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Quest Means Business
Standoff Over Greek Reforms Debt; Varoufakis Pushes for Bridge Loan; Thousands Protest ECB Decision; European Markets Mixed; Greek Stocks Shrink; BT to Buy EE for $19 Billion; Diplomatic Push to End Conflict in Ukraine; EU Raises 2015 Growth Forecast; US Stocks Soar on Earnings; Sony Studio Chief Steps Down; Tomorrow Transformed: Buying Homes Online; Threat of Boko Haram in Nigeria
Aired February 05, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: The market closed nearly at the high point of the session, a gain of more than 200 points, up 1.1 percent. New Home
company hits the gavel -- ooh, a very cheerful man, he must be building lots of homes -- on Thursday, it's the 5th of February.
Tonight, call it a grudge match at the heart of Europe's economy. German and Greek ministers square off in Berlin, and no love is lost.
From one European crisis to another, world leaders visit Ukraine to make the case for peace.
And Nigeria's finance minister tells me tonight the country needs more help in fighting Boko Haram.
(BEGIN VIDEO CLIP)
NGOZI OKONJO-IWEALA, NIGERIAN FINANCE MINISTER: It's been very slow for the international community to realize the problem and grasp it.
(END VIDEO CLIP)
QUEST: You'll hear more from Ngozi Okonjo-Iweala as the program moves on. I'm Richard Quest, I mean business.
Good evening. Tonight, Greece's European tour has culminated in a standoff. It was always going to be the meeting in Berlin between the
Greeks and the Germans that was going to be the most contentious.
The Greek finance minister faced his most difficult meeting yet with the German counterpart, Wolfgang Schaeuble. Now, you can think of it as
the Schaeuble versus Varoufakis in the Brawl in Berlin.
So, how did this brawl pan out during the course of the day? The first hit, Minister Schaeuble saying "We agree to disagree. The former
leaders of Greece have made progress by following the austerity program," a reference to the previous governments that signed on the dotted line.
He said the new government "should not change course. Syriza should not make promises that come at the expense of other Europeans." So, that
was Schaeuble's view, "We agree to disagree." The counter-punch from the Greek finance minister, Mr. Varoufakis.
(BEGIN VIDEO CLIP)
YANIS VAROUFAKIS, GREEK FINANCE MINISTER: As Dr. Schaeuble said, we didn't reach an agreement. It was never on the cards that we would. We
didn't even agree to disagree, from where I'm standing. From where I'm standing, we agreed to enter into deliberations as partners with a joint
orientation towards a European solution for European problems.
(END VIDEO CLIP)
QUEST: Schaeuble says "We agreed to disagree." Varoufakis, "We didn't even agree to disagree." These two countries, Greece and Germany,
Varoufakis and Schaeuble, they were always going to be the most difficult part, particularly since Varoufakis says it's the "gross indignity of
austerity" and says that Germany needs to ease off.
(BEGIN VIDEO CLIP)
VAROUFAKIS: What we request at this stage is, perhaps, the most precious of commodities: time.
(END VIDEO CLIP)
QUEST: And that time is exactly what isn't available, because time is what Greece needs to get an agreement on the debt engineering plan. Think
of it this way: the way it works is that, of course, Greece is due to exit its current program with the Troika towards the end of February.
It's going to take months to negotiate a new deal. In that medium term, Greece is proposing to swap for the longer term the existing debt
with bonds with easier repayments. Those bonds, part of the architecture, will be linked to the economy.
But how do you get there? That's the problem. Well, according to Varoufakis, Greece needs a bridge loan until the end of May. That's from
the end of February's program through until a new negotiation.
But if there's no deal by the end of the month, if that bridge loan doesn't exist, then the Greek government is very likely to run out of cash.
This is the architecture, the real architecture that's being faced at the moment.
In Athens, thousands of demonstrators gathered in a square where they had often objected to the government's actions. Now they were there to
support the government in the face of the ECB's decision -- we talked about it last night -- to restrict Greece's access to ECB money.
Banks hoping to borrow cheap funds from the ECB can no longer use the Greek bonds as collateral. The banks are dependent on emergency financing
and the like.
Let's put all this together. It's a serious situation. Fred Pleitgen, Berlin correspondent, joins us now from London. Fred, Schaeuble
is sticking firmly to the traditional line. This is very Germanic.
(LAUGHTER)
FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: It is, indeed, very Germanic. And it's also very Wolfgang Schaeuble. I was very
interested to see how you framed that as a match between Varoufakis and Schaeuble, because I have to say, I'm usually against such comparisons, but
in this case, it's absolutely true.
Wolfgang Schaeuble is a man who has been known for years to be somewhat of a bully, also towards other ministers in Angela Merkel's
cabinets, towards coalition partners, you name it, and he certainly wasn't going to back down.
The Germans were not happy at all with a lot of the rhetoric that they were hearing from this new Greek government, first the talk of haircuts, of
debt relief. Then, as things progressed, the whole thing with these growth-related bonds that they wanted to --
QUEST: Right.
PLEITGEN: -- put out. It's not something that sits very well with the Germans. So, this was something that you could see coming. These are
two very strong personalities, and certainly Wolfgang Schaeuble and Varoufakis sitting there would be exactly the way I would have imagined
those talks take place, Richard.
QUEST: Now, with your insight and experience in here, Varoufakis doesn't just go to see Merkel and Schaeuble on his own, he's now got Renzi
of Italy and many of the other countries that are feeling badly done to by the German position, not quite in his pocket, but certainly in his camp.
Will that carry any sway in Berlin?
PLEITGEN: Well, it's an interesting question, and I actually think that it might, Richard. It's not just the Germans, it's other European
countries with strong economies that would see things similar to the Germans as well. But you're absolutely right, the front of austerity --
and I've been saying this for a while now -- the front against austerity seems to be crumbling.
If you look at Renzi there in Italy, if you look at the French position as well, they've all been quite welcoming to this new Greek
government. And one of the things that we have to keep in mind is that it's not only about the governments, it's also about the people.
Because it's not only the people in Greece, but also the people in Germany, many of which are saying we've seen this austerity for so many
years, and quite frankly, we're sick of it.
QUEST: Right.
PLEITGEN: However, you also still have people at the ECB, you have people in Europe, in European institutions, and they are the ones who say
we need to stick to these bailout terms.
I had an interesting talk today with the EU's finance commissioner for finance and economy, and he was telling me of course we want to stimulate
the economy, but at the end of the day, all of this needs to be paid for. And it needs to be paid for by balanced budgets. Let's listen in to some
of what he had to say.
(BEGIN VIDEO CLIP)
PIERRE MOSCOVICI, EU ECONOMICS COMMISSIONER: And I'm sure that we are in a constructive mood in order to find solutions. So no, the Grexit is
not -- not -- a scenario we privilege and we think about. No. No Grexit.
(END VIDEO CLIP)
PLEITGEN: That's Pierre Moscovici there. So, you can see that this - - there's some discontent there between these parties. Certainly, this new Greek government is one that's brought a whole new dimension to the
discussion in Europe, Richard.
QUEST: Fred Pleitgen, who's watching events for us in Europe.
Now, European stocks -- thank you, Fred. European stocks ended on Thursday in a very sort of up and down sort of way. Two were up, two were
down.
There were no major losses or gains except, of course, those double- digit declines for Greek banks, which pushed the Athens composite sharply lower. Athens was off more than 3.33 percent. Obviously on the back of
the fact that Greece's banks are going to be restricted in terms of loans.
BT, the old British telecom's agreed to a $19 billion takeover of EE. BT and EE -- EE, of course, was the combined Orange and Deutsche telecom,
or T-Mobile in the UK. It creates UK's biggest telecoms and broadcast -- broadband provider.
Ukraine's currency plummeted more than 30 percent against the US dollar. That's because the central bank has basically given up the battle
to shore up the hryvnia by intervening in the markets, 31 percent down.
Fighting between the army and pro-Russian separatists is pushing Ukraine closer to financial collapse. The country's allies are making
moves to restore peace in the eastern part. The US secretary of state John Kerry met the Ukrainian prime minister, Arseniy Yatsenyuk. The German
chancellor Angela Merkel and Francois Hollande are in Kiev for talks. You're getting the picture with all of that.
Let's talk more about it. Jim Sciutto is in the Ukrainian capital and joins me live at the moment. Jim, the situation, see, economically it's
dire, militarily it's getting worse, diplomatically, it's frozen. Help me understand where this goes next.
JIM SCIUTTO, CNN CHIEF US SECURITY CORRESPONDENT: You know, it's interesting you mention that, because we talk a lot about the economic
costs on Russia due to the sanctions, but enormous economic costs on this country due to tremendous instability, really a war, frankly, inside Europe
in the eastern part of the country.
And I'll tell you, Richard, I have never heard more dire assessments of the situation on the ground than I have today from senior State
Department officials, Ukrainian officials. They describe it as "grave." They blame Russia. They say Russia is getting more involved, more heavy
weapons, more troops.
And what is proving elusive is the solution. Is it more economic sanctions? Is it military aid to Ukrainian forces?
(CROSSTALK)
QUEST: All right, but Jim --
SCIUTTO: Is it some deal that perhaps Merkel and Hollande can work out? All open questions.
QUEST: Jim, I just want to quickly jump in and ask you, does the deteriorating military situation, does that give the US -- does it make the
US more emboldened to support Ukraine, they're determined to see this through? Or push back slightly and start to run in the opposite direction?
SCIUTTO: Well, you certainly heard bold calls today from Secretary Kerry, bold expressions of solidarity with the Ukrainians. He brought some
more economic aid today.
But on the silver bullets, if there are any, on the solutions that are truly going to move things on the ground, which frankly are up in the air
as a question mark, no hard progress today. There is no new round of punitive sanctions. There is no military aid to Ukrainian forces. We
can't say -- none of us can say if that's going to make a difference.
What you do have is yet one more diplomatic trip to Moscow that's been tried before, remember? And those agreements have been broken. It's a
really intractable situation, and the level of concern extremely high now, Richard.
QUEST: And we're glad you're following it for us tonight. Jim, thank you very much, in Kiev with the secretary of state.
After her private e-mails were put online for all to see, Amy Pascal spent weeks in the spotlight trying to limit the damage for herself and for
Sony Pictures. Now one of the biggest targets of Sony has lost her job, and we will tell you how and why after the break. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: So, we've talked about Ukraine, and you've heard about the situation with Greece and Germany. Amid this turmoil, the European
Commission's raised its growth forecast, predicting the EU economy will expand 1.7 percent this year.
It's the first time since 2007 that every national economy in the EU is expected to grow. Weaker euro and falling oil prices have helped some
countries more than others.
From Baltimore, Maryland, I'm joined by Steve Hanke, the professor of applied economics at Johns Hopkins University. So, Steve, hey, round of
applause! All the countries of Europe are going to grow, and there's a devalued euro, which should be good for exports.
STEVE HANKE, JOHNS HOPKINS UNIVERSITY: Richard, do you believe in the Tooth Fairy?
(LAUGHTER)
QUEST: Well, maybe.
HANKE: What can I say? This -- such a wild forecast. You have banks that are still deleveraging in Europe, banks produce 90 percent of the
money supply, and they're shrinking. Credit has been contracting for over a year and a half, and all of a sudden, things are going to change rapidly?
QUEST: All right.
HANKE: There's no way.
QUEST: OK. So, now let's talk about the Ukrainian currency's down 30 percent. They abandoned the peg against the other currencies. You're an
expert on pegs, so let me ask you --
(LAUGHTER)
QUEST: -- does Ukraine's currency basically continue this free fall?
HANKE: Until they establish a currency board, like Bulgaria has, they will continue to free fall. Actually, since November, that's when the
Russians decided, misguidedly, to float the Russian ruble, the Russian ruble has gone down about 32 percent since November of last year.
But the Ukrainian hryvnia has gone down about 43 percent in that period of time. So, it's crashing even faster than the Russian ruble.
QUEST: Right.
HANKE: And the story here is, Richard, let's get Ukraine into context so people really understand what's going on. I calculate something called
the Misery Index. Misery Index is just unemployment plus the lending rate at banks plus the inflation rate minus the GDP growth. And if you took the
top five, here you go, for the top five --
QUEST: Right.
HANKE: -- on the Misery Index. Venezuela number one. Argentina number two. Syria number three. Ukraine number four. Iran number five.
You got the picture?
QUEST: I have. Thank you, sir.
HANKE: Good.
QUEST: We'll talk more about the Misery Index when we're more cheerful. Thank you for joining us, Steve Hanke, from Baltimore --
HANKE: Good, thank you.
QUEST: -- on European -- you can always rely on Steve to put it into context with his Misery Index. US stocks --
(RINGS BELL)
QUEST: -- they rose sharply. The Dow ended the day up more than 200 points. It wasn't at the best of the sessions, that was at 17,888. But it
was a focus on strong earnings that certainly pushed the market into the green and held it there for the session.
It's two months since the Sony hack, and it's still causing major shocks at Sony itself. Amy Pascal, the co-chairman of Sony Pictures, is to
step down from her post. Pascal had embarrassing e-mails that you'll recall leaked to the internet during the hacking situation.
Brian Stelter is our senior media correspondent and joins me now. Was she pushed? Did she fall? Or is she leaving to spend more time with her
family?
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: She's leaving to spend more time making movies for Sony, but she won't be in a position anymore of
real power. So, I think it's safe to say that she's a victim of this hack.
As soon as those e-mails came out, Richard, the speculation began whether she was going to survive. For about a month, it seemed like she
might. There was the quiet period where Sony was starting to get back on its feet.
I was on the lot a few days ago out in Hollywood. It feels like the studio is getting back to normal. But this company concluded she could not
be the co-chair of the studio anymore.
QUEST: Right, but she's going to a very nice, feathered nest.
STELTER: Oh, yes.
QUEST: She's got a production company --
STELTER: And Sony's going to finance her movies, that's right.
QUEST: I mean, nice work if you can get it.
STELTER: She's got a beautiful office on the lot and all of that, yes. Yes.
QUEST: So, there is life after failure.
STELTER: I suppose -- well, I don't want to say "failure," because she helped grow this studio. But these e-mails were so embarrassing, and
it really spoke to this issue of relationships in Hollywood. Could she keep these relationships going?
I think the conclusion from Sony's big, big bosses was that she can make good movies, she's got an eye for talent, an eye for creativity, but
those relationships were not working out. And her contract was up before the hack even happened, so this was a rather easy way for her to step
aside.
QUEST: Brian, thank you for making it sensible.
STELTER: Hollywood. Scary place.
(LAUGHTER)
QUEST: I can think of scarier, but -- OK.
We all use the internet to shop for household items. Now more people are going online to buying their house. How owning the roof over your head
is going high-tech. We're going to show you Tomorrow Transformed on QUEST MEANS BUSINESS.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: Now, we've talked about Nylonkong. It's the shorthand for the cities of New York, London, and Hong Kong. Nylonkong, the most popular
place for buying property at the super-rich end of the market.
Wealth-X and Sotheby's International Realty also found that women more than men tended to view high-end residential property as an investment.
So, the women in the house are probably buying the more expensive ones.
For those of us aspiring to affluence, buying a home is probably the biggest investment we'll every make. Technology's already made the process
easier. In the future, technology will save us money. Let me show you how it works in this week's Tomorrow Transformed.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Hi, I'm so glad you could come.
UNIDENTIFIED FEMALE: Hi.
UNIDENTIFIED FEMALE: I am so excited to show you this.
QUEST (voice-over): Buying a home used to mean hiring a licensed real estate agent.
UNIDENTIFIED FEMALE: Brand-new whole bath, but let's do the second bedroom first.
QUEST: And visiting place after place after place until you found the one you loved. Thanks to technology and the internet, buyers can now
browse real estate listings whenever and wherever they want.
DOTTIE HERMAN, PRESIDENT AND CEO, DOUGLAS ELLIMAN: At least 85 percent of all consumers, I don't care where they live, surf, go online,
before they actually buy anything and well before they're ready to buy.
QUEST: It means traditional real estate companies must also embrace technology.
HERMAN: You have to be ahead of the curve. Not so far ahead that you lose your consumer, but if you're not, you're out of business, basically.
QUEST (on camera): Today, even with technology, red tape and paper abound. The Tomorrow Transformed of real estate will take it all online.
QUEST (voice-over): That's the vision of Square Feet, an internet- based realtor.
JAMES SIMPSON, CO-FOUNDER AND CEO, SQFT: We've streamlined the process substantially, so you as the seller would download the app, and
it's a very simple process. We start the process having you take pictures of your home. And once you're finished, it takes five or six minutes to
create a listing. It's just going to be cleaner, simpler, and faster.
QUEST: And it's cheaper, too. List your home with a traditional agent and you pay 6 percent commission. Do it yourself with Square Feet on
your smartphone, and pay 1 percent. That's a $25,000 saving on a $500,000 home.
SIMPSON: We're really sort of anticipating a big shift when the millennials become the primary home consumer, and they are so used to doing
things a certain way through the internet, they've grown up with the internet, it's just part of their daily life.
QUEST: The question for the future is whether people really will want to do it themselves.
HERMAN: I wouldn't mess around trying to take shortcuts with a big investment like this. People will pay for a service that they feel is a
benefit to them. And to me, would I look for the cheapest doctor when I was having surgery? I don't think so.
SIMPSON: Real estate sales is a service industry, and to not offer the consumer multiple choices of services seems a little silly.
QUEST: Technology may not put the broker out of business, but it does let us decide whether or not we need one.
(END VIDEOTAPE)
QUEST: You can guarantee one thing: it'll cost you money in the end.
In a moment, Nigeria's finance minister puts the threat of Boko Haram into perspective.
(BEGIN VIDEO CLIP)
OKONJO-IWEALA: It's not just a national problem, which it is, but it's also a regional and a global problem.
(END VIDEO CLIP)
QUEST: As Nigeria goes to the polls, she tells me the international community is only now beginning to provide the support Nigeria needs.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment, when Nigeria's finance minister tells me why she sees a
turnaround in the fight against Boko Haram.
And you'll meet the woman who forced the chief exec of Twitter to admit he's failed at tackling trolls.
Before that, this is CNN, and on this network, the news always comes first.
Diplomatic efforts have been stepped up to find a solution to the violence in eastern Ukraine. US Secretary of State John Kerry was in Kiev
today, where he met Ukrainian leaders. The German chancellor Angela Merkel and the French president Francois Hollande were also in Kiev for talks with
President Petro Poroshenko.
Jordan says a new wave of airstrikes against ISIS is just the beginning. The military says Jordanian jets destroyed ISIS training
centers and ammunition depots in Syria today. The Jordanian government has vowed to take revenge for the gruesome killing of the air force pilot Moaz
al-Kasasbeh.
In Berlin, Greece's new finance minister asked his German counterpart for more leniency in terms of the international bailout. After two hours
of talks, the men said they had not come to an agreement. Germany and other European partners are saying Greece should abide by the conditions
that came with its emergency bailout.
Presidential elections in Nigeria will go ahead as planned on February the 14th. Nigeria's Council of State decided not to change the date.
President Goodluck Jonathan met the council to discuss postponing the vote because of continuing military campaign battle against the terrorist group
Boko Haram.
So, let's talk about the elections in Nigeria. The finance minister says there's a growing realization that Boko Haram is a threat to all of
West Africa, and a new multinational campaign against Boko Haram is taking shape as the threat of terror.
And elections are due in just over a week. Ngozi Okonjo-Iweala has told me tonight, the situation is getting better. But Boko Haram main
operates in the northeastern part of Nigeria. There, there's an official state of emergency across three states. The group is said to control
around 50,000 square kilometers and, crucially, it's believed to have camps in Chad, Cameroon, and neighboring countries.
Of course, much of the violence has not happened in other parts of the country. This week, air and ground forces from Chad fought back after Boko
Haram slaughtered villages close to Nigeria's border with Chad and Cameroon.
Also this week, a suicide bomber blew herself up near a stadium near where President Goodluck Jonathan had just been speaking. Survivors of
recent massacres say the Nigerian military is unable to deal with the threat.
(BEGIN VIDEOCLIP)
MAHAMAT AL KHALI, TEACHER: (0:00:36.7 - 0:00:46.9)
(END VIDEOCLIP)
QUEST: Now, although there has been violence in the past and some activity in places like Abuja, in terms of the capital of Lagos and the
financial capital and the real capital, well, investors still aren't seeing the full impact of the violence taking place in other parts of the country.
So arguably Nigeria isn't feeling the full effect yet of an investment backlash. Nigeria's finance minister Ngozi Okonjo-Iweala joined me earlier
and we started the discussion with how serious the Boko Haram situation is now becoming.
(BEGIN VIDEOCLIP)
NGOZI OKONJO-IWEALA, NIGERIAN FINANCE MINISTER : The Boko Haram situation is really very difficult in the northeast of the country and this
is something that we have long been saying is not just a national problem which it is, but it's also a regional and a global problem. And the
atrocities that happened in Baga are so inhumane and so unacceptable. We were mourning the people in Baga, you know when the incident happened in
Paris, and it resonated.
But there in Baga, you know, we have to take action. And we thought that the action has to do also with getting the other countries in the
region to work with us. And now I'm happy, Richard, that this very week there seems to be more concerted action. Of course I have to say I'm not a
security expert by any means, but I am there in the government and we do see the countries of Chad, of Cameroon and of Niger working more closely
with us. And there was some backup also by the French in terms of technical support and intelligence support -
QUEST: Right.
OKONJO-IWEALA: -- and that's really helping to make a difference.
QUEST: Is the - the critics - the political critics - say that the situation is now slowly but surely on a downward spiral, and that Nigeria
is facing a security crisis.
OKONJO-IWEALA: Well I would beg to differ. I think you need to look at the results of what are happening this week. Several towns - Michika,
Mubi -- I could go on and name a lot of them -- and local government areas have been recaptured from the terrorists. And the situation is becoming
better. You know, of course we would like for the issue of the terrorism to be completely eradicated. Every Nigerian wants more security.
But we see a turn-around and I believe that with this concerted action, the military has called many more victories this week and they've
been reported and I think that's the way. We need to push, we need to encourage our armed forces and we need to make sure that all Nigerians
stand together in order to get the scourge dealt with.
QUEST: Right. But do you see yet international investors starting to shy away from going into Nigeria because at the moment this - these -
atrocities are not in your major cities which get the sort of - the travelers and the business travelers and the tourists. But it won't be
long before the investor says, `Hang on, Nigeria is simply too risky.'
OKONJO-IWEALA: What we see is that portfolio investors may be going but that may be for the reasons of the drop in oil price. But long-term
investors see a lot of potential in the country. That is why we are here today at this France Africa Summit because we were invited, with the
invitation saying that without Nigeria's participation, it would be less than complete -- because we are 26 percent of Africa's GDP and 77 percent
of West Africa's -- and we see investors making long-term decisions -
QUEST: Right. But -
OKONJO-IWEALA: -- have foreign direct investors.
QUEST: The - one of the big dangers for Nigeria is that the international attention is now very firmly on ISIS/ISIL and what's
happening there. Do you fear that the international community is not giving Nigeria the sufficient support in its fight against Boko Haram, and
if so what more do you want?
OKONJO-IWEALA: Well, I think the international community is coming to realize, you know, that this problem is bigger and deeper than they
thought. Initially it was characterized as a Nigeria problem only and it's happening because the government has not done many things.
Yes, there's a problem, yes, internally that we need to do more for the basic economic development of that region. But it is not just because
of that. It is a regional problem and global and I think this - there has been - it's been very slow for the international community to realize that
problem and grasp it.
I think that the country, this is now turning around. We are very appreciative to France where I am today for its support with backup and
intelligence. We are appreciative to the neighboring countries and I think - and to the AU - that decided to come and support and echo (ph) us. I
think they just need to turn around their thinking. Intelligence support, support with air cover and, you know, just concerted support to our ground
forces. Our armed forces we have to encourage them. They are courageous men and women who are fighting. And I -
QUEST: Right.
OKONJO-IWEALA: -- think that with this additional attention, we'll be able to handle it.
(END VIDEOCLIP)
QUEST: Will they be able to handle it? Daveed Gartenstein-Ross is a senior fellow at the Foundation for Defense of Democracies joins me now
from Washington. Sir, the Boko Haram atrocities, I mean, in many ways get nothing like the ISIS/ISIL publicity, and to that extent are we
underestimating something that should be gaining more attention?
DAVEED GARTENSTEIN-ROSS, SENIOR FELLOW, FOUNDATION FOR DEFENSE OF DEMOCRACIES, Yes and no. From a humanitarian perspective, absolutely it
should get more attention. And your previous guest was correct - this is an international issue, it's having an impact on the region and it has an
impact beyond the region as well.
The reason why we pay so much more attention to the Islamic State is, number one, it's in a truly critical region in Iraq and Syria, the heart of
the Middle East, and number two, it controls far more contiguous territory than Boko Haram does. But there's no doubt that Boko Haram doesn't get
enough attention. I mean, they've slaughtered in a period of weeks thousands of people -
QUEST: Right.
GARTENSTEIN-ROSS: -- and it's gotten almost no attention time and again.
QUEST: To that extent, the government of Goodluck Jonathan, would - how would you grade their ability or their persecution - or prosecution -
of the fight against Boko Haram?
GARTENSTEIN-ROSS: I don't think you can possibly give it a good grade. I mean, you've never had a Nigerian incumbent lose an election, but
this year it's going to be a very hotly-contested election because of Goodluck Jonathan's mishandling of Boko Haram as well as his inability to
stem political corruption.
QUEST: Right. Now, that's interesting because what will be the Achilles heel of the Jonathan election? Will it be Boko Haram, will it be
corruption or will it be as the finance minister said then clearly, you know, it's the economy, Stupid, from the U.S. that the Nigerian economy's
in for hard times because of oil?
GARTENSTEIN-ROSS: I don't think you have to choose between those various factors. I mean, all of them, and oil obviously is beyond the
power of the government to really deal with. I mean, it's a global market and you just have too many competitors to traditional oil coming on line.
But all of this gives a perception of a government that doesn't have control, a government that's incompetent, you have an insurgency within
their own territory which they're not able to stop, and Boko Haram is continuing to gain ground. Political corruption makes the situation seem
hopeless.
I have a number of Nigerian interlocutors , and I mean their - the people I speak with there have, you know, a very dark view of the country's
future and the government's current incompetence is a big part of that.
QUEST: Once we have the election, sir, we're going to need you to agree to come back and help us understand what happens next. Thank you.
GARTENSTEIN-ROSS: It's a deal.
QUEST: Thank you. That's a deal. We'll be back with more after the break.
(COMMERCIAL BREAK)
QUEST: It wasn't me - I promise you. Well maybe it was. Well, the company behind Dunkin' Donuts - we can be easily bribed in many ways. Send
me doughnuts and I'm anybody's friend. Anyway, the company behind Dunkin' Donuts and Baskin-Robbins says earnings are rising although there were
still concerns about the health of the U.S. economy. Profits are up 24 percent in the fourth quarter compared to a previous year. The growth this
year won't come up to its long-term target.
The chief exec of Dunkin' Brands is Nigel Travis. He joins me from Newton, Massachusetts. That's, I mean, thank you for the doughnuts, but
that's your problem, Nigel, by your own admission. You're earnings growth expectations are below a longer-term target. So, you're missing your
numbers.
NIGEL TRAVIS, CEO, DUNKIN' BRANDS: So, Richard, thank you for pointing it out so clearly and so, yes, last year was a tough year. When
you boil it down, we were a little bit disappointed with where we were in the U.S. with Dunkin' Donuts' sales. And internationally we're
particularly concerned about what happened in Japan. I think there's some significant pieces of news -
QUEST: Right.
TRAVIS: -- that came out of our results. One was that we grew our earnings per share by nearly 14 percent, but the most important number to
us is franchise economics. That was very stellar, --
QUEST: Right.
TRAVIS: -- growing year on year.
QUEST: Let me jump in.
TRAVIS: -- and we had spectacular growth -
QUEST: Let me jump in. When you look at this industry - and I'm being perhaps a little unfair - but the reality is it's brutal. It's
absolutely brutal. So, what new - I mean what new markets or what new trends can you introduce to your brands that's going to put you on the
front foot do you think?
TRAVIS: Well first, we just finished - the most important thing is franchise economics and that drives our growth engine which is new store
development. And no one else in our business has the kind of growth potential in the most stable country in the world which is the USA which is
74 percent of our revenue. So that it is important. In terms of your question about trends, last year digital was very important to us. We've
launched our new perks program. In the first year we got a two and a half million members - that hit our goal. In fact we slightly exceeded it.
That's going to continue to drive our business, we're bringing out some new platforms. We've got our blender platform coming out in this summer -
QUEST: Right.
TRAVIS: -- that's going to allow us to bring in fresh fruit smoothies and it's also going to introduce a Coolattar light product that is going to
be between 30 -
QUEST: All right.
TRAVIS: -- and 80 percent less in calories.
QUEST: I'm looking now at a lot of hearts Valentines doughnuts - most of which will not -
TRAVIS: Yes.
QUEST: -- last until the top of the hour, I have to tell you.
TRAVIS: (LAUGHTER).
QUEST: Seasonal products like this - I always look at it cynically and figure cashing in on a - on a holiday or a festival. How important are
seasonal stuff like a heart doughnut?
TRAVIS: Well we're in the fortunate situation that our customers come in to Dunkin' Donuts all the time. We have huge frequency. So they like
new news, they like something slightly different. And the heart-shaped doughnut - I can't actually see the ones you have, but there's my one.
It's been very popular over the years, it grows in popularity every year.
QUEST: Right.
TRAVIS: We also do special things for other occasions and by the way it's the same on Baskin-Robbins where we have this year our conversation
hearts cake coming out -
QUEST: All right.
TRAVIS: -- and we're going to make the most of Valentine's Day.
QUEST: Give me the country besides the U.S. - the country in the world that for you is sexiest for your doughnuts in the future.
TRAVIS: I think Germany where we had a great year last year. They love our doughnuts, they also love our beverages. We've got huge growth
opportunities in Germany and I think a lot of countries love our doughnuts. You only have to go to Southeast Asia, -
QUEST: Right.
TRAVIS: -- China - China where we got growth plans that are very significant. There's a lot of places around the world that love doughnuts
even more than the U.S.
QUEST: Nigel, good to see you, sir. Thank you very much indeed. My waistline doesn't thank you -
TRAVIS: Thank you very much.
QUEST: -- but I do. Now, when we come back after the break, Twitter doesn't have enough users, and it has too many of the kind it doesn't want.
The chief exec is under pressure to get more people using Twitter. Get rid of the trolls. You'll have the frank words of the CEO and the latest
financial report cards. It's coming up next if I haven't finished this lot off.
(COMMERCIAL BREAK)
QUEST: Twitter's revenue is rising but the problem is the user base isn't keeping up. That's the message in the company's latest financial
reports just come out in the last 20 minutes. The strong financial performance was enough to push the stocks higher in after-hours trading.
The EPS was double what was expected. The company's chief exec is using some very frank language to describe the - Twitter's - troll infestation.
An internal e-mail that was obtained by Verge the CEO Dick Costolo wrote "We suck at dealing with abuse and trolls on the platform and we've
sucked at it for years. I'm frankly ashamed of how poorly we've dealt with this during my tenure as chief exec. There's no excuse for it. It's
nobody else's fault but mine and it's embarrassing."
Ooh! Frank words indeed. Costolo's promised to make squashing trolls a priority. You've got both the trolls and you've got the results. Samuel
Burke's with me to talk about the results to begin with.
SAMUEL BURKE, BUSINESS CORRESPONDENT: Well the stock is up about 8 percent now. And basically what's happening is the market likes the money
that they're seeing. They're making money, Richard, but the problem is they don't have the growth with users. Remember this is the opposite of
what we were talking about for so long - they have all these users but how will they make money? They're making money but the rate at which they're
adding users is much lower, and what the market complains about over and over again and what I hear from analysts is that people sign up for Twitter
but they don't understand how it works and so they leave.
QUEST: Well I've been using Twitter for years, and I still do not understand what happens if I put an @Samuel Burke versus in the middle, at
the beginning, at the end. I still do not understand if I send a direct message, do I risk my mother reading some things that she shouldn't do? I
don't understand it!
BURKE: Well even more difficult for them is people sign up and they don't even get as far as you, Richard. So they're making core changes to
the platform. Now when you sign up for Twitter for new users, you don't even have to follow people. It will scan your cell phone contact list and
create a list of followers and a timeline for you based on that. So they're having to change the core product now because they need to increase
those monthly active users long term.
QUEST: Right. So the monthly active users was down or at least didn't meet expectations, but the revenue - did - it's still not a lot of
money. It's 4 or 500 million dollars that they're making.
BURKE: And that's the other story here is that for a long time people thought, ah, I have the next Facebook stock. They saw how well it's done -
Facebook now with 1.39 million - billion - users rather, and at the end of the day, Richard, what we see after quarterly report after quarterly
report, Twitter is not Facebook and it's still not profitable, Richard.
QUEST: Thank you. Thanks, Samuel. Don't touch the bell. Dick Costolo made the comments concerning trolling after being confronted by
someone who works at Twitter. His comments of course you just heard me say - the employee had read Lindy West's) article about how she was tormented
by trolls on Twitter. Lindy now joins us from Seattle. So you must be hugely grateful that Dick Costolo basically says `I'm a disgrace, I'm the
worst thing, I'm a troll. I should go back and eat worms.' And basically he is agreeing with you and he's done nothing about it.
LINDY WEST, WRITER: Well I don't know if I'd go so far as to say grateful yet. I mean, it's easy to say - in an internal memo, by the way -
this was not a public statement, `Ok yes, we're screwing this up and we should fix it.' What really matters to me is what they actually end of
doing - what changes they make on the ground that actually affects my day- to-day of the system. Because my experience on Twitter - yes, it's very useful for my career in terms of sharing information, promoting my work and
making professional contacts - but my experience is one of constant, daily harassment. And I use the term troll myself but I want to say that I think
it's important to remember that a lot of what we're talking about here crosses the line into stalking, harassment and abuse. And -
QUEST: All right, but, Lindy, but -
WEST: -- that's really what -
QUEST: -- but what do you want? I mean, he has come out and said we could do a better job, so you're now really turning `around to say well get
on and do it.
WEST: Yes. That would be great. I mean, people in my position who face this kind of abuse on Twitter, I mean, are actively being driven away
from that platform which has an effect on my career. I mean, I need social media for my job, and people have been dealing with this problem ourselves
for years. We've been figuring out coping mechanisms and compiling block lists of trolls that need to be blocked so that we can just get on with our
day without being threatened, you know -
QUEST: Right.
WEST: -- with murder and rape. So, what I would like is for Twitter to pick up that task -
QUEST: Do you -
WEST: -- and take care of that for us.
QUEST: -- do you have any hope, Lindy, and we're delighted to have you on the program tonight. Do you have any hope as a result of what
Costolo says things are going to get better? And I assume you are one of those people who will be holding him to his words in pen and ink in the
future.
WEST: I will do my best. No, it's definitely encouraging. I mean, just to be acknowledged, just to have the problem be acknowledged. Because
there's so many of us who have been hammering away at this for years - who have been writing about this for years - and it's - to at least - just to
have it out there in the open and in the public consciousness is very encouraging, and I really look forward to see - to seeing - what they
actually do with it.
QUEST: Lindy, please come back in the future and help us understand more. We're very grateful that you've come in tonight to talk about it.
While we have been talking, Pandora, which is a music streaming service, has produced results. Sam's back with me. Samuel.
BURKE: Yes, revenue way down, Pandora is singing a sad song, Richard. Stock down 22 percent -
QUEST: This is another Spotify?
BURKE: It's another Spotify. It's the number one streaming service here in the United States, so very unknown around the world. But stock
down 22 percent because they say they're having trouble with mobile ads. This is an entirely mobile company and so people are very worried. It
looks like people are backing out of the stock because of that.
QUEST: Right. I mean, when you've got problems with mobile in this day and age, you've got problems to the core of your company.
BURKE: Exactly. There's no way that a company like this can't deliver every single time on mobile.
QUEST: Sam, thank you very much for that. Some disturbing pictures that I need to bring to you before we finish tonight. Fans of Ghana's
National Football team were forced to leave a stadium in Equatorial Guinea after missiles were thrown at them. Look at the pictures. It was during
the Africa Cup of Nations. It happened as Ghana took a 3 - nil lead in match against the host country.
There's 3 - nil lead. Officials had to stop the game because of argy- bargy missiles were thrown. There was some serious disruption in the stadia - in the stadium - as a result of what happened. We will have - now
we stop to see what's actually taking place. Very difficult to play and that's a new sort of situation - very dangerous and it happened. When we
come back, a "Profitable Moment."
(COMMERCIAL BREAK)
QUEST: We agree to disagree. Tonight's "Profitable Moment." The German finance minister said, "We agree to disagree" - talking about the
relationship and negotiations between Greece and Germany. `Oh no we didn't,' says the Greek Finance Minister Varoufakis. He says we never even
got that far.
Well, all week you and I have been hearing about different countries - from Italy with Matteo Renzi, the U.K. with George Osborne, Francois
Hollande in France, Jean-Claude Juncker in Brussels and everybody has papered over this dispute between Greece and other countries in Europe.
Well today those financial chickens came home to roost. Germany is not going to budge. And as long as Germany continues to pay the bills, no
amount of charm from Mr. Varoufakis is going to make any difference. And that's the significance of what happened today. Because when they all get
together and firstly - firstly -- they have to provide temporary financing for Greece after the current project ends in February and then the long-
term deal.
Mr. Varoufakis and Mr. Tsipras have had it their own way so far - a lot of charm, elegance and bluster. What Wolfgang Schaeuble did today was
basically called them out. And that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead,
(RINGS BELL) I hope it's profitable. We're get together tomorrow.
END
