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Quest Means Business
U.K. Criticized Russia and China for Vetoing a U.N. Security Council Draft; U.S., Europe and the Arab League have Economic Sanctions in Place Against Syria; Foxconn Poor Working Conditions; Manufacturing Jobs are an American Export. Hong Kong Expanding Subway System; On the Brink; Ivan Watson Norman Lamont; China Snubs E.U. Carbon Tax Scheme; Interview with Mark Bristow; Interview with Gloria Guevara
Aired February 06, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HALA GORANI, CNN NEWS ANCHOR: I'm Hala Gorani, there are your headlines, this hour.
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UNIDENTIFIED MALE: (speaking foreign language)
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Anger and grieving in Homs, Syria where at least 37 people have been killed, today, at least 19 more have been killed across the country. The regime seems to be stepping up its campaign to crush defense by protestors in Homs and other cities.
The escalating violence has lead Britain to recall its ambassadors. Foreign Secretary William Hague called China and Russia's veto of a U.N. resolution, "A betrayal of the Syrian people." The U.N. has closed its Damascus embassies citing an unstable security situation.
Some progress in the reconciliation efforts between the rival Palestinian factions. Leaders of Hamas and Fatah have signed an agreement that calls for the Palestinian authority president Mahmoud Abbas to lead an interim unity government at C.M. (ph). The rest of that Government is set to be announced next week. Israel's prime minister says that if implemented, the new deal would be a step backward from peace.
Romania's president has started talks on naming a new prime minister after the resignation of Emil Boc. Boc said he was stepping down in an effort to help defuse political and social tensions. Last month, demonstrators protested on austerity measures and they demanded that their government leaders resign.
Also among the headlines, rescuers in Pakistan are trying to find roughly 50 people believed to be missing after a factory collapsed in Lahore. At least six people were killed when the building fell, apparently after a boiler exploded there and eight people have been pulled alive from the rubble.
That is a look at your headlines; I'm Hala Gorani in Washington. QUEST MEANS BUSINESS, live from CNN London, starts now.
NINA DOS SANTOS, CNN NEWS ANCHOR: No U.N. resolution, no military action. Obama says the diplomacy and economic sanctions are key to change in Syria.
Greece's last lifeline, Merkel and Sarkozy, say that the country must now sign up for the deal and do so quickly.
And high tech, low wages. We examine allegations of long hours and poor working conditions in China.
Hello, I'm Nina Dos Santos and this is QUEST MEANS BUSINESS.
Good evening. As fighting rages in Syria, the U.S. says that it will use diplomatic and economic measures to end the bloodshed.
This is said to be the sound of shells falling on the city of Homs. These pictures are taken from a video posted on YouTube, but at the moment, we are not independently able to verify what it shows.
The Syrian opposition says that at least 56 people were killed across the country on Monday, 36 of them in the city of Homs.
Syria state-run television network said that Homs terrorist groups were attacking police and civilians. The U.S. State Department has announced that staff working at its embassy in Damascus have now left the country. It says that the building is not sufficiently protected from an armed assaults.
In the meantime, the U.K. through its foreign minister, William Hague, announces that Britain's ambassador to Syria had also been recalled. He also criticized Russia and China for vetoing a U.N. Security Council draft resolution which demanded an end to the violence.
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WILLIAM HAGUE, UN FOREIGN BRITAIN'S AMBASSADOR TO SYRIA: Russia and China have twice vetoed reasonable and necessary action by the United Nations Security Council. Such vetoes are a betrayal of the Syrian people. In deploying them, they have let down the Arab League, they have increased the likelihood of what they wish to avoid in Syria: civil war. And they have placed themselves on the wrong side of Arab and international opinion.
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SANTOS: CNN's Jill Dougherty joins us now, live from Washington to shed more light on what all this means and what's going on from here on.
And Jill, first off, let's be specific for our viewers. The United States hasn't actually severed diplomatic relations, here, has it?
JILL DOUGHERTY, CNN NEWS CORRESPONDENT: Yes, that's important to note. What they are doing is they are shuttering the embassy. They have pulled out the staff. They `re coming to Washington and they will be, in essence, setting up the embassy here, in Washington, at the State Department. The ambassador remains in the ambassador, they still have diplomatic relations and the Syrian embassy is expected to, here in Washington, is expected to be -- remain open.
But, why the shuttered it was, they say that security is deteriorating by the hour. They say that they had asked over weeks for the Syrian government to increase security outside. You know, the embassy is on a very busy street, very near a busy street and what they wanted was either shutting down the street, providing some types of barricades and that the Syrian government would not do that.
What they're worried about is some type al Qaeda-style attack. So, that is why they pulled them out. So, you're right, diplomatic relations continue.
SANTOS: But diplomatic relations are still tense, particularly given the fact that there has been disappointment when it comes to this U.N. Security resolution. Tell us about how the U.S. is taking that, presumably they're furious.
DOUGHERTY: Well, yes. It's more that disappointment, they are furious. And all you had to do was listen to the comments by Susan Rice right after the vote, this past weekend; Secretary Clinton has made comments. And right now, what they are worried about is with the government action in Syria, the attacks on the cities, Homs and others, that the citizens, themselves, Syrians are arming themselves, some getting weapons from inside the country, some from without. And that this is turning into a civil war.
How do you stop it? obviously, diplomatic relations and diplomacies, so far, have not done it and you don't have the Russians and Chinese aboard and so what do you do? And that's what they're working on, right now.
SANTOS: OK, Jill Dougherty joining us there, from CNN Washington. Many thanks for that.
The U.S., Europe and the Arab League, already have economic sanctions in place against Syria. Those restrictions are designed to try and pile on the pressure on the regime there, but as Arwa Damon now reports, it's the country's poorest people who are affected the most.
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ARWA DAMON, CNN CORRESPONDENT (voice-over): At this particular market in Damascus, all shoppers are reluctant to talk on camera. The cloak of fear surrounds everything, no matter what the topic of conversation; however, the impact that sanctions are having cannot be masked.
(on camera): As one shop owner put it, look around, you can see for yourself that the market is not as busy as it used to be. Things like eggplants, cucumbers, tomatoes, basic staples in the average diet, here, well they're imported from Jordan, the shop owner was telling us and their price has gone up 40 percent. And then you have products like these coconuts brought in from Sri Lanka, people aren't buying things like this anymore.
(voice-over): The sanctions imposed by the West and the Arab League were intended to deliver a blow to the government that would force the Assad regime's hand. Instead, the economic pinch is being felt by those who can least afford it.
Mohammed Asiad (ph) sees it daily in his clientele. It hasn't yet hit the middle and upper class families.
"It's the lower class that has been forced to become more conservative in their spending," he says.
(on camera): Powered baby's milk, 35 percent increase in price, just about the same for anything here that has been imported. Some other products, as little bit more. We just saw a customer come in asking how much Nutella had gone up, 50 percent. He immediacy turned around and walked straight out the door. And it really is, when it comes to foreign imported goods, that one can see the impact of the situation that the sanctions are having on the local market.
Cracked wheat, though, that's a local product, it stayed relatively stable. Rice has been subsidized by the government.
(voice-over): But other local products have seen a price hike and it's mostly due to the oil sanctions which are having the biggest trickledown effect, says economist Nabil Sukkar.
NABIL SUKKAR, ECONOMIST: I should say that we are trying to cope with the situation by encouraging our exports to Iraq and Iran and trying to find markets for our crude oil, trying to find sources for our import -- for that import.
DAMON: Syria's not refined enough oil products, like diesel, to meet local demand. Sanctions are making imports a challenge, causing prices to go up. And that has even impacted the cost of some local products, like chicken.
"There needs to be a certain temperature that is maintained when the chicks are growing, it's a critical three month period," explains this man who sells chicken. This means heat and light. Running the equipment requires diesel. As a result, the price of chicken, which used to be easily affordable to even the lower class, has gone up 20 percent, and it could get worse.
SUKKAR: Well, it is also important is that the sanctions are pushing the government to go into protectionism and reversing its liberalization (ph) policies. So, this could be another victim of the sanctions, going back to the old command economy tools.
DAMON: The sanctions are working, though perhaps not quite yet the way those imposing them intended.
Arwa Damon, CNN, Damascus.
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SANTOS: Coming up next on QUEST MEANS BUSINESS, E.U. leaders are losing patients with Greece. Angela Merkel and Nicolas Sarkozy pile on the pressure, but there's no agreement in Athens.
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SANTOS: Whatever their crime, whatever the brand, there's a good chance that you're watching this very show on a product made at Foxconn. It's an electronics company which produces about 40 percent of all of the total electronic equipment out there in the world, today. And tonight, we're a look at the human cost of its operations.
Foxconn's workers in China talk of punishing work hours and also a work culture that's more like the military. Labor groups say that those conditions lead to several worker suicides in 2010 and a threatened of mass suicide, just last month.
Well, Foxconn responded by raising wages and purportedly improving working conditions for its staff. And while its reputation may have taken a severe blow in the West, people in China it seems, are still lining up to get jobs there.
Foxconn is a subsidiary of Taiwan's Hon Hai Precision Industry Company. Apple is one of its most successful clients. But Foxconn also assembles goods for a whole rost (ph) of other family known names. We're talking about people like Amazon, Dell, Hewlett Packard, Motorola, Nintendo, Nokia and Samsung, as well as Sony electronics. Some of the other household names include, IBM, Microsoft, also Cisco Systems that this (INAUDIBLE) does business with.
Foxconn employees more than a million people around the world, our Stan Grant spoke to one of them. a young woman who describes the conditions inside the Foxconn facility.
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STAN GRANT, CNN SR INTERNATIONAL CORRESPONDENT: (INAUDIBLE) my iPad.
(voice-over): Believe it or not, this woman's never seen an iPad before, even though she toils more than 60 hours a week making them.
MISS CHIN, EMPLOYEE OF FOXCONN: Oh, I like it.
GRANT: You like it?
CHIN: UNIDENTIFIED FEMALE: Yes.
GRANT (voice-over): She's like many migrant workers from rural China spending endless hours putting on screens, but never glimpsing the finished product.
Here's another first, this is her only meal at a restaurant since she started at Foxconn, a company that produces electronics for the world leading brands.
CHIN: It's very (INAUDIBLE)
(on camera): Yeah, interesting...
GRANT (voice-over): This sure is a change from the factory where she works, sleeps and eats. She doesn't want to be identified; we'll call her Miss Chin. If she's caught speaking to us, she says she will lose her job.
CHIN (through translator): We were being trained for work. They told us that if we accept interviews, we will be investigated for criminal responsibility, according to law. It's really a big deal.
GRANT: Miss Chin is one of more than a million workers at Foxconn in China. She works at this factory in the city of Chingdu, installing iPad screens.
The company makes the iPads, iPods and iPhones that have made Apple a commercial and cultural icon, but there are no iWorkers here, only we workers and Miss Chin says, "We work whenever Foxconn says so."
CHIN (through translator): They use women as men and they use men as machines. There's another way of saying it. They use women as men and they use men as animals.
GRANT: (on camera): Well, this is the front gate of the Foxconn factory is as far as we're going to be able to go. But every day, literally tens of thousands of workers go through these gates. According to the worker that we spoke to, people don't tend to stay very long, here. If they have any complaints, well the attitude of management is, if you don't like it, you can leave.
(voice-over): Only weeks ago, workers threatened mass suicide at a Foxconn factory in Wuhan, manufacturing Microsoft products.
Microsoft said in a statement, it investigated and found the matter related to staffing assignments and transfer policies, not working conditions. The company noted that it works to ensure employees are treated fairly. Foxconn says it resolved the dispute.
But in 2010, the company made unwanted headlines when more than a dozen workers killed themselves, forcing Foxconn to improve its factories.
The company tells CNN it boosted pay and provided counseling. Foxconn now boasts that its on-site healthcare and worker living conditions, which it claims are among the best in China.
Apple's being criticized for its links to overseas factories it maintains it would not work with companies that do not respect their employees.
In a recent e-mail to staff, Apple addressed critics, it says, "We care about every worker in our worldwide chain." Miss Chin, though, sees it very differently.
CHIN (through translator): Do they care about us? I don't know. At least I'm not getting any of that, here.
GRANT: Though Foxconn insists its workers are treated fairly and their rights fully protected, workers rights groups say the company favors only a privileged few, executives, managers. For the many thousands of others, it is run with a military culture. They point to unpredictable hours at the whim of management, complaints of inadequate breaks and workers not even allowed to speak on the factory floor.
As we found, they're not too keen to speak outside, either.
(on camera): Want to speak to us?
UNIDENTIFIED FEMALE: (INAUDIBLE)
GRANT (voice-over): We had to meet Miss Chin at this restaurant, it's a rare outing for her, Foxconn takes up every waking moment.
CHIN: It's so boring. I can't bare it anymore. Every day was like I get off from work and I go to bed. I get up in the morning and I go to work. It became my daily routine and I almost felt like I was some kind of animal.
GRANT: Hers is just one tale, but it's an experience repeated elsewhere by other disgruntled Foxconn employees. She says she will leave soon to go back to college, she has no desire to return here.
CHIN: (INAUDIBLE) I don't want to work in Foxconn.
GRANT (on camera): You don't?
CHIN: No, I don't.
GRANT (voice-over): But, there is always the lour of that iPad.
(on camera): You like it?
CHIN: I want to keep I want to have one.
(LAUGHTER)
GRANT: You want to have one?
CHIN: Maybe one day I have enough money.
GRANT (voice-over): Enough money? Right now, Miss Chin says she earns less than $1 an hour.
Stan Grant, CNN, Chingdu.
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SANTOS: It was about two years ago that Foxconn decided to raise its wages in China after the suicide controversy began, and this is how it played out in just a matter of months. The basic salary, when those suicides began was $132 per month, then in July Foxconn increased its minimum pay by 30 percent to $176 per month. Three months later we saw another increase, this time up two-thirds, or 66 percent and that, in turn, brought the monthly salary up to $294.
But of course, with such a modest wage bills, it's clearly cheaper to run a factory in China as it is in the United States and as Jim Clancy now reports, manufacturing jobs are fast becoming a big American export.
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JIM CLANCY, CNN NEWS CORRESPONDENT (voice-over): We're advised that no matter where you're doing business around the globe, the factory floor is in China. As outsourcing and relocations continue a pace, Europe and the U.S. are bleeding jobs. Politicians say they want it reversed.
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BARACK OBAMA (D), UNITED STATES PRESIDENT: We have huge opportunity, at this moment, to bring manufacturing back.
My message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country.
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CLANCY: Apple's late founder, Steve Jobs, met with President Obama last year and put it bluntly, "American manufacturing jobs are not coming back."
Workplace wisdom, when it comes to profits, patriotism cannot compete. Corporations contend it's not all about profits, either. Experts say the U.S. doesn't train enough people for midlevel jobs, those between a high school diploma and a college degree.
Many manufacturers have concluded that Asian workers, supply chains and assembly lines are faster and better. U.S. labor organizations counter the Chinese government is funding the infrastructure and exploiting its workers to lour in foreign corporations.
Apple has been embarrassed that one of its assembly operations in China has become notorious for worker suicides.
BOB BAUGH, AFL-CIO INDUSTRIAL UNION COUNCIL: Do you know what one of their solutions were? Well, we should put up more nets so people can't off their buildings. We should have more psychiatrists to help advise people. And oh, we should have more medical services to help the people who get hurt doing this. Instead of talking about what's wrong with a country that has no labor right. I mean, people die in this country, to stop that behavior.
CLANCY: Apple, the most valuable company in the U.S. outsources and doesn't apologize. Directly or indirectly, Apple employs 700,000 people overseas and just 20,000 in the U.S.
U.S. workers do get to deliver the products to homes and store shelves. Apple products do inspire parallel innovations by American entrepreneurs who profit from them. Apple's prominence in the marketplace and U.S. unemployment have made the company a target for election year politics.
RICK SANTORUM, REPUBLICAN PRESIDENTIAL CANDIDATE: Well, we're competing for jobs that China wants to take away from us. But we have to have a competitive environment for America.
CLANCY: It's a familiar theme, bring back the jobs. But the embarrassing fact is that the U.S. has no strategy.
BAUGH: Frankly, it's up to the government, it's up to us, as a country to have a strategy, it's up to us, as a country to talk with our employers in the community and say you have some obligations here, you know, you actually do business in this country.
CLANCY: In the past two years, the U.S. has gained more than 330,000 manufacturing jobs. Experts credit rising costs in China, a weakened dollar, and rock bottom interest rates. No, it isn't a strategy, it's market forces. America will just have to settle for that.
Jim Clancy, CNN, Atlanta.
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SANTOS: Well, this story impacts business right across the globe and as such, we continue to examine the issues at CNN.com, including why some top economists say that sweat shops are just necessary for developing economies to grow. You can read more about that on our Bis360 blog and to access it, you can go to CNN.com/business.
Now, it's one of the world's most densely populated places, so how can Hong Kong find space to find a whole new subway system? We'll tell you after the break. But before we get to that, here's a clue. It involves quite a lot of dynamite.
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SANTOS: Well, this month, Hong Kong is our "Future City" and if you've ever been, well you'll recognize this, it's the subway map for the MTR. Some four million people ride it every single day and as Hong Kong just keeps on growing, well, those lines are just getting busier and busier. And why it's already getting started on a new expanded subway system. Building on that crowded island, as you'd imagine, isn't an easy task. But, as Richard found out, there is one pretty explosive solution.
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RICHARD QUEST, CNN NEWS ANCHOR (voice-over): More people are living in urban areas than ever before. And that migration is expected to continue in the decades ahead. Hong Kong has certainly seen its own population boom. In the past 45 years, the number of people living here has more than doubled. Today, seven million people call Hong Kong home.
It's one of the most densely populated places on the planet. So in a place like this, one of the greatest challenges is simply getting all these people from A to B.
This the city's main artery, the remarkably efficient subway, the MTR line, carrying four million passengers a day, with an on-time record better than 99 percent, according to the MTR. It's the on-time record that sets this system apart.
And these days, this key piece of infrastructure is expounding in all directions.
This is the crowded Western District, a stone's throw from heart of the city, and it's here were workers are extending the main line of Hong Kong Island. Look around, it's not the easiest place to move massive machinery or set off underground explosions.
(on camera): Tunneling is always a difficult and expensive business, even more so, here in Hong Kong with all these towered lots and buildings, around you. They have to blast their way through the bedrock, down here. And you're about to get a rare look beneath these city streets.
Suited and ready. How far down are we going?
JULIAN SAUNDERS, WEST ISLAND LINE: Forty meters to the bottom.
QUEST: Forty meters.
(voice-over): Every aspect of this construction has to go underground.
(on camera): So you can't really put the station above the (INAUDIBLE)?
SAUNDERS: No, we don't have space within Western District; there are too many buildings, too many structures, roads to be able to put the entrances directly above the station, so we have long passenger added to get from the station to the entrances. That's the nature of West Island Line.
QUEST: Fascinating! Fascinating!
And to create this cavern and this tunnel, did you blast this?
SAUNDERS: This is all done by drill and blast, yes.
QUEST: OK, so how -- for each blast, how much progress do you make?
SAUNDERS: Between two and four meters with each blast. Yea, and we will generally do two blasts a day.
QUEST (voice-over): It's a bit unnerving, the idea of setting off explosions underneath towering apartment blocks. It's all happening, as least 40 meters below ground. And the residents are given notice of each day's events.
On blast in the morning, one in the evening. Underground sprinklers help the minimize the dust and the vehicles, they're hosed down before returning to Hong Kong's busy streets.
(on camera): So, where are we? Tell us where we are now.
SAUNDERS: We're currently standing on what will be the future concourse of (INAUDIBLE) of Hong Kong University station. As you can see, we've currently excavated the full width of the station, 22 meters, and we've excavated the full length of the station, 220 meters.
QUEST (voice-over): The bedrock here is hard, very hard. And that makes blasting easier. The harder the rock, the less support and brace work needs to be done. Still, it's a slow, grind and a dirty business.
After each blast, remnants are pounded to bits in giant crushing machines and then transported out to sea.
(on camera): You've got the entrance, the tunnel, the station, and then you still got to do the tunnel where the train will be.
SAUNDERS: That's correct.
QUEST: It's a long business.
SAUNDERS: It's a very long business, yes, and that's why it's taking us five years to building it.
QUEST (voice-over): And this is just one of five expansion projects underway. Various lines across Hong Kong, itself, as well as an express link to mainland China, tacking on an added 56 kilometers, that's nearly 35 miles of rail.
(on camera): How important is it to you that Hong Kong does stay ahead of the game in terms of increasing the MTR, keeping the infrastructure up.
DONALD TSANG, HONG KONG CHIEF EXECUTIVE: It is important. If a major city stops, an infrastructure improvement is dead. It will be more (ph) competitive over time. you need to make sure that a cast moves, the communications work, the trains are on time, and the electricity is always on supply and everything is strong and steady.
QUEST (voice-over): With all these projects, it does beg the question, is the MTR over extending itself?
TC CHEW, MTR PROJECTS DIRECTOR: No, on the contrary, I think that we are approaching the construction program based on what we believe we need to serve our customer and the volume of project might seems significant, but it's manageable.
TSANG: A city economy cannot stop in any particular position. You have to move on, you have to invest. Infrastructure is fundamental.
QUEST: At a time when so many other projects are being canceled or cut back and cities are feeling the lash of austerity, here in Hong Kong, they continue to blast ahead, spending $2 billion on this project. It's a sign and a testament that they still regard Hong Kong as a future city.
Richard Quest, CNN, deep underground on Kong Island.
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DOS SANTOS: Up next, deadlines -- what deadlines?
Greece doesn't seem to be in much of a hurry to reach a deal on austerity. And that, in turn, has given Europe's power couple another big problem to worry about.
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DOS SANTOS: Welcome back.
I'm Nina dos Santos.
You're watching DOS SANTOS MEANS BUSINESS.
And these are the main headlines this hour.
Pro-democracy activists say that at least 56 people have been killed across Syria this Monday. Thirty-seven of those victims were in Homs, seen here, which is reportedly being pounded by government security forces.
Western diplomats say that the UN's failure to pass a resolution condemning the violence has given the regime a green light to crush dissent.
Well, it was scenes like this one that forced wor -- forced Washington's hands. The U.S. has announced the closing now of its Damascus embassy and American diplomats have repeatedly expressed their disgust with China and Russia, which vetoed a U.N. Security Council resolution condemning that violence on Saturday.
Britain, in the meantime, has also recalled its ambassador, as well.
The U.S. is hitting Iran with new sanctions over its nuclear program. All assets of Iran's government and central bank held in the United States are being frozen.
Well, Iran insists that its nuclear program is peaceful, but the U.S. and other Western countries suspect that Iran is trying to build a bomb.
Some progress in the reconciliation efforts between Fatah and Hamas. Leaders of the rival Palestinian factions signed an agreement on Monday that calls for the Palestinian Authority president, Mahmoud Abbas, to lead an interim unity government.
Israel's prime minister, though, has been saying that, if implemented, the new deal would be a step backward for the overall peace process.
And, finally, rescuers in Pakistan are trying to find roughly 50 people believed to be missing after a factory collapsed in Lahore. At least six people were killed when the building fell, apparently after a boiler exploded. Eight people have been pulled alive from the rubble so far.
Greek debt talks are grinding on with still no agreement on painful measures that would see the country receive a $170 billion bailout deal to keep it from defaulting. Talks between members of the Greek coalition have been postponed until Tuesday. That's the same day that the country's two main unions plan a strike over these kind of proposed measures.
Well, the country's public debt stands at $433 billion. That is equal to about 160 percent of its total GDP. And with bonds worth about $18.9 billion due for redemption just next month, as you would imagine, time is running out.
And while Athens delays, the German chancellor, Angela Merkel, and the French president, Nicolas Sarkozy, have been holding talks in Paris.
Earlier, they caught up to talk about Greece, to try and make its mind up to resolve the crisis and called it to take action soon.
CNN senior international correspondent, Jim Bittermann, joins us now live from Paris with more on what's been said so far -- Jim, any progress?
It must be extremely frustrating for these two leaders to see what's going on in Athens.
JIM BITTERMANN, CNN CORRESPONDENT: Absolutely. You know, this schedule -- this summit was scheduled some time ago. It's one of the regular summits between France and Germany. And they're doing what they see as an increasingly important job of providing a zone of stapil -- stability, as they put it, in the center of Europe, what with -- with so many problems out on the fringes, particularly in places like Greece.
And they expressed that frustration today repeatedly. They said the Greeks have given their word that they're going to come to an agreement on writing down their debt. And now they've got to come true. But, of course, they have not.
Here's the way President Sarkozy admonished the Greeks.
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NICOLAS SARKOZY, FRENCH PRESIDENT (through translator): We have been working on this agreement for months, so we're not going to tell you today that we're going to accept failure. We want this agreement, but we also stress that considerable measures have been put into motion to help Greece, this big country in Europe, out of the situation that it finds itself in today.
But the Greek leaders have made commitments and they must respect these scrupulously. There is no choice. There is no choice.
(END VIDEO CLIP)
BITTERMANN: And Chancellor Angela Merkel, when asked about whether or not the Greeks should be expelled from the euro, said we want the Greeks to stay in the euro. But she didn't say any more than that -- Nina.
DOS SANTOS: And, Jim, it seems to be getting increasingly confusing here. What the Greeks are saying is a deadline seems to slip and it turns out it was the target.
We've got about $19 billion worth of bonds due for redemption in just next month, presumably, the EU leaders are really worried here. BITTERMANN: Well, absolutely. And I think that's what the point of these negotiations are that are taking place between the European Central Bank, the European Union and the IMF, the troikul -- troika, as it's called. They've been negotiating with the Greeks for some time. The Greeks have said they're going to come to an agreement, but it hasn't happened.
And so these leaders are frustrated. Angela Merkel said today there's going to be no further program, no new program. What she really meant was there's going to be no new bailout. That's not going to be any further European effect to help save the Greeks. And if they get into trouble and default on those loans, it's going to be a -- a new day and they're going to have to try to figure out where they're going to go from there, I mean. And it could, in fact, lead to something like the expelling of the Greeks from the euro.
But that is something none of the political leaders want to talk about -- Nina.
DOS SANTOS: Absolutely. That's an excellent point.
Jim Bittermann joining us there live from Paris this evening.
Many thanks.
Well, the former U.K. finance minister, Norman Lamont, says that it's just inevitable that Greece will leave the euro eventually.
Earlier, I asked him what the future holds for the debt-laden country.
(BEGIN VIDEOTAPE)
NORMAN LAMONT, FORMER U.K. FINANCE MINISTER: There is bound to be a Greek default. But that doesn't mean automatically that Greece will leave the euro. There is a danger of that. I think that depends on a number of factors, but particularly whether they can satisfy their Eurozone partners that they actually can meet the austerity targets they have been asked to meet.
But if they sign up to those, they may be able to remain within the euro. They will get support that would see them through for a year, a couple of years.
In the long run, I think Greece must inevitably leave the euro.
DOS SANTOS: I mean what does it mean for sovereign debt if we've got countries within the Eurozone, so we're talking about a lot of countries that are AAA rated there, in terms of the safeness of their investment, and we've got countries within that bloc having to impose 70 percent write- downs here?
LAMONT: Well, I don't think sovereign debt is going to be regarded in future as it was in the recent past. And although I think the Eurozone may well get through this year intact, I don't think that people are going to flop back into Italian bonds or Portuguese bonds. I think there will be a distinction between the finances of countries like Germany and those of the periphery, the countries that have got into trouble. But there always should have been a distinction. The market did not do its job properly. There was market failure.
What you have in the Eurozone is one central bank and 17 sovereign governments who can issue their own bonds. And the central bank has to accept those bonds, as though they were risk-free, as collateral for loans to the banking system.
Now we've learned that those bonds are anything but risk-free. But this is a fatal flaw in the architecture of the euro.
DOS SANTOS: Do you think that the ECB is doing enough?
LAMONT: I do think the ECB is doing enough. I agree with the German view that the ECB should not be the lender of last resort to governments. It's not the function of a central bank, to bail out governments that overspend. The function of a central bank is to be a lender of last resort to the banking system. And I think it would be a dangerous route if the ECB bailed out government excessive spending. And I don't believe they will.
I know the markets have convinced that that will ultimately happen, but I don't think the markets are right.
(END VIDEO TAPE)
DOS SANTOS: Norman Lamont speaking to me earlier, Lord Norman Lamont, I should say, a former U.K. finance minister.
Now, China has banned its airlines from paying a European carbon tax. The country's civil aviation administration has told carriers that they can't join the EU emissions trading scheme or otherwise charge customers extra because of this without government approval.
Well, China's airlines had already said that they would ignore the tax. And now, with the state rules in place, well, they've got some serious muscle behind them.
Europe says that its carbon scheme plays an important part in preventing climate change. It warns airlines that don't pay the charge that they will be fined or even banned, possibly, from using European airports.
From Beijing, CNN's Eunice Yoon explains why China is pushing for a more international carbon agreement.
(BEGIN VIDEOTAPE)
EUNICE YOON, CNN CORRESPONDENT: China has long been opposed to the European carbon tax scheme. They've called it an improper tax. They've called it an unfair trade barrier. And they, just like so many other countries in the world, including the United States, have also argued that this program violates international law.
Now, the point of the program is to help improve the environment. It's supposed to cut back on climate-changing gas emissions.
China is one of the biggest offenders of those gas emissions. But they say that this particular program is lop-sided. They say that it's lop-sided and that it shouldn't be applied in the same way to developing nations.
Now, another big concern here in China has been the potential financial fallout. The estimates have been that once this program is applied, that Chinese airlines could lose over $120 million a year.
Another big concern here has been that this issue could escalate into a full-blown trade war. People are concerned that the issue is going to end up at the World Trade Organization. Already, every indication that we've heard from Europe has been that they are going to stand their ground. On the Beijing side, they are also digging in on their -- digging in their heels. The government is getting involved. There is still some room and time to negotiate, but people here have been saying that China does have a lot of leverage because there are so many tourists here who are interested in going to Europe at a time when Europe really could do with the business.
(END VIDEO TAPE)
DOS SANTOS: Eunice Yoon there reporting in Beijing.
I just want to point out that the bangs that we were hearing just behind Eunice in her report were the sound of fireworks for the Chinese Lantern Festival. That day marks the end of the Chinese New Year celebrations.
Now, earlier, we brought you a story about conditions in a Foxconn factory. Foxconn Technology Group recently issued this statement, and we want to bring it to you. It said: "Foxconn takes our responsibility to our employees very seriously and we work hard to give our employees a safe and positive working environment."
It also goes on to say that "Foxconn is not perfect, but we have made tremendous progress. Our programs are having a very positive impact on our employees and on our overall operations businesses."
Well, CNN has asked Apple for an interview, but the company has declined to speak to us so far. It has, however, issued a statement. And this is what it says. Quote: "We care about every worker in our worldwide supply chain. We insist that our suppliers provide safe working conditions, treat workers with dignity and respect and use environmentally responsible manufacturing processes wherever Apple products are made. Our suppliers must live up to these requom -- requirements and recommendations if they want to keep doing business with Apple."
Apple also says that it conducted 229 audits at supplies facilities in 2011 and it says that it is the first technology company to be admitted to the Fair Labor Association, which is specifically dedicated to improving conditions for workers worldwide.
Now, it's the safest of havens right now and a pretty safe bet for profits, as well. Gold miners have had a year to remember. The chief executive of Rangold will tell me later on in the show where the industry goes next.
Stay with us.
That's after the break.
(COMMERCIAL BREAK)
DOS SANTOS: The price of gold is already up by 10 percent this year and profits for the mining company, Rangold, are heading in the same direction. Profits for the last year were up 259 percent. $433 million in total was the figure this company posted, including a record fourth quarter.
Well, the earnings for that kind of growth was a major production boost across all of its sites. It managed to ramp-up production by a total of 58 percent worldwide.
So gold might be glittering right now, especially for companies like Rangold Resources, but it's been a volatile few months for this particular precious metal.
I spoke earlier to the chief executive of Rangold, whose name is Mark Bristow.
And I asked him if profit growth like this was sustainable.
(BEGIN VIDEOTAPE)
MARK BRISTOW, CEO, RANGOLD: Absolutely it's sustainable. I think, you know, when you look at the gold price, I think there are two aspects to our business, the margins and profitability and then the gold price.
And -- and when we deliver, you know, increased production into a robust gold price, as we have done, then you -- you expect the profitability that we've been able to deliver.
I would just point out that we've been able to do that for some time now, not just last year.
DOS SANTOS: Let's talk, also, about the price of gold going forward.
What's your outlook like as a company?
What are you expecting?
BRISTOW: Well, I think the -- the -- you know, I will often say that there's probably more up side than down side in the gold price as we stand today. I think if you look at the market, the supply and demand side of the market, the supply side is tight and it's tightening because the industry is -- hasn't replaced the -- the -- the answers that it's mined with the same quality. So the grades are declining.
On the -- on the demand side, we've seen a new player in the demand equation, and that is the emerging market central banks that are, you know, not in buying gold because they're bulls, but buying gold because they've got money to manage and they want to manage the -- the currency risk or foreign exchange risk.
So that's, you know, and then we've got the traditional demand side of the equation, the growing Asian economy, the increased off-take in jewelry, which is high quality jewelry or -- or, effectively, gold investment. And then, you know, at the same time, there's -- there's the traditional jewelry and the ETF private investor, who's also trying to hedge his position, you know, given the uncertainty of the goal -- the global -- global economic situation.
(END VIDEO TAPE)
DOS SANTOS: Coming up next, Mexico, the home of beautiful beaches and making -- amazing archeological sites and
Judgment day. Well, the government thinks that tourists will probably be flocking in the face of the music in Mexico,
Despite predictions of the troubled times ahead.
(COMMERCIAL BREAK)
DOS SANTOS: The Mexican Tourism Board has a major event on the way -- the end of the world. Doomsday, according to the Mayan calendar, is about to happen at the end of this year. And Mexico, in light of that, is inviting everyone to come and enjoy themselves while they still can.
The Tourist Board is spending almost $10 million to try and promote the Mayan region and it's expecting visitor numbers to rise by some 10 percent.
Al Goodman spoke to the tourism secretary at Madrid's International Tourism Fair.
(BEGIN VIDEOTAPE)
GLORIA GUEVARA, MEXICAN TOURISM SECRETARY: Well, in the case of Mexico, it's a very large country where we have a lot to offer. And if you look at the number of counties, for instance, or municipalities that we have, it's 2,500. Yes, we have a challenge. But that challenge is concentrated in 80 of those counties. The vast majority of the country is OK. And the proof of that is the amount of travelers that we receive.
To give you an idea, 148 nationalities have increased their visits to Mexico and that's very interesting.
We have great expertise in adventure traveling, for instance, adventure -- for the adventure travelers. We also have great destinations, our coasts, sun and beaches, the three popular ones, Cancun, the Riviera, Cabos, Majorca and -- and all of those.
AL GOODMAN, CNN CORRESPONDENT: Mexico is promoting the Mayan World Initiative this year. Doomsday prophets say the -- the world, according to the ancient Mayan calendar, is going to end in December of this year, although other people think it just means a big change in the world.
What is this initiative and do you think the world is going to end this December?
GUEVARA: Of course not. December 21st of 2012, that's the end of the Maya calendar. And for us, it is a great opportunity to promote the country, the initiative with the Maya and the composition (INAUDIBLE) to the country is that we encourage the Maya, like Mexico and the other four countries in Central America. It's also a contribution to the world.
So for us, it's the beginning of a new era. And that's what we are inviting everyone to come and see it firsthand and learn exactly what the country (INAUDIBLE) from the Mayas.
(END VIDEO TAPE)
DOS SANTOS: It may be warm in Mexico, but it's pretty chilly where I am here in London and across the rest of Europe.
Jennifer Delgado is standby at the CNN International Weather Center to tell us all about it -- hi there, Jen.
I can tell you, my heating is broken. It is freezing here.
Got any good news?
JENNIFER DELGADO, ATS METEOROLOGIST: Yes, it's cold in London. But let me tell you, Nina, it is bitterly cold through parts of Central as well as Eastern Europe. And we've been talking about this cold wave that's been happening. And some areas have been dealing with temperatures as low as minus 27 degrees. And this has been going on in Kiev for the last 12 days. For Warsaw, seven days there. For Berlin, the temperature dropped down to minus 20. They've been dealing with this cold wave for eight days. And for Paris, you've dropped down to minus seven degrees.
And current temperatures right now, minus 17 in Moscow; 14 in Warsaw. When you add in the wind, it feels even cooler than that, in some locations about five to about 10 degrees cooler.
In London right now, your temperature one degree. So that's a lot more bearable than what they're experiencing elsewhere across parts of Europe.
As I step out of the way for you, I want to show you the forecast. As we go for your Tuesday, you're going to have to bundle up once again. Minus five for Paris. That cold air has filtered all the way to the west, down toward the south. For Vienna, minus six. Minus 10 in Kiev. And for Bucharest, minus seven degrees. And this spell, it's going to last through the week.
And here's the forecast for your Tuesday. The average high should be minus 20 degrees. And we're talking minus 13 for Tuesday. And then notice, for Wednesday morning, dropping down to minus 20. So still running about 10 degrees below average for this time of year. And some locations even cooler than that.
In addition to the cold weather, we're talking about incredible amounts of snow. Let's get some snow video for you. And let me give you an idea of, we're talking white-out conditions. This video showing people trying to clean the roadways. They're also basically walking through, because you can't get around in a car. You can't get around in trains. Airports are being canceled. We're talking flights in and out of airports to various places through parts of Europe.
As I take you back over, more snow is going to be on the way. Anywhere you're seeing in this purple pink shade, Nina, we're talking about another 25 centimeters, 50 centimeters in some locations, in addition to what you're seeing in that video.
And then for Turkey, they're also talking about more snow. And they've also dealt with some heavy snowfall over the last several weeks.
For the latest today, if you're flying out, out of Sofia, in the morning, one-and-a-half to two hours. And I think these will certainly be even longer than that.
And then for Munich, as well as into Berlin, we're talking just some low clouds around, keeping it very cold. And then, Nina, in addition to the snow, the cold temperatures, now we're getting video in of flooding through parts of Southern Europe because it has been so active across this region.
So the one degrees doesn't sound so bad right now, does it?
DOS SANTOS: It's all relative, isn't it?
DELGADO: Yes. Oh, yes.
DOS SANTOS: Jennifer Delgado, many thanks for that.
DELGADO: OK.
DOS SANTOS: Jennifer Delgado there at the CNN International Weather Center with your business travelers forecast.
Now, stocks in New York struggle to gain any momentum today. Each of the big four finished slightly down.
Let's start out with the Paris CAC Courant. That does worst of all, as you can see. It remained in the red for the entire session, losing about, as you can see, two thirds of 1 percent.
Societe Gen and Credit Agricole were both off more than 2.5 percent thanks to the lack of action over Greece, an issue we've been talking about extensively throughout the course of the last hour.
And that doesn't mean that Greek banks followed suit, however, because take a look at this. The Athens Composite Index in the Greek capital, up some 3 percent. Banks listed there saw double digit percentage gains. And that was largely because the one thing Greece has agreed on is a plan to recapitalize its banks.
And that's it for QUEST MEANS BUSINESS.
I'm Nina dos Santos in London.
Thanks ever so much for watching.
The news continues, though, on CNN.
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