Return to Transcripts main page
Quest Means Business
Lagarde Calls to Ease Austerity Pace in Europe; Buying Time for Greece; Coca-Cola Hellenic Leaves Athens Stock Exchange; Spain Downgraded; European Markets Up; ILO Calls for Employment Action; Lance Armstrong Sponsors Support Cyclist Against Doping Allegations; Lance Armstrong Brand; European Currencies Up; Outlook Taiwan: Growing Business of High-End Bicycles; Breaking News: Blast in Damascus
Aired October 11, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, HOST: The austerity speed limit. The head of the IMF tells CNN Europe is cutting too fast.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: When many countries at the same time adopt the same austerity measures, it creates a bigger and deeper impact on growth.
(END VIDEO CLIP)
FOSTER: A Kentucky Derby. We look at how the US presidential running mates stack up ahead of tonight's vice presidential debate.
And staying loyal to Lance Armstrong. The cyclist's sponsors stand by him, despite those doping allegations.
I'm Max Foster. This is QUEST MEANS BUSINESS.
Well, the head of the IMF says Europe's focus on deadlines is putting global growth at risk. At the annual IMF meeting in Tokyo, Christine Lagarde told CNN that the country at the center of the euro crisis should be given more time to reach its deficit goals. Lagarde says Greece can't relax its austerity plans, but it should be given another two years to implement them.
(BEGIN VIDEOTAPE)
LAGARDE: What we have observed is that when may countries at the same time adopt the same austerity measures, it creates a bigger and deeper impact on growth. And what we have advocated for some of those countries is, go a little bit more slowly.
Second, don't be focused on a number, the nominal target, but make sure that you actually implement the measures that will take you to that number at some stage.
And three, and I know it's a complicated matter, but let the automatic stabilizers operate. In other words --
ANDREW STEVENS, CNN INTERNATIONAL CORRESPONDENT: Automatic spending kick in.
LAGARDE: That's right, yes.
STEVENS: With this new research about the austerity measures and the impact, you're currently negotiating with Greece over the conditions of getting bailout money. Does this mean that the IMF, as part of the troika, is now going to go easier on Greece on its targets?
LAGARDE: We are not negotiating a new program. We are doing a review of an existing program. So, Greece, back a few months ago, has agreed to do certain things, fiscal consolidation, structural reforms, and various other things. So, we are now on the ground with members of the troika, determined to work as hard as is needed to make sure that the program can be on track.
STEVENS: Does that mean it will be an easier set of conditions for Greece, though?
LAGARDE: There's a lot of work to be done, really. And the Greek population and the Greek authorities have been very serious about operating changes, but they need to continue being serious. It's not as if there could be a relaxation.
However -- and we've said that regularly -- Greece needs more time. And I have indicated to the euro partners that an additional two years would be very helpful and reasonable for Greece to actually meet its objectives.
(END VIDEOTAPE)
FOSTER: Well, Matthew Chance joins us now from Athens. Matthew, another two years, would that fix it for Greece? Can it get ready in two years?
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it's certainly going to go some way towards alleviating some of the harsh austerity measures and some of the harsh pain that, of course, the vast majority of Greeks are feeling.
There's been no direct comment, reaction, yet from the government here in Athens to those words from Christine Lagarde, but it's certainly tallies with what they've been asking for all along, since they were elected several months ago. This government has been calling for an extension on its loan repayments for about two years. It's been basically sort of whistling into the wind for that.
But over the past couple of weeks, it does seem to have attracted some sympathy. We've had these comments from Christine Lagarde. There was also a visit a few days ago from Angela Merkel in which she expressed some sympathy for the very difficult position Athens is in.
There's also been some very interesting official figures published today, unemployment figures in Greece. Unemployment in this country, Max, has now risen to over 25 percent nationally, much worse than it was last month.
In the group between 15 and 24, it's risen to a staggering 54 percent or more, which means that over the course of the past 12 months, 1,000 jobs every day in Greece have been lost as a direct result, it's said, because of these austerity measures.
And so, it's really bolstered the argument that many people are having in this country and around Europe and around the world as well about the effect -- the negative effects -- austerity is having. And there is this growing sympathy for some easing of those austerity measures, Max.
FOSTER: And another big blow in confidence, Coca-Cola, Greece's biggest company, I believe, delisting from the Athens Stock Exchange.
CHANCE: Yes, it is another blow for this struggling eurozone country. It is the biggest company by market value, but it does a lot of its work around the region, and that's what the company says is the reason for its moving its listing from Athens to the London bourse.
It worked in 28 countries from Russia to Nigeria, other countries in between, and only 5 percent of Coca-Cola Hellenic's operations take place in Greece. It says those operations will continue. It won't affect jobs in that sense.
But there's been long-standing complaints from shareholders of Coca- Cola Hellenic about the high taxes extracted from the company because it's listed on the Greek Stock Exchange by the Greek government.
There's also been concerns about liquidity, about the company not being able to get the loans that it needs to expand its business because of its base here in Greece. If it changes to London, Switzerland, that will be much easier for it.
There was also an underlying concern, according to many of the analysts I've spoken to, that if Greece in the future does default on its debt repayments and does crash out of the euro, stockholders in Coca-Cola Hellenic would be left with stock which is denominated in a potentially worthless currency.
And so, those are the reasons why it's said that this company has shifted its listing from the Athens bourse to the London Stock Exchange.
FOSTER: OK, Matthew, thank you very much, indeed.
Well, at the IMF meeting in Tokyo, Christine Lagarde also said that Spain should also be given more time to reduce its deficit. Late on Wednesday, Standard and Poor's cut its rating on Spanish debt by two notches to Triple-B Minus. That's just one step, actually, above junk status.
Investors have shrugged off the news. The yield on Spain's ten-year bonds has actually fallen. It's now comfortably under 6 percent. Now, Spain's main stock index gained around four-fifths of one percent this Thursday. Santander gained nearly 2 percent.
Europe's other major indices also rose, led by banking shares in London, Barclay's up 4.8 percent, Deutsche Bank up nearly 4 percent, and Societe Generale up nearly 5 percent.
Now, the International Labor Organization says it's time to act on job creation promises. Certainly something Greeks will be wanting to hear right now. In this statement, the head of the ILO urges G20 leaders to make a coordinated effort to promote employment. The ILO director-general Guy Ryder told our John Defterios it's imperative that leaders act now.
(BEGIN VIDEOTAPE)
GUY RYDER, DIRECTOR-GENERAL, INTERNATIONAL LABOR ORGANIZATION: What we're doing is recalling what G20 leaders themselves said in Mexico last June, which was if they saw a significant deterioration in global economic conditions, that they would then go back and look again at what measures they could take jointly to stimulate demand and hence employment prospects.
Now, in the light of the downward revisions, again by the IMF, of growth projections for the future, we believe it is, indeed, urgent that the G20 governments go back and pick up on this commitment and put it into action, and the time is now.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: In fact, Mr. Ryder, let's see if we can push the debate down the road a little bit here. I've seen some proposals being floated. One of them was at least a trillion- dollar spending package within the G20 economies.
At least nine of that group on infrastructure to try to boost jobs and actually improve the infrastructure in some of these economies, especially the emerging market economies. Is this something the ILO's specifically supporting?
RYDER: We're picking out four areas where we think that this pledge to boost demand could be implemented. One of them is, indeed, in the area of infrastructure. It's got two benefits. One if it puts people straight back to work on infrastructure construction, and the second is it simply improves future productive potential. It's a good investment for the future.
But we're picking out three other areas, as well. One is getting credit lines to small and medium-size enterprises moving again. The fact is that there are very many -- hundreds of thousands of viable small and medium-size enterprises, the real job creators of the global economy, which simply can't move forward because they're starved of credit. So, that has to move forward as well.
Then, we're looking at major international action to tackle the global youth unemployment crisis. We know that youth are affected between two and three times more heavily by unemployment than other sectors of the working population.
And lastly, we believe that it's time to invest in social protection on a much wider scale.
DEFTERIOS: The G20 seems to be at odds within itself in some of the policies pushing forward. We saw the Los Cabos statement about trying to create jobs. At the same time, they had the -- to meet the requirements of the balls of three banking requirements and raise the capital requirements of banks in their home markets. And this is why lending's not taking place.
So, either you change the policies to get the banks to loosen up some of the money or you're still going to have the same problem and the same debate this time next year, it seems.
RYDER: I think the danger of having the same debate in worse circumstances one year on is really with us. Perhaps I could say that the latest downward revisions by the IMF of growth, in our estimations translates into 3 million more jobs lost worldwide, starting for a basis of already 200 millions lost.
You're absolutely right. It is essential to get the financial economy working for the real economy. And where there are contradictions, and where those contradictions lead to the types of blockages that stop the financial system from doing what it really should be doing, which is to lubricate the real economy and get production back into place, then that certainly needs urgent attention. And whatever contradictions there may be in the G20, they have to be ironed out pretty quickly.
(END VIDEOTAPE)
FOSTER: For more analysis of today's economic developments, I spoke to Tobias Blattner, the European economist at Daiwa Capital economics. He told me it's only right that the IMF is speaking out for Greece. And that interview will be available online at cnn.com/business.
The regulators have slammed him, his sport has disowned him. But Lance Armstrong's sponsors are still in his corner. We'll ask why they're not changing their minds, next.
(COMMERCIAL BREAK)
FOSTER: Lance Armstrong's sporting legacy is in tatters because of allegations by the US Anti-Doping Agency. Its report says the evidence against Armstrong is beyond strong. It is as strong or stronger than any presented in any case brought by the US ADA.
What it hasn't done is affected the strength of Armstrong's relationship with sponsors, though. Not one of them have changed their position since the report came out, so Jim reports.
(BEGIN VIDEOTAPE)
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT (voice-over): Lance Armstrong is more than a former top-class cyclist and accused drug cheat. He is a massive brand in the United States.
As an athlete and remarkable cancer survivor, his Twitter account has a huge following. The breathtaking doping allegations, which he has always denied, still don't seem to have tainted him. Will that now change?
ADAM HANFT, BRAND SPECIALIST, HANFT PROJECTS: I think what we'll see, it's a gradual peeling away from him. I think some people will run quickly, others may not want the publicity of dropping him, so they'll stay with him, and then when his contract is up or sometime in the future, they'll quietly drop him. So, I think there'll be different strategies to deal with this.
BOULDEN: Armstrong's cancer charity, Live Strong, and its distinctive yellow products is very popular. It was launched with Nike in 2007. A look at Nike's online store, and the Live Strong products are still for sale.
(BEGIN VIDEO CLIP - NIKE AD)
LANCE ARMSTRONG, FORMER CYCLIST: The critics say I'm arrogant.
(END VIDEO CLIP)
BOULDEN (on camera): And Armstrong did numerous ads for Nike as one of its top spokesman. Nike reissued a statement confirming it plans to continue to support Armstrong and his cancer charity, noting that Armstrong has always stated his innocence and has been unwavering in that position.
BOULDEN (voice-over): That is not a surprise to some sports branding experts.
CHARLIE DUNDAS, REPUCOM: Nike are still heavily invested into him, so to extract that would be very difficult to do.
BOULDEN: Electronic retailer Radio Shack says it recognizes the serious nature of the situation and continues to monitor these events closely as the process unfolds. Drinks giant Anheuser-Busch says its current relationship with Armstrong remains unchanged.
For now, Armstrong's numerous sponsors continue to back his charity. A unique athlete and cancer survivor, Armstrong has so far been able to keep sponsors backing Live Strong. A massive feat in itself.
Jim Boulden, CNN, London.
(END VIDEOTAPE)
FOSTER: Nigel Currie is the director of brandRapport. It's a sports consulting agency. Thank you so much for joining us. Can you in some way shed some light on why sponsors are staying so loyal to him, despite this very damning evidence?
NIGEL CURRIE, DIRECTOR, BRANDRAPPORT: I think sponsors traditionally will hold fire to begin with. They'll wait for the initial storm to die down a little bit. They'll take their time to consider their position, and then I think they'll act.
FOSTER: Is that because if they were pulling out today, we'd be reporting on it, and maybe if it's done so quietly in a couple of months, we might not notice?
CURRIE: I think that's probably got a lot to do with it. Sponsorship contracts by -- traditionally are quite long-term, so they've got a little bit of time to run. People may have campaigns in place that they don't want to change. But I think ultimately, they'll take some big decisions.
FOSTER: There is a suggestion that there's a distinction here in perception between his cycling career and his caner campaigning career, which has been hugely successful and credible, of course. Is there a way a sponsor can attach itself to the cancer side of things, as opposed to the cycling, and survive that way?
CURRIE: Well, I think that's what most of them have done, really. They tend to be corporate social responsibility-type sponsorships. In other words, they're putting a lot of money into what is a great charity and has done really well on the back of the profile that Lance Armstrong has developed.
Now, it's whether that profile is going to remain as strong, I think it's extremely doubtful, and it's certainly a tarnished image.
FOSTER: If they using him at a corporate event, the one subject that's always going to come up is the doping, isn't it?
CURRIE: Yes.
FOSTER: Isn't that the problem?
CURRIE: I think that is the problem. He's never going to escape this, now. He's -- stands accused of basically cheating, which is the worst thing you can do in sport, really.
FOSTER: Tiger Woods's team seemed to turn things around quite successfully, and the sponsorship came back, even though it initially went away. Is there any way of doing that with drugs and doping?
CURRIE: Well, there's two big differences with Tiger Woods. One, Tiger Woods didn't cheat at his sport. That's a pretty significant difference. And secondly, I think Tiger Woods was at the height of his career and still had a lot of golf left in him. Armstrong hasn't got any more of a career in cycling, I'm afraid.
FOSTER: And what about the impact on cycling, or even sport?
CURRIE: I think bad -- cycling has always struggled and that this has always been hanging over it, so it's --
FOSTER: Isn't that partly why it's not as damaging?
CURRIE: Well, it is -- but I think it had gone a long way to make people believe that everything was OK. And this is just -- poured a lot of water over that and opened up a whole new can of worms, so the whole thing now has put cycling back a long, long ways.
FOSTER: And is this always a -- well, it is always a problem, isn't it? When sponsors line up with an individual who is potentially -- any individual, a character, a human being -- is potentially faulty. Is this going to make -- are you concerned that it may make sponsors' companies less willing to come forward?
CURRIE: They're definitely getting more and more worried, because more and more things are being exposed about people's private lives and their -- the way they carry on in society. So -- these athletes are more under scrutiny than ever before, and sponsors are being much, much more wary.
FOSTER: OK, Neil Currie, thank you -- Nigel Currie, thank you very much, indeed, for joining us.
The Currency Conundrum for you now. New Zealand is to release a set of coins commemorating Peter Jackson's "The Hobbit" trilogy of films, the first of which is about to be released. My question to you: which character from the story will be featured on the new solid gold NZ$10 coin? Is it A Bilbo Baggins, Gollum B, or C Gandalf. The answer later in the show.
Away from Middle Earth, the European currencies are making grounds on the dollar. The euro is up around two thirds of one percent against the greenback, as is the Swiss franc, which tends to move in tandem with the single currency. The British pound is also around a fifth of one percent higher.
(COMMERCIAL BREAK)
FOSTER: Well, all this week, we are shining a spotlight on Taiwan, with a close-up look at the island's business, industry, consumer trends that fuel its economy.
So far, we've focused on the driving forces behind its economic growth. We've also looked at concerns over Taiwan's long working hours and the steps being taken to bring them under control. We've also examined Taiwan's growing airline industry. From Hello Kitty-themed flights to cut- rate fares, airlines are pulling out all the stops to attract passengers.
We'll also look at how the government is promoting the island's indigenous culture, but first, Taiwan is also making inroads in the lucrative bicycle-making industry. Paula Hancocks reports on the growing business of high-tend bicycles that could take Taiwan all the way to the top.
(BEGIN VIDEOTAPE)
PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT (voice-over): Autumn in Atlanta, the perfect time for mountain bike enthusiasts to leave the city and head for the forest.
Cycling for sport or for fun is growing in the United States. Close to 20 million bicycles are sold every year. The members of this group are fans of one particular Taiwanese company. They all have Giant bikes.
UNIDENTIFIED MALE: I think Giant bicycles, because for the money, you can't beat them. Best for the money compared to any other manufacturer in the industry, you can't touch them. And their quality is just as good as any of your handmade bicycles out there.
UNIDENTIFIED MALE: Taiwan has definitely for the mass-production bikes, probably one of the leading countries making bikes. Handcrafted, you still can find them pretty much any country. As far as mass-produced, they have definitely the best factories.
HANCOCKS: Thirteen-thousand kilometers away at Giant's headquarters in Taiwan, the bikes are rolling off the production line. More bikes are made in this one factory in a day than the company created in its first year of production back in 1972.
It started small, right here in the city of Taitung with just 30 people. It now has 11,000 dealers in 80 countries worldwide.
ANTHONY LO, CEO, GIANT GLOBAL GROUP: Almost 40 percent of our employees already do the Tour of Taiwan.
HANCOCKS: Chief executive Anthony Lo takes me out of the factory and onto the roads to explain Giant's philosophy. A keen cyclist himself, he believes that is key to understanding the market.
LO: We are the only company we cover the full chain, from manufacturing, supply chain management, technology product development, global marketing, sales. And we even get into the retailing.
HANCOCKS: Lo credits some of that success with the decision to get involved in competitive cycling, sponsoring professional racing teams in events like the Tour de France.
LO: Through that race, we get a lot of input to help us to make better products. So, the product's not only engineered by ourselves, it's really co-designed by the athlete.
HANCOCKS: Lo does admit that the made in Taiwan brand, with its cheap, low-quality connotations, was a hurdle in the past. But by focusing solely on high-end products, and with an expected revenue of $1.6 billion this year, he's confident that that perception has now changed.
Paula Hancocks, CNN, Taitung, Taiwan.
(END VIDEOTAPE)
FOSTER: Well, for more information on Taiwan and our coverage this week, go to cnn.com/outlook.
Some breaking news coming into CNN for you. Syrian state television is reporting an explosion in the capital, Damascus. The blast reportedly occurred near the military judicial headquarters in the eastern al-Mezzeh neighborhood. There have not been reports of casualties. We'll bring you more information on this as it comes to us. You're watching CNN.
(COMMERCIAL BREAK)
FOSTER: Welcome back. I'm Max Foster, these are the news headlines this hour. Breaking news coming into CNN, Syrian State television is reporting an explosion in the capital, Damascus. The blast reportedly occurred near the military judicial headquarters and Ministry of Higher Education in the al-Mezzeh neighborhood. There have not been reports of casualties. We'll bring you more information as it comes in.
The leader of Hezbollah has claimed responsibility for sending an Iranian-made drone into Israeli airspace. Israel revealed on Saturday it had shot down an unmanned drone, which it believed came from Lebanon. Nasrallah confirmed the drone's origin in a televised speech a few minutes ago.
(BEGIN VIDEO CLIP)
HASSAN NASRALLAH, SECRETARY GENERAL, HEZBOLLAH (through translator): The resistance in Lebanon has sent an advanced surveillance drone from the Lebanese territories -- there's no need to specify from where -- towards the sea and flew this drone for hundreds of kilometers over the sea.
The drone then penetrated the enemy's defense procedures and entered occupied southern Palestine and flew over critical and important bases and installations until it was discovered by the enemy near the area of Demona.
(END VIDEO CLIP)
FOSTER: Turkey's prime minister is defending the Turkish military's interception of a Syrian air jet on Wednesday. Recep Tayyip Erdogan said the plane was carrying weapons, ammunition, and military supplies from Russia to the Syrian regime. Syria calls the incident an act of piracy, and Russia says it endangered lives.
A Yemeni security officer working for the US embassy in Sanaa has been shot and killed. Yemen's Interior Ministry says unidentified motorcyclists gunned down the officer as he headed to work on this street. It's not clear why. The officer was involved in the investigation into the assault on the US embassy by protesters last month.
(MUSIC PLAYING)
FOSTER: The head of the IMF says swift action is needed to pull the United States back from the brink. Christine Lagarde says the U.S. is teetering on the edge of the fiscal cliff. In the second part of our interview with CNN's Andrew Stevens, Christine Lagarde says the world wants to know how America plans to avoid this looming crisis.
(BEGIN VIDEO CLIP)
LAGARDE: Time is clearly of the essence for the U.S., you're right, because we are getting closer to the date when the fiscal cliff and the debt ceiling will be just major issues and could have very serious consequences on U.S. growth, which is the largest economy in the world, which has impact in a big way across the globe.
STEVENS: Most people think they will muddle through. It will be done. This will be averted.
Do you share that view?
LAGARDE: All I can tell you is that, based on our study, our graphs, the risk is not factored in yet. So it could well be that people assume that there will be a muddling through scenario. But that muddling through is not satisfactory.
And there is still that big uncertainty how as to how it's going to be resolved in the short term, but also how will it be resolved in the medium term. What is the strategy of the United States when it comes to its debt, when it comes to its deficit? The world doesn't know and the world wants to know.
STEVENS: We're just past the fourth anniversary of the Lehman Brothers collapse. Is the global financial system much safer now than it was then?
LAGARDE: On the road to being safer, but it is not yet safer. And I would say that it's still mission to be accomplished.
STEVENS: Four years on, still not safer?
LAGARDE: That is the case, unfortunately.
STEVENS: Why?
LAGARDE: I think it's attributable to the fact it was so damaged to begin with. It was such a massive shock to financial institutions that it took a little while to actually measure the depth of the difficulty and the scope of the changes that had to take place.
This is gradually happening. You have the Basel committee that is doing a very thorough and good job, you know, prescribing the appropriate level of capital, the appropriate liquidity ratio, and so on and so forth.
But now it's about implementing --
(CROSSTALK)
STEVENS: So you --
LAGARDE: -- added to which -- added to which you have this shadow banking system that is nicely developing around the highly regulated sector. So that's also an area where clearly regulators, supervisors, are going to have to be able to do their job.
STEVENS: How concerned are you about the shadow banking symptom (ph)?
LAGARDE: I'm concerned because, you know, if you look at derivatives, for instance, there's a lot that we don't know, a lot that is not transparent and that supervisors should know about.
(END VIDEO CLIP)
FOSTER: Well, the U.S. jobs market does look like it's improving. First-time claims for unemployment benefits were at their lowest level in more than four years, down around about 30,000 from the week before. That's seen U.S. stocks snap (inaudible) streak as Alison has been finding out.
Hi, Alison.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Hi, Max. That big drop of weekly jobless claims that you mentioned brings that claimed level down to 339,000. That's good news after claims had been stuck above the 350,000 range for a long time.
But you know, a lot of people at this point are being very cautious of today's reading, and rightfully so, because the Labor Department says this drop that we're talking about was an anomaly because one state, possibly California, posted a large decline in claims, which is not typical during the last week in September. Plus this is a weekly report, so these results can be volatile.
So essentially next week's reading, Max, is really going to have more details of the state-by-state breakdown. But you know what, even with the anomaly, the broader trend is down for jobless claims. It will hopefully help the Dow stay in the green and put an end to a three-day losing streak, at least for today, Max.
FOSTER: OK, Alison, thank you very much indeed.
And that dip in jobless claims is a boost for the Obama camp going into tonight's vice presidential debate of course. The economy is expected to dominate the first and only discussion between Joe Biden and Paul Ryan. Maggie Lake takes a look at what each vice presidential candidate brings to the table.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Welcome Vice President Selina Meyer.
MAGGIE LAKE, CNN CORRESPONDENT (voice-over): Many call the vice presidency a thankless job, made fun of in shows like the cable comedy, "Veep."
"SELINA MEYER": Did the president call? No, no.
LAKE (voice-over): But with the economy the defining issue in the presidential race, Paul Ryan and Joe Biden find themselves in pivotal roles, as they hammer home their party's message on jobs, taxes and the deficit.
JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: Time to help the middle class, not lay more burdens on the middle class.
REP. PAUL RYAN, GOP VICE PRESIDENTIAL NOMINEE: America needs a turnaround. And the man for the job is Governor Mitt Romney.
LAKE: Call them the policy wonk and the populist, two fiercely competitive candidates with two very different economic CVs.
(BEGIN VIDEO CLIP)
LAKE (voice-over): First, the Biden CV.
He's been with President Obama since day one. Before that, a 36-year veteran of the Senate, where he was the chairman of the Foreign Relations Committee. No fancy arugula for this guy. He's generally viewed as an Amtrak-riding, straight-talking everyman and an aggressive defender of the Obama economic record.
BIDEN: We're going to ask the wealthy to pay more. My heart breaks.
Come on, man.
PAUL STEINHAUSER, CNN POLITICAL EDITOR: Joe Biden is the Obama campaign's weapon when it comes to working class voter. Joe Biden seems to connect better with working class, with blue-collar workers in some of the tough battleground states, like maybe a Ohio, a Pennsylvania.
LAKE (voice-over): Biden's also known for his famous unscripted moments.
BIDEN: Well, the number one job facing the middle class -- and it happens to be, as Barack says, a three-letter word -- JOBS, J-O-B-S, jobs.
LAKE (voice-over): No wonder he's the gift that keeps on giving for comedians.
DENNIS MILLER, COMEDIAN: They say Paul Ryan has 6 percent body fat. I guarantee you Biden's got 8 between his ears, OK?
(END VIDEO CLIP)
LAKE: Next up, the Ryan CV.
(BEGIN VIDEO CLIP)
LAKE (voice-over): He's a seven-term congressman from Wisconsin and the chairman of the House Budget Committee. He made a name for himself with the so-called Ryan budget, which would cut taxes and entitlement programs. Ryan says action is needed now to slash government spending.
RYAN: We've got to get this debt under control. We're not going to kick the can. We're not going to duck these issues. We're going to fix this mess.
LAKE (voice-over): Many say they like Ryan's straight-from-the-gut message.
RYAN LIZZA, "THE NEW YORKER" MAGAZINE: In general, you know, he preaches a sort of deregulatory philosophy. That's been received very, very well from the business community. He really tapped into that, you know, anti-Washington, Tea Party sentiment.
LAKE (voice-over): But expect Biden to come into this debate swinging.
LIZZA: That's the danger in a presidential campaign of specifics. You put out a specific plan and it can get attacked.
LAKE (voice-over): The Ryan budget guarantees the economy will take center stage for the first and only vice presidential debate.
(END VIDEO CLIP)
FOSTER: Well, CNN is your destination, of course, for full coverage of the 2012 U.S. election. And we'll bring you coverage of Joe Biden and Paul Ryan's one and only vice presidential debate. Stay up and with us watch it live starting early on Friday at 1:00 in the morning in London. And if you miss that, you can see a replay of the full debate Friday night at 9:00 in London, 10:00 in Berlin, right here on CNN.
QUEST MEANS BUSINESS will be back in a moment with a check of the weather.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
(BEGIN VIDEO CLIP)
FOSTER (voice-over): The answer to today's "Currency Conundrum," and we asked you which character from "The Hobbit" film trilogy we featured on a 10 New Zealand dollar (inaudible) coin. The answer is A, Bilbo Baggins. A thousand are being minted from solid gold. Each one will set you back around $3,000 U.S. And they are legal tender.
(END VIDEO CLIP)
FOSTER: Let's find out what the weather has in store. Getting wintry across Europe, Jenny.
JENNY HARRISON, CNN METEOROLOGIST: It is, Max. Yes, and you say that as if it's something to do with you. You're going to feel a bit wintry as well. I can promise you that you won't see any snow. But the rain is on the way.
It's already moving across into western regions of the U.K., western areas of France as well, trailing all the way down into Spain, some pretty hefty totals in the last few hours, some areas (inaudible) about 25 millimeters.
You can see the red and the yellow indicating where we're seeing as heavier spells of rain. Not many places are going to escape the rain over the next 24 hours. It's a bit more scattered across into France, as you can see there, and it's continuing to work its way eastwards. This is a front, though, sweeping through. And it's pretty cold ahead of this front and certainly pretty chilly once that has gone through as well.
So we're beginning to feel like those months in autumn, although, of course, if you get the good weather and the blue skies, it is looking glorious. It's photo sent to us by an iReporter. You can see there just a beautiful colors in Sweden. Of course, they do end up on the ground a lot of these leaves. They have to go somewhere. And they look lovely, of course, until they get mixed up with the rain, as well.
And the winds are fairly brisk across the northwest, 40 kph right now in Plymouth. Those are sustained winds, so we could be seeing some gusts at around 55 or 60 kph. So that'll certainly bring the leaves off the trees.
And those winds are going to stay pretty blustery, moving through the North Sea and certainly coastal areas of Norway and Sweden will really see some fairly windy conditions over the next 24 hours. You can see here on the temperature trend how much cooler it is going to be -- below average, actually, across much of Scandinavia and also these eastern areas of Europe.
And as I say, Moscow will be seeing a few flurries of snow mixed in with some rain in the next couple of days.
When it comes to traveling on Friday, not too bad across central Europe, but we have got those brisk winds certainly impacting travel at the airport there, Friday afternoon, could be quite lengthy, some of those delays. And they're quite widespread as well.
In Rome, we would see some rain for you in the morning on Friday, so that might delay your travel by up to an hour. That's the front, of course, sliding through, bringing with it the rain and also those brisk winds.
And then you'll notice here, just a few areas of white mixing in with the rain, that is those snow flurries pushing into Moscow, pretty chilly in Kiev on Friday, just 10 degrees Celsius, the same in Bucharest, pretty nice in Rome, 22 degrees. And then you can see 14 Celsius in London. So it really is feeling pretty cool right now.
And somewhere you don't expect to feel that cool this time of year, as we moving into the spring months, is actually Australia, the interior. Temperatures have been well above average but that is all changing Thursday into Friday.
The temperatures as much as 10 degrees below the average there. We're seeing some pretty hefty thunderstorms along the east coast. We could even see some winds at around 100 kph. But, again, it's moving off fairly swiftly, but it'll stay cool on Friday here as well, just 12 Celsius in Melbourne and 16 in Adelaide, Max.
FOSTER: Jenny, thank you very much indeed.
That is QUEST MEANS BUSINESS. Thank you so much for watching. I'm Max Foster in London. MARKETPLACE EUROPE continues for you now here on CNN.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
RICHARD QUEST, CNN HOST: From Barcelona in Spain, this is MARKETPLACE EUROPE. I'm Richard Quest.
Spain is its worst economic crisis in decades. As the country grapples with recession, we're here in Catalonia to show you the companies that are doing everything they can to survive.
(BEGIN VIDEO CLIP)
(MUSIC PLAYING)
QUEST (voice-over): Coming up, struggling.
QUEST: You take the baby --
MONTSE MUNOZ, FOUNDER, TUCUXI: Yes.
QUEST (voice-over): The nappy company, struggling to grow in a cold economic climate.
QUEST: What's this fuss about nothing, eh?
QUEST (voice-over): And the CEO of health care company, Grifols, says blood plasma donors in Europe should be paid.
VICTOR GRIFOLS, CEO, GRIFOLS: Seventy-five percent of the blood products or plasma products used in Europe are made from U.S. plasma. That's not logic. It's not rational.
(END VIDEO CLIP)
QUEST: This is the Olympic port in Barcelona. Do not be fooled. The sheer number of expensive vessels masks the very real financial crisis in Spain, and no more so than in this part of the country, where companies are struggling to survive. And that's why we're here, to show you the plight of the businesses large and small that are doing their best to stay afloat.
(BEGIN VIDEO CLIP)
(MUSIC PLAYING)
QUEST (voice-over): The reels of new industry are turning in this tiny workroom.
MUNOZ: This is a modern cloth nappy.
QUEST (voice-over): It's an uphill struggle for Montse Munoz, who set up her reusable nappy business in 2010.
MUNOZ: We have a key advantage in recession, which is an economical advantage for parents with the first baby, with the first baby, where they have to invest in cloth nappies. They already save 900 euros. And this is a saving strategy for the family.
Another type of customers buy them because of ecological motivations. Well, it's obvious about pollution of disposable nappies.
QUEST: This is the original small business, opened in the teeth of recession. But because it has a niche market, it's expanding. It's got one machine over here -- come with me -- and this is the empire.
MUNOZ: Yes, three sewing machines and that bit. You don't need much more.
QUEST (voice-over): Second-hand machines at that, because like thousands of small businesses across Spain, there's precious little support from the banks for investment.
MUNOZ: To get 1 euro from a bank, you have to put 2 euros in the business and you have to guarantee it with 5 euros of your own (ph). So if they give you, I don't know, 1,000 euros, you need to have 5,000 euros in the bank to make them sure that you will pay them back.
So you need such guarantees that it makes impossible to get a loan.
QUEST (voice-over): A lack of access to funding means growth must remain modest.
Montse reinvests her earnings back into the business. She's proud her products are made in Spain. She frustrated that the current tax regime makes local production uncompetitive.
MUNOZ: The cost of labor is not because of the salaries, because Spanish salaries aren't that high. It's because of the taxes for every 100 euros I pay to a person, I have to pay 40 to 50 to the state. And that is very expensive. It's extremely expensive.
QUEST (voice-over): Nearby in a former schoolhouse, Santa and Cole saw the home market for its urban lighting and furniture all but disappear, as building projects, public and private, ground to a halt.
JAVIER NIETO SANTA, PRESIDENT, SANTA AND COLE: In 2006, we were exporting some 30 percent of our sales. In this years, Spain has disappeared and our sales abroad increased. So now we are exporting more than two-thirds.
So this means that the whole company certainly has became international. The major problem is that a lot of little suppliers have disappeared. The real sad news is when you know that another little supplier has closed the doors. That's a pity.
QUEST (voice-over): The dark days of recession have forced this business, like so many others, to refocus its spotlight beyond Spanish shores. Javier believes it's forced companies to become braver, taking risks. They have to to survive.
SANTA: We are not giving up. Spain has done a lot of things properly in the last 15 years. I strongly believe in our country, strongly, strongly. But we are learning, certainly, the whole country, it is like us. They -- we all have become international.
(MUSIC PLAYING)
QUEST (voice-over): To continue to move forward, the one thing businesses here crave is predictability. And that is the one thing in today's Spain that's a long way off.
(END VIDEO CLIP)
QUEST: Companies struggling in the teeth of economic adversity.
In just a moment, we should pay people to donate blood plasma, so says the chief executive of one of Europe's largest health care companies.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST: Welcome back to MARKETPLACE EUROPE in Barcelona.
The economy of Catalonia is so large it's the size of Portugal's. It's not surprising there's not many leading companies based here, including the health care group, Grifols.
(BEGIN VIDEO CLIP)
QUEST (voice-over): Grifols is the European leader and third-ranked company in the world for plasma therapy sales. It collects 8.5 million liters of plasma a year with 147 donation centers in the U.S.A. Grifols employs nearly 11.5 thousand people worldwide with annual revenues of $2.8 billion.
(END VIDEO CLIP)
GRIFOLS: When I started in this, well, my father, my grandfather, I was told that plasma had something around 30 bloodings (ph). Today we are talking about more than 3,000 bloodings (ph) in the plasma. The problem is we don't know what these bloodings (ph) do. And our job is to, when they discretion a new use of a new blooding (ph) to isolate that blooding (ph), convert it into a safe pharmaceutical product.
And we are bleeding (ph) today something like 26,000 people a day. And every donation has to be tested, of course. And we perform like 10 tests per donation, so 260,000 tests per day without mistakes. We cannot afford 0.001 percent mistake. To transfer, transport all this plasma, the plasma has to be kept at -30 degrees Celsius. It's a complicated, complicated logistics and quality control.
QUEST: So this is fascinating, isn't it? This is fascinating. The - - 26,000 people a day. That's --
GRIFOLS: It's only our company.
QUEST: That's an enormous number.
GRIFOLS: Our competitors do the same, so.
QUEST: It's an enormous number.
GRIFOLS: Yes, enormous. Enormous.
QUEST: You're allowed to pay them in the United States, but not elsewhere.
GRIFOLS: Well, in Europe, some countries do, like Germany, Austria, I think the Czech Republic. But not the U.K., not in France, Italy, Spain, Holland, Belgium.
QUEST: Would you like to see a common policy across the European Union on the payment for blood donation?
GRIFOLS: Sooner or later. I think Europe will have to make a decision to be self-sufficient. I mean, I think that 75 percent of the blood products or plasma products used in Europe are made from U.S. plasma. That's not logic. I mean, it's not rational.
QUEST: But do you believe if you were able to pay donors in the E.U., then there would be more people donating?
GRIFOLS: Yes, of course, because, I mean, who is going to donate plasma once the week or twice the week just for -- I mean, I am a donor. In Spain, I donate every three -- well, every year one or two times, no? Because I had an accident many years ago, and I have to -- but that's not enough.
QUEST: Let's talk about Spain, if we may, sir.
How are you being affected by what's happening, and particularly at the moment?
GRIFOLS: Our products, because they are needed, are not so much affected by price restrictions and things like this. However, we have other activities in the company, like we produce all the products, diagnostic products, hospital products. And we are more affected with these products.
What we are suffering today is the consequence of the last, in my opinion, 12-13 years of some wrongdoing. Spain was living very good in the '90s, '95. We came from those periods with Franco. And we thought we have done it, OK? Now we are rich. So this is like -- today is like a push and a pull. And I think it will be necessary and Spain will come back, maybe in 3-4 years.
(END VIDEO CLIP)
QUEST: Victor Grifols and the products from plasma.
Next week on the program, we stay in Barcelona and look at independence for Catalonia. As the debate heats up, we examine the effects on business if this region goes its own way.
And that's MARKETPLACE EUROPE for this week. I'm Richard Quest in Barcelona. Whatever market you're in, I hope it's profitable. I'll see you next week.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
END
