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Democrats Lost Their Trust to Attorney General Barr's Partisan View; E.U. Grants Prime Minister Theresa May a Breathing Room till October; Prime Minister Benjamin Netanyahu Won Fifth Term in Office; Sudanese Activists Wants President al-Bashir Out; House Committee Demanding Six Years Of Trump Returns; Mnuchin, Unable To Release Tax Returns By Deadline; Purported Military Council, Sudan's President Ousted; Another Brexit Delay, European Union Agrees To Brexit Delay Until October 31st; South Korean President To Meet With Trump In Washington. Aired 3-4a ET
Aired April 11, 2019 - 03:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[03:00:00] (COMMERCIAL BREAK)
ROSEMARY CHURCH, CNN ANCHOR: Attorney General William Barr alleges the Obama administration may have spied on the Trump campaign but offers no proof, sparking outrage among congressional Democrats.
Brussels grants a break for Brexit. What the E.U.'s extension on the deadline will mean for Theresa Mays plan to get the U.K. out of Europe.
Plus, Benjamin Netanyahu's big win. He has his right-wing allies and Donald Trump to thank for his victory.
Hello and welcome to our viewers joining us from here in the United States and all around the world. I'm Rosemary Church. And this is CNN Newsroom.
In his second straight day on Capitol Hill, the U.S. attorney general used a term that no doubt pleased supporters of President Donald Trump while it outraged congressional Democrats.
William Barr told lawmakers the Trump campaign was spied on and he's looking at whether unauthorized surveillance was done.
Sara Murray has the details.
(BEGIN VIDEO CLIP)
WILLIAM BARR, UNITED STATES ATTORNEY GENERAL: I think there's a spying did occur. Yes. I think spying did occur.
(END VIDEO CLIP)
SARA MURRAY, CNN WHITE HOUSE CORRESPONDENT: A stunning statement by Attorney General William Barr, claiming that the FBI or intelligence agencies during the Obama administration may have spied on the 2016 Trump campaign. (BEGIN VIDEO CLIP)
BARR: I think spying on a political campaign is a big deal. It's a big deal.
(END VIDEO CLIP)
MURRAY: Barr later tried to clarify his claim.
(BEGIN VIDEO CLIP)
BARR: I am not saying that improper surveillance occurred. I'm saying that I am concerned about it and looking into it. That's all.
(END VIDEO CLIP)
MURRAY: And while he stopped short of accusing anyone of breaking the rules, Barr suggested there may have been missteps among those in the upper ranges of the FBI led by James Comey during the 2016 election.
(BEGIN VIDEO CLIP)
BARR: To the extent there were any issues at the FBI. I do not view it as a problem that's endemic to the FBI. There was probably a failure among a group of leaders there at the upper echelon.
(END VIDEO CLIP)
MURRAY: His comments drew a sharp rebuke from Democrats.
(BEGIN VIDEO CLIP)
NANCY PELOSI, UNITED STATES SPEAKER OF THE HOUSE: The chief law enforcement officer of our country is going off the rails yesterday and today. He is the attorney general of the United States of America. Not the attorney general of Donald Trump.
(END VIDEO CLIP)
MURRAY: Barr telling lawmakers he's looking into the origins of the FBI investigation into possible ties between 2016 presidential campaign and the Russian government. The investigation into the investigation already cause for celebration from the president who repeatedly called for a probe like this.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: He's doing a great job. Getting started ongoing back to the origin of exactly where this all started because this was an illegal witch hunt and everybody knew it. What they did was treason. What they did was terrible.
(END VIDEO CLIP)
MURRAY: When it comes to Special Counsel Robert Mueller's report the president may not be as pleased. Barr told lawmakers he will not sanitize it to protect Trump.
(BEGIN VIDEO CLIP)
SEN. JEANNE SHAHEEN (D-NH): Does that mean that you will redact information to protect the reputational interest of the president?
BARR: No. I'm talking about people in private life.
BARR: Not public office.
(END VIDEO CLIP)
MURRAY: Still Barr faced another round of criticism for his decision to clear the president of obstruction of justice.
(BEGIN VIDEO CLIP)
SEN. CHRIS VAN HOLLEN (D-MD): You indicated that they did not exonerate the president. You did. And so, I'm asking you whether you agree with Mueller that there were difficult issues of law in fact making that assessment.
BARR: That's not a question I really can answer until I --
(END VIDEO CLIP)
MURRAY: Admitting he did not know if Mueller wanted him to make that call.
(BEGIN VIDEO CLIP)
SEN. PATRICK LEAHY (D-VT): Did he express any expectation and interest in leaving the obstruction decision to Congress?
BARR: Not that -- he didn't say that to me, no.
LEAHY: So, he said the obstruction decision should be up to you?
BARR: He didn't say that either. But that's generally how the Department of Justice works.
(END VIDEO CLIP)
MURRAY: And he still doesn't know if Mueller agrees with it.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Did Bob Mueller support your conclusion?
BARR: I don't know whether Bob Mueller supported my conclusion.
(END VIDEO CLIP)
MURRAY: Now Bill Barr also said that he will hopefully have a version of the Mueller report ready for Congress and the public next week. But of course, that will be a report that is full of redactions and certainly won't be enough to satisfy the Democrats.
Sara Murray, CNN, Washington.
CHURCH: Ron Brownstein joins me now. he is CNN's senior political analyst and a senior editor at the Atlantic. Great to have you with us.
[03:05:02] RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Thanks. Nice to be here.
CHURCH: So, Let's look at the shocking and unsubstantiated claim from the attorney general that he thinks spying occurred on the Trump campaign by the FBI or intelligence agencies. And he's investigating if it was unauthorized. Where did this suddenly come from and what is driving this claim do you think?
BROWNSTEIN: Well, first, I mean, this along with the way that Barr handled the Mueller report in the early days is almost instantly stamping him as the most partisan attorney general and the one most who views him himself as a lawyer for the president rather than for the country since John Mitchell in the Watergate era.
I mean, it is astonishing how quickly Bill Barr has settled into that role for the president. Where it's coming from is the president and other conservative media outlets which have long argued for turning the tables and investigating the investigators. And now we see the attorney general although in some ways qualifying and trying to walk back a little later, putting his imprimatur it on these -- on these accusations.
CHURCH: Yes. And of course, some critics have suggested that Bill Barr is increasingly doing the political bidding of the president. Clearly, you appear to agree with that.
CHURCH: But what is astounding is why a professional like himself would be doing that.
BROWNSTEIN: Look, you know by this point if you go into the Trump administration, you know what you are signing up for. You are signing up for a president who according to our own Jake Tapper's reporting a few days ago told border patrol agents to ignore the law.
And then expect others around him to explain, justify, and clean up until they -- until which point, they are no longer valuable or necessary. At which point they will be kind of unceremoniously dismissed.
So, if you sign up for this, I think you have a pretty good idea of what is ahead of you. And Bill Barr I think has moved into this role quickly than many expected. But which as I say, perhaps they should have expected given his awareness of what he was letting himself in for. CHURCH: Right. And of course, the president is thrilled that the
attorney general is looking into the origins of the special counsel's investigation. Calling the Mueller probe illegal and attempted coup, even going as far as calling it treason. And he is continuing to falsely claim he was exonerated on the issue of obstruction of justice.
When the report was first released, he was commending it. What suddenly changed?
CHURCH: And why is the U.S. president using words like coup and treason?
BROWNSTEIN: Well, that's a separate question. What's changed is the indication from, you know, the leaks to the various media outlets from investigators or at least people who have spoken to the investigators that the attorney general's summation which he does not call a summary of the report may have been overly positive toward the president and the final report may have more kind of curve balls in it for him.
And so, he is looking to preemptively discredit it. The language that he uses is I think part of coup and treason is really part of his overall effort to one, disqualify and discredit any institution that he believes can threaten him.
But secondly, even more important, to convince his voters that they are under siege from shadowy forces either, you know, elites, coastal elites, or the deep state or undocumented immigrants who threaten them and only Trump can protect them. And I think it's very consistent with the way he kind of portrays himself, portrays his movement, and ultimately will portray this electoral choice in 2020.
CHURCH: And the attorney general also told Congress that once the Mueller report is released, we will understand why Mueller could not make a decision on the question of obstruction. What do you think he means by that?
BROWNSTEIN: Well, I think at this point, you know, I think people -- I think across the broad-spectrum Americans are kind of pretty tired of commentary. They would like to read the report themselves. And they don't really know how much of it they're going to get.
I think it's highly likely the Democrats are going to end up in court no matter what Barr gives them because I think they will feel that -- I think there's a lot of concern among Democrats that it will be overly redacted.
Look, I mean, I think what Barr is trying to suggest is that the evidence is ambiguous and does not -- and thus justifies his own conclusion, which is not clear than anyone asked for that the president did not obstruct justice.
The one thing we know from his letter is that the Mueller report contains evidence on -- investigative evidence on obstruction that goes beyond what we have seen publicly.
So, there is going to be new material in here. We just don't know how much we're going to see. Initially, I suspect, as I said, we're going to end up with a sustained legal battle between the House Democrats and administration over what ultimately is available.
CHURCH: Right. And finally, I do want to go to immigration. Because on Wednesday, the president said he is the one running the Department of Homeland Security when asked if he's adviser Stephen Miller should run it given the new tough line on migrants appears to be driven by Miller, himself.
[03:10:05] BROWNSTEIN: Yes.
CHURCH: What did those words from the president signal to you in the midst of this purge that's going on in the department?
BROWNSTEIN: They reinforce the signal of the purge itself which is how -- which is that however hard line the policies have already been and in many -- and in almost every respect they have gone beyond any previous boundary in terms of kind of being harsh policies headlined of course by the child separation policy.
However hard they have been, the president is signaling that between now and 2020 they are going to get harsher still. And it is remains striking to me that while there is some quibbling, kind of handwringing at the margins among Republicans in Congress about the extent of the purge at DHS there really is no longer any organized resistance to his direction on immigration.
And the Republican Party is kind of strapped itself in for a ride towards being defined, being tattooed by this president as a party hostile to immigrants, in particular, and the demographic change in general. And that is just an enormously consequential bet at a time an American society is going more diverse than ever especially in its younger generation.
CHURCH: Ron Brownstein, always so much to cover and you do it so well. Thank you for your analysis and perspective. I appreciate it.
BROWNSTEIN: Thank you.
CHURCH: And we are following breaking news from Sudan. Activist are circulating a statement from a purported military transitional counsel announcing that President Omar al-Bashir has been removed from power.
Now this comes after months of antigovernment protest demanding an end to al-Bashir's 30-year rule.
CNN's Farai Sevenzo joins us now from Nairobi, Kenya keeping a very close eye on this breaking news story. Farai, what are you able to confirm to us?
FARAI SEVENZO, CNN CORRESPONDENT: Well, what I can tell you is what CNN has been reporting all morning in that. Yes, it is true. It appears to be some kind of change of guard happening over in Khartoum. And as you know, the whole protest movement that began back in December the 18 to 2018 has taken a huge toll on the Sudanese people.
Some -- the police and the authorities say 32 died, as well as doctors and other organizations put it at 78. But what we are knowing for certain is that participate in solid demonstration against the rising cost of living as you -- as we know.
But this morning the military, members of the military say that they would be removing al-Bashir. That we are now at the moment just waiting for another statement, Rosemary.
Also, we're gathering -- I'm sorry. I've got two phones going on, there's so much moving pieces in this story. The Sudanese Professional Association who called for the protests said that any declaration about the situation and any change should meet their demand.
So, we're in this sort of fluid position when we don't quite know the whereabouts of al-Bashir, for example. There's some other talk about arrest being made and there's some other talk about holding people the army, the followers of al-Bashir responsible for the several deaths that have happened during this latest sit in which began on April the 6th on Saturday.
And it's been the catalyst, of course, where the army then joined with the protestors and a massive division started appearing. It was -- in what was it to a very loyal army for al-Bashir.
Remember, he came in power in a coup himself in 1989. He became president in 1993. And at the moment we are watching events very closely to see what will come out of Khartoum.
CHURCH: Right. Farai Sevenzo, thank you so much for that live report from Nairobi, Kenya, keeping a very close eye on that story from Sudan. We will go back to you as we get more updates on this. Many thanks.
Let's move now to Brexit where British Prime Minister Theresa May now has another six months to try to get a deal approved. The European Union has granted her another Brexit extension, this time until October 31st. Now she says she's confident she can get a deal through parliament. But staying in the European Union for another six months is likely to turn even more of her fellow conservatives against her.
European Commission president Jean-Claude Juncker says the media and E.U. members have become too focused on Brexit. Listen.
(BEGIN VIDEO CLIP)
JEAN-CLAUDE JUNCKER, PRESIDENT, EUROPEAN COMMISSION (through translator): I do rather regret the fact that we only talk about Brexit. I read the European press this morning. Brexit, Brexit, Brexit.
(END VIDEO CLIP)
CHURCH: And CNN has correspondents covering developments across the continent. Isa Soares is in London this hour. Melissa Bell joins us live from Brussels. Good to see you both.
So, Isa, let's start with you. And Theresa May now has more time to get a Brexit deal approved by parliament. But, the big but, hard line Brexiteers are not going to make this easy for her. So, what's their likely strategy going forward?
[03:15:05] ISA SOARES, CNN CORRESPONDENT: And that but, Rosemary, has been following her and plaguing Theresa May all along. Those are the hard Brexiters, the ERG within her group that have really been putting her two different directions and putting pressure on her.
But like you clearly and quite correctly said, she's got some breathing room until October, the Halloween deadline. Although may I add, that her trajectory according to what we heard from Theresa May yesterday is still to leave the European -- still to leave the European Union sooner rather than later.
She still wants to leave at the end of May before taking part since she -- haven't part, rather, U.K. doesn't take part in European parliamentary elections. That is still key for her. And of course, that means she's only got several weeks in fact to go in order to do that.
She's hoping that she can reach some sort of consensus with the leader of opposition, Jeremy Corbyn. And in those cross-party talks they can then work out a deal to put two members of parliament in order it leave on time.
If she doesn't or -- however, she has until October to thrash out another deal. But if it goes any longer of course, and this is what the hard Brexiteers have been saying all along, Rosemary, is the fact that the longer their extension the softer the Brexit. And that of course will infuriate so many of them.
And I think today when Theresa May is expected to speak to the House of Common -- Commons and tell them exactly what was agreed that you would expect to see some sort of fireworks within her own party.
And potentially, members resigning because of course they didn't want an extension. They don't want to be part to European parliamentary elections and some of them will no doubt say that she is already -- that she is yet again not in control of the Brexit process and Europe is in fact leading the way telling U.K. telling Britain how to leave.
So, more pressure on Theresa May. She's got the breathing room to get that deal with Jeremy Corbyn. No movement on that as of yet. And so, it will depend the next couple of weeks of whether in fact she can hold onto her position which is extremely fragile at this moment, and whether she can deal, get a deal passed in the Houses of Commons.
So, a lot to work for, a lot to work for Theresa May and a lot of pressure still on her despite that October cliff edge now. Rosemary?
CHURCH: Yes. She's still in a tough place, isn't she? Thanks so much for that, Isa.
CHURCH: Melissa, the E.U. has offered Theresa May the six-month lifeline along with a warning not to waste this extra time. So, what happens if U.K. lawmakers are unable to make a deal in that extra time? Is that it? No more extensions and a no deal Brexit.
MELISSA BELL, CNN INTERNATIONAL CORRESPONDENT: I think pretty clearly that is what's being offered and that is all that will be offered. Bear in mind, that when these negotiations began last night, what was going to be a long night of negotiations, six hours in all. And all the leader and the heads of E.U. really getting to bed in the very early hours of the morning.
When this began the idea had been Donald Tusk's idea had been for a yearlong extension. But there were divisions within the E.U. for a bloc that's been remarkably united ever since these negotiations began in the wake of the British vote in favor of Brexit.
This time there were divisions because the Europeans' patience has been so tested by the inability of the British to come up with a way out of the E.U. of their own, and also, their own unwillingness on the part of the Europeans to push the United Kingdom out in any way.
But that patience really has worn thin. Hence, the division in one camp led by Emmanuel Macron, a desire for a much shorter extension. And that in the end is what was given just the six months until the 31st of October, a desire for a greater number of conditions to be placed on Britain to prevent it from being a sort of troublesome leaving member of the E.U.
In the end, the certain number of warnings were included within the conclusion including this idea that in June there will be a sort of taking stock of how Britain has behaved as a leaving member of the E.U. to see whether the process can continue until the 31st of October. Because there was this fear that perhaps leaving a United Kingdom would seek to make trouble. Particularly if there were some change of government and they found themselves with Brexiteer at the helm.
So, on the one hand, the camp led by Emmanuel Macron much more hard line on Britain because wanting to protect the future of the E.U. and get on with it in order that the E.U. can once again look ahead more ambitiously to its future post-Brexit.
And on the other, the voices of moderation saying let us give the British more time, and in particular led by Angela Merkel whose interest were those of Germany which will be particularly badly affected economically should there be a no deal Brexit.
[03:19:55] So, I think this is the last extension you're going to see. The Europeans have made it clear that Britain must not waste, as you just said, Rosemary, that precious time. The breathing space as Isa suggested describe it has been granted to Theresa May because this, what they're saying is, that this is going to be it.
CHURCH: Yes. The ball is in the U.K. parliament's court. We shall see what they do with it. Melissa Bell joining us live from Brussels where it is 9.18 in the morning. Many thanks to you.
We'll take a short break here. Still to come, Benjamin Netanyahu makes history in Israel now on track for a record fifth term as prime minister. But there are still some roadblocks ahead. The latest on the election, that's next.
CHURCH: Benjamin Netanyahu is headed for an unprecedented fifth term to become Israel's longest serving prime minister. After a hard-fought campaign and close election, his main rival former military chief Benny Gantz conceded defeat.
As of now the prime minister's Likud Party and Gantz's Blue and White Party are both on track to gain 35 seats in parliament. Mr. Netanyahu has the advantage when it comes to building a majority coalition, pulling in ultra-orthodox and smaller right bring groups.
[03:25:04] Michael Holmes is standing by for us in Jerusalem who joins us now with more on all of this. So, Michael, Benjamin Netanyahu, the declared winner. But of course, it's worth noting votes are still being counted at this hour. For soldiers and diplomats, what impact will those votes likely have?
MICHAEL HOLMES, CNN CORRESPONDENT: Yes, that's right, Rosemary. Those last votes being counted, soldiers, as you say, overseas diplomats, prisoners, people in the hospital, and so on. That's nearly done now. We're talking about 250,000 of those votes. And they could in fact have an impact. They could lift one right wing party that is currently under the threshold for seats above the threshold.
What that would so was add another partner, if you like, to the Netanyahu bloc, his coalition hive him a couple more seats. Now what happens next is the president is going to start calling in delegations from each party with seats in the Knesset and ask them who they think should be given the chance to form a coalition.
That likely, of course, at the moment to be Benjamin Netanyahu. That could take about a week or so. Then Netanyahu would have 28 days to get it done. If it all goes smoothly and there are no hiccups a new government probably likely to be sworn in perhaps next month. Rosemary?
CHURCH: Wow. Michael Holmes, reporting there from Jerusalem. Many thanks.
We'll take another short break here. Still to come, U.S. lawmakers set a deadline. But the treasury secretary says he won't meet it. The battle over President's tax returns.
[03:29:58] CHURCH: We want to talk a bit more about the political battle over the president's tax returns. Joining me now is CNN legal analyst Shan Wu. Welcome. Good to see you.
SHAN WU, CNN LEGAL ANALYST: Good to see you.
CHURCH: So, of course with all the distractions Wednesday, little attention is being paid to the fact that the Democrats deadline has come and gone. The six years of President Trump's tax returns to be release. And the president and his treasury secretary have made it clear they won't comply. What are the legal ramifications of non- compliance here?
WU: Well, they will have no choice, but to end up in the court, I think. Congress could seek to hold the Treasury Department in contempt, but most likely what's going to happen is they'll end up having to go to the courts over this. The letter of that law that they are relying upon is quite plain. It says shall. So there's not really any wiggle room for the Treasury Department.
They seem to be following according to treasury secretary the argument that had been made by President Trump's private lawyers which is rather interesting. They also will be asking the Justice Department legal counsel to weigh in on this, but to me as legal analyst it seems like a very weak defense or no defense at all. And so, I think, the ramifications will be that they are going to have to litigate the issue.
CHURCH: Interesting. And just to set the same President Trump said Wednesday, he would love to release his taxes, but can't because he is under audit. Just a few days ago he said he will fight this all the way to the Supreme Court. And he's acting Chief of Staff, Mick Mulvaney, says Democrats will never see Trumps tax returns. So, clearly he'll do whatever it takes to resist releasing them.
CHURCH: You mention the courts and specifically the Supreme Court. How are they likely to respond to this in the end? Do you think the Democrats and the public, the people of the United States of America will ever see Donald Trump's tax returns?
WU: Well, I'm pretty sure Congress will get to see them. Whether they get more broadly released I think that is a tougher call. This particular law says that the Congress can ask for the returns. So, if we just focus on that argument at the district court, not sure which way it will go. Court after appeals, not sure which way will it go. Supreme Court this is not that partisan of an issue. It's not a values issue. It's not conservative values, but it very much does go to the power of the president.
So, the extent that the Supreme Court is a conservative one that is a supporter of a very strong executive power, then they may rule in favor of the president. And I think it's going to come down to that issue. With regard to the public seeing it. That is not required by law. That is been something that for the last 40 years, every president has released the returns, but there's not a compulsion to do that by law.
But interestingly enough now, there's some talk of making that a law that presidents must submit their returns. We already know that the IRS automatically will audit a president, once they start. I should add however with regard to President Trump's frequent implication of the audit that I'm still not aware of anybody saying that anything prevents you from having your returns released while there is an audit. There really is a legal bar that.
CHURCH: Right. Nothing legal and of course we know that U.S. Presidents in the past has released their tax returns even when they are under audit. So, that in fact, shouldn't be a problem or challenge in any way. So, if this does go to the courts, how -- what sort of time frame are we talking about here? Because essentially the president could run out the clock, couldn't he?
WU: Yes. There is some concern about that. I actually don't think they'll take as long as some cases do because there's not a lot of factual scenarios. So, it's not a case for you would have a big fact trial with a jury. I think it is something which is likely to be decided just on the legal issues and their mechanism for that, there might be like a motion for some re-judgment. There might even be some injunction coming up meaning injunctive relief asking for the Treasury Department to perform.
So those sorts of vehicles procedurally tend to be purely legal and those can quickly go through the trial court. And then the Court of Appeals and then get to the Supreme Court. If they want to touch it. I mean, United States Supreme Court has discretionary authority. They don't have to take everything. And it's possible it's too much of a hot potato. Chief Justice Roberts may want to avoid it if he can.
CHURCH: Right. And of course, it has to be oust, because when you look at so much resistance from the president. From his acting chief of staff. To release these tax returns. The question of course is what do you think the president is trying to hide by refusing to release his tax returns year after year? Because that is the optics of this resistance, isn't it?
[03:35:07] WU: Right. Absolutely. And I think the speculating, it runs everything from perhaps he's worried that he is not worth as much as he says. He is -- two more serious concerns he may have. Because some of the testimony that he's former lawyer Michael Cohen gave talked about pretty reckless inflating and deflating of values and there could be a problem with tax fraud. And also we have to remember that the chief of financial officer of the Trump organization has been cooperating with prosecutors in New York. And obviously that is someone who is in a good position to know the truth behind what was filed.
CHURCH: So, if President Trump wins a second term, there's going to be an instance there presumably we will see or certainly Congress will see his tax returns? That is your belief, right?
WU: That is my belief. Yes. I think that they will be seeing them at some point.
CHURCH: All right. Shan Wu, we'll keep an eye on it and see it does indeed happen. Many thanks.
WU: Sure thing. Good to see you.
CHURCH: And we continue to follow breaking news from Sudan. Protestors are gathering in the streets. Amid reports the president Omar al-Bashir has been removed from power. Activists are circulating a statement from a reported military transitional counsel announcing the news. And this comes after months of antigovernment protest demanding an end to al-Bashir's 30 year rule. We'll keep you posted on any update we get on that.
Well, the European Union agrees to another Brexit delay. Just ahead we will see the how financial world is reacting. You're watching CNN Newsroom.
CHURCH: Welcome back, everyone. British Prime Minister Theresa May has another six months to get her Brexit deal through parliament. The European Union granted another extension on Wednesday. This time until October 31st.
[03:40:06] Now Mrs. May says she is counting on a breakthrough from cross party talks which are set to resume in the coming hours. E.U. leaders say they will not renegotiate the withdrawal agreement. And European Counsel President Donald Tusk warned that the U.K. do not waste this time.
CNN's John Defterios is live this hour in Abu Dhabi. He joins us now. Good to see you, John. So, the E.U. has given Theresa May this extra six months to get this deal approved. How are markets reacting to this?
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Well, they have taken it in stride. Let's put it that way. They are relieved that we didn't crash out of the European Union. But it's not removed the cloud of uncertainty if you will, Rosemary. And I think we are going to have jokes back and forth all the way up to that Halloween deadline of the tricks or treat, because of the E.U. extension that is taking place. I'm sure in the British press.
But let's get to the market reaction as you will, and the number one test, of course, is the British pound and how it's been trading against the U.S. dollar. We've been harboring this rate of 1.30 to 1.31. It's actually risen after this decision from Brussels. It's not a huge surprise, but 1.3107 is a net positive. It's been one of the strongest currencies within the developed world, the G7 at start of 2019.
Let's look at the market reaction over all. Asia has been not affected by the British vote itself. But worries about a slow down due to the international monetary fund. Latest forecast here, the Tokyo was up slightly. You see Shanghai down sharply, that's because of concerns that China would be hit by a slowdown of the United States and in particular the European Union.
I thought the head of the British Chamber of Commerce summed it up extremely well after the extension that we saw come out of Brussels last night suggesting that the extension buys some time and this is a quote from him, that they, the parliamentarians cannot afford to squander the opportunity.
We have the head of Siemens (ph), the German industrial giant tell me, we don't like to invest in uncertainty. And the bottom line is not the near term uncertainty in the financial market, but the long term damage the brand U.K. particularly when it comes to foreign direct investment, which is down nearly 20 percent since they have that referendum vote back in 2016. Major companies. Honda, Toyota, Siemens and scores of others within the Fortune 100 have decided to pull out of the U.K., because they want access to the single market of the European Union, which is (inaudible) 500 million consumers. That's still in play. Those who want to have access to that large market, Rosemary.
CHURCH: All right. Many thanks to John Defterios, bringing us market reaction. I appreciate that.
Journalist Josh Boswell, joins me now from L.A. bureau to talk more about all of this. Good to see you.
JOSH BOSWELL, JOURNALIST: Hi.
CHURCH: So, the E.U. leaders have given the U.K. a big break here. Donald Tusk warning British lawmakers to use this time wisely. Let's listen.
(BEGIN VIDEO CLIP)
DONALD TUSK, PRESIDENT OF THE EUROPEAN COUNCIL: Let me finish with a message to our British friends. This extension is as flexible as I expect it. And a little bit shorter than I expected, but it's still enough to find the best possible solution. Please do not waste this time.
(END VIDEO CLIP)
CHURCH: So, he also said Britain will have all options on Brexit available during this time. How optimistic are you that this six months extension will make a difference in result in some workable Brexit deal and how viable of a cross party talks between Theresa May and opposition leader Jeremy Corbyn, given this new timetable?
BOSWELL: Personally, I'm not particularly optimistic. And I think it's quite fitting that this deadline is on Halloween, because this is turning into a Zombie Brexit. It just refuses to be laid to rest. And I think it's also interesting that it's Halloween, because at Theresa May's Morgan (ph) deal and her Morgan premiership as well, are going to drag on just that little bit longer.
I think that people were expecting a year's delay. President Jean- Claude Juncker was suggesting that that's what it would be before this 27 E.U. members states. But now we got just six month delay. It looks like it's there's probably not enough time for conservative M.P.'s who wanted to get rid of the Prime Minister and put somebody else in charge. And maybe a more hardline Brexiteer. It looks like they are not going to have enough time with what the
E.U. elections coming up in May. You have also got local elections in the U.K. at the beginning of May. And they might not just be able to fit it all in. So, Theresa May hanging on again until October 31st. And then the real question is to go to your question, what's going to happen now, we cannot find some kind of deal from this delay.
There's not much incentive for a deal between the two major political parties in the U.K. Theresa May has been trying to engage Labour in some cross party talks, but Labour's leader Jeremy Corbyn, is very little incentive to make a deal. If he weds himself to Theresa May's Brexit, that's going to cause a split in his own party.
[03:45:18] If he goes for anything less than a referendum, second referendum on Brexit. Then that is going to cause some serious discomfort in his party and could lead to him being ousted potentially. And that is a red line that I think Theresa May probably isn't going to cross, so, at least that can split her party if she does cross it. And so, you've got this impasse.
CHURCH: Really what you are saying is this extension of six months has made absolutely no difference at all. Except that they just have more time to keep going over the same ground, right. So, Theresa May still has challenges when she returns to London. She has spoken about her frustration trying to get her deal approved. Let's just listen.
(BEGIN VIDEO CLIP)
THERESA MAY, PRIME MINISTER, BRITISH: Over the last three months I have voted three times to leave the European Union. If sufficient members of parliament had voted with me in January, we would already be out of the European Union. We have not been able to get that majority in parliament. As you know, I have now been reaching out to find a way in which we can get an agreement that will command a majority across the House of Commons.
(END VIDEO CLIP)
CHURCH: And of course the world shares her frustration, right? So, how will she sell this extension to lawmakers? And of course the public when she returns and can she expect more cooperation from her conservative M.P.'s? I mean, now they are going to be stuck with her essentially, as what you are saying, and possibly E.U. leaders factor that in when they gave the six month extension. So, where do they go from here?
BOSWELL: Well, I think this gives permission really, sadly to conservative M.P.'s and in fact all of parliament to kick the can down the road another six months. And they've not got a particular reason to come to a deal now for another six months. And it's this real still edge manship (ph) game. This game of chicken were neither side wants to give an inch, because they still think that they can win.
You know, you have got the hard line Brexiteers still thinking that they can eventually force a no deal Brexit or a more hardline Brexit. And then there's the remainers, who think that they're closer than ever before to getting a second referendum or even cancelling Brexit and slightly less likely option.
But it's interesting to look at the parliamentary statistics. Who is voting for what? In terms of the pushing blame here. The conservative M.P.'s voted no for the no-deal Brexit. They voted no for May's compromised deal. They've voted no, for a second referendum. They've voted no, to cancel Brexit and they've voted no for a general election, where his Labour M.P's are voting yes on most of those things.
So, the sticky wick it here, the people who are not moving seem to be the conservative M.P.'s and its them who May's has been trying to get on side and she has failed so far. It doesn't seem to be mush reason, much indication that they are going to change their mind and join her, especially with this delay.
CHURCH: Very telling indeed. We'll be watching to see what they do in the coming days and weeks ahead. Josh Boswell, thank you so much. We appreciate your analysis.
BOSWELL: Thank you.
CHURCH: And we'll have more CNN Newsroom after the short break. Stay with us.
[03:50:00] (COMMERCIAL BREAK)
CHURCH: We continue to follow this breaking news out of Sudan. Protestors gather in the streets amid reports that President Omar al- Bashir has been removed from power. Activists has circulating a statement from a purported military transitional counsel, announcing the news. And this comes after months of antigovernment protests demanding an end to al-Bashir's 30 year rule.
Well, North Korea will be front and center at the White House Thursday. South Korean President Moon Jae-in will meet with President Trump. There are reports that Mr. Moon will invite Mr. Trump to Seoul in the coming months. And wants to broker another U.S.-North Korea summit. Our Paula Hancocks joins us now live from Seoul with more on all of this. Good to see you Paula. So, this comes amid new threats from North Korea. Is this all an effort to appease Kim Jong-un and will President Trump be open to the third summit given the second one failed?
PAULA HANCOCKS, CNN CORRESPONDENT: Well, Rosemary, it's interesting, because even before the second's summit happened, I heard South Korean officials talking about the third summit. So this is something they have wanted all along. And now, of course, the fact that the Hanoi Summit ended without an agreement makes it even more important from the South Korean point of view that the North Koreans and the Americans are sitting and talking.
President Moon Jae-in has stakes a lot of his creditability on this talks working on the relationship between the U.S. and North Korea improving and on steps towards denuclearization. So what we're hearing is that President Moon will be trying to encourage the U.S. President once again to consider sitting down with Kim Jong-un. Now, clearly very little has happened since the Hanoi Summit. At
least when it comes to seeing the relationship with anybody improve. We hear from the South Korea side as well that the North Koreans are not cooperating when it comes to things like looking for remains of Korean War veterans on the DMZ. The North Koreans simply aren't engaging the way they did with the South Koreans before the Hanoi summit.
So, clearly, there's a lot riding on this meeting for President Moon and he really wants to try and push the U.S. President to go back to talk to Kim Jong-un and try and make another potential summit a lot more successful than the previous one.
CHURCH: Yes. And the South Korean President Moon, I mean, he really has been in the inviable position of trying to broker peace on the peninsula. Drawing together two unpredictable leaders.
[03:55:00] How difficult has this task been for him? And how determined is he to make this work?
HANCOCKS: Well, the U.S. President asked him to be the mediator between the U.S. and North Korea. And initially you can imagine he would have been delighted. But of course that role becomes increasingly more difficult, the further along this process you get.
We heard from the North Korean leader Kim Jong-un just on Wednesday saying that sanctions should not be pushed forward. Talking about that they are going to deliver a blow to the hostile forces who believe that sanctions are the way forward. Now, historically when they talk about hostile forces, they are presumed to be talking about the U.S.
It is interesting though that Kim Jong-un is still not talking about President Trump in detrimental terms. That is still being left alone. So, clearly the relationship between the leaders, he understands there is some room for that. But we are potentially expecting to hear from him this Thursday. He is meeting at the Supreme People's Assembly. This is the North Korean parliament is convening. And it could be the first time we hear the North Korean leader specifically talk about the Hanoi summit. In the past we only heard statement media mention that they thought the U.S. was to blame for no agreement. But we haven't specifically heard from Kim Jong-un himself.
CHURCH: All right. Our Paula Hancocks bringing us the very latest live from Seoul. Many thanks to you.
And before we go, I do want to update you on the breaking news we've been following from Sudan. Protestors gather in the streets amid reports that President Omar al-Bashir has been removed from power. Activists circulating a statement from a purported military transitional counsel announcing this news. And it comes after months of antigovernment protests demanding an end to al-Bashir's 30 year rule.
And thank you so much for joining us this hour. I'm Rosemary Church. Early start is next for our viewers here in the United States. And for everyone else, CNN Newsroom continues after this short break. Do stay with us.