completely different.
NEWTON: Yes, and he also has to get to Congress. Right behind you have the capital building and he has to get through that legislative arm as
well. You know, I have to ask you, many people never thought that Donald Trump would go through with the wall.
[16:30:00] There are already opening contracts on building the wall. Again, and again everyone in Mexico has said, sometimes very colorfully, we
will not be paying for that wall. Can you see any way that Donald Trump will take credit for Mexico paid for that wall one way or the other?
NEWTON: I mean, anyway. Remittances, whatever, sleight-of-hand.
CALDERON: Of course, there will be some way in which you can impose government contribution taxes or whatever. There is no way to impose
direct economic bullying to pay that. And let me give you one single word related with that, it's illegal. Illegal. Because under which law and in
which country if your neighbor try to build a new kitchen, a garage, or whatever, he or she could be right or wrong on that. And he or she can
have the right to do so. But under which law you must pay. This is the decision of your neighbor. It's completely absurd and illegal, that's the
NEWTON: All right, we will continue to follow the story. President Calderon, thank you so much for joining us. You're welcome anytime here on
the program especially as these issues come more into focus.
CALDERON: Thank you.
NEWTON: In two days France, as we been telling you, will head to the polls to choose its new president. The finish line is in sight. But last
night's attack might yet change that outcome. The former French finance minister up in just a moment.
NEWTON: Hello, I'm Paula Newton. There's more QUEST MEANS BUSINESS in a moment right here live in Washington in the IMF World Bank spring meetings.
You will hear the EU economic chief tell me Marine Le Pen does not have a viable plan for France. In my interview with South Africa's new finance
minister about fixing the country's junk status. Before that, this is CNN and the news comes first.
A source close to the Paris shooting investigation says French authorities began a counterterrorism investigation against the gunmen in March. The
attacker had allegedly tried to communicate with an ISIS fighter in Iraq or Syria. A Paris prosecutor says a note praising the Islamic State fell out
of the attacker's pocket. French presidential candidates agreed to cancel campaign events ahead of Sunday's vote.
Violent protests overnight in Caracas, Venezuela left storefronts Baron and streets and chaos Friday morning, continuing clashes have left at least a
dozen people dead, Venezuela's oil dependent economy is not coping with the highest rate of inflation in the world following the dramatic fall of oil
[16:30:00] A U.S. defense official says Russian military aircraft have been spotted off the coast of Alaska for the fourth time in as many days. Now
the two most recent events happened on Wednesday and Thursday. The aircraft did not enter U.S. airspace but U.S. and Canadian jets were sent
to intercept Russian aircraft during an encounter on Thursday.
German police have arrested a 28-year-old man in connection with last week's attack on the Borussia Dortmund football team, but they believe the
suspects motive was greed and not terrorism. Investigators say the man planned a bomb a famous football club, drive down its share price, and then
make a large profit.
France is going to the polls on Sunday with terror casting a shadow over the presidential election, the attack on the Champs-Elysees has added a
twist to what has been a very unpredictable four-way race. We want to discuss this now with James McAuley, Paris correspondent for the
"Washington Post." James, we are all following Donald Trump and the way he interjected himself into this campaign. Again, his tweet and we should
repeat key with an exclamation mark on the end, said this is going to have an effect on the elections. I mean what do you think, first, will it have
an effect and how are people taking Trump weighing in on this selection?
JAMES MCAULEY, PARIS CORRESPONDENT, "WASHINGTON POST": First of all, Paula, thank you so much for having me, it is a pleasure to be with you.
To answer your question, I think honestly, we have no idea how this is going to go. We are at the very end of the campaign, campaigning shuts
down officially in about two hours, and that is a hard line. So, no more after that.
But one thing I think we can say without having any sense of the outcome as you rightly say is a really tight four-way race, is that basically a
campaign that has been all over the place in the last several weeks about any number of themes, now has a clear question that voters will have on
their mind when they go to the polls this coming Sunday. And the question is terrorism, before it was any number of other things. Was the economy,
it was globalization, it was history, was identity. It was so many things and all of those things are of course still here but now one question seems
to have risen to the top. And that is thanks to the attack last night here in Paris.
NEWTON: James, in terms what this election campaign means, pardon me, I have not been to France in a long time, I have been trying to watch this
from the sidelines. And from the sidelines why is it, if you explain to people why to use a term, that nationalism and security has trumped the
economy? Because for so many French people the economy is really floundering, it is not giving them what they need in any sense, way, shape
MCAULEY: I think that is a really interesting question, I think the answer has any number of explanations but I think France in recent years has
arrived at a sort of crossroads in its history. And I think there is the sort a palpable sense of loss that many people outside of Paris have felt
for any number of reasons. Whether their material circumstances have changed, whether their social networks have altered, the migrant crisis in
Europe has, although less in France than in other neighboring countries, it has also taken its toll here and people feel, some people, not all people,
some people feel that in some senses vision or some might say imagined vision of French life that they have grown up with is somehow in jeopardy.
And that is exactly the sensibility that the Le Pen campaign seeks to captivate.
NEWTON: OK, James, thanks so much, we will continue to follow your reporting on this and what will be quite a cliffhanger we think for the
weekend. Appreciate it.
Now as I have been telling you here at the IMF meetings and at the World Bank, the French elections are very much on everyone's mind. And a lot of
them are saying, look, there is no way that Marine Le Pen will win.
[16:35:00] Having said that Pierre Moscovici is France's former finance minister in the current economics commissioner for EU, he says the rise of
Marine Le Pen is of course a wake-up call. Now Europe has not delivered enough results he says to its own citizens. Take a listen
PIERRE MOSCOVICI, FORMER FINANCE MINISTER, FRANCE: Her program is bad for France that it would weaken the condition of poorer people because they
suffer from higher inflation, our interest rates and lower purchasing power. But I am confident, I can tell you here, I would make more than a
bet, I am certain of that, if victory cannot happen, won't happen. Marine Le Pen is not going to be the next president of France, but even if she is
25% in the first round and qualified for the second round, it means that the war against ideological populism has not ended. We might win a battle
but we will still have to convince people that Europe is good for them. And there is a wake-up call there.
NEWTON: You still have that battle of populism and what she stands for is intoxicating to some.
MOSCOVICI: To me the grassroots of populism lie in the fact that we have not produced enough economic deliverables. This is I think what the
lessons must be taken after the French elections. No, Mme. Le Pen is not going to be the next French President but, yes, populism is still vivid and
we need to be stronger against it through results.
NEWTON: Moving on the results, Greece, it seems to me that there is a very large tug-of-war right now between the you and quite frankly, the IMF and
others, about what to do about the Greek bailout. Where you think that is going?
MOSCOVICI: The commission's in the view that we need to move to reduction, re-profiling of the Greek debt that we are ready for that. And I think
that is a key condition for a successful Greece.
NEWTON: It is not the last four years.
MOSCOVICI: I know, and Greece has made a lot of progress.
NEWTON: The time has come and gone.
MOSCOVICI: I know that again, but you know, if I look at the Greek economy, at Greek society, I see that so many reforms have been voted and
are now implemented since July 2015, it is not four years ago, it is not 10 years ago, it is 18 months ago. And I think we are now on the right path
and Greece is at a turning point, we need to seize the moment now, right now. In the very months to come, and move forward together, and when I say
together meaning also with the IMF.
NEWTON: You will promise me then we will not be covering the Greek crisis this summer. As much as I love Greece in the summer but no.
MOSCOVICI: I'm also interested in having a summer for me and my family, so I would like to make a promise, no, I am quite convinced we will have a
safe summer. But that is not the only point, the point is that we need to do more for Greece. The Greek people have suffered so much, they have lost
27% of the GDP. 20% of the population is unemployed, 50% of the youngsters. That is not something you can impose to a society. That is
why now we must move to the success of the program as well as debt reduction.
NEWTON: You just returned from the White House? Interesting conversations with the economic advisor Gary Cohn.
MOSCOVICI: Yes, I met Gary Cohn, and who I met Stephen Mnuchin, and again before, Janet Yellen, I've got a clear view, as clear as possible of what
is happening here in the US.
NEWTON: While you were doing that, Donald Trump did two things, he started an investigation into Chinese steel dumping, and he called out the
Canadians because he said they were not practicing fair trade on a number of issues. Does that sound to you like an administration that wants to
make progress? It sounds to me like they want to continue with America first.
MOSCOVICI: It is clear that their motto is America first, and I trade will be a real issue but we, the Europeans are attached to free trade, we are
attached to the WTO, we are attached to our agreements. And I had an occasion to explain to my interlocutors that are trade system is based on
fairness, and that we cannot compare Europe with China or other key partners. And so, I hope that we will in the time coming understand each
other better. It is necessary.
NEWTON: But would you say to the people manufacturing cars in Bavaria or airplanes France, what do you say? Mean to me it would seem these are
industries at risk. If you're thinking America first --
MOSCOVICI: These are decisive industries, and I heard from Gary Cohn as well from Stephen Mnuchin that their target is not to prevent people to buy
German cars or do by European and French manufactured planes. The bottom line is that they want to export more, that they want to build more in the
US. Well, we will have talks, but let started on good faith and not in a contentious manner.
[16:40:00] NEWTON: It was so interesting to see everyone but the most positive spin possible on what was going on at the White House a few blocks
from here, even though Donald Trump looks set to tear apart some trade agreements. Now, Italian Prime Minister Paolo Gentiloni, he is at the
White House, he joined a growing list of EU leaders to visit there on Thursday. Discussing the crisis in Libya, the Italian leader said the US
played a critical part in the countries stabilization, while President Trump said he could not see a future US role in Libya. Of course, Italy
has been struggling with that refugee crisis spurred on by the chaos in North Africa. An earlier I had a very frank discussion with the Italian
finance minister, he told me he is in fact optimistic about Italy's economy, but he was very, very candid about the problem of the refugee
crisis. Take a listen.
PIER CARLO PADOAN, ITALIAN FINANCE MINISTER: There is no bailout anymore in Europe, the word use bail-in. And bail-in is a macro story which were
carefully dealing with, number one. Number two, that will after 15 years begin to go down as of next year, and this is a major change. Again, maybe
this is not happening at the speed of light, and I would like to see it much faster, but it is going in the right direction.
NEWTON: As the finance minister when you look at the Five Star movement, enlighten us, what is at the heart of that movement that is resonating with
Italians who have chronic unemployment especially among youth?
PADOAN: This is a good question, I would like to ask that same question two Five-Star people.
NEWTON: You are fighting them in the polls, you can say that is a good question, but they are resonating.
PADOAN: They are resonating because so far, and this is not just in the Italian case, the real conflict is between any policy program of any
responsible government on the one hand, in a simple no on the other. This is the political fight in Europe, and when we talk about populism or
nationalism, this is what we are talking about. A government program which you may like or not, against not another government program, but I guess
the refusal of doing anything real.
NEWTON: That what you think the choices?
PADOAN: This is what the choice is, this is what people think when they support in polls Five-Star movement or other very strongly nationalist
parties in my own country like the Northern League.
NEWTON: OK, but why have they taken hold?
PADAON: They have taken hold because Europe has responsibilities, for many years Europe has forgotten about producing growth perspectives, employment
perspectives, defending the welfare system. We have to go back to those basic policy needs people expect from governments and they rightly do so.
And take the policy action is needed growth and jobs and welfare.
NEWTON: The immigration situation, it is spring again and there is a lot - - a huge crisis obviously, now in Libya, it seems to be the crisis area. How much you worry in terms of Italy's capacity to do with that?
Obviously, from a socioeconomic perspective, we have a talk about the economics of it as well. Italy takes on a huge burden, and you have any
indication about how much -- you have any warning signals about what the outlays are going to be there in terms of taking people in? What is going
to cost you? You obviously have a certain cost in terms of patrolling the waters as well.
PADOAN: We are doing our calculations and we are revising them very quickly upwards because of the season coming up with a number of immigrants
and refugees approaching the coast of Italy, but basically, we need a much deeper and long term strategy. We have to void these people of the
incentives to move, so this means first of all in the current situation to have a deal with the Libyan government not to let migrants take off from
the coast of Libya. Without that we will simply be receiving refugees.
On the financial side, we are spending a lot of money, some of that has been recognized, not provided, recognized by the European commission, that
the impact on the budget numbers could be frozen, so to speak. But this is still a huge amount of money, and we also have another problem. That some
of these people have to be relocated in towns in Italy. And therefore, you have to convince the local populations to accept these people. Who are of
course stranded and in very poor condition but still they do provide an impact on the local communities. So, it is economic, social and political
at the same time.
NEWTON: As far as Italy goes, watch this space, remember after the French elections a lot of attention will turn to Italy where there is a lot of
euro skepticism. President Jacob Zuma's dismissal of South Africa's finance minister because the rand to plunge. I spoke to the new finance
minister to find out how he plans to fix an economy so deep in crisis now, that is next.
[16:45:00] (COMMERCIAL BREAK)
NEWTON: We have some news just in to CNN here, interesting it is on this United Airlines story that we have been covering for some days now. United
says that Oscar Munoz who was the head of United will no longer become that company's chairman. He was supposed to take broader control of that entire
airline. They would have to file this with the FCC, they did not, SEC, pardon me. In these filings, they said he will no longer do that, that
will be cold comfort for some passengers and even the head of Emirates, Tim Clark, who said, look, this man should've been fired for dragging a
passenger off that airplane. We will continue to bring more information on the story, but right now United saying that Oscar Munoz will not be the
chairman as well as the CEO of United Airlines.
South Africa's finance minister has only been in the job a few weeks but Malusi Gigaba is not about to be cut any slack. There is concern that the
country is no longer a stable place to invest. Not put yourself in this guy's shoes, he is saying that there it is more about South Africa's
politics than its economy but the country erupted into protest after President Jacob Zuma dismissed Gigaba's predecessor, Previn Gordhan, he was
popular, definitely within the party. His removal also sparked a plunge in the South African rand. Now the currency has recovered slightly since
then, those ratings agencies, Moody's has put the country under review for a downgrade and to other agencies have already cut it to, you guessed it,
It means South Africa is not seen as a place to put your money. You got a feel for this guy, you had a good sense of humor about it, saying look I
barely got into this office, all of a sudden you are told you are junk.
I spoke to him a little earlier here at the IMF, and asked about those investor concerns.
MALUSI GIGABA, SOUTH AFRICAN FINANCE MINISTER: The challenges we face, especially with the ratings agencies, are much more linked to the political
perceptions, the political processes rather than the strength of the economy itself. And insofar as the economy as I say it remains resilient
and robust, the discussion in South Africa is about inclusive growth. Whether people call it radical economic transformation, or they call it
inclusive growth, we are talking about the same thing. The structure forms that must be affected in our economy to grow the economy, to diversify it,
to transcend to new sectors that have been neglected in the past, such as the oceans economy, to take advantage of agro-processing to stabilize and
provide certainty with regard to certain economic policies, such as mining, energy and others.
[16:20:00] And create more jobs, industrialize the economy, make sure that we grow SME sector, invest in building capacity for our young people, that
is what we are talking about regardless of what name you give the same program.
NEWTON: Are you also talking about nationalization?
GIGABA: Absolutely not.
NEWTON: Absolutely not, that is a promise to investors, you will not nationalize anything in South Africa.
GIGABA: There is no such discussion.
NEWTON: OK, you heard him, no nationalization in South Africa. Here at the IMF World Bank meetings, populism, protectionism, there is lot of
uncertainty. Remember, they raised their forecast here, and still you could not -- everyone was still very jittery about what is going on at that
White House. John Authers of the "Financial Times" will join me with how these meetings here are going in Washington.
NEWTON: Christine Lagarde of the IMF tried so hard to be optimistic, she even had this forecast, she was able to raise a global growth forecast, and
still everybody seemed a little tense, John Authers joins me from the "Financial Times". John, that was my sense, what did you think? Did I get
JOHN AUTHERS, SENIOR INVESTMENT COMMENTATOR, "FINANCIAL TIMES": No, not at all, I think there is a huge sense of cognitive dissonance, it is almost as
though -- it is like the ghost in Macbeth, the main player just isn't here, and we are all somehow or other talking across him. There is great concern
largely unspoken about what is going on, two or three minutes' walk from where we are right now, in the White House and obviously, the agenda that
we have heard the last few days from there about is different from the very, very globalist, in trade terms very liberal views that people are
espousing at the IMF and the World Bank.
I chaired a panel on tax evasion, very big political issue, the big idea that the IMF and World Bank are espousing is that if Third World countries
raise taxes little bit more that means they will be able to cut tariffs more, isn't that a great idea?
Meanwhile, here in Washington we appear to be on the brink of doing exactly the opposite.
NEWTON: No one will say that there won't be a border adjustment tax, and we had Donald Trump -- Christine Lagarde was talking about the sword of
protectionism, beware the Ides of protectionism. I'm going back to Shakespeare. But then we have got him here at the White House chiding
China on steel, chiding Canada. I said to the chancellor of the Exchequer, look, Canada is not getting anywhere with this. He called them out,
thought everything was going so well. You get the sense, I heard so much that was optimistic here, didn't matter if it was the Greek bailout, or
Trump's view on the Greek bailout in the IMF or the World Bank, or protectionism, he's not going to go through with it. What you think? What
are you hearing in the back halls here?
AUTHERS: In the back halls it is different people, they are nervous, there are concerns largely because again, there is this complete disjunction with
the US. There is this sense, you hear a number of people say that they sense there is a possibility for moral leadership from the US. And the
Bretton Woods organization is much weaker given the current agenda. Also, the other thing that is very surprisingly little discussed in the formal
process but is being discussed in the halls is Europe, there are plenty of concerns around the fringes of Europe. And we do have the selection you
were discussing in a couple days' time which people are very anxious about.
[16:55:00] NEWTON: And then we get to move on to all the problems in Italy. John, you are a warrior, you are absolutely at these meetings you
have been at, these WTO rounds, all of these trade talks all over the world. No protesters. The silence is deafening.
AUTHERS: Yes, that is another area, it is almost as though, again, I imagine it is because of the oxygen leaving the room thanks to the Trump
phenomenon not so far away. It doesn't seem as though this is the main issue anymore. Certainly, I have been places where it really felt almost
as though you are on a military footing in the Cancun WTO protests a few years ago. There is nothing like that, there isn't even a normal token
perfunctory protest, in the kind of anger, the kind of really clear-cut opposition from civil society or NGO groups that you normally get at these
gatherings which the IMF and the World Bank very decently do allowed to have space, to be part of the process.
It isn't there, the reason the energy that there usually is.
NEWTON: John, thanks so much, we're going to see where we are, are going to have you back next year, well, we will see where we are at these
meetings. John, thanks, enjoy your weekend, and all of you enjoy your weekend that is QUEST MEANS BUSINESS. I am Paula Newton live from
Washington. The news continues right here on CNN.