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Interview with Jose Manuel Albares, Spanish Foreign Minister: Ukrainian Refugees Flooding into Europe; U.S. Federal Reserve Increases Interest Rates .25 Percent; IEA: Oil Supply Shock Coming as Russian Output Falls; British-Iranians Back Home After Years of Detention in Iran. Aired 4:30-5a ET

Aired March 17, 2022 - 04:30   ET

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

[04:30:00]

MAX FOSTER, CNN ANCHOR: Welcome back. I'm Max Foster in London with the latest out of Ukraine. Ukrainian authorities say pieces of a downed Russian missile hit a residential high-rise in Kyiv killing at least one person. The debris started a fire but was soon put out.

On Wednesday a theater being used as a shelter in the coastal city of Mariupol was reduced to rubble by Russian shelling. A satellite image taken before the strike shows the Russian word for children had been painted outside. Hundreds of people were believed to be inside at the time but the number of casualties isn't yet known.

And as the fighting rages on at home more and more Ukrainians are finding refuge abroad. More than 3 million of them have done that so far, according to the U.N. refugee agency. Poland has taken in the lion share of Ukrainian refugees. A number that it says has just grown to more than 1.9 million. Romania, Moldova, Hungary and Slovakia have taken in the next most refugees.

The flood of refugees is especially hard on Moldova, one of the poorest countries in Europe. Its Prime Minister has said that so many Ukrainians have come in that one out of eight children in Moldova now is a refugee. She says about 3/4 of them are staying with Moldovan families because there are few other places to place them.

But Spain is willing to help saying it's ready to take some Ukrainians from Moldova and send more aid to that country. Spain's Foreign Minister Jose Manuel Albares is touring the countries affected by the refugee crisis. He's joining us now him from Warsaw in Poland. Thank you for joining us. What's been more striking to you about your tour of that region?

JOSE MANUEL ALBARES, SPANISH FOREIGN MINISTER: The part of when I was yesterday in Medyka at the border between Poland and Ukraine, seeing a very young women with children and no men. It was a real vision of war and talking to those women who have lost everything. One of them was telling me that her best friend, 17-year-old was killed and that her house was bombed and she didn't know where his father was. This is real humanitarian disaster.

FOSTER: One of the most warming parts of this story, one of the few warming parts of the story is how countries like Poland have opened the borders. How Moldovan families have opened their doors and allowed people in. And how other countries perhaps further away haven't done quite as much. But have you been very impressed by those East European countries and what they managed to do with smaller budgets than the likes of Spain or the U.K. or Germany?

ALBARES: Yes, very especially with Moldova, Poland as well. Poland giving them a tremendous amount of people. But we have taken up this issue in Brussels within the European Union to accept any people coming from Ukraine. But in Moldova, one of the poorest countries in Europe, the number of refugees that have gone through Moldova equals 10 percent of the Moldovan population, which is a very small country and a very large part, 80 percent because they don't have shelters. They don't have refuge centers. There are very few refuge centers such as the one that that I visited yesterday at the capital, are being taken by the Moldovan families.

And what's sure is that the Spain will expand for them and we will back them.

[04:35:00]

We will bring Ukrainian refugees, we have already 2,000, and we will be bringing many more thousands in the next few weeks. And we will provide with humanitarian assistance Ukraine and Moldova.

FOSTER: 2,000 isn't very much, is it, frankly, when you talk about 2 million going into Poland?

ALBARES: No, it's not very much but the war started two weeks ago and what we bring them is not just the treatment, it's people that unfortunately will be probably be staying very long among us and some of them will remain forever in our society.

So, the places that we have provided in Spain includes permanent housing, permanent work and also education for the children. We have already prepared 20,000 places like this and we are going to scale up. It's already four Spanish cities and we are putting all together. We are taking decisions very, very quickly. The war is only a few days old and unfortunately, it seems that it will last very long.

FOSTER: Do you worry, I mean, a lot of people say to me who aren't necessarily informed about all of this, we talk about the lone millions of refugees coming out from Ukraine, when it's a country of more than 40 million, does that mean that many more are going to be crossing the borders or that the crisis for the refugees largely will remain within Ukrainian borders?

ALBARES: Well, yesterday when I was in Medyka in the border between Poland and Ukraine and I was talking with the mayor of the city next to the border, he was explaining to me that what we have seen is the first wave. Those that have relatives in Poland and in some European countries, those that speak other languages and Ukrainian. But he knows there is at least as many people on the border, people that have probably never left Ukraine, that don't speak any other language, that Ukrainians that have no relatives. People that when they cross the border, they will need everything. So, yes, as the war continues, and it looks like it, because of this illegal aggression of Russian and this every day escalation, more will come. Just to see what we are talking about, all through the '90s during all the Balkan wars, 2.5 million people left all of those countries, the former Yugoslavia. So many people have gone (INAUDIBLE).

FOSTER: OK, Jose Manuel Albares we really appreciate your time on the program today. And thank you for giving your insight into the refugee crisis around those borders.

Spanish authorities have detained a super yacht called Crescent Meanwhile. Spain's Minister of Transport says they're trying to establish whether it belongs to anyone sanctioned due to Russia's invasion of Ukraine. The 135-meter-long yacht with a Cayman Islands flag. It's the third yacht detained by Spain in a week.

The U.S. Fed is in somewhat of a high wire act trying to control inflation without causing a recession. We'll look at how the world is reacting to that. And the world is also looking at an oil supply crisis. The warning from the International Energy Agency just ahead.

[04:40:00]

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FOSTER: Stocks in Europe could be in for another big day after the U.S. Federal Reserve announced it was raising interest rates. Markets are up right now in early trading. Let's have a look. You can see they're only up by 1.1 percent -- 0.1 percent I should say. The U.S. Fed's increased rates a quarter of a percentage point on Wednesday. Its first big step to help rein in inflation and the first hike in more than three years. As many as six more increases could come this year given the consumer prices are rising at the fastest pace in 40 years. The feds slashed rates to near zero at the start of the pandemic. So even with this hike it's still relatively cheap to borrow money, but Chairman Jerome Powell warns the war on Ukraine adds another element of uncertainty.

(BEGIN VIDEO CLIP)

JEROME POWELL, CHAIRMAN, U.S. FEDERAL RESERVE: The implications of Russian's invasion of Ukraine for the U.S. economy are highly uncertain. In addition to the direct effects from higher global oil and commodity prices, the invasion and related events may restrain economic activity abroad and further disrupt supply chains.

(END VIDEO CLIP)

FOSTER: Live now to Hong Kong and CNN's Kristie Lu Stout. There are so many uncertainties. The markets absolutely hate that. But actually, what was interesting about yesterday was how there's going to be many more rate increases in the U.S. that's going to affect all the other markets around the world.

KRISTIE LU STOUT, CNN CORRESPONDENT: Yes, and it's injecting a lot of confidence into the markets. In fact, shares here in the Asian Pacific region all closed in the green. They rallied on Thursday after the U.S. Federal Reserve, as expected, hiked interest rates in order to tame inflation. Inflation at its highest levels in years. You can look there at how the region has reacted to the news and they all ended in the green.

You see Japan's benchmark Nikkei index closed up 3.46 percent. Australia adding 1 percent. At the end of the day sole cost be The anything kay closed up. Added more than 1 percent. Seoul Kospi adding 1.3. Shanghai Composite adding 1.4 percent. And check it out, here in Hong Kong a strong gain at the end of the day adding 7.04 percent. Today's gains added to the surge that we witnessed on Wednesday when Chinese shares experienced their strongest days in years after Chinese officials stepped forward and pledged to help boost economic growth in China and also pledged to stabilize the markets.

Earlier in the week we saw a major selloff in Chinese shares over concerns about the ongoing COVID-19 outbreak in China. It's growing. It's the worst outbreak since the days of Wuhan in early 2020. And also concerns about differences between the U.S. and China in regards to Ukraine and the war there. Those concerns perhaps alleviated somewhat with the news that came out just this afternoon local time of a Chinese envoy in Lviv pledging support to Ukraine.

Now from Asia this day, we are also monitoring U.S. futures. Let's bring up that data chart for you. On Wednesday we saw that there was a volatile day of trade there. But look, futures all in the green but marginally so. Nasdaq futures up just a touch over 0.02 percent. That's the picture right now.

Look, analysts say the impact of the invasion, of the ongoing conflict, the war in Ukraine, of related sanctions, the impact it's all going to have on global economic growth is uncertain. They been saying investors should be cautious but also must maintain balance. I want you to listen to this from JPMorgan Asset Management.

(BEGIN VIDEO CLIP)

KERRY CRAIG, GLOBAL MARKET STRATEGIST, JP MORGAN: We would argue that the hardest decision right now is to do very little and actually think more around about imbalance in portfolios.

[04:45:00]

So, it would be a case of being very impatient when it comes to being an investor and just holding firm when it comes to sort of a more neutral stance in portfolios rather than moving out of risk assets completely. Given that, you know, there is not a clarity around exactly what might happen in the coming weeks or months.

(END VIDEO CLIP)

STOUT: You know, throughout the conflict in Ukraine prices for energy, for commodities have been rising including commodities like wheat which is a key export from Russia and Ukraine. All of this could be a drag on global economic growth especially if consumers make the decision to hold back on spending. Max, back to you. FOSTER: Kristie, thank you.

Russia has avoided going into default on its debt for now and it's making good on interest payments. On Wednesday Russia paid $117 million to investors from its foreign reserves which had been frozen by the U.S. A treasury spokesman says the payment will be allowed to go through though.

Meanwhile, the International Energy Agency says an oil supply shot could be coming. The agency says Russia may be forced to limit its output by 30 percent as demand in Russia slumps and major oil companies trading houses and shipping companies reject it exports. Eleni Giokos is in Dubai with the very latest. And you know, it is your region, isn't it, that would be forced to step in to make up for shortage of supply from Russia.

ELENI GIOKOS, CNN CORRESPONDENT: Absolutely, and that's the hope. I guess, that's the anticipation because it's the UAE and Saudi Arabia that has currently excess capacity that they can tap into to alleviate the shortfall or the deficit that will be traded by Russia. Here is the International Energy Agency talking about an oil supply shock absolutely is creating so much concern about what it would mean for the oil price which has been extremely volatile over the past few weeks since the start of the war.

But that is the issue, that the volatility is showing that there's a lot of speculation, Max, in that oil price. How much does it really have to do with supply and demand? And that has been the stance of the OPEC plus countries that they say in terms of fundamentals, supply is actually in, you know, sort of unison with what they see on the demand front. But if Russia is experiencing issues in terms of being able to sell its oil, some companies are, for instance, not going ahead and buying some of those barrels of oil from Russia, that could create a bigger deficit.

Now importantly, the British PM came to visit the Crown Prince of Abu Dhabi here in the UAE and also the Crown Prince of Saudi Arabia, two very strategic relationships in terms of building up and also securing an increase in oil supply.

We haven't heard any public pledge in terms of what that would look like. Many people say that Boris Johnson walked away with not being able to fulfill that expectation. But importantly here the region has been trying to stay diplomatic and very neutral. They have been very vocal about the humanitarian impact and have said that they are calling for de-escalation.

But it's also important for the OPEC plus countries to maintain a relationship with Russia. Because that means more stability in the oil and gas markets going forward. It's a fine balance. British PM really wanted to walk away with a commitment. We heard some news a few weeks ago that perhaps that could be on the cards but then Saudi Arabia and the UAE have not actually publicly said that they would do so. So, what is the supply/demand scenario going to look like? It's going to be a big question. In the meantime, inflation is hitting all countries, Max, around the world as oil prices rise. FOSTER: Eleni in Dubai, thank you.

The top Chinese diplomat in Ukraine says China will, quoted, never attack Ukraine. That's according to a press release from the regional government in Lviv. The Chinese ambassador is quoted as saying, we will help, especially economically. We will act responsibly and that China is a friendly country to the Ukrainian people. This show of support comes after U.S. intelligence found that Russia had asked China for support in its invasion of Ukraine. Something Moscow and Beijing have both denied.

Still to come on CNN NEWSROOM, the long struggle is over to free a British woman detained for six years in Iran. Details just ahead.

[04:50:00]

(COMMERCIAL BREAK)

FOSTER: Officials say at least 4 people are dead and more than 160 injured after a strong earthquake that hit Japan. Wednesday's quake was also stronger than initially reported with a magnitude of 7.4. Japan's Prime Minister says there are no problems at the nation's nuclear plants. Whilst a tsunami warning issued after the quake was later canceled. The earthquake struck east of Fukushima prefecture where another quake and tsunami led to a meltdown at the nuclear plant 11 years ago.

The shaking derailed this high-speed train on Wednesday leaving almost 80 passengers trapped for hours, but they later escaped through an emergency exit without anyone getting injured incredibly.

Now a British-Iranian woman held by Iran for 6years is now back home here in the U.K. Charity worker Nazanin Zaghari-Ratcliffe was detained in 2016 while visiting relatives in Iran. She's now at home with her husband and daughter who was just a toddler when she last saw her. CNN's Natalie Bashir has more on her release.

(BEGIN VIDEOTAPE)

NADA BASHIR, CNN PRODUCER (voice-over): Free at last. Nazanin Zaghari- Ratcliffe finally home after almost six years in detention in Iran. The end of a long and arduous fight for freedom for both Nazanin and her family. Gabriella was too young to understand the serious nature of her mother's situation. Arrested and detained in Iran in 2016. The coming years would see Nazanin separated from her daughter. Seen here just a matter of months ago delivering a speech on her mother's behalf. Written from a jail cell Tehran.

GABRIELLA RATCLIFFE, NAZANIN ZAGHARI-RATCLIFFE'S DAUGHTER: One day may we live in a world where we do not need to fight for our freedom.

BASHIR (voice-over): The British-Iranian national had been on vacation visiting family with her daughter when she was arrested, accused of working with organizations allegedly plotting to overthrow the Iranian regime. It's an accusation she has vehemently denied.

[04:55:00]

But the situation was further complicated in 2017 when Boris Johnson then foreign secretary made an appalling blunder inaccurately telling Parliament, she had been training journalists in Iran.

BORIS JOHNSON, THEN BRITISH FOREIGN SECRETARY: I acknowledge that the words I used were open to being misinterpreted and I apologize.

BASHIR (voice-over): Zaghari-Ratcliffe's husband, Richard, tirelessly championed her case throughout her detention embarking on hunger strikes to pressure the British government to take tougher action against the Iranian regime.

RICHARD RATCLIFFE, HUSBAND OF NAZANIN ZAGHARI-RATCLIFFE: The government strategy isn't working. The government's approach is unchanged.

BASHIR (voice-over): After several years into Iran's notorious Evin prison, Zaghari-Ratcliffe was placed under house arrest due to the coronavirus pandemic. And in April 2021 she was handed a further one- year sentence and a travel ban on charges of spreading propaganda against the Iranian regime. In the background ongoing negotiations to revive Iran nuclear deal, controversy around a now settled multi- million-dollar debt to Iran pre-dating the Iranian revolution and according to Foreign Secretary Liz Truss, tenacious British diplomacy.

LIZ TRUSS, BRITISH FOREIGN SECRETARY: I did pay tribute to foreign officials who have worked tirelessly for years to make this happen.

BASHIR (voice-over): For Nazanin's family, the wait for her return has been long and difficult. Now their fight for freedom is finally coming to a close.

R. RATCLIFFE: I think, you know, it's going to be the beginning of a new life.

BASHIR (voice-over): Nada Bashir, CNN, London.

(END VIDEOTAPE)

FOSTER: Thanks for joining me. I'm Max Foster in London. Our breaking news coverage of the war in Ukraine continues though "EARLY START" with Christine Romans and Laura Jarrett. You're watching CNN.

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