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CNN International: U.S. Politicians Trade Blame for Banking Troubles; European Central Bank Raises Rate by Half a Point; U.K. and New Zealand Lates to Announce TikTok Ban from Government Devices; Major Outrage After French Government Rams Pension Reform Bill; Protests Intensify Against Netanyahu's Planned Legal Reforms. Aired 4:30-5a ET
Aired March 17, 2023 - 04:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[04:30:00]
BIANCA NOBILO, CNN ANCHOR: Welcome back to CNN NEWSROOM. I'm Bianca Nobilo.
MAX FOSTER, CNN ANCHOR: I'm Max Foster. If you are just joining us, let's bring you up to date with the headlines.
The U.S. military is assessing its drone operations in the Black Sea region after that encounter with Russian fighter jets earlier this week. It also released video that it says shows the Russians were lying about forcing down the drone.
Plus, First Republic, a vulnerable U.S. bank, just secure $30 billion rescue from a group of 11 big banks. This comes after Treasury Secretary Janet Yellen tried to reassure Congress and the nation that America's banking system is sound.
NOBILO: U.S. politicians have been reacting to the banking turmoil with fingers being pointed along largely partisan lines.
FOSTER: Democrats were blaming Trump era regulatory rollbacks for the trouble. While Republicans were blaming the administration for failing to see what was happening in the economy in the banking sector. Take a listen.
(BEGIN VIDEOTAPE)
REP. PATRICK MCHENRY (R-NC): There's been a recent study that had that rollback not happened, quote, unquote, rollback not happened, this bank run would have still happened. So what they're doing, what most of the politicians on Capitol Hill are doing, are dining on their typical book of business and resorting to that as the answer and solution for what just happened.
SEN. ELIZABETH WARREN (D-MA): Over the last few days, we've heard a lot of Republicans say that this collapse wasn't their fault, it was the banking regulators who were asleep at the wheel. And believe me, I have questions for a lot of the banking regulators. But Congress handed Chair Powell the flame thrower that he aimed at the banking rules.
(END VIDEOTAPE)
FOSTER: The European Central Bank says the banking sector is strong and solvent. It raised its benchmark interest rate half a point bringing them to 3 percent, the highest level since 2008.
NOBILO: ECB President Christine Lagarde says inflation is projected to remain too high for too long. But the U.S. banking system is stronger now than before the great recession.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, EUROPEAN CENTRAL BANK PRESIDENT: Given the reforms that have taken place -- and I was around in 2008 so I have clear recollection of what happened and what we had to do. We did reform the framework. We did agree on Basel III. We did increase the capital ratio. We did increase the financial coverage ratio as well. And I think that the banking sector is currently in a much, much stronger position than where it was back in 2008.
(END VIDEO CLIP)
NOBILO: More now from CNN's Clare Sebastian.
(BEGIN VIDEOTAPE)
[04:35:00]
CLARE SEBASTIAN, CNN CORRESPONDENT: Despite the recent turmoil in the financial markets, and despite this decision coming on the same day a major European bank, Credit Suisse, was forced to borrow more than $50 billion from Swiss Central Bank, the European Central Bank stuck to its guns, going ahead with the half percent rate rise it explicitly telegraphed last month.
Why? Well, the ECB president, Christine Lagarde, was very clear. Inflation at 8.5 percent in the Euro area is too high, and they are not seeing enough progress on bringing it down.
They are, however, she said, closely monitoring the financial markets, keeping a close eye on whether banks tighten lending. But they have other policy tools, she said, to tackle that while fighting inflation at the same time.
CHRISTINE LAGARDE, EUROPEAN CENTRAL BANK PRESIDENT: I believe that there is no trade-off between price stability and financial stability. And I think that, if anything, with this decision we're demonstrating this.
We are addressing the price stability issue by raising interest rates by 50 basis points, which is what we had intended. And because inflation is projected to remain way above our target and for too long. And separate from that, we also are monitoring market tensions. We stand ready to provide any kind of additional facilities if needed. SEBASTIAN: Well, stocks in Europe closed higher Thursday on the back of that. Credit Suisse gaining 19 percent, reversing most of Wednesday's losses, despite lingering questions about whether the credit line from the Swiss Central Bank is enough, or whether it might end up being taken over.
European banks overall though were mixed. Investors here in Europe, just as in the U.S., worried that still more problems could come to light.
Clare Sebastian, CNN, London.
(END VIDEOTAPE)
FOSTER: New Zealand and the U.K. are amongst the latest countries to announce TikTok will be banned on government devices due to security concerns. The popular social media platform is under growing scrutiny. Governments around the world fear data collected from users' phones could end up in the hands of the Chinese government.
NOBILO: The U.S., Canada and the European Union have also imposed similar precautionary bans. Earlier CNN spoke with Eric Noonan a cybersecurity expert and CEO of CyberShealth. Here's what he had to say about the potential risks associated with TikTok.
(BEGIN VIDEOTAPE)
ERIC NOONAN, CEO, CYBERSHEALTH: It's on millions and millions and millions of devices across the world. And has the ability of being a forward deployed intelligence network to collect information. And this isn't a theoretical threat, right. So, I think sometimes when the threat maybe several years ago when all the energy started around the threat that is TikTok, it was less understood what could actually happen.
But we actually have evidence now, right. And so, we've seen the chief of TikTok's internal audit who reported back to his boss, was in Beijing targeting journalists from Forbes -- it has been widely reported -- and the company has acknowledged they did that and were tracking locations of journalists. So, we've seen when the threat is weaponized and that's just one public example.
(END VIDEOTAPE)
NOBILO: And he is talking there about the weaponization of the threat. But it's interesting, in the U.K. at least, this ban is for government issued devices, not personal devices. If you work in government. So that does still leave you open to quite a wide array of potential security.
FOSTER: Yes, but it doesn't allow you into the government systems, does it, in a way that the work phone would do, I presume.
NOBILO: No, absolutely. But then if you think about personal information, potential extortion, that will likely be concentrated on the personal one. FOSTER: But they're talking about banning it across the board in
America, among some politicians. And so that's going to be the next sort of consideration.
NOBILO: We'll have to see.
New protests in the streets of Paris and chaotic season Parliament too, after the government found a way to raise the retirement age. We'll explain how all of that played out.
FOSTER: And mass demonstrations across Israel, protestors say Benjamin Netanyahu's proposed judicial overall amounts to a constitutional crisis. Coming up, the Israeli Prime Minister on the defensive.
[04:40:00]
(COMMERCIAL BREAK)
NOBILO: New protests broke out in Paris a short time ago after the French government found a way to overall the pension system despite not getting enough votes in Parliament. We are told that union members blocked the road in the north of the city causing a traffic jam during the morning commute but has since dispersed. Workers are furious over the retirement age being raised by two years from 62 to 64. And unions are already planning another day of nationwide strikes.
FOSTER: On Thursday classes erupted between demonstrators and riot police with fires set in the streets. Authorities say at least 210 people were detained across France on Thursday. There's also outrage amongst lawmakers who shouted down the Prime Minister in the national assembly. CNN's Jim Bittermann has the story.
(BEGIN VIDEOTAPE)
JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: For weeks, the protests and strikes have continued, trying to stop the government from enacting changes in the French retirement system. Changes which would raise the retirement age from 62 to 64 years old.
Thursday the French Parliament was meant to vote on the new law, which had already been passed by the French Senate. But before the vote in the lower house, Prime Minister Elisabeth Borne said the government had counted votes and realized that it would lose.
The Prime Minister went before the National Assembly and announced that there would be no vote, that the law would be enacted by decree, something allowed by the French Constitution, but something that further enraged the opposition.
ELISABETH BORNE, FRENCH PRIME MINISTER (through translator): We cannot bet on the future of our pensions. This reform is necessary.
(SHOUTING)
BORNE (through translator): It's also because I am attached to our social model and because I believe in parliamentary democracy. (BOOING)
BORNE (through translator): It is your reform on Parliament text, fruit of the compromise between the two assemblies, a time ready to engage my responsibility.
BITTERMANN (voice-over): Outside the chamber where protesters had gathered, there was further outrage that went on for hours. The spontaneous demonstration that moved to Place de la Concord in central Paris and was finally broken up by police using a water cannon and tear gas.
BITTERMANN: The prime minister and her government now face the possibility of a no-confidence vote, which could bring down the government if it succeeds.
And a French joint union committee announced plans for another round of strikes and demonstrations next Thursday to keep up the pressure on the Parliamentarians to vote against the government plan.
Jim Bittermann, CNN, Paris.
(END VIDEOTAPE)
NOBILO: And Macron essentially forcing it through is acknowledging that he obviously doesn't have the confidence of Parliament and is overwriting it.
FOSTER: Can't afford the pensions basically.
[04:45:00]
NOBILO: No, but it's interesting because we were looking at the pension ages and retirement ages and around 65 is average.
FOSTER: It'll be 80 when you get there.
NOBILO: Looking forward to it.
FOSTER: Protests intensified for another day in Israel against the government's plan to overhaul the judicial system. In Tel Aviv, Jerusalem and cities across the country crowds packed the streets and expressed their discontent. Protestors say the planned legal reforms would weaken the country's courts, erode the judiciary ability to check the power of other branches of government.
NOBILO: Israeli Prime Minister Benjamin Netanyahu defended the proposed changes while in Berlin on Thursday for a meeting with the German chancellor. Mr. Netanyahu insists that the reforms are meant to bring Israel's democracy into line with Western democracies. Chancellor Olaf Scholtz says that Germany is deeply worried about Israel's legal overhaul.
(BEGIN VIDEO CLIP)
OLAF SCHOLZ, GERMAN CHANCELLOR (through translator): Prime Minister Netanyahu also informed me about the judiciary reform that his government is planning and which is also being discussed very controversially in Israel. As partners who share democratic values and close friends of Israel, we are following this debate very closely with great concern and I do not want to conceal this.
BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: The ideas presented in Israel is though this is a break with democracy, is not true. Israel was, Israel will remain a liberal democracy, not different and as strong and vibrant as it was before. And as Europe is today. We are not going to deviate from that one bit.
(END VIDEO CLIP)
FOSTER: Mr. Netanyahu shortened his visit to Germany as he is facing pressure back home. Critics say the proposed judicial reforms from Israel's right wing government amount to a constitutional crisis. CNN's Hadas Gold reports from a student led protests in Jerusalem.
(BEGIN VIDEOTAPE)
HADAS GOLD, CNN JERUSALEM CORRESPONDENT: We have now been at dozens of protests across Israel, another massive day of disruption. Israelis taking to the streets in the tens of thousands, protesting against this massive judicial overhaul plan by Benjamin Netanyahu's government.
We are here, actually, at a student protest at the Hebrew University in Jerusalem, and many of the (INAUDIBLE) what they see is the beginning of the end of Israeli democracy if this overhaul goes through.
At its core, this overhaul would not only allow the Israeli Parliament to overturn Supreme Court decisions. It would also drastically change how judges are appointed in Israel. But supporters of the reform say that it's sorely needed. That it's been lacking for a long time. That will help rebalance the branches of the Israeli government.
Last night the Israeli President, Isaac Herzog, put out his own compromise proposal, warning that if a proposal -- if a compromise is not reached, then the country could be on the brink of a civil war.
ISAAC HERZOG, ISRAELI PRESIDENT (through translator): I'm going to use a phrase I haven't used before. An expression that there is no Israeli who is not horrified when he hears it. Whoever thinks that the real civil war of human lives is a limit that will not reach has no idea. Precisely now, in the 75th year of the state of Israel, that the this is within touching distance.
GOLD: But the Israeli Prime Minister Benjamin Netanyahu flatly rejecting the compromise proposal, saying it doesn't do enough. And he says it would only perpetuate what he believes is the current problem with the judiciary. Now the question will be, what will Netanyahu's government do next? Will they push forward with their very speedy unilateral action, trying to get it done within the next few weeks or potentially even few days, or will they possibly, potentially, soften their legislation just a little bit to help tamper down these very fervent emotions that we're seeing here on the streets of Israel?
Hadas Gold, CNN, Jerusalem.
(END VIDEOTAPE)
NOBILO: The death toll from cyclone Freddy has jumped to at least 326 in southern Malawi. Rescued crews have been forced to you shovels and their bare hands to search for those who are trapped in the rubble.
FOSTER: Officials say that a number of roads and bridges have been flooded or caught off entirely. And more than 22,000 people have been displaced.
March Madness gripping U.S. basketball fans. Barack Obama and Joe Biden share their brackets. And the U.S. vice president catches a game as well. All that next.
[04:50:00]
(COMMERCIAL BREAK)
FOSTER: It's that time of year when American sports fans become obsessed with college basketball and the tournament known as March Madness. And the U.S. vice president is no exception. Kamala Harris attended the first men's game of her alma mater Howard University on Thursday with her husband, the second gentleman Doug Emhoff.
NOBILO: Howard is a MHWC, which stands for historically Black colleges and universities. And Howard said that it's important for the sport's programs to be well funded. The University of Kansas overcame Howard University 96 to 68.
FOSTER: Yes.
NOBILO: I have both the U.S. presidents wished good lucks to all teams in the tournament. Joe Biden had the University of Arizona taking home the men's championship, but they fell in the first round to Princeton. And for women, he said Villanova always wins in his household which makes sense because his wife Jill got her master's there.
FOSTER: Absolutely, and Howard also had the first all-black winning swimming -- women's swimming team as well.
NOBILO: Oh really?
FOSTER: And that's a big break because it's seen as a tradition.
President Biden's former boss released his picks as well. Barack Obama has Duke winning the men's tournament and for the women, South Carolina.
NOBILO: And attention all Swifties, four new songs from the singer song writer Taylor Swift have just dropped ahead of her Era tour.
(BEGIN VIDEO CLIP)
TAYLOR SWIFT, SINGER: All of the girls you loved before Made you the one I've fallen for
(END VIDEO CLIP)
NOBILO: That one is titled "All the Girls You've Loved Before," and the other three are new versions of some of her older songs.
(BEGIN VIDEO CLIP)
SWIFT: Come back, come back to me like you could you could, you could if you just said you're sorry
I know that we could work it out somehow
(END VIDEO CLIP)
[04:55:00]
FOSTER: That's Taylor's version of "If This Were a Movie." She's been rerecorded many of her hits after her former label sold her master recordings of her music catalog back in 2019.
And Brian May, the famed guitarist from the classic rock group Queen has been knighted by King Charles. The guitarist known for his role in hits such as "Bohemian Rhapsody" will now be known as Sir Brian.
NOBILO: May was honored for his services for his music and charities. He performed a rendition of "God Save the Queen" from the roof of Buckingham Palace at Queen Elizabeth's Golden Jubilee in 2002. And he performed for her again 20 years later at the Queens Platinum Jubilee.
FOSTER: And his hair never changed throughout.
NOBILO: Exactly. Something from my generation Taylor Swift and from your generation Queen.
FOSTER: Yes.
And before we go, a Chicago man has filed a class action lawsuit against Buffalo Wild Wings. Accusing the restaurant chain of deceptive marketing because their boneless wings aren't really wings. In the complaint the man said he believed the boneless wings were made of deboned wing meat -- which is understandable -- in reality they are made from chicken breast meat. He wants restitution for himself and anyone else who purchase them.
NOBILO: So far the only response from the company has been in a tweet and it reads: It's true, our boneless wings are all white meat chicken, our hamburgers contain no ham and our buffalo wings are zero percent buffalo.
FOSTER: And you up to today that buffalo wings aren't real buffalo.
NOBILO: Now, I knew that obviously, Max. But one of our esteemed colleagues here was reminding us that of course buffalo and hamburger are named after places. So it's a little bit of an erroneous statement perhaps in them.
FOSTER: I think the guy -- I'm not getting involved in the case -- but I think people would assume that they were wing meat.
NOBILO: Probably, yes. Something for everyone to think about over the weekend.
FOSTER: OK. thank you for joining us here on CNN NEWSROOM. I'm Max Foster.
And I'm Bianca Nobilo. "EARLY START" is next right here on CNN. And we will see you next week.
