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QUEST MEANS BUSINESS
Pound Slips as May Hangs on To Power; EU Leaders Wait for Brexit Negotiations; Trumps Calls Out Qatar Over Terror Funding; U.K. Faces New Brexit Uncertainty After Tight Election
Aired June 9, 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] RICHARD QUEST, CNN ANCHOR: Now that's a sight you want to see. Bank of New York, Mellon, a group of lady executives ringed the closing
bell, the end of trading on Wall Street. I've got a good feeling with the gavel. Come along, hit the gavel at the end of trading. And gavel is over
at the same time in London we have Big Ben, chiming the top of the hour. It is Friday, the 9th of June at 9:00 p.m.
Tonight, Theresa May's reputation takes a pounding at the polls. The sterling has slipped significantly. Think of it this way. Ready when you
are. European leaders say they're waiting for the new government's Brexit planning negotiations.
And funding terrorism at the highest level. Donald Trump now calls out Qatar. I'm Richard Quest, live in London, where of course I mean business.
Good evening. The British stock market looks strong and stable. The U.K. government looks anything but. The country upset the pollsters yet again,
voting for a hung Parliament. Now Standard and Poor's says, the situation could delay the Brexit negotiations making the process of leaving the
European Union more complicated and more fraught with peril.
S&P says the U.K.'s credit rating is not under immediate threat. The pound is recovering some ground after a sharp fall when the exit poll was
received. This is how the pound is. This is the way you've got 119, you've got the pound falling, and then you've got back, the British pound
versus the euro, not versus the dollar here. This is what's happened over the last couple of days with a slight recovery. Its tumbled around 2
percent against the dollar since last night. The pound is continuing to boost the FTSE. Remember, it's two sides of the same coin. Lower pound,
higher exports. And in a day when we are talking about confusion, chaos, mayhem, misfortune for the U.K. government, how perverse that the FTSE
actually rises 1 percent, now 7527, almost at record levels.
In the wake of the election that Theresa May called and failed to win, the Prime Minister is now apologizing to her Conservative colleagues who
suffered embarrassing losses. The Prime Minister is preparing to lead an uncertain minority administration. What does it mean? Let's go into this
in some detail.
There is the House of Commons. These are the numbers. Remember, it's about 326 that you need. It's actually slightly less than 326 that you
need, because the speakers don't vote, Sinn Fein don't take their seats and there's always somebody either ill, dead or not in the house. But that's
what it made, 318. She's going to be forced to rely on these people. Ten members of the Democratic Unionist Party, Austin Unionists. It will not be
an official coalition. Instead it will be some form of agreement, confidence and supply that will give the government -- pledging to give the
government the country certainty.
(BEGIN VIDEO CLIP)
THERESA MAY, BRITISH PRIME MINISTER: As the results started to come -- more results started to come through, it became clear we were the party
that won most seats and most votes. And I felt it was incumbent on us at a critical time in our country to form a government in the national
interests. And that is what I'm doing.
(END VIDEO CLIP)
QUEST: A government in the national interest is what she says she's doing. But this is a result that few could have fathomed a few weeks ago.
Although there was the YouGov poll that we talked about on this program, QUEST MEANS BUSINESS, when we were out in Freddie Brexit last week.
Remember that's Wednesday I think it was. We were specifically talking about the YouGov poll suggesting a hung parliament.
The political miscalculation is enormous and has changed the landscape of politics. The Brexit negotiations, they begin just ten days from now. And
European leaders are already tapping the watches as they await the visitors from London. It provides another dose of unwelcome uncertainty for
business. That is a crucial thing we'll be talking about in tonight's program. And the question of Theresa May's own future, the PM admits she
needs to take a look at what went wrong.
[16:05:00] (BEGIN VIDEO CLIP)
MAY: I'm sorry for all those candidates and hard-working party workers who weren't successful, but also particularly sorry for those colleagues who
were MPs and ministers. Who'd contributed too much to our country and who've lost their seats and didn't deserve to lose their seats. And as I
reflect on the results, I will reflect on what we need to do in the future to take the party forward.
(END VIDEO CLIP)
QUEST: The final result has just been announced in the election. It's the U.K.'s Labour Party taking another seat from the Conservatives.
Kensington. I mean, a bastion of conservatism. A narrow margin, probably the lowest margin in the Parliament, 20 votes, a constituencies report,
returning officer has reported. So, the Conservatives have 318 seats. Phil Black is outside Downing Street. Nic Robertson is in Belfast. We'll
come to you, Nic, in just one second. To you, Phil, in Downing Street, if we were expecting contrition from the Prime Minister, it was noticeably
PHIL BLACK, CNN CORRESPONDENT: Indeed, Richard. The Prime Minister clearly decided that today was not the day for contrition, it was not the
day for acknowledging mistakes or accepting responsibility or contemplating resignation. Instead, as you've been describing, she has decided to crack
on and form a government in the interests of national unity, she says. She talks about this being a critical time. She talks about the need for
certainty because of the coming Brexit negotiations, security because of the recent terror attacks. These are the priorities.
And so no, there was no acknowledgement that she made the mistake that brought her and her government to this point, losing their majority in
Parliament instead of increasing it, and did not begin to talk about the possibility that perhaps this result was in some way the electorate or a
good part of the electorate rejecting her leadership, her style, her policies, particularly on key issues like Brexit, Richard.
QUEST: So, look, Phil. Tonight, the only issue is, people are asking -- well, I'm asking -- how safe is her position? When is there likely to be a
challenge? And when is the U.K.'s next election likely to be? What's the best opinion from what you're hearing around the halls of Westminster and
BLACK: Well, I think what we're hearing today noticeably, particularly from Senior Conservative Party members is silence, an almost eerie silence.
There has been no significant speculation about Theresa May's leadership of the party within the party itself. We've heard calls for her to go from
opposition party members, notably Jeremy Corbyn, the Labour leader. But the Tories themselves, they're not entertaining this today. It seems that
the Prime Minister's efforts to simply present this driven effort to put together a government for the purposes of national interest. That seems to
be what the party members are getting behind. What we've heard from 10 Downing Street is that all the senior officers of state within the cabinet,
so the Chancellor, the foreign secretary, secretary of defense, secretary for exiting the European Union and the home secretary, those key officers,
they're going to continue to be occupied by their incumbents. So, there will be no significant reshuffle at that level.
QUEST: Phil Black in Downing Street, thank you. To Nic in Belfast, who are the DUP? To those who -- this rather straining strange group of MPs
that have been around for a long time, set up by Ian Paisley. We know their history, but what are their policies?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, the key issue that faces the Democratic Unionist Party right now is to get the power
sharing government in Northern Ireland that's shared with the main nationalist Catholic party, if you will, Sinn Fein, get that back up and
running. They fell out of agreement a few months ago. The Sinn Fein criticized the leader of the party, the DUP party, for squandering
millions, hundreds of millions of dollars on a failed green energy scheme. So, there is that -- that is the sort of principal political agenda here,
if you will.
[16:10:00] QUEST: But Nic, what is likely to be their number one price, besides the pork barrel politics of wanting more money in Northern Ireland?
What's going to be their Brexit price for competence and supply of the U.K. government?
ROBERTSON: The things they're going to want a certainty on are that they, Northern Ireland will remain part of Great Britain, part of the United
Kingdom, that there is no way that Northern Ireland would unite with the Republic of Ireland. That's what they're all about. This is a party
that's very steeped in a history, and a history that's different than the mainland British political history. This is a party that doesn't believe
in gay marriage. This is a party that doesn't believe in abortion. Some of these issues, of course, are sort of metropolitan politics of some of
the big cities of Britain.
But for Theresa May, the things that they're going to look on in the Brexit negotiations is to make sure that they can continue to have this good trade
between Northern Ireland and the Republic of Ireland. Why? Because many of their constituents are farmers and the trade goes freely across the
border. But at the same time, they won't want to be left out of all the security that goes with mainland Britain being -- you know, having security
and border controls coming from Europe. Northern Ireland has the only open land border with the European Union. And what happens along there is going
to be critical.
QUEST: Nic Robertson, who is in Belfast tonight, even Conservative members of parliament appear skeptical about the Prime Minister's future. The
former minister for small business says, Theresa May needs to think hard about what happens next.
(BEGIN VIDEO CLIP)
ANNA SOUBRY, BRITISH CONSERVATIVE MEMBER OF PARLIAMENT: I'm afraid we ran a pretty dreadful campaign, that's probably me being generous. I can't
explain exactly what has happened.
I think she's in a very difficult place. She's a remarkable, she's a very talented woman and she doesn't shy from difficult decisions. But she now
has to obviously consider her position.
(END VIDEO CLIP)
QUEST: Tobias Ellwood is a Conservative member of Parliament joins us from Southampton. Let's not waste too much time, Mr. Elwood, sort of
postmortem-ing last night, other than to say there didn't seem to be much understanding by the Prime Minister in her various public statements today
of the fact that yes, she's the largest party, but her gamble had failed and her cry for a mandate had been rejected.
TOBIAS ELLWOOD, BRITISH CONSERVATIVE MEMBER OF PARLIAMENT: Well, the first thing to recognize is that we will be forming the next government. That
has been agreed. That's why she went for an audience with the Queen. Our percentage of the vote went up by 5.5 percent, but we should recognize that
Labour's went up higher than that. As you say, we will look at the postmortem. The student effect was huge. You just mentioned Kensington.
A couple of dozen votes in that result. And when you've got students being promised to have their tuition fees written off at a cost of tens of
billions, that attracted lots of people to vote. And I'm afraid it did skewer some of the votes as we've seen up and down the country.
QUEST: Where, where is the humility tonight? Where is the Tory Party's humility, that basically says we called an election that wasn't necessary,
we specifically said --
ELLWOOD: No, I don't agree with that.
QUEST: We are specifically going for a mandate, for stability in the negotiations, we didn't get it, and we're sorry.
ELLWOOD: Well, first of all, there is a recognition that we need to look carefully as to why we didn't get the result we wanted. We need to be
aware that there are issues on welfare, on pensions, on schooling, funding for education and health. Of course, we need to look at those. And that
will happen in the postmortem that you didn't want to talk about. The important thing about why this election was called, was if you remember
back at the last budget we had, we couldn't even get aspects of that through the Commons. And that was because there were disagreements from
other parties and so forth and even part of our own party.
Now, the Prime Minister looked at this and said, I'm going to have two years of this with Brexit negotiations.
[16:15:00] It would be far simpler if I was to gain the mandate to able to secure the majority for those talks to then take place with a large
majority. Now, we've seen, because democracy takes place, we've seen it with the Donald Trump election, we've seen it with the Brexit vote as well.
Democracy, we have to respect the results. As I mentioned, there's lots of analysis to take place, but very much there was a massive student effect
here. Our vote went up 5.5 percent, as I say. In any other election, we would be delighted with that.
QUEST: Let's look to the future. Let's look to the Brexit negotiations. The Prime Minister wanted a stronger mandate so that she could negotiate in
a much more forceful position. She clearly hasn't got that. So, the reverse side of that same coin, by definition, Mr. Ellwood, must be that
she is weakened in those negotiations.
ELLWOOD: Well, we have to realize that this is the result we're working with. We recognize that we are able to form a government. You touched on
the support we'll get from the DUP. We should also mention that there are a number of MPs that don't take their seats, Sinn Fein don't take their
seats, the speaker also doesn't participate. So, from a numbers perspective, this is workable. Of course, it's a diminished position from
what we had before.
Negotiations begin in ten days' time. They don't begin in earnest, in fact actually until September. There is a process that needs to be worked
through, what will be on the agenda. My view is actually there's more that we have in common than separates us. I think when we get down to the
negotiations, which has been spelled out in Theresa May's Lancaster House speech which I know you've covered, going through the details, you'll find
there are businesses and politicians in Germany and France that want us to strike a good deal.
There are three large countries in Europe. And when those three countries, Britain, France, and Germany, agrees, the rest of Europe tends to follow as
well. And there's been a huge amount of rhetoric come out of Brussels, different quarters and so forth. Once the talks start to commence and the
seriousness of negotiations actually takes place of trying to work out what both sides can offer, there is a recognition, an absolute understanding
that there is mutual benefit in making sure we secure a compromise decent deal that works for both sides.
QUEST: I promise you I won't ask you about mandates next time we speak. Mr. Ellwood, please do come back, once those negotiations begin, because
we're going to need your guidance on exactly the situation on how the U.K. is performing in those negotiations. Good to see you, sir, congratulations
on those results of your own last night. Thank you, sir.
Now, President Donald Trump spoke to Prime Minister May a short while ago. We'll await in details a full readout of the conversation. Robin Oakley is
here. I'm not sure you were able to hear my discussion with Tobias Ellwood. I mean, it is a very uncomfortable position that the party is in.
But let's push forward to this negotiation that starts in ten days.
ROBIN OAKLEY, CNN POLITICAL COMMENTATOR: Yes. That negotiation, remember, Theresa May has been trying to present Europe as a force against her that
was wanting her to lose this election. That wasn't true. The leaders in Europe who will be negotiating with her wanted to see her come out with a
big majority. Because at the end of the day, if a deal is done, both sides will have had to give something. Now, if she gives anything very much, her
own hard line Brexiteers in her own party are going to kick up against that. What she needed that majority for, partly, was that if she came back
with a deal and she got 10 or 15 Conservatives saying, oh, no, we're not having that, we're going to vote against that, she needed that sort of
cushion to be able to deal with those rebels. Now that's stripped away from her before she even begins the negotiation.
QUEST: And what she could end up with of course is having to rely on the opposition.
OAKLEY: Indeed yes. Yes. But, you know, Theresa May has just thrown away her authority. This gamble that failed to come off, she has completely
diminished her authority. Look at the reshuffle today. No reshuffle, because she was allegedly wanting to move her Chancellor. She couldn't
dare do that after this election result. And one of the key things is going to be, is she going to change the way she runs things? Because
what's been infuriating a lot of her leading figures in her cabinet are the two gatekeepers, Fiona Hill and Nick Timothy, in her office who drive
Theresa May, they feel, who make all the decisions in a close-knit little circle with her. A lot of people in the Conservative Party are blaming
them, they would love to see a ritual sacrifice of at least one of those two. Of course, they had fallen out with Philip Hammond, the Chancellor,
in earlier exchanges.
[16:20:00] QUEST: Now look, the Prime Minister is primus inter pares, the most powerful, has the huge patronage. But eventually, as Margaret
Thatcher discovered, and indeed what Tony Blair discovered, eventually if your cabinet is against you, and are we getting to the point where the
cabinet is going to be starting to say, you change or else?
OAKLEY: Well, yes, because I know of at least one minister who has written a letter to Theresa May saying he won't put up with the current way of
decision-making and the two have been talking about it. Yes, things are going to start stirring that way. But no Conservative, leading figure on
the Conservative Party, is going to be thanked for rocking the boat even more at the moment. They want to settle things down first. But when it
comes to the next election perhaps within a year or in about a years' time, my betting would be that Theresa May will not be the Conservative leader at
that election. They're not going to fight another election with her doing that job. She just doesn't do elections.
QUEST: In a sentence, the Tory Party is brutal, isn't it?
OAKLEY: It always has been, Richard. Always has been.
QUEST: Robin Oakley. We continue tonight. Fired FBI director James Comey called President Trump a liar, five times. The presidents come back. He
says, he'll will swear an oath that he's not.
QUEST: Fired James Comey testified under oath. Now President Trump says he's willing to do the same and when he does so, it will be a very
different tale he'll tell. The President spoke a short time ago alongside the President of Romania. He was pressed, Mr. Trump, to confirm or deny
the existence of his tapes of conversations with Comey. He refused. In fact, he said he would soon tell everybody things that would shock them or
not surprise them. Mr. Trump said Mr. Comey's testimony contained things that just weren't true.
UNIDENTIFIED REPORTER: He did say under oath that you told him to let the Flynn -- you said you hoped the Flynn investigation --
DONALD TRUMP, U.S. PRESIDENT: I didn't say that.
UNIDENTIFIED REPORTER: So, he lied about that?
TRUMP: Well, I didn't say that. I mean, I will tell you I didn't say that.
UNIDENTIFIED REPORTER: And did he ask you to pledge --
TRUMP: And there'd be nothing wrong if I did say it, according to everybody that I've read today. But I did not say that.
UNIDENTIFIED REPORTER: Did he ask for a pledge of loyalty from you? That's another thing he said.
TRUMP: No, he did not.
UNIDENTIFIED REPORTER: So, he said those things under oath. Would you be willing to speak under oath to give your version of events?
TRUMP: 100 percent.
QUEST: Sara Murray, is CNN's White House correspondent, joins me now. It was another surreal experience, with the Romanian President standing next
to him. They talked about NATO, they talked about corruption, and all of a sudden, oops, we're back at Comey. But Sara, the president's statement
that he would testify on oath, how significant was that?
[16:25:06] SARA MURRAY, CNN WHITE HOUSE CORRESPONDENT: significant if he follows through with it and if we do see the investigators from these
committees or even the special counsel ask the president to testify under oath. Right now, what you have are the president's words which obviously a
lot of people trust the president. He is the president. But they're not under oath, giving his version of events. And then James Comey, who is the
former FBI director, who was testifying under oath.
The president is basically saying, look, this guy, the former FBI director, committed perjury in what he was saying about me. The president disputed a
number of things that James Comey testified to, including the fact that Comey said the president suggested that he sort of back off this
investigation into Michael Flynn, the former national security adviser. So, it is very significant that President Trump is saying that he would be
willing to give his version of events under oath.
QUEST: This idea of there being tapes, first of all, the president said when he walked into the Rose Garden, something along the lines of, "I'll
let you know very soon." And then when another reporter shouted about tapes later on, he said, well, you're going to be disappointed or something
about that. What did you interpret all that to mean?
MURRAY: Well, let's remember that this is a problem of President Trump's own making. He is the one who initially fired off on Twitter that James
Comey should be worried about whether tapes exist. And that raised the whole notion of whether the president is secretly recording conversations
in the White House. Since then the White House has refused to answer that question. So again, we saw the President punt on that. He would not say
whether tapes exist, whether there is a recording system. But he did seem to suggest that reporters would be disappointed when they found out the
answer. Maybe that means that these tapes don't really exist, that it was an empty, thinly-veiled threat the president fired off on Twitter. This is
what gives members of Congress so much heartburn, when they have to deal with this president, because they're wondering, why would you even suggest
this in the first place?
QUEST: It's a very good question and one we're not going to be able to answer at half past 9:00 on a Friday night. Sara, have a lovely weekend,
have a good weekend.
The Dow Jones close at a new record. It rose 89 points. It had one little bit of a dip there just before 3:00, not sure what that was all about. The
NASDAQ rose then fell, ended the day off 1.8 percent. Shares of Facebook, Amazon, Apple, Alphabet, Microsoft, all fell by 3 percent or more. Goldman
Sachs one with low volatility in tech stocks is leading investors to underestimate the risk. Which is even more so when you think some of them
are over a thousand. Oops, there's the election.
Theresa May promised to be a bloody difficult woman in dealing with Brussels. It's the negotiations that now that look bloody difficult.
They're due to begin in ten days. In just a moment, we'll talk to the man who took the bloody difficult woman and said she's bloody weak. That's lot
of "B" words for Friday night on a family network. We'll have more after the break.
[16:30:26] QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. I'll be talking with a member of the European
Parliament who says Theresa May has gone from bloody difficult to bloody weak. Rex Tillerson warns that the blockade against Qatar is obstructing
business across the world.
Before we get to any of that, this is CNN. And on this network, the news always comes first.
The British Prime Minister Theresa May is apologizing to Conservative MPs who lost their seats in Thursday's election. She says she'll reflect on
how to move forward after the snap policy left her party without a majority. She's had to turn to northern Ireland's Democratic Unionists for
President Trump says James Comey is lying about their private conversations. And he's willing to go under oath to talk about it. Mr.
Trump spoke to reporters as the fired FBI director testified on Capitol Hill. He says Comey's testimony shows there was no collusion and no
obstruction with the Russia investigation.
ISIS says it is responsible for two suicide attacks in Iraqi Shiite regions south of the capital. 22 people were killed during Ramadan, a time of
prayer and fasting, and when jihadists ramp up attacks.
The president of the United States is calling on Qatar to stop funding terrorism. Nine nations have cut ties with the gulf country over the past
week. There were allegations that Qatar supports terrorism. Mr. Trump said he helped those countries make the decision to break off relations
during his trip to Saudi Arabia last month.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT: We had a decision to make. Do we take the easy road or do we finally take a hard but necessary action? We have to
stop the funding of terrorism.
(END VIDEO CLIP)
QUEST: Downing street says Phillip Hammond is to keep his job as finance minister and chancellor of the exchequer. The rest of his economic team is
going to look very different after voters turned their anger against top treasury ministers. Phillip Hammond is seen here with the red suitcase.
He's staying. David Gauke was reelected. Jane Ellison and Simon Kirby both lost their seats. John Mills is chairman of the consumer products
company JML, a major donor to the Labour Party. I think it's fair to say with an introduction like major donor to the Labour Party, you're quietly
pleased with last night.
JOHN MILLS, CEO, JML: Yes, I think Labour did much better than everybody thought they were going to. I think Jeremy Corbyn produced a remarkable
rapport especially with young people. The results in terms of seats gained were much better than I think most people thought they were going to be.
In terms of having an effective Labour party for the future, I think this is a good step forward.
QUEST: Do you believe Corbyn's position is now, if not rock solid, is certainly safe?
MILLS: I think he's very safe, because any challenge to him is going to trigger off an election within the Labour Party. And I think he's got a
very substantial amount of support within the Labour Party which would be very difficult to overturn.
QUEST: Even though many policies such as renationalizing railways, other things, national investment bank, increase of taxation to 50 percent, plus
a surcharge for those who are earning considerably more, a lot of people haven't quite twigged what those policies are.
MILLS: I think that's probably right. I think a lot of people are enticed by the expenditure plans that the Labour Party put forward. But perhaps
didn't really think all that hard about where the money was going to come from. I think that is a big problem.
QUEST: How concerned are you now that the Prime Minister going into Brexit negotiations is weakened?
MILLS: I think she has to be weakened by what happened. I think the worst possible outcome would be for an agreement to be negotiated with the EU by
the British government and for it then to be turned down by the house of commons.
[16:35:00] A lot of the reason for the election was to try and put a barrier to stop that happening by having a substantially large increase in
the number of Conservative MPs. That strategy clearly hasn't worked.
QUEST: Quite a few people, Lord Bilimoria was telling me, a lot of people are looking at this current situation as a way that either the next
election or somehow the referendum issue is relitigated, and another vote of some shape, form, or description at this point. Do you see that
MILLS: I think there's an outside chance that this will happen. I think it's going to be not at all popular. I don't think there's a big appetite
for another referendum in the population. But I think one of the problems is that the complexion of the House of Commons is quite different from the
electorate at large. I think it may be Parliamentary arithmetic that makes this sort of thing happen rather than any will in the country to see a
referendum take place.
QUEST: You're a businessman of a large company. How worried are you -- put your Labour Party hat aside? How worried are you that when it comes to
business, when it comes to the lifeblood of this country, we are in a mess? The economy is slowing down. Things are not going well. Negotiations are
about to begin. And at best, things are poor.
MILLS: We did much better after the referendum. I agree things are down at the moment. Trade is picking up. I don't think we're going to see a
recession in the British economy. I think we'll see slowing of growth, which is not a total catastrophe, not as good as we would like things to be
but not the end of the world.
QUEST: I won't hold you to this. When is the next election? Just about everybody believes it's going to be sooner rather than later. This
Parliament will not last five years.
MILLS: I wouldn't be surprised if it's quite soon, possibly in autumn.
QUEST: That soon?
MILLS: I wouldn't be surprised. I think we're in for a very unstable period over the next few months. I just think -- I should be very
surprised if it lasts all that long.
QUEST: Good to see you, sir, thank you very much indeed. Have a good weekend.
MILLS: Thank you.
QUEST: Theresa May returned to the key message of her campaign theme that only she can negotiate a favorable Brexit deal. The Prime Minister says
the reason to forge ahead with her minority government is to make sure Brexit talks can get going.
(BEGIN VIDEO CLIP)
THERESA MAY, PRIME MINISTER, BRITAIN: This will allow us to come together as a country and channel our energies toward a successful Brexit deal that
works for everyone in this country, securing a new partnership with the EU, which guarantees our long-term prosperity. That's what people voted for
last June. That's what we will deliver. Now, let's get to work.
(END VIDEO CLIP)
QUEST: European leaders are checking their watches. Brexit negotiations are due to begin June 19. And Britain is scheduled to leave the EU with or
without a deal in March of 2019. One of the EU's lead negotiators he called the negotiations a known goal that makes complex negotiations even
more complicated. The negotiators from the EU could be unwilling to make commitments without a stable government on the other side of the table.
The president of the commission says he's ready and waiting for negotiations to begin.
(BEGIN VIDEO CLIP)
JEAN-CLAUDE JUNCKER, EUROPEAN COMMISSION PRESIDENT: As far as the commission is concerned, we can open negotiations tomorrow morning at half
past 9:00. We are waiting for visitors coming from London. I hope that we will not experience a further delay in the conclusion of these
(END VIDEO CLIP)
QUEST: Joining me now a member of the European Parliament, vice chair of the EU budget committee. In a tweet today, sir, you said Theresa May has
gone from bloody difficult to bloody weak. How will that weakness translate into the negotiations, do you think?
SIEGFRIED MURESAN, VICE CHAIR OF THE EU BUDGET COMMITTEE: Well, the U.K. Prime Minister had a stable majority in the U.K. Parliament before these
elections. She called for these elections in order to obtain the much- needed legitimacy for complicated two years' negotiations on the departure of the United Kingdom from the European Union. And what do we have now?
We have a weakened Prime Minister who has lost majority, who has no coalition partner and needs to go as soon as possible into these difficult
negotiations with the EU because once Article 50 was triggered on the 30th of march of this year, it is clear that negotiations must end, and the
outcome must be ratified before the 29th of March 2019.
[16:40:00] QUEST: OK. But -- I get that. But where does the weakness manifest itself? Her team will be starting to do the negotiations. So
that weakness, what do you perceive it actually translating into? What's going to happen that shows that weakness?
MURESAN: Firstly, we need a government that is ready and capable to commit, as I said, to two years of negotiations, and then also able to
deliver a majority in the U.K. Parliament for the ratification of the agreement. And as long as the new government does not have a majority of
its own within the new Parliament, I'm not sure whether what we are going to discuss on the 19th of June and agree in the first round of negotiations
will still be valid and whether the negotiating partners and the commitments that they make now will still be valid throughout these two
years of negotiations.
QUEST: And that just proves the point, doesn't it, that as bad as it is for the Tories and the British side, it's also very worrying and dangerous
for the EU side, because if that weakness translates into a failure in the talks, both sides will suffer.
MURESAN: This is correct. You are absolutely right, Richard. It's in the interests of both sides that these negotiations are concluded successfully,
because there is too much which ties us, which connects us. On matters of economy, of politics, of security. And the departure of Britain on the
29th of March 2019 without an agreement would be a bad thing for the United Kingdom. It would be a bad thing for us, for the remaining 27 member
states of the union as well. We are aware of this. So, we are interested in a deal.
QUEST: All right. But you're also a politician. And you know, sir, that the chips fall where they lie. In politics, you have to take the decision
as it came from the electorate. In that scenario, you know, you're in this leaking boat together, everybody is. There's no obvious way out of it.
She is the Prime Minister. She has got her coalition of sorts. She's the only one you've got to negotiate with. I'm not sure -- and there is this
two-year deadline. I'm not sure what the EU can do, other than to nervously bite your fingernails.
MURESAN: Yes. So, we have our mandate for the negotiations. We have our guidelines. We have our negotiating team ready. We're looking forward to
starting talks on the 19th of June. You're absolutely right. This is exactly what is needed right now. Get the negotiations started. Because
we know when the negotiations have to end. So, the first time that we have to make in order to prevent a disorderly Brexit in two years' time is to
get down to negotiating. This is what we are ready to do. We are waiting for the current government because that is the outcome of the elections.
We did not want Brexit to happen. We did not call the referendum. We did not organize it. We did not lose it. We did not call the election. But
this is the situation that we are in. So, the best we can do for the time being is indeed start negotiations, which will indeed be complicated,
because it is 45 years of European integration which have to be reversed now in the negotiations over the course of the two years. So, we need to
get down to negotiations as soon as possible.
QUEST: Those negotiations start in ten days' time. Thank you, sir, for joining us, good of you to be with us tonight.
Investors are feeling a spot of Brexit Deja vu. The pound has gone down, the FTSE has gone up. It's QUEST MEANS BUSINESS. we're in London tonight.
[16:45:00] (COMMERCIAL BREAK)
QUEST: European markets closed in the green, following the U.K. election. Investors think a hung Parliament in Britain could mean a soft Brexit.
It's difficult to extrapolate why. Who really knows? But the FTSE did eke out the best of the day, on the back of the weaker pound which then became
a stronger pound. The best performers of the day, the FTSE lagging behind the others. Ruth Lea is with me, economic adviser at Arbuthnot Banking
Group. I will not be indelicate to discuss predictions made earlier in the week.
RUTH LEA, ECONOMIC ADVISER, ARBUTHNOT BANKING GROUP: I don't mind. I was wrong.
QUEST: I think we all were. So, you're in excellent company.
QUEST: What do you make of it, how bad is it?
LEA: I think the actual result is disastrous. But somehow Theresa May, she had this speech this morning, when she had been to see the queen and
all this palaver. She came out in front of 10 downing street, and it was sort of business as usual, I'm going to carry on. I thought behind that
there was a very, very, very big question mark. That is undoubtedly what she will do. Sure enough, she will have to start the negotiations about
Brexit on the 19th of June. I suspect she will negotiate on the basis of what she's already agreed with the European Union, when she sent her letter
to Donald Tusk, the European president, at the end of March, which seems an awfully long time ago, and she'll basically stick to that as her script.
QUEST: But we just heard a German MEP on the program who said, this is fine, but the other side can't rely, not just on her, of course don't rely
on what she said, but will she still be there, will there be a change in the mandate, and can she get what she agrees through Parliament? So, she's
weakened in that respect. And that's before we even get onto the question of how much she can give that the dup and her own back benchers will allow.
At what point in this, Ruth, are we going to see the markets wake up and say, whoa, this is economic Armageddon on the horizon?
LEA: It depends on what happens. If she can do business as usual, even though she's incredibly weakened, and I do take the point, if she can, and
the tory party keep together behind her, the problem is she does have some rebels which doesn't help, but if she can maintain this quasi coalition,
it's not a proper coalition but a quasi-coalition, and continue to govern, the markets will bite their fingernails and accept it. But I take the
point from your German interviewee, the risks are there and we have to prepare for those risks.
QUEST: At some point the pound will wake up, or go back to sleep, the pound will suffer. The FTSE, even on the back of higher exports and
stronger gilds, is going to say that the economy is in trouble or potentially in trouble. Maybe it doesn't.
LEA: We don't know. I mean, this is the problem. And when people talk about the slowing of the economy, obviously it was a very weak first
quarter, I suspect growth will pick up a little bit in the latter half of this year. And if the risks are in growth, I don't actually worry about
that, I suspect the markets won't necessarily worry about that either. We are due to have slower growth because the actual recovery now is very
mature and we've got unemployment, less than 5 percent. At some point, you can't keep chugging along and having unemployment, your unused resources --
[16:50:00] QUEST: It's that old thing about the feel-good factor.
LEA: The feel-good factor -- my feel-good factor has disappeared, but there we go. This is economic reality. People should accept that
economies do go in cycles. I'm sure the markets accept that as well. At some point, they'll have to face the fact and raise interest rates.
QUEST: What's your forecast for when that happens?
LEA: About 18 months' time.
QUEST: Oh, wow. That's a long way out. Good to see you. Have a great weekend as always.
] Donald Trump claimed credit for a diplomatic blockade against Qatar after
his secretary of state called for it to be eased. Live from Doha, next.
QUEST: During the last hour, Donald Trump stood in the White House ROSE GARDEN and accused Qatar of funding terrorism at a very high level.
Moments before the president took credit for orchestrating the diplomatic blockade, moments before, his secretary of state Rex Tillerson warned it
was hurting business worldwide.
(BEGIN VIDEO CLIP)
REX TILLERSON, SECRETARY OF STATE: The blockade is also impairing U.S. and other international business activities in the region and has created a
hardship on the people of Qatar and the people whose livelihoods depend on commerce with Qatar.
(END VIDEO CLIP)
QUEST: Our guest is in Doha for us this evening. So, the -- first of all, let's have situation update of what it's like, what's going on in Doha? Is
there a feeling of siege, a mentality of attack?
JOMANA KARADSHEH, CNN CORRESPONDENT: You know what, initially, Richard, there was concern on day one of this crisis. People did rush to the
stores, there was panic buying, they were concerned what was going to happen. But the government reassured people. This crisis didn't happen
overnight, it's been building for some time as you know. They reassured people, they prepared for a scenario like this, so there was no need for
panic. And there were alternative plans, other countries that would help Qatar. There is this feeling and mood of defiance here. People in Qatar
do not want to see their government change its position. As we've heard from senior officials here saying, they're willing to talk, they want to
resolve this crisis, but they will not have other countries in the region dictate how Qatar should change its foreign policy just because it
contradicts with their own, Richard.
QUEST: OK. But there's starting to become an almost unanimous -- if that's not a contradiction -- view that Qatar's behavior, its policy, its
funding mechanisms, in the most charitable interpretation, is causing mischief and mayhem, funding violence and terrorism. The government says
it is not. How is the government going to convince, if it can, or change?
[16:55:00] KARADSHEH: I think this is the big question. The government of Qatar says that these allegations are not true. They say they are the
victims of this coordinated campaign of misinformation. And Richard, keep in mind, we have heard from U.S. officials saying Qatar has made some
effort. They do say it's not enough. But that it has made some effort when it comes to fighting extremism and extremist funding. Its involvement
in some of the conflicts in this region, which obviously has been coming into competition with other countries in the region. You have this war for
influence in different parts of the region, between Qatar and other countries in the region. It's no secret, whether it's Saudi Arabia or the
UAE. There is this feeling that this is what this whole crisis is about right now, and that president Trump's visit to Saudi Arabia did trigger
this, and it was the catalyst for this by emboldening countries to move against Qatar.
QUEST: Thank you. Our podcast is available from the usual providers and you can also listen to it at CNN.com/podcast. It can put you to sleep when
you go to bed, that's one possibility. We'll have a Profitable Moment after the break.
QUEST: Tonight's Profitable Moment. The election is over. The countdown clock is now running. This is how long it's going to be before the Brexit
negotiations actually get under way. And a weakened government with no mandate or at least a small mandate and a minority government, this is what
Theresa May will be going into battle with. And she's got nine days to solidify her position and make it clear that she can negotiate from a
position of something approaching strength. And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Whatever you're up to
in the hours ahead, I hope it's profitable. I'll see you back in New York on Monday.