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Quest Means Business
EU's Trillion Dollar Talks; Budget Tug of War; European Markets Up; Eurozone in Crisis; Future of Greece; Chinese Investing in South African Mines; Euro Flat, Yen Up, Pound Falling; Make, Create, Innovate: Technology Behind Tetra Pak
Aired November 22, 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: A trillion-dollar tug of war. The battle for the EU budget begins this hour.
In Spain, Catalans are fighting to break away as the region prepares to go to the polls.
And brawling for bargains. Shoppers get ready for a bruising Black Friday.
I'm Max Foster, this is QUEST MEANS BUSINESS.
Hello to you. Europe's leaders are entering the budget battleground. Within the next hour, they're set to clash on the trillion-dollar question of how the EU will spend its money in the seven years up to 2020.
As the leaders take their positions in Brussels, some already admit this skirmish may end in stalemate. German chancellor Angela Merkel says a second round of talks may be needed to reach a deal.
The first draft on the table amounts to a budget increase of around 5 percent. The UK has already said that's unacceptable. Prime Minister David Cameron says because of cuts in his own country, he'll veto any rise in EU spending.
(BEGIN VIDEO CLIP)
DAVID CAMERON, PRIME MINISTER OF BRITAIN: It'll be quite wrong, it is quite wrong, for there to be proposals for this increased extra spending in the EU. So, we're going to be negotiating very hard for a good deal for Britain's taxpayers and for Europe's taxpayers.
(END VIDEO CLIP)
FOSTER: Now, the laborious and prickly task of working out who pays what and who gets what happens ever seven years. As Jim Boulden reports, every delegate will have their own agenda.
(BEGIN VIDEOTAPE)
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: To the skeptics, the European Union is a groaning bureaucracy in buildings dotted around Brussels, complete with two parliamentary buildings, to appease multiple constituencies.
Then, there is the European Commission, the Council, the euro group, Europol. But the running of the EU is only a fraction of the costs. Much of the trillion-plus-dollar budget to operate the EU for seven years is for grants and subsidies, things like funds to upgrade the poorer parts of Europe, from motorways in Poland and Ireland to a subway system in Bulgaria.
These so-called cohesion funds are credited with increasing wealth, which comes back to the economies of, say, Germany and the UK in terms of exports and tourism.
Then there are the fisheries budgets and the farmers with the so- called Common Agriculture Policy. It's hard for any government anywhere to cut the subsidies to farmers. Though there has been reform of the CAP, it's still the biggest single item in the budget, whether it's for French dairy farmers or British bee keepers.
In truth, where the money is going is pretty much set. The battle now is over whether the overall budget should be frozen or even cut in these austere times. Any cuts to the Ag budget could lead to a French veto. Any cut to Britain's rebate could lead to its veto being wielded. Less- developed countries could veto it if there are any big cuts to their subsidies.
Critics have plenty to point to, of course. Waste can be found in any large budget. But the bottom line is, the eurozone crisis has lead to plans for ever closer integration, and this budget debate reminds supporters and detractors exactly why the European Union was created, even if it pits the rich states against the poor ones.
Jim Boulden, CNN, London.
(END VIDOETAPE)
FOSTER: Well, Europe's leaders really are pulling in every direction in these budget negotiations. Take Bulgaria, for example. It'll be pushing for an increase to the budget. Being the poorest member of the European Union, it's highly reliant on EU funding for its public investment. Any cuts from the cohesion fund would hit it very hard.
The UK's goals are polar opposite. As we mentioned earlier, it's vowed to veto any increase in spending. It also says the budget rebate it secured in the 80s is non-negotiable.
In France, they are willing to compromise, but they've drawn a line in the sand when it comes to agriculture. France says a cut of even one euro from the Common Agriculture Policy is simply out of the question.
And in Germany, well, the focus there really is better spending. It's the biggest contributor to the EU budget and it wants to reshape the budget to invest in newer areas, like high-speed internet, climate change, and energy.
Well, Europe's major stock indices ended Thursday's session with pretty solid gains. They're not really expecting much out of the EU summit, so they were looking at corporate results, mainly. Most banking shares rose. Deutsche Bank up 1.6 percent, Barclays, Royal Bank of Scotland each gained around one -- a third percent.
Brewer SABMiller was the best performer on the London FTSE. It gained more than 6 percent on strong earnings. There's no action on Wall Street. US traders have the day off for Thanksgiving.
Factory output in the eurozone is continuing to contract, that's according to the latest numbers from Market. Its Purchasing Managers' Index shows manufacturing activity is still shrinking, albeit at a slower pace than in the previous eight months.
Market says the eurozone is entrenched in the steepest downturn since mid-2009. It warns GDP could contract as much as half of one percent in Q4. The survey also shows Europe's peripheral economy, like Portugal and Greece, are losing jobs at their fastest rate since July.
Well, Greece is a continuing source of worry for the European leaders, eurozone leaders. Frank Vogl is a former World Bank official and author of "Waging War on Corruption: Inside the Movement Fighting the Abuse of Power." He told our Nina Dos Santos the haircut private investors took on Greek debt was not enough to fix the problem and that Europe must do more to help.
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FRANK VOGL, PRESIDENT, VOGL COMMUNICATIONS: I think there's two major issues here. I think the banks, primarily, and the private sector investors took what amounted to a haircut of really about 75 percent. That's unprecedented.
DOS SANTOS: Which is a huge knock to investor confidence in European debt.
VOGL: Unprecedented. We were talking 206 billion euros of outstanding debt. Enormous. It provided a breathing space for Greece. But you didn't see the ECB reducing its holdings, you didn't see European Central Banks reducing their holdings. And instead, you saw all of the official creditors just tightening the screws on Greece, and I believe that has made the situation much worse.
We had a real chance, I think, in Greece after the debt restructuring to create a proper breathing space for the Greeks to move forward and start a growth-oriented program, and I that that -- I think they have been really badly treated by the official sector.
DOS SANTOS: Sapped the impetus for reform over there. Do you think that we're seeing a little bit of that already or not? Or is the complete opposite?
VOGL: In the fourth or fifth year of a recession, where it's absolutely clear that the political system is trying everything it possibly can to reform, in a democratic system, it is -- you are really testing democracy itself by pushing -- in this case, the Greeks -- any further.
And I think that, frankly, people who've been looking just at the financial numbers and not thinking of the broader political issues have been very much at fault, in Brussels, in Frankfurt at the ECB and, in fact, at the IMF as well.
DOS SANTOS: They cannot agree on what a sustainable debt reduction target is for Greece. 120 percent by 2020. As somebody who has been involved the negotiations, would you say that's sustainable?
VOGL: I'm just talking personally, here. Greece, for the first time, I think, has just got a current account surplus for a month. They are becoming more competitive. This can happen very fast.
If they can maintain great -- if they can build their competitiveness -- and I actually think they can only do that if there's a prospect of growth down the road -- if they can do that, then they can get back to a more sustainable position in four, five, six, seven years. In which case, a lot of these numbers that are now being put on the table will look completely unrealistic.
We've seen it in the past. Turkey, 11 years ago, was really seen as a basket case in the same way. Brazil in 1991. Korea after the Asia crisis. And yet, they all came back, and in every case, they came back faster than most of the academic economists, as I call them, the location economists, expected.
DOS SANTOS: Well, one thing we should tackle is this issue of corruption --
VOGL: Yes.
DOS SANTOS: -- and also tax evasion which, according to some of the reporting that's being done, has landed some journalists in Greece in hot water, goes right -- permeates right the way through the political establishment in Greece. What can be done, then? Your thoughts.
VOGL: Absolutely. And the Greek government was given by then French finance minister now IMF managing director Christine Lagarde in 2010 a list of 2,000 Greeks with Swiss bank accounts. It was very clear that she handed over the list because she believes that there was massive tax avoidance.
Everybody you speak to in Greece knows about that. Everybody knows about the huge collusion between major industrialists and people who run the private sector of the Greek economy, including property developers and parliamentarians of all political stripes.
You need to attack that. There is a lot that can be done. The Greeks keep on delaying on that, and the Europeans and the IMF, for that matter, have not put the pressure there on the Greeks, which they should do.
(END VIDEOTAPE)
FOSTER: Well, South Africa's mining sector is struggling. Wildcat strikes, violent protests, and strife. Well some are pulling out, some of China's richest men are going in.
(COMMERCIAL BREAK)
FOSTER: This week in South Africa, the Marikana inquiry is hearing evidence about what led to the killing of 34 miners in a single day of protests, and all this week, we're examining what's behind the ongoing instability in South Africa's mining sector.
The widespread unrest has caused some investors to pull out. But one of China's wealthiest men told Nkepile Mabuse he sees an opportunity for growth.
(BEGIN VIDEOTAPE)
NKEPILE MABUSE, CNN INTERNATIONAL CORRESPONDENT (voice-over): "Forbes" Magazine describes him as a self-made billionaire, among the top 100 or so richest men in China. Li Jinyuan made his money in the pharmaceutical industry. Now, he's hoping to snap up struggling South African mines desperate for a cash injection.
MABUSE (on camera): Are you not concerned about the current environment?
LI JINYUAN, CHAIRMAN, TIENS GROUP (through translator): I think this is a very good moment for making investments. Many, many investors now have fled away from South Africa, but I think that's the best investment opportunity for our Tiens Group.
MABUSE (voice-over): Wildcat strikes in South Africa's mining industry have cost the country more than a billion dollars in revenue, forcing some investors to walk away. But Li is hoping to cash in on the crisis.
LI (through translator): Actually, we have the specific target company already.
MABUSE (on camera): Most of the miners who are on strike are demanding a monthly take-home salary of about $1500 US. If you owned a mine today in South Africa, would you be able to pay those kinds of wages.
LI (through translator): We hope both parties can make some negotiations, and both parties can reach some consensus, understanding only through this way, they can get better results.
MABUSE: But some of the miners had said their demands are non- negotiable.
LI (through translator): I hope this negotiation will be happening for the triple parties. We'll be including the representative from miners, and mining owners, and also should be including the government.
MABUSE (voice-over): But government's role in South Africa cannot be more than that of mediator. Li seems to want more state intervention.
LI (through translator): Government needs to do something. Government needs to do something to sort out these kinds of problems.
MABUSE: $800 million is what he says he will invest in the continent's pool of minerals. But while African leaders have been quick to cozy up to the Chinese, citizens accuse them of unfair labor practices.
MABUSE (on camera): Chinese-owned mines in Africa have quite a negative reputation. Recently, Human Rights Watch said that in Zambia, working conditions for miners at Chinese-owned mines were worse than at other mines owned by foreign nationals.
LI (through translator): With Tiens Group, we make some investments in any countries, the precondition is that we must strictly follow -- abide by the local laws.
MABUSE (voice-over): Will he use labor from China? I asked.
LI (through translator): In the future, for my mining project, only the very senior management assigned from China. But all the other stuff, we all make the localizations.
MABUSE: Li insists he will play by the rules, but says the only way Africa can benefit from its raw materials is if the continent makes it easier for foreign capital to flow in.
LI (through translator): Leadership of the government, they must have vision. They must have strategies.
MABUSE: His own strategies are not very clear when it comes to how he will navigate South Africa's challenging mining environment.
Nkepile Mabuse, CNN, Johannesburg.
(END VIDEOTAPE)
FOSTER: And tomorrow, we explore the political impact of the fatal Marikana strikes on Southern African president, Jacob Zuma. And don't forget to watch our CNN special, "South Africa: After the Strike." See it on Friday at 4:30 PM in London right here on CNN.
A Currency Conundrum for you, now. Catalan independisists want to quit Spain but remain within the euro. Our question to you: how much do the region's banks owe the European Central Bank? A, $38 billion? $77 billion, B? Or $110 billion, C? We'll have the answer for you later int eh show.
The euro is flat, currently, as investors wait for from Brussels on those meetings. The yen is coming back off eight-month lows against the dollar. And the pound is falling.
(COMMERCIAL BREAK)
FOSTER: Packages like these are in every cupboard and fridge in the world, pretty much, and for most of us, they are a simple fact of life. But the humble Tetra Pak has opened up all kinds of food possibilities and made millions, of course, for its creators. In this week's Make, Create, Innovate, we look at the technology behind the Tetra Pak.
(BEGIN VIDEOTAPE)
NICK GLASS, CNN INTERNATIONAL CORRESPONDENT: These days, we fill our supermarket trollies, we pile them without really thinking about it. Not so long ago, we didn't have the same wide-ranging choice. The great challenge was to keep food fresh, to give it a longer shelf life. The revolution began here in Sweden in a place not so far from here.
GLASS (voice-over): Tetra Pak is the biggest packaging supplier on the planet, with a turnover last year of $13.5 billion. Heading up the technology team is Laurence Mott. The company's success, he tells us, is based on the innovation of aseptic technology.
LAURENCE MOTT, VICE PRESIDENT OF TECHNOLOGY, TETRA PAK: It's a technology whereby you simultaneously sterilize the milk or the juice, for example, and the packaging material. So it doesn't matter if that then that package lives in room temperature, it doesn't have to be refrigerated. Because there's no bacteria in there, it can't spoil.
GLASS: That's the revolution. Aseptic technology, rapidly preheating and cooling the liquid. Tetra Pak gave us long-life milk.
MOTT: It launched a whole new class and category of product, and this allowed you to manufacture a package in one location and ship it many hundreds or even thousands of kilometers to another location.
RUBEN RAUSING, PACKAGING PIONEER: I began thinking about packaging fluids, especially milk, right from the very beginning.
GLASS: The bid idea came from the Swedish packaging pioneer Ruben Rausing in the 1940s. He began with a shape you only ever saw in geometry class: the tetrahedron.
MOTT: It allows you to pack product without any air, so it makes it very, very efficient in terms of the materials used and to distribute this around the world.
Here is a tube. It's continuously filled here, and as it's moving through the machine, we simply grip and seal the tube and it's a continuous motion. It's fantastically simple. It's the foundation of what we do today.
GLASS: It was the first step towards sterile packaging and aseptic technology. The tetrahedron was followed by other shaped packages. So far, about 230 different types. They sell the packages, but also the machines that make them.
GLASS (on camera): Pride of place in Tetra Pak reception, this prototype filling machine from 1946, all cog wheels, bicycle chains, and wood.
And this is its gleaming modern equivalent, capable of making and filling a quarter of a million cartons a day.
MOTT: This is what we believe is the fastest injection molding machine in the world.
GLASS (voice-over): Constant innovation is fundamental to the company. Refining the packaging, refining these machines. And it all goes back to Rausing himself.
RAUSING: That it would survive and be of importance only if they are continuously innovative.
MOTT: Many of the philosophies that used to guide him daily in his work, such as a package should save more than it costs, it's -- it lives with us every day.
GLASS (on camera): Ruben Rausing died in 1983, reputedly the richest man in Sweden. His spirit of innovation lives on. Tetra Pak cartons are now part of all our lives. The company has helped change the way we shop - - indeed, the way we consume food. It still does.
(END VIDEOTAPE)
FOSTER: Well, there's talk of another European breakup and, once again, it's the debt crisis that's to blame. Next, we're in Catalonia, where economics and politics collide.
(COMMERCIAL BREAK)
FOSTER: Welcome back; I'm Max Foster. These are the news headlines this hour.
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FOSTER (voice-over): Egypt's president is assuming sweeping new powers, albeit temporarily. Mohammed Morsi issued an order preventing any challenges to his laws or declarations until a constitution is written and a parliament is elected. It is an apparent effort to speed up the creation of Egypt's new government, but critics see it as a power grab.
The cease-fire between Israel and Gaza has reached a crucial 24-hour mark. Both sides agreed to a new set of negotiations if the agreement held for a full day. People in Israel and Gaza have been taking advantage of the break in the violence, leaving their homes for fresh air and for supplies.
A Syrian opposition group says at least 76 people have been killed across the country this Thursday. Online footage appears to show regime forces shelling Daraa, a suburb of the capital where rebels have maintained a strong presence.
Rebels in the Democratic Republic of Congo refusing international demands to give up territory seized earlier this week. The so-called M23 group is now trying to push west after taking the city of Goma along Congo's border with Rwanda. The U.N. says it's heard reports that people who get in the rebels' way are being executed.
European Union leaders are in Brussels to thrash out agreement on the next seven-year E.U. budget. Plans to increase it to $1.2 trillion has met with strong opposition. Nations dealing with cuts to their own budgets feel the E.U. budget should also be frozen or cut.
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(END VIDEO CLIP)
FOSTER: Well, Spain must raise tens of billions of dollars to get through 2013 and it got off to a pretty good start today. It managed to raise almost $5 billion at a bond sale, more than it had expected, and it was only aiming for $4.5 billion at best. And that suggests investors still have some confidence in Spain at the moment. And that encouraged Spanish stocks to rise.
The benchmark IBEX 35 finished up around 1 percent; most companies saw shares gain with financials amongst the very best performers there.
There was good news on yields, too. The interest rate on the 10-year bonds was 5.5 percent, much lower than the yields we saw on the (inaudible) market a few months ago, which were above 7 percent. The lower the yields, the more sustainable all this Spanish borrowing will be.
Now Spanish regions are still struggling with debt, including Catalonia, where the current president is hoping to be reelected on Sunday. If he returns to office, he'll hold a vote on Catalonian independence from Spain.
As Al Goodman reports, the region's economic troubles are only fueling the calls to break away.
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AL GOODMAN, CNN CORRESPONDENT (voice-over): Spain's economic slowdown has been harsh on this Catalan company near Barcelona. It used to rent out more than a thousand elevated platforms for industrial use. But now rents out less than 100.
Owner Ivan Papell says turnover is down 80 percent.
IVAN PAPELL, OWNER, LIFTISA: In some ways, we have some people make fun and we say, hey, the more you work, the more you lose. So sometimes you start thinking, hey, I'd better stop. But this is too easy.
GOODMAN (voice-over): Papell's sense of survival has a long tradition in Catalonia, which takes nationalist pride in its own flag and language.
The industrial belt around Barcelona displays Catalonia's economic muscle, producing 19 percent of Spain's wealth with just 16 percent of the population.
Even as the heavily indebted Spanish government itself is under pressure to ask Europe for a national bailout, which the prime minister says isn't needed just yet, and which this former MIT economist now teaching in Barcelona can hardly believe.
JAUME VENTURA, POPEU FABRA UNIVERSITY: I'm totally surprised that it has not asked for it already. I mean, for most economists, it doesn't make any sense that the Spanish government is not asking for it.
GOODMAN (voice-over): Yet while Madrid pressures Spanish regions to clean up their finances to help reduce the national debt, Catalonia is pushing back hard. Last September, an estimated 1.5 million Catalans filled central Barcelona, demanding independence, raising an old complaint that Catalonia sends far more in taxes to Madrid than it gets back in central government spending.
GOODMAN: Spain's internal dispute is similar to one in Europe, where the wealthier northern countries grumble about funding the indebted southern countries like Spain. Catalonia, in northeast Spain, complains its taxes support the poor southern regions of Spain.
GOODMAN (voice-over): This economist says the crisis has brought long-simmering nationalist sentiment to the forefront.
GONZALO BERNARDOS, UNIVERSITY OF BARCELONA (through translator): The crisis has made many people in Catalonia desperate. They see a dark future. Then hope springs that with Catalonian independence, things will be better.
GOODMAN (voice-over): Elections for Catalonia's regional president and parliament are this Sunday. Independence is not on the ballot, but the incumbent, expected to win again, vows to hold a referendum in his next term.
Papell likes the self-determination option.
PAPELL: We don't just think about, hey, is this going to solve the Spanish economic problem or crisis or the Europe -- the European economic crisis. We're now thinking more, can we solve -- we have to solve what we can manage, which is our own economy.
GOODMAN (voice-over): The Catalan economy, that is, which he and others hope won't keep going down -- Al Goodman, CNN, Barcelona, Spain.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
FOSTER (voice-over): Let's get the answer to our "Currency Conundrum" now. How much do Catalonia's banks owe the ECB? Well ,the answer is B, $77 billion or 60 billion euros. The economy of Catalonia is actually bigger than Greece's Greek debt is around six times as high as Catalonia's.
(END VIDEO CLIP)
FOSTER: Spain isn't the only E.U. country struggling with debt; France is heavily burdened, too, as they face a lean festive season, many French are laying the blame squarely on their president. We'll have more on that after the break.
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FOSTER: Now Nicolas Sarkozy has faced French magistrates over accusations that his 2007 election campaign was illegally financed by France's richest woman.
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FOSTER (voice-over): The former president denies allegations he took financial advantage of elderly L'Oreal heiress, Liliane Betancourt, when she was too frail to fully understand what she was doing. Mr. Sarkozy lost his immunity from prosecution when he lost the presidency in May. He has not been charged with any offense, but the case threatens the 57-year old's hopes of a political comeback.
(END VIDEO CLIP)
FOSTER: Mr. Sarkozy's successor is also having a tough time at the moment. Francois Hollande's popularity is sliding as he wrestles with a sickly economy and rising unemployment. Not even a festive season is generating goodwill towards France's first Socialist president in 17 years. Isa Soares reports.
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ISA SOARES, CNN CORRESPONDENT (voice-over): Paris is dressed to impress, but behind the music, the decorations and the seasonal offerings, there is little else to cheer.
UNIDENTIFIED FEMALE (from captions): -- life is the same whether you are working or not. There's a lot of depression, people feel that the cost of living is higher and higher. They complain.
SOARES (voice-over): There's a lot of complaining, too, at this Christmas market at Champs-Elysees.
UNIDENTIFIED FEMALE: Before the family were ready to spend around 600 euros to buy the gifts for Christmas and now I hear that it will be more 400 or 300.
SOARES (voice-over): One man who is now trying to capitalize on his hat making hobby tells me he has only one concern right now.
UNIDENTIFIED MALE (from captions): Unemployment, of course. It is my main concern. Today I am 59 years old and for two years I have been looking for a job and I'm not finding anything. I'm too old.
SOARES (voice-over): This is France's sluggish new reality, one that some say France's president is in denial about. Economist Ludovic Subran believes France's recent tax credit, designed to save jobs, is a good thing.
LUDOVIC SUBRAN, ECONOMIST, EULER HERMES: The government just announced a 20 billion euros credit generation package that is supposed to target the companies so that it can prevent companies from firing people and it can reduce the lack of fluidity, the lack of inter-business' deadlocks that we are kind of facing right now in French economy.
So I think we're on the right track. The question is are we triggering enough?
SOARES (voice-over): President Hollande has been adamant that he'll reform a la Francaise. In other words, he'll do it his way. But his softly, softly plan is showing little results. Public spending accounts for 56 percent of GDP, the highest in the Eurozone. And unemployment is at 13-year high, as companies like Peugeot, Citroen and Alcatel-Lucent slash thousands of jobs.
SUBRAN: I think if there is one thing to solve right now is really to target the -- to stimulate investment by the private sector. We have been focusing so much on reducing public (ph) deficit, on making sure that we raise enough taxes, that we reduce spending, but nothing has been done on creating long-term wealth and assets in the economy, and this is what create jobs in the end.
SOARES: For French President Francois Hollande, this is a battle for growth and competitiveness. Now he must show the French people and the rest of Europe that he's as serious about structural reforms as he is about austerity -- Isa Soares, CNN, Paris.
(END VIDEO CLIP)
FOSTER: Let's find out what our weather has in store. It's cold in Europe, I know that, Jenny.
JENNY HARRISON, CNN METEOROLOGIST: Ooh, Max, that's a good forecast, isn't it? You've very good at it, yes.
It is cold; it's windy; it's wet. It's all of those things, pretty much the way it's been for the last few weeks, it has to be said, and you get a bit of a cold blast of air, which is coming your way. Then it's going to get mild again.
But the main story is this: it's the very heavy rain that's continuing to come across the U.K. in a particular. Now look at this line of very heavy rainshowers coming through. You can just really see that even the chance of some sort of thundery showers in there as well, but it really is very heavy.
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HARRISON (voice-over): Have a look at these images, because it has been coming down fast and furious. This is Somerset in the southwest of England. And an area that tends to see quite a bit of the brunt of this.
This is coming in from the Atlantic, so people, as you can see, just trying to do their best, prepared to keep the water at bay, but unfortunately, there is more on the way. Now when that front actually does slide through, there's a bit of a break, but guess what? There's another system not that far behind it.
(END VIDEO CLIP)
HARRISON: Now I want to show you some of the totals that have actually come down across in Europe. You get an idea. That's why we've been seeing pictures like that. And this actually not in the southwest. This is some of the heavier totals been across into Wales. You can see there, (inaudible) Walney Island, also Aberdaron.
And then also Valley at 41 millimeters of rain. But the wind has been really strong. At Capel Curig, which typically does see some pretty high winds, 86 kph. And then in the north of the U.K., up in Loftus, 111. So some very strong winds with this system of low pressure.
And in fact, it's going to be cold, too. When this system goes through and that rain finally clears, eastwards, of course, pushes across into France, the Low Countries, it turns to snow across into Scandinavia. But some cold wind and strong winds, it will be coming in.
And then once all of this clears further, there's another little system just already developing at the Atlantic. That will push particularly through much of northern Spain and then across into France.
So, again, some heavy rain with that system as well. But the winds have been very, very strong. Now they should begin to ease as this system kind of goes through, another 24 hours of very blustery winds, the same winds that nearly 40 kph in Plymouth right now.
And in fact, the winds actually you can see pushing across the North Sea on towards Scandinavia and then there's that next area of low pressure, so again, some pretty brisk winds with the rain again.
So when the system goes through, it'll feel quite a bit colder, colder than average, but then the next little low, which is coming up from the southwest, you see what it does there, those warmer colors indicating some milder air coming in with the direction of those winds.
So there's the first front, there's the area of low pressure, snow to the north, pretty good really across much of central and eastern Europe. We've got 16 in Rome, but just 7 in Vienna and still clinging onto double figures there in London, Max, at 10 degrees Celsius.
FOSTER: Jenny, thank you very much indeed.
More QUEST MEANS BUSINESS after the break.
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FOSTER: Twenty-eight floats, 11 marching bands, thousands of cheerleaders and Santa, superstorm Sandy failed to diminish the spectacular -- it is the annual Macy's Parade in New York.
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FOSTER (voice-over): In this (inaudible) it features stalwarts like Kermit and Charlie Brown along with a couple of newer faces, around 3 million people lined the streets, 50 million were expected to watch on TV. And organizers are hoping the celebrations were able to lift the mood of those still recovering from last month's superstorm.
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FOSTER: Now on Wall Street, may be closed for Thanksgiving, but some U.S. stores are getting ready to open in just a few hours' time. Retail experts are expecting a $21 billion bonanza on Black Friday, the day after Thanksgiving. And shops like Toys 'r' Us are looking to cash in by opening later this evening.
Maggie Lake -- Maggie Lake asked the Toys "R" Us CEO what would be on people's shopping lists.
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GERALD STORCH, CEO, TOYS "R" US: One of the hottest products is Tabeo. This is a Toys "R" Us designed kit tablet.
MAGGIE LAKE, CNN CORRESPONDENT: Even the kids want a tablet?
STORCH: Even the kids want it. It's an Android tablet, wi-fi, the great -- the thing most kids use it for is playing apps, like Angry Birds or Cut the Rope. And parents love it because then they don't have to give their kids their iPad. They can play with this.
For dolls, Monster High is one of the hottest lines; Lego is doing fantastic. Across the board, it's got to be the hottest toy brand in the world right now.
LAKE: These are not inexpensive toys. Even though they're sturdier, if a parent buys something like this does that cut down on what else they're able to buy?
STORCH: Toys "R" Us is a holiday store. It's a Christmas story. So we're the place that parents typically come or grandparents (inaudible) buy that big gift.
LAKE: You mentioned the discounting. Is that going to be really important this Christmas season?
STORCH: I do believe this year the consumer wants a great deal, and we're going to give it to them. On Black Friday we have over 200 door- busters. That's up from 150 last year. Our ad is four pages longer, full of more and more and more great deals on products. And we're going to keep adding all day, all weekend, all season, more and more and more great deals.
And this year we've also introduced price match, you know, because we know consumers care a lot about price. And so if by any miracle you should find something less expensive at one of our competitors, we'll match that price, too.
LAKE: How much of the mix is it between brick-and-mortar and online now?
STORCH: Well, it's about 90 percent in the stores and 10 percent -- 10 percent online. But I have to tell you that I believe, in the future, we'll see that 100 percent of our sales will be Internet-affected.
By that I mean the customer doesn't distinguish any more between the digital world and the physical world. They relate to a great brand like Toys "R" Us. They want to do business with Toys "R" Us. So they might start on their cell phones, for example, to see if we have a product, then go to the store to pick it up.
LAKE: Where is the consumer in terms of their ability to spend? Is it going to be a better spending season?
STORCH: We know the economy's a little tough, but we're still very optimistic. We've seen that in good times and bad. The last thing parents cut back on is that Christmas present for their child.
And even in the depths of recession, in 2008 or 2009, we still saw growth in our sales at Toys "R" Us. So we expect that when Christmas comes, they're going to want to buy that great Christmas present for their child.
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FOSTER: Well, it's not always child's play on Black Friday. Thankfulness is thrust to one side, as Kyung Lah reports.
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KYUNG LAH, CNN CORRESPONDENT (voice-over): The stampedes, the gate crashing, the pushing, even tasing, shoppers consumed with a deal turning on one another. At this Walmart last year one used pepper spray to fight suffocation in the crowd. This is Black Friday in America, and Connecticut shopper John Daggett --
JOHN DAGGETT, CONNECTICUT SHOPPER: I've been standing in line for 36 hours.
LAH (voice-over): -- loves it. This father of an 18-month old has been camping out for years. One year he snapped photos as this crowd fought over $5 headphones.
DAGGETT: The shoppers just went berserk. I've never seen anything like it. People start lunging and grabbing and you just see the arms all just go at once, just you know, forward, like a team of superheroes.
AIMEE DROLET, CONSUMER PSYCHOLOGIST, UCLA: What is relatively new are shoppers turning on other shoppers.
LAH (voice-over): Aimee Drolet is a consumer psychologist. She says competitive shopping has gotten worse, so accept it on Black Friday that it's here to stay.
DROLET: This piling on stores, being desperate for consumers to come and shop, so they're going to be offering a lot of deals and making the promotional environment something that predisposes people to not behave.
LAH (voice-over): Bad behavior has led to serious injuries, even death, from crushed workers and shoppers to shootings at stores. That's why Best Buy has been running drills this year on crowd control. They're so serious at this store, check out the plan on the Black Friday War Board.
UNIDENTIFIED MALE: We prep a lot of this. We make sure the line is being monitoring. We let in little groups at a time so that our employees aren't getting overwhelmed and neither are the customers.
LAH: The tents, the lines, the mayhem, some shoppers say the only way that they can handle Black Friday is by declaring a shopping blackout.
JENNIFER BAGHDADLIAN, BLACK FRIDAY BOYCOTTER: People go crazy for a good deal, but it's not worth it to me. It's not worth it to my family.
LAH (voice-over): But crowds are just part of obtaining rare Black Friday deals, says Daggett.
DAGGETT: I love it when they try to swing at you or anything. It's funny to me, because everybody always gets mad when you're the one with the items that they want.
LAH (voice-over): Consumers driven by competition, no matter the cost -- Kyung Lah, CNN, Los Angeles.
(END VIDEO CLIP)
FOSTER: We'll have an update on the E.U. budget battle after the break.
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FOSTER: Let's return to our top story now.
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FOSTER (voice-over): Europe's leaders are gathered in Brussels tonight, tasked with working out the European Union's trillion-dollar budget. Talks are now underway. German Chancellor Angela Merkel has warned the two-day summit may not be enough to secure a deal. It is a thorny issue and each delegate will be bringing their own demands to that table.
U.K. Prime Minister David Cameron has vowed to veto any increase in spending. France has stated their only cuts to the common agriculture policy are out of the question.
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FOSTER: U.S. major stock indices ended Thursday's sessions with solid gains, really awaiting that result and not expecting them particularly soon. So as you can see, all the main markets are up, mostly on corporate news. Most banking shares rose. Deutsche Bank up more than 1 percent; Barclays and Royal Bank of Scotland each gained around 11/2 percent.
The latest numbers on the manufacturing indicate that the Eurozone economy is in its steepest decline since June 2009, and could see its GDP shrink half a percent this quarter for the markets shrug that off.
U.S. markets closed this Thursday as America's celebrates Thanksgiving. Wall Street will reopen to a half-day of trading on Friday. It has been a disappointing month for U.S. stocks. The Dow has fallen by almost 4 percent and the S&P 500 and the Nasdaq have both fallen by around 3 percent.
That is QUEST MEANS BUSINESS. Thank you so much for watching. I'm Max Foster in London. The news headlines are next.
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FOSTER: Egypt's president is assuming sweeping new powers, albeit temporarily. Mohammed Morsi issued an order preventing any challenges to his laws or declarations until a constitution is written and a parliament is elected. Critics see it as a power grab.
The cease-fire between Israel and Gaza has reached a crucial 24-hour mark. Both sides agreed to a new set of negotiations if the agreement held for a full day. People in Israel and Gaza have been taking advantage of the break in the violence, leaving their homes for fresh air and supplies.
A Syrian opposition group says at least 76 people have been killed across the country this Thursday. Online footage appears to show regime forces shelling Daraa, a suburb of the capital where rebels have maintained a strong presence.
E.U. leaders are in Brussels to thrash out an agreement on the next seven-year budget. Plans to increase it to $1.2 trillion has met with strong opposition. Nations dealing with cuts to their own budgets feel the E.U. budget should also be frozen or cut.
Boxing great Hector "Macho" Camacho is now considered clinically brain dead. The 50-year-old fighter was shot twice in the face during a drive-by shooting on Tuesday.
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FOSTER: That's a quick look at some of the stories we're watching for you here on CNN. "AMANPOUR" is next.
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