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QUEST MEANS BUSINESS
The FAA Is Demanding To Know Why The Boeing Withheld Information About 737 MAX; Anti-Austerity Protests Sweep Lebanon; E.U.'s Outgoing Economic Commissioner, Pierre Moscovici Says Johnson's Deal Is Better Than No Deal At All; NASA Astronauts Complete First All-Female Spacewalk; Chinese GDP Growth Slows To Lowest Since 1992; Demonstrators March In Barcelona As Tens Of Thousands Rally Against Jailing Of Separatist Leaders. Aired 3-4p ET
Aired October 18, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: A sea of red across on Wall Street right the way throughout the course of the day, 60 minutes to trade.
Frankly, this isn't going to change that much, I don't believe over the next hour because if you look at the reason for the fall, which we'll be
talking about in just one second, once you see that reason, which we will get to, you'll understand why it's not likely to change. The markets --
and these are the reasons why.
Turbulence for Boeing. The FAA is demanding to know why the company withheld information and messages about 737 MAX.
Anger and violence in Lebanon. It's economic this time. A proposed tax on WhatsApp calls sparked widespread deep-seated protest.
And China reports its slowest quarter of growth in 27 years. It all adds to the fear of a global slowdown.
Tonight, we are of course live in London. It is Friday. It's October the 18th. I'm Richard Quest and here, I mean business.
Good evening. Tonight, the FAA - that's the Federal Aviation Administration in the United States is demanding answers from Boeing
specifically, why the company failed to disclose what it's calling concerning internal messages during the certification for the 737 MAX.
The FAA says it needs an immediate explanation about what was in the messages and why they were withheld. The news had an immediate effect on
Boeing's share price. It's down nearly six percent.
And by the way, because of the way Boeing is the largest component in the Dow - that is roughly 100 to 105 points off the Dow. And when the
announcement came out at lunchtime, if you looked at the Dow, that's why the Dow fell very sharply, and it is unlikely that Boeing will recover much
of that loss. So therefore, it is unlikely that the Dow will come back much of its current low levels.
The report comes as Boeing's Chief Executive, Dennis Muilenburg is preparing to testify before Congress next week, and Muilenburg has already
been ousted as chairman. He remains a CEO.
Peter Goelz joins me from Washington, the former Managing Director of the NTSB. Peter, I was reading "The New York Times" has the supposed content
of these messages.
These are pilots, basically saying that the MCAS system was egregious - that they found it difficult to control the plane. They should have been
given to the FAA sooner.
PETER GOELZ, THE FORMER MANAGING DIRECTOR, NTSB: It should have been given to them immediately. I mean, it should have been discussed at the moment
that they were making that determination. I mean, I think this is really quite damning.
And that, you know, the CEO is now getting ready to testify before Congress, perhaps on both Wednesday before the Senate, and Thursday on the
House. I mean, that's kind of like singing for your supper, Richard, this guy's job is on the line.
QUEST: So there are two things here really, aren't there? The first is why when those messages were exchanged, it wasn't taken up within the
company. In other words, the certification process didn't look into this.
For instance, apparently one of the messages, one of the people who were doing it convinced the FAA not to put the MCAS into the manual for pilots.
So that's the first issue.
The second, once these messages became aware to Boeing that they weren't revealed, which is the most -- I suppose the first is more serious in a
GOELZ: Well, of course, this was the chief pilot, the chief test pilot, and if he found the MCAS system to be dangerous or to be too strong, I
mean, that should have been flagged for the engineers to address that he then went on to advocate, well, there's no reason to bring this up in a new
manual. It really wasn't significant. I think that deserves very heavy examination.
And secondarily, they then bury the e-mails until a lawyer somewhere said, listen, guys, this is too important. You've got to turn it over.
QUEST: At what point is somebody going to lose their job at Boeing? And at what point -- you know, does it get to the stage where I may not have
been responsible, but it happened on my watch or I am under the principle of responsibility?
GOELZ: Those are two great questions. You know, this seems as though nobody so far that, you know -- Mr. Muilenburg lost his chairmanship. The
question is, how is he going to respond Wednesday and Thursday? And if it's not a really artful performance and an honest performance, I'm not
sure that he won't be on the chopping block.
QUEST: And Peter, this is a tough one for both of us. I mean, you're obviously in the industry. I cover the industry.
Boeing has or did have an exemplary safety record. It spares no efforts on safety. It begs the question, how did they lose their way with the MCAS
that makes all that protestations of safety now that they will only put that plane back in the air when it is safe ring hollow?
GOELZ: Well, that's going to be the story that business schools and others are going to be looking at for the next generation.
You know, and you just don't know, I mean, I was disappointed when the top executives from Boeing moved their headquarters from the Seattle area to
Chicago. I felt as though maybe they were losing touch with their production line.
But I don't know. I think that's something where wise management guys are going to look at this and say, here is where it turned.
QUEST: Peter, we're grateful for you tonight, sir. Thank you as always. I appreciate it.
GOELZ: Thank you.
QUEST: Now we're following major protests in Europe and the Middle East. In Lebanon tonight, anger over years of economic dysfunctions finally boils
The Prime Minister has issued an ultimatum telling political adversaries in his national unity government, they have 72 hours to find a solution to the
economic crisis, but look at the stage of the crisis.
Clashes are escalating, roads are blocked, burning barricades. Tear gas is being fired at protesters on demonstrators according to the government to
There is a raft of austerity measures that triggered all of this? The most hated measure, a tax on WhatsApp calls. Now, remember in that part of the
world, everybody is calling on WhatsApp, because it's obviously free versus quite exorbitant telco charges. The tax has been reversed.
CNN's Ben Wedeman is in Beirut tonight. Ben, Friday night, normally a party night in Beirut. What's it like tonight?
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: You see that -- this fact that you say it's a party night in Beirut - that implies a very small
percentage of the population here.
According to the World Bank, 30 percent of the population lives under the poverty line and this is what you are seeing. The people who are poor and
have seen their life, their standard of living drop steadily is why they are out on the streets for the last 24 hours.
So at the moment here, we will show you what's going on. We're right below the building that houses the Prime Ministry and the Cabinet. Now, the
protesters have been dispersed. The police fired dozens of volleys of teargas.
But until that happened, though, there were protests. This area was jam packed with protesters, and this is just one part of Beirut.
There are protests in other parts of the city. There are protests across the country and they were sparked with the news about this so-called
WhatsApp tax, 20 cents per call, which in a country where people don't make a lot of money that's very expensive, and within hours, the government had
to rescind it.
But that was not enough to calm the anger, and now they're simply calling, to so to speak throw the bums out. People say we've been looted for
decades and they want their money back. So lots of anger. And it does not appear that Prime Minister Saad Hariri with his latest speech is going to
really change the feeling of the people below.
QUEST: Okay. All right, so I get the anger, the raw passion, but who's in the wings waiting to take over because decades of corrupt leadership, not
just in Beirut in Lebanon, but throughout the region has left economies in shambolic states, but who's waiting to take over?
WEDEMAN: It's important to keep in mind that the government of Saad Hariri sort of contains everyone. It contains various Christian parties, it
contains Hezbollah, and what we're seeing here is that everybody is being blamed for the current crisis.
It's hard to say who would take over. One has to ask given Lebanon's precarious economy at the moment, who would want to take over?
WEDEMAN: Yes, there is this regional conflict between Iran and Saudi Arabia. Saudi Arabia in the past did provide cash handouts to keep the
Lebanese state from going under, but they've become hesitant to do that because they resent the fact that Saad Hariri is willing to form
governments with Hezbollah which of course is supported by Iran, which of course is the arch enemy of Saudi Arabia. So Lebanon in a sense is caught
in the lurch -- Richard.
QUEST: Keep watching, please, Ben Wedeman. When there's more to tell us, please come back. Thank you.
Now the underlying issues though, of course, as Ben was saying, not new, festered for years. Inflation. They're under pressure. Stagnant growth,
rampant corruption, and all made worse by a refugee crisis.
Add on to that one and a half million people are being sheltered in Lebanon, fleeing from the war in Syria, and an infrastructure that just
barely exists in some parts.
You can be mistaken and fooled when you look at the posh parts of Beirut, as Ben was saying, and forget what the rest of the country is like. It all
ensures frequent, lengthy power outages because the infrastructure is so bad.
Joining me from Beirut is Maha Yahya, the Director of the Carnegie Middle East Center. So, same question to you as to Ben. If this government, if
Hariri's government goes down, who takes over?
MAHA YAHYA, DIRECTOR, CARNEGIE MIDDLE EAST CENTER: Hi, Richard. It's not clear who takes over quite honestly and this I think, is the big black box
at this moment. There is no lady in waiting, so to speak.
The concern is if the Hariri government goes down, we're looking at two possible scenarios. One scenario is we go into a period of chaos,
political unknown, where the country is in limbo. There's no government that has been formed. So we -- it's really a period of unrest and possible
The other scenario is that they could possibly try and form a government appointed by the Prime Minister, more aligned with Hezbollah and the party
-- the political party of the President.
But then, that means they're taking responsibility for a country that's literally facing economic collapse or possible economic collapse.
QUEST: Right. Right. But here's the real problem, of course, every government of every complexion has seemingly been corrupt in some shape or
form. And that level of corruption, and you know, I mean, we're not just talking about -- we're talking about an understanding of way of doing
business that is not followed elsewhere.
That has now seeped right the way down through the economy. It's difficult to see that the calls of those on the street can ever be met.
YAHYA: Well, this is the fundamental problem, because the demand today is the resignation of the government. But even the resignation of the
President, we've heard protesters calling for the resignation of the President himself.
So even if there was a new government formed with technocrats, which is what now is being also asked for, the ideas, you bring people who are not
affiliated to the political parties and who actually know what they're doing, and put them in government without any political consensus to give
them the support they need, these people won't be able to do anything.
No reform can take place without the political parties agreeing to it. Agreeing to reforms means accepting that they're going to lose of the
revenues that they've been getting out of state institutions since the Civil War ended. That's kind of the conundrum we're in right now.
So unless there is an agreement between the political parties saying, okay, we've really reached the end of the line here. We either choose to rule
over a country that's falling apart, or we try and save the country. I just don't see a way out at this point.
QUEST: Thank you for joining us. Have a good weekend. I appreciate it. Thank you. Now, another pit stop or is it the finish line in sight. Hours
away from momentous day on the road to Brexit. British MPs are getting ready to vote. We'll discuss that after the break.
QUEST: You've been forgiven for being completely puzzled and wondering exactly what they agreed in Brussels and whether it has any chance of going
The British Parliament now has his own historic choice to make tomorrow, on Saturday, whether to agree to Prime Minister Boris Johnson's new Brexit
The PM held a Cabinet meeting a few hours ago. They reviewed strategies for getting the plan through. Northern Ireland's Democratic Unionist Party
has already made it clear, it will not back the deal. And whichever way you look at it, the numbers are going to be close. He needs 320 votes for
it to pass.
Speaking to me from Washington at the IMF, the E.U.'s outgoing Economic Commissioner Pierre Moscovici said he is not worried how the numbers will
shake out. He says Johnson's deal is better than no deal at all.
(BEGIN VIDEO CLIP)
PIERRE MOSCOVICI, E.U. ECONOMIC AFFAIRS COMMISSIONER: Politics is not only about arithmetic. It's about also reason and when I look at this deal, I
regret the Brexit. I was always thinking that the U.K. was better in the E.U. and outside the E.U. But this deal is the most fair and reasonable
that we could get. And it's much better than no deal which would be a threat for our economies.
So I think the MPs have some food for thought. We will respect again the vote of the Parliament. We are looking at it. We are waiting for it. And
then we'll see.
QUEST: Do you have a Plan B? Because if they voted down or if there's a whole load of really complicated amendments, what's going to happen, of
course is that -- and it is very likely, even if they don't vote it down, is that they will need another extension. The Benn letter, you're familiar
with it, will kick in. Will you agree to that extension, do you think?
MOSCOVICI: Well, first, I never speak about a Plan B, because when you start talking about the Plan B before the Plan A expires, that means that
you don't believe in the Plan A.
I believe in the Plan A. I think that we've been negotiating so hard, that it was so difficult that we've made so tremendous progress, that it's
absolutely doable, that we get where we want to go, meaning an agreement for now, and an exit on the 31st of October.
If it does not happen, as Jean-Claude Juncker has said, then we're in a complicated situation. And I imagine that the leaders of the European
Council would have to examine that again, and we know that there is a bill that then would apply, but it's also up to the British political system to
So let's again wait for tomorrow and let's hope --
(END VIDEO CLIP)
QUEST: Now, some of Britain's top business leaders and lobby groups are pleading with the MPs to back this new deal, this Brexit deal. Further
delay they say could run British industry deeper into turmoil with the cost of jobs and investment.
The Chair of the Institute of Directors is urging Parliament not to commit Britain to another extension. The head of E.U. Trade and Policy, the IoD,
Allie Renison joins me now. Where do you stand on this deal?
ALLIE RENISON, HEAD, E.U. TRADE AND POLICY, IOD: Well, it depends on which part of the business primarily you're talking about. I mean, effectively,
if you look at it, and we look at the deal, a lot of the contentious stuff in there in this new deal is about Northern Ireland and a lot of Northern
Irish businesses are very uncertain about it because it may create barriers internally within the U.K. for their business.
Having said that, if the counterfactual is indeed deal or no deal tomorrow and it's not 100 percent certain at this point, whether it is, then
obviously this deal is miles better than the counterfactual.
QUEST: Right, so, there is a difference though because not only is the Northern Ireland bit new, there is part of the political declaration which
applies to the whole country, which is also new.
We're going to show up on the screen exactly the wording that's different. In the old wording, it talked about having a trading relationship that is
as close as possible, which suggested Customs Union, of course.
In the new one yesterday, a trading relationship on the basis of a free trade agreement. Is this semantics or is this a real difference?
RENISON: It's both. In fact, in terms of content, it is very different because it doesn't prioritize frictionless or frictionless as possible
trade with the E.U. It talks about having distinct legal orders. That means basically it doesn't want to be bound by E.U. rules.
It does technically provide in other areas of that declaration for a range of different outcomes. Having said that, it is not a binding document. It
is not like the actual withdrawal agreement.
QUEST: No, but it does go to the state of mind of the British government. And Angela Merkel said in her press conference yesterday that Boris Johnson
had made it clear, the U.K. was not interested in Customs Union.
RENISON: No. The U.K. government, the current administration is definitely not interested in keeping its tariffs aligned with the E.U., it
wants to be able to have full flexibility to do as many trade deals separately to the E.U. as possible.
And that is a bit of -- when it comes to what the businesses use, certainly for our own members, we know that the vast majority of them would prefer to
continue that alignment in order to keep having continued ease of access into the E.U. But that is clearly not where this government wants to be
QUEST: How -- practically, how difficult will it be to implement the Northern Ireland protocol, Articles 5 and 10 and all of them? You know,
this idea of goods going in will need to be tariffed if there's a risk of them going south and all that sort of stuff?
RENISON: It's very complicated, and unlike the last deal, which basically was an insurance policy option, had a whole U.K. Customs Union. This deal
basically gets rid of that contingency policy continuously.
QUEST: This is the norm.
RENISON: Yes, this is now the actual starting point, at least for Northern Ireland and that is why because if that isn't part of the binding document,
the actual exit treaty, that is why Northern Irish businesses are more sort of ambivalent towards it.
QUEST: But is it likely that in the fullness of time, once you've put in place the procedures, once everybody knows how it works, five years down
the road, everybody is saying, well, what was all the fuss about?
RENISON: Not necessarily if you're a Northern Ireland business, because effectively what a lot of people are worried about is that effectively, it
makes it much more less attractive to want to trade with Northern Ireland, if you're in the U.K., basically, their internal biggest market, do you
start basically pricing them out of the actual internal market, because it becomes they're more closely aligned with the E.U.? You have controls on
sending products back and forth within the U.K. and I think that is why the Unionist Party has big issues with it.
QUEST: Because obviously, eventually it becomes well -- it's easier to send to France than to stock to the pontes.
RENISON: Effectively, and certainly, it becomes easier to send things south to Ireland rather than to the rest of the U.K.
QUEST: What do you think is going to happen tomorrow before Parliament? I mean, that's an unfair question. You're quite happy if you are to plead
RENISON: I won't plead the fifth because I think one of the things that's emerged very late on the day is basically an amendment, a motion that
basically says from --
QUEST: The Letwin amendment.
RENISON: The Letwin amendment that basically says effectively, this is a conservative rebel who was very anti-no deal, who wants to say and
basically say, he will support the deal, but he will also put an amendment for it to make sure that actually, we don't end up with no deal in a year
and a half either.
QUEST: Okay. But the Letwin amendment would require the triggering of the Benn Act, which would open up a host of whole new problems.
RENISON: Only if the deal is not passed, because you could have a situation where basically the amendment is passed, but then Tory MPs now
that they feel more comfortable that there's going to be no no-deal further on down the line, then will also vote for the Johnson deal.
QUEST: Then, they don't have the Benn Act.
RENISON: Then you don't have the Benn Act, but you may have to actually have a technical extension.
QUEST: Technical extension.
RENISON: To be implemented.
QUEST: Good to see you. It's going to be a busy weekend for all. Thank you very much indeed.
As we continue tonight, the U.S. President cast this as a straight fight for the USA to win and China must lose. New growth numbers were out today
from the world's second biggest economy. The trade war is having an effect. After the break.
QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. We will be live at the IMF discussing China's weakest
quarter of GDP in 27 years, and I'll speak to the Security Chief of Huawei USA. He says the company is doing fine, despite being on a U.S. blacklist.
As we continue, this is CNN. And on this network, the facts always come first.
Anti-government demonstrators in Lebanon protested late into the night after another day filled with smoke, fire, teargas and the anger. The
unrest started on Thursday after officials announced new austerity measures.
On Friday, the Prime Minister blamed his political rivals for the economic crisis and gave them 72 hours to figure out a solution.
There are clashes in Barcelona as well. Protesters have filled the streets for the fifth straight day. Officials estimate more than half a million
people attended Friday's demonstration.
The clashes began on Monday after the Spanish Supreme Court gave nine pro- independent Catalan leaders long prison sentences.
There are accusations that Turkey is violating a ceasefire in Northern Syria. Kurdish fighters said the Turkish military and Syrian rebel
supporters targeted medical facilities in a border town.
The Turkish President is threatening to resume full military operations if the Kurdish forces haven't withdrawn from a border safe zone by the end of
the ceasefire period.
Mexican forces say they allowed the son of the drug road, El Chapo to go free after Federal troops were outgunned during a firefight with the cartel
in the Sinaloa state.
Mexico's President says the operation was suspended and Ovidio Guzman was released in order to save lives.
The American astronauts Jessica Meir and Christina Koch have completed their first ever all-female spacewalk. They successfully repaired a faulty
battery unit at the International Space Station.
President Trump congratulated the women on this historic event.
Growth in the world's second largest economy slowed to a near 30-year low. Chinese GDP grew at a rate of 6 percent in Q3 as the trade war with the
U.S. was taking its toll. President Trump has taken credit for the slowdown.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Our country is a financially much stronger country than when I took it over. China would have been
right now the strongest economy in the world, the number one economy in the world. And right now, China is way behind us, we picked up trillions of
dollars in value, in worth. And they've lost trillions and trillions of dollars, and they're having the worst year they've had in 57 years.
(END VIDEO CLIP)
QUEST: Well, we don't need to necessarily worry too much about one or two facts that seem to have been left behind somewhere in there. China's
effect on the global economy is one of the hot topics that they're talking about at the IMF and the World Bank meetings in Washington. Eleni Giokos
is there. How worrying is it? Bearing in mind --
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: Yes --
QUEST: Bearing in mind what we know about the United States' slowdown. We know about what Germany is going through and the EU.
GIOKOS: Yes, and that is the big issue, right? So how important is China going to be? And it really just leads back to the U.S.-China trade war
QUEST: I know, is going to be --
GIOKOS: That is having a fundamental problem with of course where China is going to be headed, and it's creating uncertainty. So, here are the
numbers. U.S.-China trade war could wipe out 0.8 percent of global GDP by next year. And people are talking about this, and saying well, how do we
take the uncertainty out of, you know, the scenario?
And that could only happen if calls received, the U.S. and China come to some kind of agreement. And it seems that's going to be kind of unlikely.
And we know that there is optimism, but unfortunately, the best-case scenario is that there is going to be, of course, a big impact. And of
course, China growing by the lowest level that we've seen in 30 years, Richard, does not create any kind of optimism, but let's be realistic here,
we're still talking about 6 percent growth.
QUEST: Six percent growth is not good enough. And that's as you --
GIOKOS: Yes --
QUEST: Said, if we even believe the numbers. But the IMF and those at the IMF are grappling with a slowdown when they -- the ammunition that they've
got available to them is not as robust as it should be.
GIOKOS: Yes, absolutely. And I mean, we're also talking about a synchronized global slowdown. And we're talking about uncertainty, so the
culprits are the trade war. Brexit being another big issue, and of course, you've got accommodative monetary policy at the moment which means that if
something does happen, and we've seen even weaker economic growth, what kind of tools can be activated to pull us out of that kind of scenario?
Business sentiment and productivity is also going down around the world. And that's another big risk factor. You've got debt levels rising, and
you've got negative yields on around $15 trillion worth of bonds globally as well. So, these are the risk issues that we keep talking about. The
red flags that the IMF is worried about.
And they're talking about, yes, synchronized slow growth. But how can we create coordinated action against this?
QUEST: Eleni Giokos, thank you. Now, in the past week, we've seen worrying cracks appearing in the world's economy that we've just been
talking about. After all, the IMF has cut its global growth forecast to the lowest level since the financial crisis a decade ago. And mote of the
U.S. economy, retail sales unexpectedly fell for the first time in seven months.
And today we got weaker-than-expected GDP numbers from China. The reality is, many economists agree President Trump's trade war has played a major
part in all of this. At the same time, the new leader of the IMF says it will take more than a truce between the U.S. and China to revive growth.
At the same time, if you take a look at the way the markets are trading, and you look at for example today's Dow Jones Industrials and how they are
bouncing around the place on the news or otherwise of whether or not, there is a trade war or whether or not there's trade tensions or whether they've
relieved or not.
Jose Angel Gurria is the Secretary-General of the OECD, he joins me now from Washington at the IMF too. Good to see you, sir. How worried are you
that the slowdown is real?
It is getting worse, and there is no obvious engine of growth to pull everybody out?
JOSE ANGEL GURRIA, SECRETARY-GENERAL, OECD: Yes, it is bad, it is real, it's getting worse. And the engine of growth, its fiscal policy, the
engine of growth is coordinated expansion by those countries that have the capacity.
Those countries that can profit from the fact that you have the lowest -- historically lowest interest rates, and therefore, they're paying less for their debt, and therefore they can dedicate this extra, you know, if you
will, surplus amount in order to grow more, to infrastructure investments for example which are good for the short-term, but also will improve
productivity in the medium and long-term.
QUEST: OK, that's if it all works well. But the reality is, the trade dispute -- and if we look at the level of global world trade -- as a global
trade, and you look at the growth numbers and how they've fallen, that's perhaps the most worrying part of all for you.
GURRIA: Absolutely. Listen, it's very clear, you had those decisions on trade, immediately followed with a lag of quarter -- two quarters, then,
you have now negative growth of trade itself, and of course what does that produce? It produces immediately industrial production start to fall, and
then what you have is investment start to fall, and what if investment starts to fall?
It was already at 5 percent, now it's at 1 percent, it's practically flat. What if -- if investments starts to fall, that means the growth of tomorrow
falls, the growth of next year, the growth of two years from now.
QUEST: Right, but I know also you're very concerned about the question of tax. Global harmonization, global rules on tax, a digital tax, all these
sort of issues which the G20, God love them, has tried and failed -- and I mean, there's a race to the bottom on corporate tax rates and nobody seems
to want to actually harmonize on tax rules.
GURRIA: Today, we have already made, not public, because we don't put it in the newspapers, but we have already divulged to the proper authorities,
50 million bank accounts from all over the world that are worth 5 trillion euros. And which have already produced more than 100 billion of interests
or fines or delayed payments, and they're going to produce even more.
And that is the result of the concerted automatic exchange of information of the G20 on the tax issues. Now, today we also approved that we were
going to go forward with the digital taxation.
QUEST: Right --
GURRIA: So, we're going to be looking at how we're going to be taxing not the digital companies, but a growingly -- you know, a growing digitalized -
QUEST: Right --
GURRIA: Economy in the world.
QUEST: Angel, good to see you, sir, as always. I appreciate you giving us time to talk to us tonight, it's very appreciative of you. Looking well
sir, you're looking well no matter what the crisis --
GURRIA: Thank you, thank you so much, Richard.
QUEST: We're following major protests tonight in Lebanon and in Barcelona. We'll get to the heart of the issues in Catalonia in just a moment. It is
QUEST MEANS BUSINESS tonight.
QUEST: The following fast-moving situations tonight in Beirut and in Barcelona. Clashes in Lebanon of course, escalating, and police have fired
tear gas at demonstrators. The Prime Minister has issued an ultimatum, telling his political adversaries in the National Unity Government, they
have 72 hours to find a solution to the economic crisis, although since he's the Prime Minister, it does beg the question of what he expects
everybody else to do.
In Barcelona, Spain's acting Interior Minister is warning protesters who break the law, now, they face up to six years in prison. It's the worst
that Barcelona has sustained in street violence for decades happening tonight, and it's raising economic fears in what is of course, such a
popular tourist destination.
Antonio Gaudi's masterpiece, the Sagrada Familia Basilica, that is closed to tourists for the time being. The Spanish Football Federation has
postponed El Classico, the eagerly-awaited match between Barcelona and Real Madrid. And the city's main airport has canceled 57 flights. They
airlines have offered flight waivers earlier in the week when the protesters stormed the various premises.
It's looking pretty serious, and it has the potential to get a great deal worse. CNN's Isa Soares brings us this report from the streets of
ISA SOARES, CNN CORRESPONDENT (voice-over): Defying Catalans in the face of police, chanting "the streets will always be ours", foreshadowing what
was to come. Anger and frustration on one side, met with force and rubber bullets. This has been the daily scene in Barcelona every day this week.
Ever since the Spanish Supreme Court in Madrid handed heavy prison sentences to nine Catalan politicians for their role in an independence
movement two years ago.
Protesters here say those politicians are political prisoners, and accused Madrid of persecution. An allegation the Spanish Prime Minister, Pedro
PEDRO SANCHEZ, PRIME MINISTER, SPAIN (through translator): Today is the confirmation of the collapse of the political project that failed in its
attempt to gain internal support, an international recognition, he says. Sanchez says he wants to start a fresh dialogue with Catalonia. Meanwhile,
Catalan regional President Joaquim Torra says certain conditions have to be met.
JOAQUIM TORRA, REGIONAL PRESIDENT, CATALAN: We call for an end to repression for the release of the political prisoners for the exiles to be
free to return home.
SOARES: Some movement leaders insisting the current situation can only be solved by a new vote on Catalan independence. But Madrid is unlikely to
support this. They refuse to endorse the last one. Despite opposition from the central government, local politicians went ahead with a referendum
on October 1st, 2017. Catalan's returned a resounding call for a split, halting the vote was far from easy.
(on camera): This has been a contentious referendum and a very chaotic day for those people who wanting to vote in the very early hours in the morning
in the rain, they saw d'Esquadra; state police move in, trying to block them from voting, and really dragging some people from those polling
stations. Authority telling CNN, more than 800 people have been injured.
(voice-over): Weeks of protests ensued until Madrid moved in and seized control of Catalonia. Nearly all the politicians who led the independence
movement were arrested, charged with rebellion, acquitted and later convicted of sedition. The man who led them avoided that fate.
Former Catalan President Carles Puigdemont fled and sort exile in Brussels, hoping to convince European politicians to support his quest for Catalan
independence. From there, he, too, criticized the sentences handed to his former cabinet.
CARLES PUIGDEMONT, FORMER CATALAN REGIONAL PRESIDENT: No propaganda strategy in the world could mask so much shameful injustice.
SOARES: With both sides entrenched in their position, a peaceful outcome seems a distant future, making nights like these a likely scenario across
QUEST: Pau Mosquera is in Barcelona for us tonight. What is the situation? How bad or is it getting worse or are people dispersing?
PAU MOSQUERA, CNN PRODUCER: The situation here in Barcelona is getting worse and worse. This is the fourth night in a row that there are violent
clashes in the streets of Barcelona. We're actually, Richard, just to let you know, our exact position, a few meters from where the clashes are
The demonstrators now are just using rocks, using fire to keep the security forces away from the places that they have been taken which is (INAUDIBLE)
as I am standing a few meters from here. The cribs which actually by the government is thought that they are organized a little --
QUEST: Right --
MOSQUERA: In the way that they are thought. They are actually causing a lot of damage to the city. The council just told us this morning that it's
costing around 1.5 million euros, all the damage, all the burning of the garbage cans, of the urban furniture that they have been setting fire to
QUEST: Right --
MOSQUERA: But this is coming from another specific demonstration through the afternoon, Richard?
QUEST: Yes, so essentially, the demonstrations are taking place late in the evening, and during the day, what's happening? Is the city -- is the
city basically paralyzed and shut down in those areas?
MOSQUERA: Absolutely. Also because during the day, there was a worker's general strike that kept most of the businesses closed. But during the
afternoon, there was a big demonstration happening here, downtown, but it was a pacific movement.
There were families, there were young people participating for me, just to say that they do not agree on the verdict made out on Monday by the Supreme
Court of Spain, that was condemning to a 13-9 years in prison to those 12 Catalan and pro-independence leaders. But every night --
QUEST: Right --
MOSQUERA: It's been turning out that all of this specific demonstrations just got to these violent clashes, Richard.
QUEST: Thank you, thank you for joining us, be safe tonight as it gets later, and of course, as the protests may get more ugly. Thank you, sir.
Tonight, in a moment, Huawei shrugs off tensions with the U.S., rising revenues and strong smartphone sales. The USA chief of Huawei, a security
officer is here to talk strategy.
QUEST: Huawei may be frozen out of the world's biggest economy, but it's still the world's biggest telecoms provider. Company-wide revenues jumped
27 percent this past quarter, thanks to surging smartphone sales. And this week, the Chinese tech giant got the green light from Germany to help
develop its 5G network despite being barred by the U.S., Australia and New Zealand.
With me is Andy Purdy, the Chief Security officer for Huawei Technologies in the USA, joins me from New York -- from Washington, good to see you,
sir. The --
ANDY PURDY, CHIEF SECURITY OFFICER, HUAWEI: Thank you --
QUEST: Ability, I mean, these deals that you're getting such as with Germany and others, they are to a large extent tests in some ways or not
tests, but you know, what I mean, to prove your ability to manage and to remain secure from elsewhere.
PURDY: And in fact, more importantly, the efforts of Germany and the road that the European Union is going down is consistent with what all
cybersecurity experts say. You need to have a comprehensive approach to address real cybersecurity risks, and you need to do it relative to the
telecom operators and the equipment vendors.
You need trust through verification because the bad guys can hack through everybody's equipment. So, we need to take these kinds of measures to be
QUEST: Right, but I have no doubt as to the integrity and excellence of Huawei's Telco equipment. Of course you're familiar, the argument is, it's
your own people, it's the Chinese that are the problem. And how do you trust and verify against the government of the company that's providing the
PURDY: Well, two things and it's the kinds of measures that companies need around the world. The first thing is as the former principal deputy to the
director of National Intelligence, regarding the danger of back doors, we can test for that, and secondly regarding access do data, people forget
that the Telecom operators control access to the data.
There are measures that we use in the United States that can guarantee that what we access is completely recorded, completely auditable, completely
governed by the Telecom operators. And so, it's important that we start telling the truth about access to customer networks and customer data. All
equipment vendors need to use the kinds of measures that we're using to help provide assurance and security.
QUEST: But what is that assurance? Because as I understand it, and I mean, I'm going to put it in simplistic terms, of course, the idea -- you know
the arguments better than I do. The idea is that it is the Chinese government that might or at some point in the future access the data of
others inappropriately through your equipment and with your acquiescence.
Now, it's the trust and verify, and clearly you're doing a good job of convincing people that you won't because you're getting more contracts and
your work is going up.
PURDY: Well, it's really a trust through verification. And as the former DNI principal deputy said, and as a recent former FCC, former admiral said
you need to have measures to evaluate the equipment from all Telecom operators -- excuse me, all telecom vendors because the bad guys can hack
through that equipment.
And regarding access to data, it's time to stop saying that we can access or we provide software updates from China. We don't provide software
updates from China, we don't provide software updates --
QUEST: Right --
PURDY: From the Huawei network. We use specially configured laptops approved by the customer after written permission --
QUEST: Right --
PURDY: Each time we record every keystroke, so it's completely recorded, completely auditable. That's how you provide assurance.
QUEST: On the bigger issue sir, whoever it might be, is cyber security the single biggest problem that any CEO faces or should be aware of?
PURDY: Well, certainly, cyber security and privacy are part of the comprehensive universe of risks that face major government and major
private organizations. As we're moving in information and communication technologies, the greater dependence on for example --
QUEST: Right --
PURDY: Five-G, it's more and more important to address the risk and promote resilience to make sure our organizations and governments and
citizens are going to be protected. So, it's much more important that we have a trust --
QUEST: Right --
PURDY: And verification than we did before.
QUEST: Andy, good to see you, sir, have a lovely weekend, I appreciate --
PURDY: Thank you --
QUEST: Your time tonight --
PURDY: You're welcome --
QUEST: Joining us from Washington. And to the last few minutes of trade on Wall Street. Yes, look at that. Well, I was -- I was right and I was
wrong. It didn't get better, it actually got worse. The Dow is sinking, it's down 200 points, it's on China's slowing GDP and reports about Boeing
and the FAA and all the Dow 30 pretty much is down, is a sea of red across the board whichever way you look.
With the Coca-Cola doing the best of the day, that's purely on results. Boeing is down 7 percent, J&J, that's a court case and withdrawal of Talcum
Powder -- you see the markets -- profitable moment after the break.
QUEST: Moment. The allegations against Boeing are serious tonight, that these messages that were sent between the chief test officer and various
other people about MCAS, that they thought it was egregious, that it was too powerful, and that this all happened during the certification process
and nobody knew about it.
And then when the e-mails or the messages were discovered some months ago, they weren't immediately handed over to the FAA or the authorities. These
are serious. And they're serious because they go to further questions of trust about what Boeing did or did not know about MCAS and the 737 Max, and
how far they went to put it crudely, cover up the whole position.
It may just be an innocent mistake, these messages when no one really knew about, thought about or they weren't that significant, but probably not.
The way they read and from the people they were from, they should have rang alarm bells that this new system had become too powerful and was out of
control, and the result of course, we're well aware of.
And that's QUEST MEANS BUSINESS for tonight. I am Richard Quest in London. Whatever you're up to in the hours ahead, I hope it is profitable. There
they're all again actually. The Dow is down, the day is done.