Return to Transcripts main page
Quest Means Business
Yahoo! Hoodoo? New CEO Only Causes More Frustration Among Analysts; Rev. Jesse Jackson, In London, Clarifies Role of Occupy Protests Across the Globe; New Wave of Biometrics Will Change Air Travel; Interview with Zoltan Kovacs; Inventory at the London Zoo; The Legacy of Thatcherism
Aired January 04, 2012 - 14:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Yahoo! A new chief executive, now the company's chief hope.
Hungary for change, the minister for communication tonight, on this program, defends the country's constitutional reforms.
And Reverend Jesse Jackson tells me the Occupy Movement is far from over.
I'm Richard Quest. Of course, I mean business.
Good evening.
All new for Yahoo! The company says its new chief executive can turn things around so far investors haven't been cheering. The new chief is the PayPal president, Scott Thompson, who is taking over and it will head the company that is struggling with a declining market share, declining ad revenues, declining staff morale, who has been without a permanent chief exec since Carol Bartz was fired in September. She was sacked, by phone, and later e-mailed colleagues to tell them about it.
Maggie Lake is in New York and joins us.
So, they had to put somebody in the job. Who is this new person, and what do we know?
MAGGIE LAKE, CNN BUSINESS CORRESPONDENT: We don't know a whole lot about him. He is well respected. He comes from PayPal, thought to be someone with a technology, a payment background, but not exactly the sort of, you know, name that you would expect for a company that needs something dramatic.
And that is the problem, Richard, this whole announcement today, it was much more exciting to see Carol Bartz get fired than to see this guy get hired. A lot of fizzle with this, from investors. They really were looking for something. The stock fell right out of the gate. Some were concerns about the asset fails, we'll talk about that in a moment.
But they held a conference call where they introduced him and it didn't do much to provoke any enthusiasm. Have a listen to what the new CEO had to say.
(BEGIN VIDEO CLIP)
SCOTT THOMPSON, NEW CEO OF YAHOO!: I fundamentally believe that Yahoo!'s future depends on its ability to create great products and an integrated, compelling customer-sighted experiences. And how we do that will be a function of delivering both excellent technology and content.
(END VIDEO CLIP)
LAKE: Well, I could have told them that, Richard. I mean, that is the problem. This is a company who has been struggling. They need a bold vision. They need a dramatic reboot. They have had a terrible talent, brain drain away. You want somebody sort of charismatic. Investors want something to happen.
QUEST: Right.
LAKE: In fact, on the conference call, one of the analysts pushed him and said, "Listen, is this a company that believes in revolutionary change?" And he said, "Give me some time to get back to you with that answer."
Investors are out of patience, and he is out of time, so a bit of a disappointment on this one, Richard.
QUEST: Oh, come on. It is only day one on the job. Let's look at the share price. Stay where you are, Maggie, don't go anywhere.
Here we go. This is the way the share price, over the last 10 years, has gone. Now it hit its peak in January 6, $43.21 a share, Maggie, was the peak. If you look at it in other ways, you see the Microsoft merger collapsed in '08 and since then that is when Carol Bartz was hired in '09. And the share price has done nothing since September, when she was fired.
So, the share price is heavily, heavily bound, Maggie. That much we know. But when you say he has to do something revolutionary. Does this not beg the question: Does Yahoo! have raison d'etre? Does it have a mission? Does it have a goal? Or has its clothes been stolen by everybody else?
LAKE: This is the problem, Richard. And this is why, you know, yes, it is day one on the job. But this is why analysts-and analysts are the ones-saying they need a revolutionary change. This is why they are so disappointed. This isn't an execution problem. This isn't some sort of internal problem. This is-they don't-no one knows what their business is anymore. They've given up on search. They are losing terribly on advertising. What is Yahoo!? What kind of company is it? They keep saying they are a media company.
And this is a lot of the chat today. Yet they put someone in place who is sort of a payment technology guy. To a lot of people that doesn't make sense to them. One of the things that people are concentrating on is this asset sale I mentioned. There is a feeling that they are going to try to spin off their Asian assets. That could get them as much as $17 billion.
QUEST: Ah?
LAKE: That will give them the cash. What they then do with that is going to be critical. A lot of analysts wanted to see them sell all together. They brought a big change agent in with Carol Bartz and they subsequently fired her by-
QUEST: They had-
LAKE: by phone.
(CROSS TALK)
QUEST: They had a chance with that, didn't they, though with the whole Microsoft deal, that-I'm looking at my graph again, as you can see. The share price is de facto roughly where it was in 2003. It is barely- well, its budged up, and budged a lot.
You don't sound terribly optimistic about Yahoo!, Maggie.
LAKE: Well, I'm just mirroring what you are hearing from the investment community, Richard. And listen, it has been a tough market. You saw a lot of stocks with that with that trend down in '09, through the financial crisis. But they don't have a vision for the future they can articulate. So, you have a lot of disappointment around that. People are going to give them a little bit of time. But they better come up with something and come up with it soon.
QUEST: Maggie is in New York. Thank you, Maggie. Good to see you tonight.
Now, to the other big story we are watching. Worries over the Eurozone crisis, the debt issues, they are back. And that dragged the European benchmark indices into the red after a positive start to 2012. Investors sold off. Only Zurich was up slightly. Insurance stocks doing better. But by and large-look, once again it is the Paris market that bore the brunt.
If you look at the numbers, the European Central Bank continues to lend billions of dollars to euros-to Europe's banks. Each and every night the ECB is lending out more than 15 billion euros. That is roughly $19 billion.
Let's stay in euros for the moment. 15 billion dollars (sic) in short-term liquidity, overnight lending, on Tuesday. It has done the same thing every night since last week. And it is not just the loans out. These are going to banks that are stressed at the moment. There are even the good banks are parking even greater amounts of money back with the ECB. 453 billion euros was deposited yesterday. That is the most we have ever seen put back into the bank on overnight rates. More than half a trillion dollars, it breaks the record set at the end of last year. So if you are looking at the liquidity numbers of the ECB at the moment, the evidence is still strong of great stress in the system. It means banks which have cash would rather horde it than lend it and those that haven't got it, are having to borrow it.
Europe's kicked off the rally now it is starting to look like a false dawn. Credit Suisse's senior advisor Bob Parker joined me a short while ago to discuss, what else? Volatility.
(BEGIN VIDEOTAPE)
BOB PARKER, SENIOR ADVISOR, CREDIT SUISSE: Well, I think the first point to make is that we are currently in what I call a stop/start market. One day, very good markets, one day, we reverse. A lot of day-to-day volatility, but the trend, I think this month, and probably, for the next two to three months is actually going to be flat. Now, what's going to change that?
Now we know there is very significant investor cash sitting on the sidelines, and in our models the amount of investors cash is actually at a record high. So the question is what is going to shift that investor cash?
QUEST: So, what do you believe will the catalyst for that turning point?
PARKER: Well, the answer is there is no single catalyst.
QUEST: Ah?
PARKER: But a number of risk factors have already been reduced. The risk of American recession is significantly reduced. The risk of a hard landing in China, I would argue, has come down quite a bit. The risk, which obviously, worries investors significantly, is the Eurozone crisis, and the lack of resolution, so far to that crisis.
QUEST: For good reason, Bob, because that particular risk can exacerbate all the others again.
PARKER: Well-
QUEST: If the Eurozone does not solve itself, and increases the risk of-of a recession again in the U.S., and all the other problems.
PARKER: Well, if the Eurozone goes into a deep and long recession, then obviously, that has a very negative effect on Chinese exports, on trade with America. And, you know, Europe is not isolated. And there obviously would be a domino effect onto other economies.
QUEST: But you don't think it will be for long?
PARKER: We think that the recession, probably, will last most of the year in countries like Spain and Italy. Germany, the numbers, actually so far, are not so bad. German growth this year, could reach 1 percent. It is not a great result, but it is not recession.
(LAUGHTER)
QUEST: And I noticed this morning, looking at the ECB's web site, that banks are still-in fact, last night was a record, 453 odd billion was parked overnight at the central bank.
PARKER: Well, this is another risk factor which worries investors, which is stress in the inter-bank system. And, I know, you mentioned this record deposit level at the ECB. Now what does that reflect? That reflects the banks want to park their money at the ECB because they are reducing their risk in lending money to other banks. And we have got very clear stress in the interbank market. Most notably in Europe.
QUEST: So, you summed it up. You know, the good banks are putting their money with the central bank, and the bad banks are borrowing because there was over 14 billion, last night, borrowed.
PARKER: Well, clearly a lot of the stressed banks in Europe, which need to raise capital, or they need to reduce their balance sheets, or they need to make further action on cleaning up their balance sheets, are struggling to borrow in the inter-bank market. Therefore, they have to go to the lender of last resort, the European Central Bank.
QUEST: The traffic lights? You can interpret the question how-it is one of those things of, there is the traffic lights, what question would you like to answer with them. I suppose (UNINTELLIGIBLE)
PARKER: Well, I think the interesting question, it comes back to, are we going to have this stop/start equity market for the whole of the year? Or are things going to progressively get better?
QUEST: Right.
PARKER: And my answer is, from the second quarter, around the middle of the year, we are actually going to see better equity market conditions. So, the traffic light will progressively move to green during the second half of the year. So, I'll go for a green, but with a three to five months time delay.
QUEST: Ah, then we're going to have to go back to a red, I'm afraid.
PARKER: Well, we are red for the moment.
QUEST: We're red for the moment. Bob, many thanks, indeed.
PARKER: OK, thank you.
(END VIDEOTAPE)
QUEST: Bob Parker running up the electricity bill, here I'll be changing all the traffic lights every two or three minutes. Those traffic lights will stay with us on this program, until we do get some more certainty. As long as they are flashing red or amber, until we get a good run of green.
In a moment, we are looking at New Hampshire, where the race for the Republican nomination-it is over for one candidate.
The man who knows just what it is like to be in the fight, after the break the activist, the campaigner and the former Democrat contender, Jesse Jackson, on politics and protest. In a moment.
(COMMERCIAL BREAK)
QUEST: Tonight, six Republicans are still standing in the race for the U.S. presidential nomination for the Republican Party. The Tea Party favorite, Michelle Bachmann has called it quits, finishing a disappointing sixth place in the Iowa caucus.
Michelle Bachmann said, voters have spoken and with a clear voice.
(BEGIN VIDEO CLIP)
MICHELLE BACHMANN, FMR. (R) PRESIDENTIAL CANDIDATE: I ran for the presidency foremost as an American citizen who believes in the foundation and in the greatness of our American principles. And our principles derived their meaning from the founders beliefs which were rooted in the immutable truths of the Holy Scripture, the Bible. And while a congressman by title, a politician, I never have been, nor will I ever hope to be. Because I am not motivated in this quest by vain glory, or the promise of political power.
(END VIDEO CLIP)
QUEST: Michelle Bachman. The front-runner, Mitt Romney, is heading to New Hampshire, which is the next battleground in the race for the nomination. He edged ahead of rival Rick Santorum, eight votes was in it. Each candidate won 25 percent of the Iowa Republican vote. Ron Paul came a close third with 21 percent.
The Reverend Jesse Jackson is no stranger to the battle for the Oval Office, running twice for the U.S. Democratic nomination in the 1980s. The civil rights activist is now the man behind the Rainbow PUSH Coalition. Earlier today I sat down with him. We talked about the politics of Iowan and the protests of Occupy. Let's start by asking if Mitt Romney's brand of conservatism will sweep the GOP back into power, in the style of George Bush?
(BEGIN VIDEOTAPE)
REV. JESSE JACKSON, PRESIDENT, RAINBOW PUSH COALITION: Well, at least President Bush talked about compassionate conservatism. Here we see, even in the Romney campaign, not much of a reach out, not much of an expansion. These candidates all campaign on the 10th Amendment, the amendment that justified, states right, slavery and segregation, and they did not reach out.
And so they railed against President Obama, but not an alternative economic plan. They couldn't campaign on the bin Laden situation, he's gone. They couldn't campaign on the troops in Iraq, they are coming home. There is, albeit slow, economic recovery. After all, when he went in we were loosing 800,000 jobs a month. The stimulus was too small compared to the depth of the hole. They at least put a (UNINTELLIGIBLE) and we've begun to come out. So, the more narrow they get the more room it gives President Barack to operate.
QUEST: Do you think that Barack Obama will have a very tough reelection?
JACKSON: He'll have a tough re-election, but he's tough. And he has a track record to run on. And that track record will put him in a strong position, his foreign policy.
QUEST: Even going into an election with unemployment, 8.8, 9 percent, or so?
JACKSON: Even with the employment rate being where it is, because he inherited a home foreclosure crisis. It has been a huge problem. Inherited a problem with the banks without the (UNINTELLIGIBLE) and therefore manipulating investment over lending; he inherited a huge crisis and has begun to stabilize the country.
QUEST: Let's talk now about the various Occupy Movements. Because I know you have been in the U.K., visiting them here, and obviously, been involved elsewhere.
The Occupy Movements, are-they rumble along with seemingly no direction, no common cause, and one wonders whether they aren't just now becoming a nuisance?
JACKSON: No, Occupy, the idea is bigger than the crowds. The idea is there is an inequality gap in access to capital and health care, and education. And it grows out of the fact that too few people have too much concentrated wealth. There is too much growing poverty. Too much unnecessary war, therefore too much alienation. So these groups are going to grow. They are going to grow because student loan debt is creating credit card debt. They are going to grow because unemployment is growing.
QUEST: So you don't think that-that the movement has busted itself, in the sense that it has exhausted itself? The helium's gone out of the balloon.
JACKSON: No, just as Jesus had to occupy the temple because there was corruption there, Doctor King had to occupy the highway between Selma and Montgomery because of the lack of voting rights, Mandela had to occupy the jail cell for 27 years in South Africa, he wouldn't go away. I think the Occupy forces will last as long as the inequality gap keeps growing.
QUEST: So when you meet Occupy, on whichever side of the Atlantic is, what do you tell them?
JACKSON: Remained disciplined, focused, non-violent and persistent. Because if student loan debt is breeding credit card debt, and tuitions keep rising, Occupy campuses-if you cannot afford health insurance, and people are getting sicker longer and dying earlier, Occupy some hospital grounds. Occupy the spaces of inequality.
(END VIDEOTAPE)
QUEST: Reverend Jesse Jackson.
When we come back, on traveler has told border guards to check his iPassport. Find out how one Canadian man from got from A to the USA without the real thing. In a moment.
(COMMERCIAL BREAK)
QUEST: It is a video player, a way to the web and many other things besides, including now, it seems passport. I'm referring of course, to the ubiquitous iPad. One man made it over the U.S. border, twice using his iPad and a lot of gumption.
He was a Canadian citizen who left his real passport at home. He persuaded the border guards to let him through on the strength of a digital scan of his passport stored on DropBox. That man also had other forms of I.D., which is why they may have let him through. However, the story has started us thinking about the future.
Back in 2008, I met up with now the former had of IATA, Giovanni Bisignani, at Zurich Airport. We got together to talk about how paper passports of this sort of ilk may be a thing of the past. And actually how you can go from this to using other mechanisms in the future of travel technology.
(BEGIN VIDEOTAPE)
QUEST (On camera): Here is the part where you have to show, before you board the plane, your passport and your boarding pass. What do you wan to do here?
GIOVANNI BISIGNANI, FMR. IATA DIRECTOR GENERAL: We want to get rid of this, of the passport. To identify the passenger in a different way so that you are able to board with this and you go through the gate, being identified with biometrics, iris, facial recognition or fingerprint. My idea is to try to board with your fingerprint. It is possible. We have the right technology. It is a matter of coordination and modernization with government.
(END VIDEOTAPE)
QUEST: So the passport is still an essential part of travel around the world. But as anybody like you or me, who has traveled frequently, knows, it is a process, a slow process to move from this, to the different forms of mechanisms that are now being used to get us through border control and border protection. One of the most important things is fingerprint technology. One of the oldest technologies used in forensics.
Widely started a decade ago. Some of you may remember the old INS Pack (ph) system, in the United States, where you held your hand up and squeezed. Israel used it for its resident cards and things like that. So no longer in use.
But then you have cameras. You look into the camera. And it recognizes your picture, one way or the other. Finally, you have the iris, where-please, stand closer. Please, move further back. Please stand closer, and onwards it goes. But IRIS, which has been used in the U.K., at Heathrow and other airports, is now under review, for these new e-passport gates.
Jim Boulden is with me to talk about this.
This is something that has really got-
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: It is very important, isn't it? I mean, when can we get rid of this. I love the IRIS, by the way, at Heathrow Terminal 5. But you are right, you do this.
QUEST: Please stand further back.
BOULDEN: And there is always that person in front of you, who can't get it right and they get excluded and have to come back out of it and walk down again.
QUEST: Right. It's going. No, actually, they said to me today on the phone.
BOULDEN: Yeah?
QUEST: The home office said, it is under review. We know what that means.
BOULDEN: Yes, because of these e-passports, you know, the idea that you would use all the biometrics.
QUEST: Right.
BOULDEN: Which is where you scan the-you still have to have the passport. I think what is clever about e-passports is they are trying to figure ways to not have fraud. You still have to open it for that information to then be activated. So as long as it is in your pocket, they say, you shouldn't have any fraud.
QUEST: OK, let's talk about the move, different countries, doing different things.
BOULDEN: Yes.
QUEST: The U.S. with its Global Traveler, Europeans with the biometrics.
BOULDEN: Yes, I noticed. I was interested. I didn't realize countries could be so different with which biometrics they use. In the U.K., no fingerprints. In Germany, two fingerprints, one from each finger. The U.S. two photos, no fingerprints on the chip, face recognition used. So, each country is a little different. So I think that might confuse people a little bit.
But still I was looking all day today, I couldn't find any example, where any company thinks soon we will go away from a passport and have it on your iPad, where it would be completely legitimate and you could use that instead of a passport.
QUEST: But let's just hit the Global Traveler scheme, from United States.
BOULDEN: Yes?
QUEST: What is the delay? Why aren't these things-and I know some of you out there will be thinking, privacy, I don't want to hand over my details or my iris, or my fingerprints. And that is a legitimate concern. But why is it taking so long?
BOULDEN: I found this one called the TSA Pre, which just launched on October 4, this is a new system, it is Beta tested now in some airports. This is going to be even faster than the global entry. And that is the next level. That is the one they're trying to look at, for really high- frequency travelers; they say that will get you through very quickly. That is the next test. If that one works well, then you can see it beginning to snowball that way.
The idea is to take people like you, who they see three four times a year, and just let you get through the system, very, very quickly. So they don't have to worry about you, they want to worry about that other guy.
QUEST: You.
(LAUGHTER)
BOULDEN: But you know, Accentra (ph) says if they do this right, four times faster through the airports, if you get the biometric system correct, with a automated machine. If you can get that machine to do it right, you are going to get through fast.
QUEST: All right. Let's put up the Twitter address and the e-mail address. Because I know this is something that you are going to have thoughts and view on. Twitter is @RichardQuest, and the e-mail is Quest@CNN.com.
While we just finish off our discussion, we'll show you that, because nothing enrages frequent fliers and travelers more than all of this sort of stuff.
BOULDEN: Yes. And not only is it just security, but because if the airlines can differentiate people who travel in the front of the plane, from the people who travel in the back of the plane.
QUEST: Oh, please! Please, please!
(DESK BELL CHIMES)
BOULDEN: Then the airlines themselves could use the biometric information even more efficiently and makes sure they whisk those people right through the system if they pay a bit more, or a lot more.
QUEST: You enjoyed that one.
(LAUGHTER)
QUEST: I would. I would, but I can't because it would also show an enormous amount of data, show Jim Boulden's picture. I've covered it up suitably.
All right. Many thanks.
Coming up after the break, more pressure on Hungary's government. Investor confidence is evaporating. Protestors want the prime minister to step down. I'll speak to Hungary's government spokesman in a moment.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest.
More QUEST MEANS BUSINESS in a moment.
This is CNN. And on this network, the news always comes first.
The Republican White House hopeful, Mitt Romney, has received an endorsement from the 2008 Republican presidential nominee, John McCain. The two are now campaigning in the key U.S. state of New Hampshire. Romney won the Iowa caucuses by the tightest margin in the Republican presidential race, beating Rick Santorum by only eight votes.
In London, the two men convicted of killing Stephen Lawrence almost two decades ago have been sentenced to more than 14 years in prison each. Gary Dobson and David Norris were convicted of the racist murder after a trial based on new forensic evidence.
Iran's oil industry may soon face new pressure from Europe. EU ministers agreed in principle on Wednesday to ban Iranian oil imports. France's foreign minister says he hopes the EU can finalize the embargo later this month. Western nations are worried Iran may be trying to develop nuclear weapons, an accusation that Iran steadfastly denies.
Angry Nigerians are calling for more protests. Thousands of people demonstrated this week across the country over the high price of oil. The government removed fuel subsidies at the start of 2012 and that doubled the price of petrol virtually overnight.
The Hungarian forint hit a new low against the euro, as investors worry about the country's ability to for -- to borrow. Late on Wednesday, the currency broke the 320 forints per euro for the first time. The slide is due to concerns over Hungary's new constitution.
Opposition activists took to the streets in their thousands last week protesting against the passages of new laws, which includes a new central bank law. The demonstrations say it threatens democracy by removing checks and balances.
It wasn't only the forint that fell today. Hungarian stocks were down, too. In fact, the country's entire financial system seems to be at threat from controversial measures introduced by the Orban government.
Join me in the library...
(COUGHING)
QUEST: -- excuse me -- and you will see what I mean. And perhaps in a day which saw some stock markets rise and even those that fell barely budged, the Budapest BUX Index, BUX, down on Wednesday, 2.4 percent. The banks were hardest hit OTP fell almost 7 percent. And, in fact, the word from the international lending community, from the banking world, the financial world, is that Hungary is just about toxic in the sense of nobody wanting to go there and do business at the moment, because of the state of the economy and the new regulations.
There are disputes with the IMF and other European institutions. Hungary has asked the IMF for conditional support last year. The institutions are agreed by the new constitution, the fundamental law and the cardinal law. They say it questions the independence of the central bank because deputies can be appointed by parliament, a fiscal committee can have extra members appointed by parliament and they said -- say that that downgrades and questions the integrity and independence of the central bank governance.
So the IMF talks are off. The EU talks are off. And Hungary continues to -- to battle along.
Hungary is now at junk status. The rating agencies, the bond markets are concerned. S&P down to junk. Moody's did the same. Yields on 10-year bonds are now above 10 percent.
If you think that 7 percent is considered to be the pain threshold for Italy, Spain and EU, Eurozone countries, Hungary is at 10 percent.
So in this scenario, this morning in "The Wall Street Journal," there was an op-ed piece by Hungarian government called, "Hungary Is Being Rebooted," which I could -- Hungary state secretary for communication, who wrote the article, has defended the government actions.
I put it to him earlier that many of the critics of the new laws are calling them retrograde and authoritarian measures.
(BEGIN VIDEOTAPE)
ZOLTAN KOVACS, HUNGARIAN STATE SECRETARY FOR GOVERNMENT COMMUNICATIONS: Yes, that's been the political argument of the political opposition throughout this year. And I just would like to remind you that a year-and-a-half ago, this government had a very clear mandate, a very huge mandate, actually, to achieve what we are -- we are achieving, actually, at the moment, that was due to effectuate the (INAUDIBLE) changes in this country, to refurbish, renew, reboot the system and put it on a (INAUDIBLE) that is long-lasting and sustainable.
QUEST: Well, except you talk about the political opposition in their criticism. But when you have the U.S. secretary of State, you have Jose Manuel Barroso of the Commission, you have the European Central Bank, the European Union, the IMF, you know, one can -- one can pick any one of these people, they all say the same thing, that the new laws have potential for misuse and are potentially against EU treaties.
KOVACS: The potentiality or the potential expression is the importance here, because there's a first reading and there's a worst reading of things that are happening around these new fundamental law and the cardinal law.
QUEST: And shouldn't we be allowed to...
KOVACS: It will be...
QUEST: -- and shouldn't we be allowed -- shouldn't we be allowed to take the worst reading, because the history does show that whatever happens at the beginning, once an authoritarian government decides to go down that road, something can look good on day one. By day 100, it's very different.
KOVACS: The problem is that the -- the worst reading is a false reading. The new Hungarian constitution is showing to the future. It is getting rid of the remnants of forced communism and the remnants of those unsustainable systems, institutional and constitutional, that led the country, by 2008 and '09, to the brink of collapse.
So it was high time to -- for getting rid of the constitution.
QUEST: The ECB is worried about the independence of the Hungarian Central Bank. You know that the arguments backward on this particular one. The Hungarian government said it wasn't going to need IMF help. Now you're saying you want -- you mentioned IMF help.
The IMF and the EU are refusing to negotiate. It's a mess and, arguably, it's a mess that Hungary's government has led itself to, sir.
KOVACS: Well, enough it's actually the mess that has been left to us by the previous two governments. So, therefore, we are cleaning up. Actually, Hungary has taken, if you like, the bumpy way a year-and-a-half ago, when it -- when we had chosen to finance ourselves from the market. But in our possession, there's exactly the assurance that we are going to be strict, we are going to be determined and we are going to continue with the structural reforms that the economy requires and the -- the institutional and constitutional system requires.
And don't forget that the IMF is called in for reasons absolutely different from the -- the circumstances, say, back in 2008, when the IMF was saving Hungary from a complete collapse.
This time, there are pressures in the the international monetary society, which is not expecting only Hungary or Central Europe, but the entire European Union, the Eurozone. And this is a kind of a safety net we are looking...
QUEST: All right...
KOVACS: -- for from the IMF.
QUEST: But doesn't European history show that the moment the red alarm starts ringing at authoritarianism, press censorship, democratic degradation, that the rest of us have a right to be worried?
KOVACS: I don't think so. (INAUDIBLE) a historian, so I know a lot about Hungarian and European history. The situation is completely different.
I think it's a poli -- it's a very stable political community in the European Union. I mean the first communist countries have been through enormous changes in the past couple of years, the past 20 years.
QUEST: I'm talking about Hungary. I'm talking about what -- what's happening in Hungary.
Should we not now be worried about Hungary?
KOVACS: No.
(CROSSTALK)
KOVACS: In no way this constitution, the new institutional structure, is endangering neither democracy nor the Central European countries around us. I think these are every and each issue and value that is included in the new constitution is in line with the European standards.
(END VIDEO TAPE)
QUEST: Zoltan Kovacs joining me earlier from Budapest, talking about the situation in Hungary. The story will continue to develop here on the program.
In this part of the world, the mere mention of her name can send critics soaring or shivers down your spine. Margaret Thatcher will never be forgotten, especially now that there's a new film about her time. We'll take you to the premier in a moment.
(COMMERCIAL BREAK)
QUEST: The start of a new year means stock taking for lots of people. Well, we'll have to check our finances and we have to do our careers and all those sorts of issues. For keepers at the London Zoo, it's all about flippers, feathers and endangered species. They're taking an inventory of 16,000 animals. It's an undertaking and this is how they go about their world at work.
(BEGIN VIDEO CLIP)
MARK HABBEN, ZOOLOGICAL OPERATIONS MANAGER, LONDON ZOO: We're (INAUDIBLE) London Zoo doing our annual stock take and counting all the animals that we have on site. It involves, really, the individual (INAUDIBLE) sections, which is divided into groups of mammals, reptiles, etc. Etc. The keeper teams are literally going around their individual enclosures and counting the animals that they've got to monitor any breeding successes they might have had throughout the year, to share that information with other zoos, as well, and vice versa. So we're breeding species that are known to be quite difficult to breed. We can share those successes with other collections and they can do the same for us.
The most challenging animals in the zoo, with the exception of the fish, it's probably (INAUDIBLE) squirrel monkeys, because getting them in one spot is a very, very difficult. They're fast-moving. They're all over the place. They've got a huge enclosure.
Mir cats, as well, prairie dogs are very hard, because they're often underground, as well. So they're certainly the more challenging species.
We've increased our number of penguins in the zoo. We've had some breeding successes and brought more animals in with the opening of the penguin beach. We've got nearly 70 animals in that enclosure. Counting them is a quite difficult task, as well, some because they all look the same, they're all identical and they're very fast-moving in the water, as well. So it's actually easier to get them up onto the land, feed them and count them that way.
At our last count last year, we had well over 80,000 individual animals and that's over 750 species. So you can appreciate it really is a daunting task.
But it's nice being able to see how many animals you've got and the hope that you're confirming your expectations, for the most part. But, you know, it's a fun task.
(END VIDEO CLIP)
QUEST: I just love the idea of going around counting all those animals once a year.
Now, when we come back, we go into the political jungle. And this time it's the premier of "The Iron Lady," when we come back.
(COMMERCIAL BREAK)
QUEST: She was a prime minister unlike any other. Now, the story of Margaret Thatcher's life and career has premiered in London. It stars Meryl Streep as Mrs. Thatcher. "The Iron Lady" tells the tale of one of the most controversial figures in British political history.
(BEGIN VIDEO CLIP)
(BEGIN VIDEO CLIP FROM "THE IRON LADY," COURTESY PATHE/THE WEINSTEIN COMPANY)
MERYL STREEP, ACTRESS: I do this to (INAUDIBLE). The right honorable gentleman knows very well that we have no choice but to close the schools.
(BOOS)
STREEP: They're -- know
(CROSSTALK)
STREEP: -- because his union paymasters have called a strike deliberately to cripple our responses.
(BOOS)
STREEP: Teachers cannot teach when there is no heating, no lighting in their classrooms. And I ask the right honorable gentleman, whose fault is that?
(BOOS)
(END VIDEO CLIP)
QUEST: The House of Commons PMQ is the prime minister's questions. The stars of the film walked down the blue carpet in London a few hours ago.
Now, Neil Curry explains to us now why Mrs. Thatcher's story still lives on.
(BEGIN VIDEOTAPE)
(BEGIN VIDEO CLIP FROM "THE IRON LADY," COURTESY PATHE/THE WEINSTEIN COMPANY)
STREEP: One's life must matter.
(END VIDEO CLIP)
NEIL CURRY, CNN CORRESPONDENT (voice-over): The film reveals a frail, present-day Margaret Thatcher revisiting some of the highlights of her life through flashbacks and lucid moments between the onset of dementia. This is the woman credited or cursed, depending on your political view, with privatizing state-owned industry, reining in the power of the trade unions, standing up to the cold war Soviet superpower and defeating Argentina to recover the Falkland Islands.
(BEGIN VIDEO CLIP FROM "THE IRON LADY," COURTESY PATHE/THE WEINSTEIN COMPANY)
STREEP: The Falkland Islands belong to Britain and I want them back.
(END VIDEO CLIP)
STREEP: People who go in thinking it's a bio pic or a documentary of all the events of Margaret Thatcher's life, that is not what it is. You know, it is a look back at the maybe regrets or the glory days or the -- just the things that are pulled up by the turbulence of these -- her present, her present destabilization.
But I didn't, you know, I didn't agree with her politics at the time that she was elected, but I remembered being very, very secretly thrilled that a woman had been elected leader.
(BEGIN VIDEO CLIP FROM "THE IRON LADY," COURTESY PATHE/THE WEINSTEIN COMPANY)
STREEP: Gentlemen, shall we join the ladies?
CURRY: The film shows her battle to be taken seriously in a political world dominated by men. Thatcher was Britain's first and so far only female prime minister. During her 11 years in power, her policies and personality polarized the British people.
(BEGIN VIDEO CLIP)
MARGARET THATCHER: And we're very happy that we leave the United Kingdom in a very, very much better state than when we came here 11-and-a- half years ago.
CURRY: Twenty-one years since she left Downing Street, the name Margaret Thatcher still stirs British passions.
UNIDENTIFIED MALE: I'm one of Thatcher's children. I was born in the 80s. An absolutely fantastic woman. I'm glad that she's been immortalized in the film.
UNIDENTIFIED MALE: (INAUDIBLE) anguish, horror. She was an evil woman.
UNIDENTIFIED FEMALE: I think she was a prime minister that very much divided the nation. But I think people reflect very fondly on her and feel very inspired by everything that she achieved in such a long term.
(BEGIN VIDEO CLIP FROM "THE IRON LADY," COURTESY PATHE/THE WEINSTEIN COMPANY)
UNIDENTIFIED MALE: Welcome to the mad house.
(END VIDEO CLIP)
CURRY: The filmmakers talked to political friends and enemies of Margaret Thatcher under promises of anonymity. Some who had not been consulted feared the picture would not be complete without their views. Some online critics dismissed the film as Hollywood whitewash, while others feared the name of a beloved leader would be dragged through the dirt.
All of this before anyone had seen a frame of the picture.
Margaret Thatcher's dynamic personality provides a character role which Meryl Streep can really sink her teeth into. And if you believe the bookmaker's odds, this is an Oscar-winning performance from Hollywood's leading lady.
Neil Curry, CNN, London.
(END VIDEO TAPE) QUEST: So, being a business program, we need to look a bit further at this. Few things riled Mrs. Thatcher's opponents more than her economic policy. When there was Reaganomics in the U.S., Thatcherism took hold in the UK. Its effects can still be seen today. Its legacy is a lot more complicated, as Jim Boulden explains.
(BEGIN VIDEOTAPE)
JIM BOULDEN, CNN CORRESPONDENT (voice-over): Margaret Thatcher swept into office in 1979 with the promise of transforming the British economy, a promise she most certainly fulfilled.
THATCHER: Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith. And where there is despair, may we bring hope.
BOULDEN: In the 1970s, the country's economy suffered from energy shortages, massive strikes, raising inflation, three day work weeks. Her then right-hand man, Geoffrey Howe, whose resignation in 1990 played a big part in her downfall, still says she was the right person for the job.
GEOFFREY HOWE, LONGEST SERVING MINISTER UNDER THATCHER: And by the time we were elected in '79, recognized that Britain was in the last chance saloon. Everyone had tried other methods. We decided there was no alternative to tough medicine which would have to be sustained for some time. And it was accepted because there was no alternative.
BOULDEN: That alternative became known as Thatcherism. She cut the effective 98 percent tax rate for top earners to 40 percent. She made it harder for trade unions to call strikes. She unleashed the so-called "big bang," which deregulated London's financial markets, creating a financial powerhouse to rival New York.
She also privatized many companies with names that start with British, from Airways to Petroleum to Telecom.
Her belief -- private enterprise and competition would create wealth.
Thatcher's opposite for much of her premiership was Labour's Neil Kinnock, who says she hurt the economy in one important way -- widening the gap between rich and poor.
NEIL KINNOCK, FORMER LABOUR PARTY LEADER: She actually deepened and widened the inequalities of income. The number of families in poverty in the United Kingdom during the period of Margaret Thatcher's premiership increased fourfold. Old age pensioners, never well off in the United Kingdom, endured much more serious levels of near destitution. And the records are there. The facts are there. I'm not making a political point on this. It's a matter of historic record.
RONALD REAGAN, PRESIDENT OF THE UNITED STATES: Prime Minister, the entire world salutes you...
BOULDEN: Thatcherism was joined with Reaganomics, the goal of cutting taxes and government spending, though spending, along with deficits, actually rose in the U.S. during Reagan's time.
So what was Thatcher's economic legacy to her supporters?
HOWE: The test of our success is that when Labour finally did come back into office in 1997, 18 years on, they didn't reverse any one of our policies. They've all been accepted a part of what was necessary to create a prosperous economy.
BOULDEN (on camera): That was, of course, before the recent economic crisis and calls for some industries to be re-regulated and perhaps a rethink on how Thatcherism impacted the British economy.
Jim Boulden, CNN, London.
(END VIDEO TAPE)
QUEST: You only have to mention the name and it still creates debate, discussion and a heated one, at that.
Karen Maginnis is at the World Weather Center
We might do with some heated something at the moment.
KAREN MAGINNIS, ATS METEOROLOGIST: Yes, that's true.
And across Ireland and Northern Ireland and Scotland, as well as into England yesterday, those blustery winds. But for India, it is exceptionally cold, considering that during the hottest months, those temperatures are in the mid 30s, upper 30s and even low 40s.
But for now, it is the cold and the fog that is affecting the international airport in New Delhi, one of the airports that is mostly affected in the world by fog.
And here you see some men that are sitting around the warming flames of a fire outdoors while the battle with the cold continues.
And I checked out New Delhi. And the fog has actually lowered the visibility there, now down to .1 Khaled kilometers. Well, we did see about three -- two or three just in the past hour.
Well, over the next several days, Thursday through Saturday, those temperatures are still going to range between three and five degrees below where they should be. But we do think that in the next couple of days, the fog is not to be quite as prevalent or pervasive as it has been. It actually began in November, which is fairly early for the fog season to begin, which continues through January.
New Delhi, the temperature has gone down. Right now, it is 13 degrees; Abbottabad, 18. Mumbai reporting 23 degrees. In Calcutta, the temperatures there around 20.
And in the Florida Peninsula in the United States, it is also very cold. The fierce cold temperatures, below zero readings. Tallahassee, Florida with minus eight. The average temperature is usually around four.
This has highly affected the citrus crop, which is -- 70 percent of it is produced in the United States. And it's a $90 billion industry per year -- Richard.
QUEST: Karen, we thank you for that.
Karen Maginnis at the World Weather Center.
I'll have a Profitable Moment in a second or two.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment.
Earlier on this program, you heard a robust defense of Hungary's new constitution, the cardinal law and the fundamental law. The government in Budapest's aim is simple, it says. It is to repair the economic damage wrought over the last two decades by previous administrations. And to do that, it needed a new constitution and a raft of new laws.
So far, so good. That's what they say.
It is the Hungarian government's execution that is causing a great deal of concern outside and inside the country. The range of international figures and institutions voicing dissent is huge -- Hillary Clinton, Jose Manuel Barroso, the IMF, the European Central Bank, the European Union.
If all these people have their concerns, frankly, we are entitled to raise our own. That is precisely what the people of Budapest are doing. It's what the governor of Hungary's own central bank is doing. One senior banker told me Budapest was now shunned by the international financial world. The risks are too great in a country doing battle with the IMF and EU.
The fear is the economy has more to suffer in its long and checkered history, Europe has seen too many laws justified by expediency morphing into laws of oppression.
And that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I hope it's profitable.
END
