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E.U. Countries to Ration its Energy Supply; Europeans Hope to Have a Warmer Winter; More Russian Troops Crosses Northern Ukraine; Ukrainians Hit Key Bridge to Russians; Bad Memories Can't be Deleted by Simple Apology; House Speaker Pelosi Looking to Visit Taiwan. Aired 3-4a ET
Aired July 27, 2022 - 03:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[03:00:00]
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ROSEMARY CHURCH, CNN ANCHOR: Hello, and welcome to our viewers joining us from all around the world. I'm Rosemary Church.
Just ahead on CNN Newsroom, the European Union agrees to ration natural gas facing down severe supply shock. But there is concern about what this reduction means in the months ahead.
Past allies, current rivals and drastically different visions for the future. Donald Trump and Mike Pence delivered dueling speeches on their plans for the Republican Party.
Plus, as the U.S. Federal Reserve gets ready to raise interest rates to fight inflation, the IMF see storm clouds ahead for the global economy.
UNKNOWN: Live from CNN center, this is CNN Newsroom with Rosemary Church.
CHURCH: All right, thanks for being with us.
Let's start here. Europe is bracing for a cold winter with the prospect of Russian natural gas used to heat homes and businesses in short supply. E.U. members have agreed to voluntarily reduce demand by 15 percent from August through March, although the plan is loaded with exemptions.
It comes as Russia's state-owned Gazprom is once again cutting supplies to Europe via the Nord Stream 1 pipeline which runs from northwest Russia into Germany. The company says it's cutting capacity to just 20 percent while it makes repairs.
Well, Jonathan Stern is a distinguished research fellow at the Oxford Institute for Energy Studies and he joins me now from London. Thank you so much for being with us.
JONATHAN STERN, DISTINGUISHED RESEARCH FELLOW, OXFORD INSTITUTE FOR ENERGY STUDIES: Pleasure. CHURCH: So, Europe's energy requirements over the upcoming winter
months, could very well test the E.U.'s unity. How fragile is this new agreement to Russian voluntarily by 15 percent and will that be enough in the end?
STERN: Well, we don't really know whether it'll be enough. And your correspondent mention that we're all praying for a warm enter, but we're also hoping that the liquefied natural gas supply not least in fact from the U.S. will hold up well. You recently had a problem with one of the major projects in the U.S. which means we have less LNG than we hope.
We're also really hoping that the Asian situation means that a country like China will continue its low imports of LNG. But there are a lot of moving parts here and if any one goes against this, then we are going to struggle in Europe, particularly countries that are very dependent or have traditionally been dependent on Russian gas like Germany, Italy, Czech Republic.
So, it's really a question of individual country situations, rather than a European situation.
CHURCH: So, what is to stop Russia from cutting energy supplies even more just to squeeze Europe and put even more pressure on that fragile unity looking for cracks there?
STERN: Well, I think Russia has two contradictory incentives. The first incentive is that, as you say, there is a desire, particularly from President Putin, to ram the sanctions down our throats and essentially to say you impose these sanctions, and now they have consequences on you and you need to recognize that.
And the second is of course to continue to earn money from exporting energy to Europe. Russia has traditionally earned a great deal of money from exporting natural gas, but also oil and coal which have also been sanctioned and will probably phased out coal very shortly and oil towards the end of this year.
So, Russia is an interesting kind of economic and political situation where it has some contradictory incentives to both put pressure on Europe, but also continue to earn money.
CHURCH: So, what alternative energy supply should nations like Germany be considering instead of relying so heavily on Russia's oil and gas and falling victim clearly to Russia weaponizing its energy supplies?
[03:05:03]
STERN: Well, essentially, the greenhouse gas reduction targets which Europe has adopted meant that fossil fields will be phased out over a longer period. The problem is the period of this year, next year and probably up to 2026 when it's going to be very, very difficult to move into other energy sources or reduce energy demands sufficiently quickly. So, we can move back towards coal in some countries, but of course
that increases our greenhouse gas emissions, makes it much harder to meet targets that we're already struggling to meet. We can introduce more efficiency measures, which we are doing. But essentially, over such a short period the adjustment can only happen if we start to struggle in terms of energy supply through rationing, and hence this E.U. measure to try and put in place a 15 percent cut.
CHURCH: Right. And of course, as we've mentioned, this is a voluntary cut. What happens if some nations don't do their part and there just isn't enough energy to warm every home that's ever needed to be warmed across the European continent?
STERN: Well, first of all, homes, that is residential customers, are protected from this. Residential customers are prioritized and will not be cut under any circumstances. But the key thing for Europe is that some countries are very much exposed, as I mentioned before, Germany, Italy, Czech Republic, Slovakia. Some countries are not really affected. Spain, Portugal, the U.K., even though it's not an E.U. member because they never depended very much on Russian, particularly Russian gas.
So, for some countries, this won't be a big problem. But for countries that have traditionally been very dependent on Russian gas, if the weather goes against us, then it's going to be very, very tough. And it will probably impact industrial, the industrial sector. And I think your correspondent mentioned the risk of recession, which we already have. That risk will be heightened, and the recession could be deeper as a result of this.
CHURCH: All right. Jonathan Stern, thank you so much for joining us. I appreciate it.
STERN: Pleasure.
CHURCH: And CNN's Clare Sebastian is following developments live this hour. She joins us now from London. Good to see you, Clare.
So, this tested E.U. unity, didn't it, and while it did pass this time, could energy demand test that unity again come winter?
CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, Rosemary. There are still variables out there, significant variables that the European Union has no control over. One, Russia could still cut supplies even further. They've done it this much, there's no reason to suggest that they might stop here.
Of course, other than the fact that they are still making money from their energy exports to Europe. But the other is winter is coming and it could be, you know, extremely cold which could test E.U. storage capacity even further.
And finally, the E.U. was already getting gas from other sources like LNG from the U.S. like Gazprom from the Middle East there. Those supplies could also be disrupted. So, it's facing a lot of variables out there and I think this is why it was so crucial that they put on the united front here, that they were able to send a message.
That despite the fact that one member voted against, that was Hungary, despite the fact that they had to put compromises into the -- into the deal itself, that they were able to come together and to agree at least on principle that they need to work together to sort of share the pain of this and to bring down their gas usage in order to remove some of Russia's leverage here.
CHURCH: And you did touch on this, but Russia cut energy supplies via Nord Stream 1 to 20 percent this morning. What will the economic effect of this be, and can Europe store enough gas through the winter?
SEBASTIAN: So, the thinking is that even with Nord Stream at 20 percent, Europe in theory should still be able to get to its energy storage targets and still have a little bit left overcome the spring, which will mean that they can avoid shortages in the winter.
Of course, the variables that I just mentioned, if they do come to part, then that will threaten the storage capacity in Europe and could lead to shortages. But in terms of the economic impact, some of that is already here, Rosemary. Inflation in the European Union is at 9.6 percent. Gas prices around the world are soaring, particularly in the last week, U.S. gas prices are up some 20 percent.
Here in Europe, they are up about 45 percent in the last week, back to around their much higher is 10 times higher than a year ago. All of that of course fills into the economy.
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The European Central Bank is starting after 11 years to raise rates. But there are -- there is the threat that inflation could still go higher, and that economies could tip into recession. We had a dire warning from the International Monetary Fund that if Russia cuts gas to Europe fully that could bring down global growth, even lower than they are already forecasting.
So, the significant worry up there, and Europe is already feeling the pain of this.
CHURCH: All right. Clare Sebastian, many thanks for bringing us up to date on that situation. We'll continue to follow of course.
Well, Russia has launched a series of new strikes against Ukraine. Two missiles hit an industrial district in Kharkiv earlier this morning, according to the city's mayor. He says rescuers are already on site sorting through the rubble. And you can see how Russian troops are closing in on Kharkiv from the east.
The mayor of Mykolaiv says port infrastructure was damaged in a massive missile attack on Tuesday. The city has been blasted almost every night for the past month. The Odessa region was also bombed for the second time since Saturday, leaving behind this small ring wreckage.
Ukraine's president says the Russian occupiers fired missiles designed to destroy warships at ordinary houses.
Well, meanwhile, Ukrainian forces have reportedly attacked a key bridge used by the Russians to deliver reinforcements to occupied Kherson. Ukrainian authorities say the additional troops are being sent to bolster positions in the south of the country.
Video posted online earlier and geolocated by CNN shows heavily -- heavy equipment on the move clogging highways while crossing from Russia through the Crimean Peninsula and then into the Kherson region.
We now go to CNN's Ivan Watson who is live in Odessa. So, Ivan, talk to us about the latest activity on the frontlines.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Right. Well, in the east of the country the Russians continue to press on Ukrainian ground forces fighting around a power plant, for instance, near the eastern town of Bakhmut with the Ukrainians on the defensive.
In the south of the country, it is the Ukrainians who are pressuring the Russians. And they claim to be making advances on the ground, while also targeting things like the supply routes. The reports of this bridge, the Antonovsky Bridge which is critical for the Russian occupied southern city of Kherson to get across the Dnipro River, that has been hit again overnight with Russian occupation officials conceding that the bridge has been seriously damaged by long-range Ukrainian rocket attacks.
That Ukrainians say that is part of their strategy to try to hurt efforts for the Russians to reinforce and resupply their forces in the Russian occupied south of this country.
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WATSON: Scenes from Ukraine southern front during the first months of the war. Footage shared exclusively with CNN shows Ukrainian senior lieutenant Andrii Pidlisnyi hiding in shell craters, flying a drone to call in artillery strikes on Russian positions.
But the team of spotters also narrowly escapes long-range fire from the Russian military. Months after filming these videos, Pidlisnyi is still fighting on the southern front.
Were the Russians in this village before?
ANDRII PIDLISNYI, UKRAINIAN ARMED FORCES: Yes.
WATSON: The Ukrainian military is fighting to claw back territories seized by what this commander describes as well-prepared Russians.
PIDLISNYI: It's very slow, the process to take back our territories. But step by step, and with the help of Western guns, vehicles and so on, artillery systems, we do that.
WATSON: This month, my team and I travelled the length of the southern front from the critical ports of Odessa to the edge of the Donbas region. I spoke to people willing to risk their lives against the Russian war machine.
In the city of Kryvyi Rih, Ukrainian forces storm a building. It's actually a training exercise to prepare these men for one of the most dangerous forms of modern warfare, urban combat. The commander here was gravely wounded, pushing Russian backed separatist out of cities in the eastern Donbas region in 2014.
"We have a duty to liberate our territories," he says, this is our land, and we will not give it to anyone. That confidante shared by a regiment of frontline troops in eastern Ukraine.
[03:15:03]
They show off recently arrived British made land rovers, and this armored personnel carrier. I just noticed something, take a look over here at this tire. Made in Russia. This was Russian.
VILNYI, AZOV KYIV REGIMENT: It was a Russian car. But our soldiers fight him and take this car.
WATSON: You captured it? But the war is taking a dreadful toll here. Day and night, Russian rockets S-300s surface-to-air missiles repurposed to strike ground targets pound the frontline city of Mykolaiv. And more appear to be on the way. Ukrainian resistance groups shared this exclusive footage with CNN taken just days ago. Showing the arrival of a train full of missiles in the occupied southern Kherson region. Later confirmed by satellite images provided to CNN by Maxar.
But with the help of U.S. long-range rockets known as HIMARS, Ukraine has been targeting Russian ammunition depots. Senior lieutenant Pidlisnyi says he noticed a difference on the front lines.
PIDLISNYI: We've had about two or three weeks when they haven't enough ammunition to fight us.
WATSON: Still, he predicts it will take a long time for Ukraine to win the war in the south.
PIDLISNYI: I'm not sure that we will win until the end of this year. Maybe to the end of next year.
WATSON: Before I go, Pidlisnyi shows me captured Russian passports and driver's licenses. When did you capture these?
PIDLISNYI: About some weeks ago.
WATSON: Russian men ranging from 22 to 41 years old who Pidlisnyi speculates are now dead.
They look like you.
PIDLISNYI: Yes, they look like me.
WATSON: They have similar names. PIDLISNYI: Yes. But they are our enemies. I'm standing in my
territory and they came to me to capture to capture our territory. To kill me. To kill maybe my parents.
WATSON: This is what Ukrainians are fighting for.
(END VIDEOTAPE)
WATSON: Now one of the questions here is, what about the civilians living under Russian occupation, Ukrainians who Moscow claims it is trying to liberate from the Ukrainian government. Well, we've seen images of thousands of civilians stuck trying to cross Russian checkpoints from Russian occupied territory in a town called Vasylivka to the Zaporizhzhia region not being allowed through.
Ukrainian officials claiming more than 1,000 cars trying to get through there. Since the beginning of the war have been reporting on large groups of Ukrainian civilians trying to flee this Russian occupation consistently being stopped by Russian forces from leaving their territory which suggests there are large groups of people who simply do not want to live under this Russian military occupation force. Rosemary?
CHURCH: All right. Ivan Watson in Odessa, many thanks for bringing us up to date on that.
Well in just a few hours, American basketball star Brittney Griner will testify for the first time in her criminal trial. She is being detained in Russia since February on drug smuggling charges.
CNN's Brian Todd has been tracking the case.
BRIAN TODD, CNN CORRESPONDENT: Inside her cramped cell in a Russian courtroom, Brittney Griner stands and displays pictures of loved ones and supporters. During the fifth hearing of her trial her lawyers on Tuesday called to the witness stand a narcologist, Mikhail Tetyushkin who told the judge that based on the basketball star's prescription, the cannabis oil found in her luggage was likely used for medicinal not recreational purposes. Tetyushkin later explained his testimony to reporters.
MIKHAIL TETYUSHKIN, NARCOLOGIST, DEFENSE WITNESS IN GRINER TRIAL (through translator): The main uses for medical marijuana where it is allowed of course are pain relief, anti-inflammatory and relaxing effects. Athletes are among those who actually used it as all three components are usually present in sports-related traumas. Naturally, this does not legalize it in any way in the Russian Federation.
TODD: Why that caveat at the end?
JAMISON FIRESTONE, ATTORNEY WHO PRACTICED IN RUSSIA: Believe it or not it may have been added on the end just because sometimes these people who are called into highly politicized trials are also afraid for their own safety.
TODD: Griner has pleaded guilty to drug smuggling charges. Analysts say that's mainly because nearly 100 percent of criminal trials in Russia end in convictions anyway. Prosecutors have accused her of intentionally smuggling the cannabis oil into Russia, which her lawyers again on Tuesday denied.
ALEXANDER BOYKOV, DEFENSE ATTORNEY FOR BRITTNEY GRINER: We are still saying that she involuntarily brought it here because she was in a rush, as she said packing and this medication, she just forgot to take it out of her luggage.
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TODD: This is a crucial week in Griner's trial. Her lawyers say that on Wednesday she'll take the stand on her own behalf. Since Griner has already pleaded guilty to a charge that could land her as much as 10 years in prison and her lawyers are looking for leniency in her sentencing, is it a good idea for her to testify?
FIRESTONE: It can't hurt and I, again, the idea is to paint her a sympathetic, I think that the judge has been given an order on how much time to give, maybe they have been given some leeway. But probably what's happened is in order to come down saying we'd like you to rule within x and y between these two periods.
TODD: The U.S. government has characterized Griner as wrongfully detained by Vladimir Putin's regime. Analysts say as soon as she is sentenced negotiations are likely to begin in earnest for a swap for her. But some now believe the attention her case has drawn could be working against her.
SUSAN GLASSER, CNN GLOBAL AFFAIRS ANALYST: I think the more that Vladimir Putin and his government believe that they have an American celebrity athlete on their hands, of course the higher price that they may seek to extract from the United States for winning her release.
TODD: A top official from the U.S. embassy in Moscow says she spoke to Griner in court on Tuesday and that Griner told her she is doing as well as can be expected, but the analyst we spoke to are worried about the conditions that Griner is facing in custody. They say that Russian prisons are overcrowded, dirty, violent, and that the women's facilities are sometimes worse than the men.
Brian Todd, CNN, Washington.
(END VIDEOTAPE)
CHURCH: We are monitoring a developing story in the Philippines which was struck by a 7.0 magnitude earthquake early Wednesday. The U.S. Geological Survey says the quake hit northern Luzon, the country's most populous island shortly before 9 a.m. local time.
This video shows people running from falling debris as a tower shock, officials say many homes and buildings are damaged. The tremors were felt in Manila more than 400 kilometers from the epicenter, shaking chandeliers and furniture. Rescue and relief teams are being deployed and the president is expected to visit the affected areas. We will bring you any new developments as we learn more. Well just ahead, the pope again acknowledges the suffering of
indigenous Canadians as schools run by the Catholic Church. But for some, the apologies are falling short.
Plus, Mike Pence and his former boss Donald Trump were in Washington laying out their plans for the future in dueling speeches. What they said, that's next.
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CHURCH: Well, Pope Francis once again acknowledged the suffering of indigenous Canadians in Catholic run schools at an outdoor mass in Edmonton Tuesday. But some indigenous leaders say, the pope's apologies are falling short.
[03:25:06]
CNN's Paula Newton has the story.
PAULA NEWTON, CNN CORRESPONDENT: After that historic apology from the pope and apologizing to indigenous people here on Canadian soil, this was a day of healing and of communion. And the highlight is the open- air mass that he conducted in a football stadium.
And certainly, people were so enthusiastic to see him in that pope mobile. He did a good tour of the stadium. Even embracing babies and blessing them. Now, so many people this was the highlight of what the pope was going to be doing.
I want you to hear from this woman who drove 10 hours to see the pope. She is a survivor of residential schools and her uncle died in one of those residential schools. I want you to listen to her now.
(BEGIN VIDEO CLIP)
NEWTON: What did you think about what he said yesterday and his visit?
JOAN CATARAT, RESIDENTIAL SCHOOL SURVIVOR: I don't know. I don't know if it'll change anything for these young generations. Because the damage is already done.
(END VIDEO CLIP)
NEWTON: For many reasons there was that mixed reaction to the pope's apology. One of the most credible voices are coming from Murray Sinclair. He chairs the truth and reconciliation commission. He was one of the first people to ask, as a call to action from that report, to ask to for the pope to come to Canadian soil and apologize. But he called the apology, while he appreciated it, saying it still left a deep hole.
Saying, in fact, that it is important to underscore that the church was not just an agent of the state, nor simply a participant in government policy, but was a lead co-author of the darkest chapters in the history of this land. It is an important distinction in the apology itself, not just to ask
for forgiveness for the actions of individual Catholics but for the Catholic Church as a whole and acknowledging that role.
Now, look, the papal visit continues. This will continue to be occasions of feeling and of remorse, we will see him travel to Quebec City and continue meeting with more indigenous survivors.
Paula Newton, CNN, Edmonton, Alberta.
CHURCH: Tensions are running high between the United States and China amid talks of a visit by U.S. House Speaker Nancy Pelosi to Taiwan. U.S. officials are working to convince Pelosi of the diplomatic risks of her potential trip. Here's what President Biden said about it last Wednesday.
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UNKNOWN: Mr. President, do you think it's a good idea for Speaker Pelosi to travel to Taiwan this summer?
JOE BIDEN, PRESIDENT OF THE UNITED STATES OF AMERICA: Well, I think that the military thinks it's not a good idea right now. But I don't know what's the status of it is.
(END VIDEO CLIP)
CHURCH: Sources familiar with Pelosi's plans say she has invited both Democrats and Republicans to accompany her and now Beijing is warning of serious consequences if the speaker goes ahead with the visit.
CNN's Selina Wang has details.
SELINA WANG, CNN CORRESPONDENT: Beijing is furious over a potential trip by House Speaker Nancy Pelosi to Taiwan. Beijing has said it would take resolute and powerful measures if Pelosi were to visit. And just yesterday, China's defense department urged the U.S. to cancel Pelosi's visit. The department spokesperson said, quote, "if the U.S. insists on taking its own course, the Chinese military will never sit idly by. And it will definitely take strong actions to thwart any external forces interference and separatist schemes for Taiwan independence, and resolutely defend national sovereignty and territorial integrity."
Now it's impossible to overstate just how important Taiwan is to the Communist Party and its legitimacy. China sees the self-ruled island as a breakaway province that must be reunified with the mainland. Beijing is against any move that appears to acknowledge Taiwan as an independent country, or makes the U.S. relationship more formal.
There have been recent U.S. congressional visits, but if Pelosi goes to Taiwan, she would be the highest-ranking U.S. official to go there since then House Speaker Newt Gingrich in 1997. And the timing of this potential visit comes at an extremely sensitive time. China's military is celebrating its founding anniversary on August 1st, we are just months away from a key political meeting when Xi Jinping is expected to seek an unprecedented third term. And some experts say this increases the chances that China will overreact and take rash action to avoid looking weak at this critical moment.
U.S. officials have told CNN that China could impose a no-fly zone around China. A prominent hawkish voice in the country has said Beijing's reaction would involve a, quote, "shocking military response." Some experts say a visit could further compromised Taiwan's security.
And notable is that in Taiwan, media coverage of this trip has been muted. In fact, on Tuesday, Taiwan's foreign ministry reiterated that it has no information on the potential visit by House Speaker Nancy Pelosi.
[03:30:07]
Now on the other hand, important here is that the Chinese government has not announced any details about how it could retaliate. Other experts have told me that this is by design. The point is that the uncertainty will lead Pelosi to back out, but that Xi Jinping does not actually want to, and is not ready to risk a military conflict at a time when stability is so critical.
Selina Wang, CNN, Beijing.
CHURCH: From unlikely allies to bitter rivals. Former U.S. President Donald Trump and his former Vice President, Mike Pence are both eyeing the 2024 presidential race. And they were in Washington on Tuesday giving speeches at separate events.
CNN's Jeff Zeleny has details.
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JEFF ZELENY, CNN CHIEF U.S. NATIONAL AFFAIRS CORRESPONDENT (voice- over): Former President Donald Trump returned to Washington for the first time since leaving office and picked up right where he left off.
DONALD TRUMP, FORMER PRESIDENT OF THE UNITED STATES OF AMERICA: I ran for president, I won. And I want a second time, did much better this second time. Feel a lot better.
ZELENY: What began as a policy speech about crime, immigration, and the border evolved into a litany of familiar Trump grievances. As he inches ever closer to launching another bid for the White House.
TRUMP: What a disgrace it was but, we may just have to do it again. We have to straighten up our country. We have to straighten up our country.
ZELENY: The former president blasted the work of the congressional committee examining his role in the January 6 attack, even amid new signs the Justice Department is intensifying its own investigation.
TRUMP: Never forget everything this corrupt establishment is doing to me is all about preserving their power and control over the American people. They want to damage you in any form. But they really want to damage me so I can no longer go back to work for you. And I don't think that's going to happen.
(APPLAUSE)
ZELENY: While Trump seize on the nation's crime rates and repeatedly praised the efforts of police, he made no mention of the brutality endured by scores of officers at the capitol as he sought to cling power after losing the 2020 election to Joe Biden.
The stark choices facing Republicans were laid bare, as he shared the day's spotlight with former Vice President Mike Pence who implored Republicans in a speech only hours earlier to turn the page.
MICHAEL PENCE, FORMER VICE PRESIDENT OF THE UNITED STATES OF AMERICA: Now some people may choose to focus on the past, but elections are about the future. And I believe conservatives must focus on the future to win back America.
ZELENY: The dueling speeches offered competing visions for the GOP. With Pence suggesting it was time to look forward, not back.
PENCE: In order to win, conservatives need to do more than criticize and complain. We must unite our movement behind a bold, optimistic agenda.
ZELENY: While Trump has appeared at countless rallies since leaving office, the speech served as a loud rebuttal to months of testimony from people who served in his own White House about what he did and didn't do on the January 6th attack.
TRUMP: They're doing the exact same thing with January 6 as they did with all these other previous assaults in our country. So, where does it stop, where does it end? it probably doesn't stop because despite great outside dangerous, our biggest threat in this country, remains the sick sinister, and evil people from within.
(END VIDEOTAPE)
ZELENY: So even though the speech was designed to be a policy address as he inches closer to announcing whether he'll run for president, it simply was effectively a rebuttal to the months of testimony and reporting from the January 6 committee.
The former president has been very angry that his side, in his words, have not gotten out. So, he came to Washington, again the first time since he left office to effectively rebut the entire process. He compared it to the Russia investigation, saying it's simply a hoax.
The reality is though, the investigation from the Department of Justice is deepening into his involvement in the January 6 attack on the capitol. So simply a speech will not take that away. But one thing is clear, very different paths for the Republican Party. We heard the former president and the former vice president.
Jeff Zeleny, CNN, Washington.
CHURCH: The political editor for the U.K.'s TalkTV is said to be doing fine after fainting on air during a live political debate.
(BEGIN VIDEO CLIP)
KATE MCCANN, POLITICAL EDITOR, TALKTV: He's going to challenge the freedom and democracy --
(END VIDEO CLIP)
CHURCH: The crash you heard was editor Kate McCann hitting the ground after passing out on Tuesday. She was moderating the second live televised debate between Liz Truss and Rishi Sunak, the two front runners to replace Boris Johnson as prime minister. The rest of the day was canceled.
[03:35:03]
Afterwards, Truss tweeted she was relieved to hear that McCann was OK. Sunak also tweeted his well wishes and says he looks forward to finishing the debate soon.
Well, still to come, International Monetary Fund downgrades projected growth for the global economy, saying a recession may be on the horizon. I'll ask an expert what can be done to avoid it.
Plus, Russia plans to pull out of the International Space Station. Why the Kremlin's announcement has many wondering if it's really good-bye. We'll take a look.
(COMMERCIAL BREAK)
CHURCH: The Chinese city of Wuhan has shut down a district of nearly one million people after detecting four asymptomatic COVID cases. Officials say three days of, quote, "temporary control measures will be enforced."
Entertainment venues, small clinics and market places are closed and large gatherings are suspended. All public transportation has been suspended, and residents are being urged not to leave the district unless absolutely necessary.
Wuhan was, of course, the original epicenter of the COVID pandemic. Officials are imposing strict restrictions to prevent another outbreak under China stringent zero COVID policy.
Well in the coming day, the U.S. Federal Reserve is expected to once again raised interest rates to fight back against inflation. But economic uncertainty is being felt around the globe. The International Monetary Fund has downgraded its global growth forecast for the second time this year. It now predicts the world economy will grow to reach just 3.2 percent by the end of 2022. That's nearly half of last year's outlook.
The IMF's chief economist says growth is gloomy and more uncertain this year. Citing a range of issues for the change in forecast, including slowing trends in the world's top economies, high inflation, COVID-19 lockdowns and the war in Ukraine are just some of the issues impacting the global economy.
Marc Stewart is a business journalist. He joins me now from New York. Good to have you with us.
MARC STEWART, BUSINESS JOURNALIST: Hi, Rosemary. So good to be here.
CHURCH: So, the International Monetary Fund is warning the world that it could be on the brink of recession with high inflation across the globe. And each nation of course, try to figure out how best to respond. For its part, the U.S. Fed is expected to raise interest rates in the coming hours. What impact do you expect that to have, and how much do you worry that instead of fixing inflation, that high could very well trigger a presession?
[03:40:06]
STEWART: Well, Rosemary, the U.S. Federal Reserve, otherwise thought as the central bank has to do something because the cost of every day of items at least here in the United States, in many ways is out of control. We're talking about the basics. Things like food, water, eggs, clothing, the list goes on and on.
And the Federal Reserve using interest rate hikes is it's go-to tool. It's proven to be effective overtime. The thought being that if it becomes more expensive to borrow money, it will cost more to buy things such as automobiles, homes, and to pay off your credit card debt. In theory, if things cost more, demand will go down and therefore prices.
But this is an unprecedented time. So, it's not clear exactly what kind of impact it will have during such a novel period in economic history.
CHURCH: I mean, it is the great unknown, isn't it? Consumer confidence, as you say, is down showing Americans and citizens across the globe feeling the severe impact of high inflation. Paying more for gas, groceries, clothing, housing, and cars as you mentioned.
So, what else could the U.S. and other nations be doing to respond to this high inflation pressure, apart from hiking up interest rates?
STEWART: Indeed. This is a global concern. And as we have seen over the last few years, in particular, international economies are very much interdependent on each other. In the United States there are some other options on the table including tax hikes, which no one in Washington really wants to talk about.
But if it's more expensive for businesses to operate and for individuals to pay their bills because of higher taxes, there is a school of thought that demand for products will go down because there is just so much more pressure on our individual budgets and on business budgets. But as you know from reporting, and Washington is a fickle place, it
acts like are not very popular. Not something that lawmakers will want to confine especially with the midterm election. There are some other tools. In the United States there could be sales tax holidays, particularly on back-to-school items, things like backpack, school supplies.
It may not be a cure-all, fix-all, but it could provide some relief to American families. And Rosemary, one thing which I heard from economists today was a suggestion that people be mandated to work from home. Gas prices are a big expense. Obviously, the war in Ukraine is a big factor in that. But in the U.S. at least during the summer months there's been very high demand. If people stay home, the thought is that gas prices could go down, and as we have seen a lot of Americans at least like working from home. So, it could be popular on many fronts.
CHURCH: Yes. I suspect that would be very well received if that were mandated. So, Marc, do you think a global recession is inevitable despite all these efforts?
STEWART: Rosemary, I hear from economists all the time. I get notes from bank analysts all the time. And the honest answer is, I don't know, nor do some of the best minds in economics today.
There are some challenges that are going to be very difficult to shake. First of all, the war in Ukraine, despite changes that we have seen in the political landscape, it is still having an impact on fuel prices and on food.
COVID still is a concern in many countries. It is a concern. Look at the lockdowns, the draconian -- the draconian lockdowns in China that has had a lasting effect. So, it is this unknown factor of what's lurking around the corner that makes predicting this, forecasting this so difficult.
CHURCH: And Marc, which nation across the globe has responded, best to high inflation pressure so far do you think.
STEWART: Well, every nation is trying the best it can do. The European Central Bank is going to have to confront this. There are so many different financial systems. It's really hard to pick out just one. During the pandemic Europe, essentially shut down and pay people to stay home. The U.S. economy tried to keep things going.
We have sources that are bigger than any forecast than any economist. So, it is, to be honest with you, very difficult to pinpoint one place in particular.
CHURCH: All right, Marc Stewart, thank you so much for joining us. I appreciate it.
STEWART: Anytime, Rosemary.
CHURCH: Russia says it's planning to pull out at the International Space Station after 2024, a move that would end more than two decades of partnership with the United States and other countries. Some believe it's just a threat while others say it's a result of western sanctions on Moscow. The Russian space agency says it plans to build its own space station and even released a computer-generated model.
[03:45:05]
More now from CNN's Kristin Fisher.
KRISTIN FISHER, CNN SPACE AND DEFENSE CORRESPONDENT: Well, this is not the first time that Russia has threatened to pull out of the International Space Station. But what makes this time different is that the announcement was made on the Kremlin's web site by the newly appointed head of Russia's space agency, Roscosmos. A man by the name of Yuri Borisov was given the job just a few days ago by Russian President Vladimir Putin himself.
So, today's announcement carries much more weight. With that said, NASA says it still has not been formally notified about this decision. Something that is required of all the partners up at the International Space Station. So, it remains to be seen if this time Russia is serious. But regardless, the NASA astronauts up at the International Space Station right now say that they were surprised by today's announcement.
Here's NASA astronaut Kjell Lindgren.
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KJELL LINDGREN, NASA ASTRONAUT: As to the news, you know, that's a, that is very recent news. And so, we haven't heard anything officially. Of course, you know, we were trained to do a mission up here and that mission is one that requires the whole crew. So, we continue to work every day to conduct the science and research that we've been trained to conduct.
(END VIDEO CLIP)
FISHER: The State Department says, it, too was surprised by today's announcement, but regardless of whether or not this time Russia is serious. The White House says that NASA is now actively preparing contingency planning for the possibility of a full Russian withdrawal from the International Space Station.
Kristin Fisher, CNN, Washington.
CHURCH: And we'll be back in just a moment.
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CHURCH: Record breaking rainfall has caused widespread flooding in St. Louis, Missouri with hundreds rescued after they were left stranded on rooftops or in their cars. At least one person was found dead in a flooded vehicle. Flooding also forced the partial closure of all four highways heading to downtown St. Louis.
Weather service data shows intense rainfall like this happens in the area once every 500 years. The governor's office has declared a state of emergency.
And for more, we want to bring in CNN meteorologist Pedram Javaheri. Good to see you, Pedram. And you know, what more are you learning about this flooding and of course, upcoming forecast. I know you want to tell us more about what's happening across Europe.
PEDRAM JAVAHERI, CNN METEOROLOGIST: Yes. You know, the conditions across the U.S. here firsthand is really the dire situation that has played out here. In a matter of a few hours, Rosemary, the rainfall amounts as impressive as it gets when it comes to the totals themselves.
And in fact, you look at what happened here between the hours of midnight on Tuesday, going into early Wednesday morning, the rainfall amounts here, again, pushing up to, I should say Monday into early Tuesday morning rainfall amounts of 300 millimeters, which really is equivalent to say what London sees in a span of six months, that portions of St. Louis metro picked up in a span of six hours.
[03:50:09]
And as you noted, this is a five -- one in a 500-year event, which statistically gives it a 0.5 percent chance of occurring. And of course, that is just one of several extreme weather elements taking place around the globe.
And one of them across the western United States, the northwestern region, typically one of the cooler wetter spots in the United States, where often in the summer months you get a little bit of a break, but certainly nothing to this extent. But the last couple of days we've seen excessive heat alerts with temps as high as 43 degrees. Across portions of the northwest in the Seattle metro climbing up to the middle 30s four consecutive days as such.
Notice, 26 is what's normal for this time of year. We think sometime next week we'll get close to that number across the region. And the temperature trend again remains rather oppressive even into the state of Oregon where temps are running a historic amount into historic categories.
But notice into California we go where of course the Oak Fires still taking place. About 26 percent containment at this hour. The forecast does give a slight chance and I mean, slight 15 percent or so chance here for a few showers and thunderstorms to pop up. But as you know it across Yosemite temps remain very hot across this region. And we do expect some of these storms to come down with dangerous lightning. So that is really another area to monitor.
But notice in the southwestern United States, new states of New Mexico and Arizona, both almost in their entirety, underneath drought conditions. Beneficial rainfall here, some of that moisture may try to linger into the state of California which would be beneficial. But at this point it looks like it'll be limited towards parts of the four corners region.
And of course, the rainfall that we talked about across the Midwestern United States, Rosemary, that is shifting a little farther towards the east and a threat remains here for additional flooding rains into this afternoon and possibly Thursday afternoon as well.
CHURCH: All right, so much going on, you have it all covered as always. Pedram Javaheri, many thanks. I appreciate it.
Well, coming up, England and Sweden face off in Euro 2022 football action. Game highlights and a report from Sheffield when we come back.
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CHURCH: England women's football defeated Sweden four-nil on Tuesday in their Euro 2022 semi-final match. That means the lionesses are just one match away from winning the championship on home soil.
World Sports Amanda Davies has this recap.
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AMANDA DAVIES, CNN WORLD SPORTS PRESENTER: Sheffield is dubbed the steel city and yes, that performance had steel and determination, but it had a whole lot more than that. Flare fun. And just a small matter of four goals. It really is a huge milestone for the hosts, particularly after all the focus on those three major tournaments, semi-final defeats for England.
This is their spot in the final at the expense of the second ranked side in the world behind only the USA Sweden. It was Beth Mead who broke the deadlock, finding the back of the net once again for her sixth goal in five games, extending her lead at the top of the gold scoring charts.
But if ever there was a goal that sums up this England at this tournament, it was number three from Alessia Russo. That is how you come off the bench and make an impact. And it cements coach Sarina Wiegman's place as a coach who knows how to win this tournament.
[03:55:06]
So, for England, it is off to Wembley with one song ringing out loud. It took just 50 minutes for footballs coming home, really to start ramping up. And you suspect whoever it is that takes victory in that second semi-final in Milton Keynes on Wednesday night. So, either France or Germany, it really will be difficult to dampen the hype around host England.
Amanda Davies, CNN, Sheffield.
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CHURCH: Israel is facing a jellyfish invasion and beach goers are feeling the sting. Climate change is devastating for many animals, but it turns out some jellyfish actually thrive in it.
CNN's Hadas Gold reports on the squishy slimy menace in Tel Aviv. HADAS GOLD, CNN CORRESPONDENT: White specs docked the turquoise blue waters off the coast of Israel. Each one a translucent pulsating jellyfish. Hundreds of millions of them. Eye-catching but venomous swarming the Mediterranean Sea. While the region has always had a jellyfish season in the warm summer months, this year, rising water temperatures have caused an explosion in numbers.
Normally these beaches would be packed full of locals and tourists. But the lifeguards here tell me that the crowds are staying away because of the jellyfish.
UNKNOWN: I am afraid because it's very danger.
UNKNOWN: One of my sons was stung the other day.
BELLA GALIL, CURATOR, THE STEINHARDT MUSEUM OF NATURAL HISTORY, TEL AVIV UNIVERSITY: But mostly they're moving with current.
GOLD: Dr. Bella Galil is one of Israel's top jellyfish experts. She says this species is not native to the Mediterranean, but in recent years entered from the Red Sea through the Suez Canal. As the canals expanded and waters continue to warm as part of climate change, she warns they could spread even further.
GALIL: Since the sea kept warming it spread with the warming sea and it now reaches Tunisia, Malta and Sicily. And with the expected continued warming, it might reach European coast.
GOLD: Their sting is more painful than that for many jellyfish native to the Mediterranean, Galil says, and in some cases can cause people to go into anaphylactic shock and coma. But it's not just the harm they can do to beach goers that is a cause for concern.
GALIL: The most important is having a swarm, a juggernaut of very efficient predators going through the sea and eating up the local biota that other species are at a loss.
GOLD: Galil says some short-term solutions like creating salt water barriers in the Suez Canal should help stem the numbers. And within a week, this current wave is expected to subside. But as climate change continues to push temperatures upwards, these hauntingly beautiful yet dangerous creatures will keep coming.
Hadas Gold, CNN, Tel Aviv.
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CHURCH: And thanks for spending part of your day with me. I'm Rosemary Church. CNN Newsroom continues next with Christina Macfarlane.
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