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Isa Soares Tonight
Western Allies Call Sabotage After Both Nord Stream Gas Pipelines Sustained Unprecedented Damage; IMF Calls British Tax Plan A Bad Idea; Danish Foreign Minister Says Nord Stream Explosions Are "Unprecedented" And "Severe"; Bank Of England Steps In To Avoid Bond Market Crash; IMF Calls On U.K. To "Reevaluate" Tax Cuts After Pound Crash; Emergency Services Halted In Punta Gorda As Hurricane Ian Strikes. Aired 2-3p ET
Aired September 28, 2022 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ISA SOARES, HOST, ISA SOARES TONIGHT: Hello everyone, I'm Isa Soares in London. You have been watching our continued coverage of Hurricane Ian.
We'll of course be monitoring that, we'll have any developments as they happen. For the rest of this hour, we'll bring you some of the other major
stories that are happening around the world.
And coming up on the show tonight, western allies call sabotage after both Nord Stream gas pipelines sustained unprecedented damage. Danish Foreign
Minister Jeppe Kofod tells me it hurts Europe's whole energy infrastructure.
That interview just ahead. And the International Monetary Fund, the IMF, says the British government's tax plan is a bad idea. Ahead, we'll look at
how government missteps caused an economic crisis.
SOARES: Welcome back to the show, everyone. Western nations are banding together and speaking out, as relations with Moscow appear to be souring
and souring quite rapidly. European leaders have blasted the Russian president, proposing biting new sanctions to, quote, "make the Kremlin
pay." It comes after Russian-backed officials claimed victory in so-called referendum for occupied Ukrainian regions.
Now, they say the vote showed a majority of people want to join Russia. But Ukraine and the West are calling foul play, and say they won't accept the
results. Meanwhile in Russia, people are voting with their feet. Thousands of Russians are fleeing the country every day, to avoid Mr. Putin's new
These developments come as NATO and western allies say, they think the mystery damage to Nord Stream gas pipelines were, quote, "acts of
CNN international diplomatic editor, Nic Robertson with me now. So Nic, you and I were talking about this yesterday, and what we've been hearing in the
last 24 hours since we spoke is, basically, EU leaders, we've also had NATO Secretary-General, Jens Stoltenberg, call this an act of sabotage, clearly,
deliberate from what they say.
What we haven't heard is any finger-pointing directly at Russia and at Putin. Is it because it's too early? Investigations? Or just walk us
through the repercussions of this.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, at the moment, the Danes are saying it's going to take a couple of weeks because the seas
are too rough for them to be able to get to the bottom of the sea, precisely what happened. So, I think they're building a sort of a timeframe
to work out what to do about this diplomatically, because I think they've made their mind up. Russia is responsible.
Although, the Kremlin is saying, not so. The Kremlin is saying it's not In our interests, why would we do this? This is our pipeline. The
international assessment, and we heard this from the former CIA Chief, John Brennan, earlier today, saying look, this is Russia, may be hitting their
own pipeline, but demonstrating they can hit international pipelines and put them at greater risk.
So, we are seeing NATO play a role. It is German ships that have now gone to join Danish ships on this exclusion. Norway has stepped up its security
around its energy infrastructure, so all of these steps are telling us that there isn't a firm conclusion, but there's a very firm understanding that
Russia could do it again.
SOARES: Well, I spoke to the Danish foreign minister, really, who told me like you were saying, that they're increasing their presence in the area in
the Baltic sea. Have a listen to what he said.
(BEGIN VIDEO CLIP)
JEPPE KOFOD, MINISTER OF FOREIGN AFFAIRS, DENMARK: Well, It's true. All of the information we have, all the data we have, is suggesting it's act of
sabotage of explosions that led to the gigantic leaks. We are now thoroughly investigating with partner countries around the Baltic sea, of
course, and internationally.
And with our -- with our friends in the EU and also NATO countries, to see and establish the facts of what happened there. But as I said, it is
unprecedented that we see explosions on European energy infrastructure in international waters so close to Sweden and Denmark, and the rest of
SOARES: Let's talk about some of the facts and the data that you may be gathering. CNN is hearing through our sources that Russia Navy auxiliary
ships were seen in the vicinity of where the leaks occurred on the 26th and the 22nd -- 27th September. What can you tell us about this?
KOFOD: Well, I don't want to go into speculation. What we will do now and what we're doing as we speak is to establish the facts of what happened,
but also if we can attribute the explosions to someone, then we'll, of course, also do that. But also, they're looking into what kind of
motivation is there for this?
So, we're doing all of the thorough investigation together with our friends and other countries around the Baltic sea, because it's an international
event. It's explosions in international sea, and it's something which is hurting the whole energy security infrastructure of Europe.
SOARES: So, let me just ask you this again then, minister, did the Danes observe any Russian Navy or any auxiliary type ships near the area of the
explosions or any other sub activity in the area in those days?
KOFOD: No, I can't go into these issues. I can tell you that all of our competent authorities in cooperation with the surrounding countries,
Sweden, Germany, and other countries, and our friends and allies in the EU and NATO, we are looking into this, and establishing the fact,
investigating what happened.
And also looking at what can the purpose be? And also, who is behind this? This is, as I said, an episode unprecedented in international waters so
close to all of us in Europe. And it's something we take very seriously.
SOARES: When do you know -- when do you think you'll have those facts? When do you think you'll have that information, following this
KOFOD: Yes, it's clear it's up to our authorities that is working on it as we speak. But it's also clear that what we see is a gigantic leak, so the
pressure of the pipes and the release of gas is continuing. So, when pressure comes down, and we can also see what happened, then it's easier to
-- also to establish the facts. But we will -- we will work with all of our partners --
SOARES: Yes --
KOFOD: I talked to many of my partners, including Secretary Blinken, the German Foreign Minister, the French foreign minister, and a lot of other
colleagues over the last day. And we will continue to work together until we can establish what happened here. It's very severe, it's very
unprecedented. It's something we will very look very carefully into.
SOARES: The Danish foreign minister there.
There are so many questions still unanswered. Of course, they are investigating. Let's talk about the motivation, something he didn't
(INAUDIBLE) much on that. But we did hear, as you said from the CIA director, who says, Russia's certainly the most likely suspect.
So you know Russia well. You've worked there. You've spent a lot of time reporting on Russia. What is Putin's end game here?
ROBERTSON: And we both know the Danish foreign minister fairly well. And in a crowd standing around at the E.U., he will often have the strongest
things to say.
SOARES: He always has the great sound bite.
ROBERTSON: Today he's been cautious and I think this tells us that the European partners, the United States as well, are trying to sort of keep
the unity, not cast, you know, not cast wild accusations but keep the unity through being sort of careful, calculated in what they say, speaking up.
But what is the calculation from the Russian side?
I think there is a growing sense here that Putin is losing ground in Ukraine. The conscription is not going well. The referenda is just a way to
stake that piece of territory as perhaps as a preset to try and sue for peace and get out.
By threatening the energy stability of the European Union, this is a further thing that Putin can come armed with when he tries to talk for
And I think there is a school of thought that says, perhaps Putin is taking these things on now, the threats of potential legal escalation,
destabilizing energy, as a means to try to find a negotiated way out.
SOARES: He thinks that he then has a stronger hand when it comes to negotiating table with this?
ROBERTSON: From what I'm hearing from people in Russia -- and I think you and I will both understand this as well -- Putin cannot afford to lose. The
stakes are too high. He said he would gain ground in Ukraine and is losing it right now.
If he continues to lose, the economy gets hurt even more; he looks like a loser. He can't hang on to that job for very long. So the logic here is
that he needs to come to the table and try and grab something now.
He's not going to get what he wants but maybe, maybe, the thinking is, that we are at the beginning of his end game or his latest stage place.
SOARES: I'm sure that he will spin it his way at home as well, as he always does. Nic, appreciated. Thank you very much.
Still to come on the show tonight, Moscow says, Ukrainians in occupied territory have voted to join Russia. Many world leaders say, well, that is
an outright lie. How they are responding, so we have that for you ahead.
And doubling down on a trickle down. How the prime minister's economic strategy in the U.K. is leaving analysts, well, pretty baffled. That is
SOARES: Well, in a rare and damning intervention, the International Monetary Fund is saying, British tax plan, well, it's a bad idea.
It's urging the government to reevaluate huge tax cuts announced last week that caused the pound to crash and warning that far from helping the
country's cost of living crisis, the cuts could actually increase inequality as well as inflation.
Meanwhile, the Bank of England is intervening in the U.K. debt market, bailing out the government to prevent a financial dysfunction. Many accuse
prime minister Liz Truss of dropping an economic bombshell on the country and then disappearing.
Nina dos Santos has more on how the U.K. got to this point in the first place.
NINA DOS SANTOS, CNNMONEY EUROPE EDITOR (voice-over): Soaring prices and a plunging pound, Britain's economic prospects have soured significantly in
just a few short days.
UNIDENTIFIED MALE: I would say that there is plenty of evidence that high tax, high regulation socialism, leads to a complete disaster.
DOS SANTOS (voice-over): After announcing a so-called mini budget that contained $48 billion worth of unfunded tax cuts, the international verdict
on new U.K. prime minister Liz Truss' policies is damning.
With critics calling on her to rethink her so-called Trussonomics. The IMF estimates that the plan would exacerbate already stark levels of
Meanwhile, U.S. Treasury Secretary, Janet Yellen says that she is monitoring developments very closely. And the ratings agency, Moody's, has
warned that parts of the new budget could threaten Britain's credibility with investors.
So what do economists recommend should be done now?
SIMON FRENCH, CHIEF ECONOMIST, PANMURE GORDON: It's very much a self inflicted wound in recent days, which is recoverable. But it needs grown-up
behavior from the government or listening to smart people.
One of the ways in which government rebuilds its credibility is by inviting that watchdog back into the fold, get them to cost these proposals and then
you start to rebuild the idea that there is a plan depending on what today has been a series of sound bites.
DOS SANTOS: Liz Truss slashed taxes in an effort to spur growth or at least to contain a recession that the Bank of England reckons has probably
kicked in already. For the U.K. is dealing with the highest rate of inflation among G7 countries.
And sterling's recent slide has made that problem worse. That's because Britain imports most of what it needs and now those imports are fast
becoming more expensive.
DOS SANTOS (voice-over): The bank has already raised rates rapidly to levels not seen since the financial crisis in 2008. For now, it has ruled
out another emergency hike. But on Wednesday, it began to buy up long-dated sovereign debt. This, after U.K. bonds or gilts, became riskier than those
of bailed out Eurozone nations, like Greece.
DOS SANTOS: Why would the Bank of England at this point get involved in essentially what is mopping up the damage of a big fiscal policy?
FRENCH: We have a mandate not just for monetary stability and price stability but also for financial stability. This is what they've justified
their movements today on, is the idea that markets were becoming dysfunctional.
It's presenting a systemic risk for the U.K. economy. Business is struggling to get credit, insurers are struggling to meet margin calls.
DOS SANTOS (voice-over): The shadow of the banking crisis has loomed large over London's financial district for more than a decade.
But it's the memory of Britain's run on the pound in the 1980s that is today giving global markets and world leaders sleepless nights. This amid
fears that the U.K.'s financial gamble could end up sending shockwaves much further afield -- Nina dos Santos, CNN in London.
SOARES: Here to make sense of it all is Anna Stewart.
Anna, let's talk first of all about this massive intervention by the BOE. Many of us did not see that coming.
SOARES: In fact, BOE was supposed to be selling it, not buying it.
ANNA STEWART, CNN CORRESPONDENT: Exactly, next week we will have quantitative tightening, where they will start selling off their --
STEWART: -- in the first purchase of the U.K. government bonds happened today. It will happen every day through October 14th.
Now it's not unusual, really, these days, considering the (INAUDIBLE) programs we've had for Bank of England or any central banks by government
bonds. What is unusual is why they're doing it.
This was really to stop what they were concerned about being a sort of spiraling out of control selloff in U.K. bonds and the impact that would
have on pension funds. So really they were forced to act.
I feel like since we talked on Friday, where we said don't look, just don't look, let's just get through the weekend, I think since we first had the
plan from the government and the huge market reaction we have had since then, things have gone from bad to worse.
It's been, like, a game of chicken or a standoff between the central bank and the government. The government has not blinked, so the bank has.
SOARES: OK, on that point then, if it's a standoff between the treasury and the BOE, do you think that the government will have to make a U-turn
What are the options?
This is not a long term plan.
This is two weeks, right?
STEWART: Rationality would suggest, yes, they would need to announce something. But the IMF has said they need to rethink it. They've had a
stinging rebuke. Yesterday, we have the former deputy governor of the Bank of England, who said the U.K. government is guilty of -- and I'll quote --
"really stupid decisions."
Moody's, the credit rating agency, is concerned about borrowing and the pent-up (ph) damage. But listen to what we had from the U.K. financial
secretary to the treasury earlier today, because in my mind, it's like they're not listening.
(BEGIN VIDEO CLIP)
ANDREW GRIFFITH, BRITISH FINANCIAL SECRETARY TO THE TREASURY: Every major economy is dealing with exactly these same issues. The Bank of England has
made this timely intervention, doing what it should do, what the government should do.
What the chancellor and I have focused on, is delivering the economic growth plan, which is ultimately what's going to help people and it's going
to give people the confidence, it's going to create jobs in the economy and keep people in work so that they can make it through the winter, benefit
from that protection in energy and continue to protect our standard of living.
(END VIDEO CLIP)
STEWART: The Bank of England is doing what it should do. That's what he said there.
Is the treasury doing what it should do at this stage?
He's unveiled this huge fiscal policy, very ambitious. It's uncosted (ph) it's causing havoc in the market and posing a real risk to financial
SOARES: And what we need now is confidence, certainty, and we don't have that. Anna Stewart, thank you so much, Anna.
We want to take you back to the U.S. now where we have the continuing coverage of Hurricane Ian.
RYAN YOUNG, CNN CORRESPONDENT: It caught some people by surprise. We first right here, there was no rain and people were walking casually, walking
their dogs, going throughout their day.
Now they understand there is a risk. They started to try to get home to get out of the way of some of the storm waves. In fact, we arrived at this
Publix and we were talking to people getting last-minute supplies, only to see the Publix shut down because they wanted to give their employees a
chance to get home and have some preparation time.
Because obviously, they did not expect this to be headed this direction. So, Erica, as we're watching things, you can understand that people are
concerned about the next few hours.
ERICA HILL, CNN ANCHOR AND U.S. CORRESPONDENT: Yes, they absolutely are. Ryan, we will continue to check in with. You thank you.
Just ahead here, we will take you back to Punta Gorda. That's one of the areas being hit the hardest at this hour. Stay with us.
HILL: Thanks for staying with us for the special live coverage of Hurricane Ian, currently hammering Florida's West coast.
Emergency services suspended in many areas, including Punta Gorda, Florida. The National Hurricane Center is now forecasting a life-threatening storm
surge in that area of 12 to 18 feet. Storm chaser Aaron Jayjack is in Punta Gorda. That's about 100 miles south of Tampa.
You know, Aaron, this is what you do. You go around and chase these storms.
Can you put this in context for us?
We keep hearing about how massive and how slow-moving this is and how that is really going to add to the danger of the storm.
AARON JAYJACK, EXTREME STORM CHASER: Yes, this is one of the nastiest hurricanes I've ever been in. I've been in a lot of hurricanes, cat 5
Michael included. And I've never experienced so much ferocity. And the lightning and the thunder here in this eyewall. We are in the middle of the
eyewall right now as it comes to shore here in Punta Gorda.
And I had a bolt of lightning hit right next to me, almost hit the vehicle. And this, I mean, that just means it how much business this storm means. It
is a nasty storm.
HILL: Let's hope safely, right, as you are making your way around, what are you seeing?
Is the infrastructure holding up?
How high is the water?
Where do things stand at the moment?
JAYJACK: Yes, right now, I'm actually quite surprised. We do still have power here. I see a stoplight just down the road. The power is standing up.
But I do expect it. We haven't gotten to the worst of it yet. The worst of it has still yet to come. That inner eyewall, right before we enter the eye
of the storm.
And I expected to hit by those cat 4 winds at that point, where we get into that inner eyewall. Right now, we don't have any surge here yet. I think
most of the surge, the worst surge, is going to stay to the south. Fort Myers, Cape Coral area on that right southeast, that bottom lower right
quadrant of the hurricane.
I actually saw some photos online, I saw them getting really bad surge there. We will still probably get some surge here. But right here is going
to be mostly very bad wind damage here, coming up very shortly in the last half hour or so.
HILL: You are waiting for those winds in the next half hour. Even if you will not get that massive storm surge that you are talking about, maybe in
other areas very close to you, there's still a significant amount of water here.
HILL: And we know just how damaging that can be.
What are you seeing in terms of water levels rising?
JAYJACK: I mean, this storm could produce, is forecast to produce 12, 15, 18 feet of surge here. We are just getting hammered, pummeled by winds now.
It is getting worse now. So I think that inner eyewall is getting closer right now here in Punta Gorda.
HILL: So as you are looking at that, I think a lot of people wonder about this with the storm chaser.
When is the moment, right?
We know how dangerous this is.
When is the moment where you, yourself, would say, I need to seek shelter?
I need to get somewhere else?
This is not safe?
JAYJACK: But I am monitoring it by the minute. I do have fallback places by Alamo, if you will. There's a parking garage just down the street that I
could retreat to. Especially if the surge comes.
The wind, I can withstand a lot of wind, so unless debris starts flying, lots of debris starts flying, then I will probably try to stay out of here
in the wind. I'm trying to make sure I get into the center of that storm, trying to capture the pressure of the storm, see what that storm brings.
This could be a significant, historic storm here coming across in Western Florida, maybe the strongest storm that's ever made landfall here in West
HILL: Yes, some of that information, right, important, as everyone's trying to figure out if this is, in many ways, going to become what we see
more often, these stronger, larger storms. Aaron Jayjack, thank you for joining us. Be safe, glad to know you have a place that you can retreat to
if it gets to that.
Meantime, the hurricane, as we are following this, as you are seeing, as you are hearing from the folks on the ground, the high wind, the heavy
rains and this dangerous storm surge, that is the major focus at this hour. The director of the National Hurricane Center is with us just ahead. Stick
HILL: I want to take you back now to Punta Gorda, where we find CNN's Randi Kaye. You are looking at pictures of Tampa there. Randi is south of
You know, we've been watching it move around all day as the conditions are deteriorating. I know you and your team, Randi, have moved to a safer area
that looks like you may have even moved since we spoke with you at the top of the hour. Give us a sense.
How have things changed in the last 45, 50 minutes for you?
RANDI KAYE, CNN CORRESPONDENT: They've gotten a lot worse, Erica. We've actually moved to the other side of the parking garage, where we feel it's
a little bit safer for our team.
But look at what's going on outside our window, if you want to call it. This side of the parking garage, we've been watching these palm trees just
blowing like crazy. It feels like we are certainly in the eyewall of this hurricane.
It certainly feels like hurricane-force winds, upwards of 75 miles per hour here. But you can see there are some broken trees down, the palms are
moving pretty swiftly with this type of wind.
We've been watching this now for a while. And I know you were talking to that storm chaser as well. We heard huge claps of thunder and a fair amount
of lightning here as well.
There's a gas station over there, not much activity, obviously, on a day like today. But this is what is happening here in downtown Punta Gorda.
We've been waiting, of course, for this storm surge. They are talking about 12 to 18 feet, which is going to come as predicted, at least, with this
We have not seen much water. There's a little bit of water in the streets but so far not too much here. So things have certainly deteriorated quite a
bit. But we are on safe ground and we will continue to watch it. Erica.
HILL: All right, we will check in. Do stay safe, my friend. I know you will. Thank you.
So let's get you a sense of what is happening. We are going to keep updating you with the latest involving Hurricane Ian. We will take a quick
break here. Our special coverage continues. Stay with us.