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Quest Means Business
New York, New Jersey & Connecticut Team Up To Impose Quarantine On Travelers From States With Spiking COVID-19 Cases; S. Africa's Finance Minister Warns Of Potential Sovereign Debt Crisis; South Africa's Finance Minister Warns of Potential Sovereign Debt Crisis; Trump Speaks as States Report Record COVID-19 Cases. Aired 3-4p ET
Aired June 24, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:49]
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: It is the last hour of trading on Wall Street, and the day has not been a good one for
stocks. If you look at the charts, it shows down. And the reasons are many. But we are off the lows of the day, but barely. Nearly a thousand was the
low of the day. Now, we are off 701 points.
The reason, though, is clear, and here it is. A deeper recession this year, and a slower recovery next year. The I.M.F.'s chief economist joins me to
discuss her grim new forecast.
The White House is preparing new tariffs on E.U. goods. President Trump is due to speak this this hour.
And New York is planning quarantines for its southern state neighbors as the U.S. virus cases set new records in places like Texas, Florida, and
Arizona.
We are live in New York. It is Wednesday, it is June the 24th. I am Richard Quest, and yes, I mean business.
Good evening. We begin tonight with the new data from the I.M.F. which confirmed everyone's worst fears. The economic situation globally is worse
than had been thought, the recession is deeper, and the recovery is going to be slower than anticipated. You see those numbers. Globally, minus five
percent this year. U.S., minus eight percent. E.U. minus 10.2 percent, and China.
Now, if you look at the markets, they are feeling the weight of reality. The sort of bon ami and good cheer that it might all be over soon seems to
have evaporated, and this is why.
More than 120,000 people have died in the U.S. from COVID-19. Many states reopened before meeting the administration's and the CDC's own guidelines.
Those very states are facing serious spikes in cases. And that includes Texas, where the Governor is concerned, asked people to stay at home but
won't impose a lockdown.
(BEGIN VIDEO CLIP)
GOV. GREG ABBOTT (R-TX): Because the spread is so rampant right now, there is never a reason for you to have to leave your home unless you do need to
go out.
(END VIDEO CLIP)
QUEST: States like New York, New Jersey, and Connecticut have teamed up to impose a quarantine on visitors from the spiking states. They have set
specific parameters that they are going to follow. And if you go -- if you come from one of those states, you have to go into a 14-day quarantine.
Meanwhile, the E.U. is threatening to cut off travel from the United States. Despite the red sirens blaring, President Trump and his allies
still refuse to see the problem, let alone fix it. What the world is seeing is a President refusing to wear a mask.
In essence, he has become the President or the Emperor who has no clothes. And things like the E.U. ban, the quarantines from New York are all making
it obvious.
Coronavirus was never a hoax. It isn't going away any time soon. Recovery is certain. The V-shape is elongating into a U, and the I.M.F. is
forecasting a slower recovery.
Gita Gopinath is with me. The Chief Economist at the I.M.F. When I read the report or the summary of the WEO -- World Economic Outlook this morning --
good to see you, Gita. When I read your work this morning, two aspects to your revision. First, the time so far has been worse than expected. But
perhaps more important, you are factoring in longer periods of social distancing and more extreme mitigation measures.
[15:05:09]
GITA GOPINATH, CHIEF ECONOMIST, I.M.F.: Indeed, Richard. What we do have is the fact that we don't have a medical breakthrough at this point, and
so, we still have a health crisis. So that would then -- you know, you would expect to have more a persistent social distancing into the second
half of this year and a slower recovery going forward.
QUEST: That said, the backlog, if you would like, from March until now, was worse as the numbers have come in, it has been worse than had been
anticipated. Where was the -- where was the problem there? What was it? Was it simply the size and scale of this?
GOPINATH: I think it was a combination of things. One, the lockdown was longer than was anticipated in April in many countries. And in fact, it was
more severe, especially in the first half of the second quarter.
Now, it is fair to say that the first and the second quarter were probably the deepest in terms of contractions in what we were projecting. And now as
countries reopen, we are seeing a pickup in growth.
But the speed of that recovery and how long it can sustain itself is highly uncertain.
QUEST: What's the practical effect of this lower number? I mean, there is a $12 trillion cost of the coronavirus which is, you know, it sounds
horrific and indeed is horrific. But in terms of recovery of jobs, what do you think it is going to be like?
GOPINATH: So, I mean, our projection is that there is going to be a recovery, but it is going to be slow. It is going to be gradual. And for
pretty much all countries in the world, by the ends of 2021, they will still be below their pre-crisis GDP levels, and unemployment rates will
remain elevated for a very long period. Because workers that are being hit are the low skilled workers, the low income workers.
What we know from past experience is that can take a long time for these workers to get back up into full employment.
QUEST: Gita, honestly, I am not taking you into political waters, but when you see the situation in the United States and the worsening -- I mean, on
the one hand, Europe is opening and picking up. But the United States is showing every sign of needing to have more stringent measures.
If the U.S. economy does not pick up as you planned, what happens then?
GOPINATH: Well, we have considered a scenario where there is a serious second wave in the world economy, and in that case, growth in 2021, which
we are now projecting to be 5.4 percent, will be close to zero percent.
So that would be a really very large hit and it would look like a true L- shape, none recovery, as you might say.
But I think what countries still haven't done enough of is realize that this is a health crisis which means you need to have sufficient health
capacity, testing, tracing -- contact tracing, enough isolation possibilities and that still is not in place in terms of medical equipment
and medical facilities. And a lot more needs to be done there.
QUEST: Later in the program, we are going to be hearing about South Africa and the budget there, and without sort of specifically commenting on South
Africa, but I look at countries like South Africa that have no fiscal head room for, really, large-scale stimulus, extra budget.
You look at emerging markets that are being clobbered on commodity prices and haven't really grasped the full metal of the health crisis to which you
talk about. I don't know, Gita, where the help comes from for those economies.
GOPINATH: Richard, you know, countries around the world are needing to do a lot of spending, including countries like South Africa have actually put
significant stimulus in place, nowhere of the magnitude that advanced economies are doing.
Now, what has absolutely helped is that while there is a real crisis, we don't have a financial crisis at this point, and that is because of the
unprecedented Central Bank support, fiscal support around the world, which has meant that actually portfolio flows to emerging markets that were
tanking in March have stabilized and credit spreads for these countries can actually come down.
So for now, we do have access to finance. But if the financial situation changes quite sharply and as we saw today, negative news on the health
front can trigger that then that can change dramatically, in which case, international institutions including the I.M.F., of course, will step up
and do what is needed.
[15:10:10]
QUEST: Gita, it is good to see you. Thank you, I appreciate the time today. Thank you.
GOPINATH: Thank you, Richard.
QUEST: So, to the United States. And more details, if you like, of the crisis now facing the country. Infections are on the rise in 26 of the
states. The caseloads are particularly heavy in Texas, Florida, and Arizona. All places that reopened early and in many cases reopened without
having met the strict criteria of the C.D.C.
Today, three northeastern governors enacted restrictions on interstate travel. They have ordered a self-quarantine for people that enter from
those high-risk states. New York Governor Andrew Cuomo alongside his counter-parts from New Jersey and Connecticut explained the new rules.
(BEGIN VIDEO CLIP)
GOV. ANDREW CUOMO (D-NY): It's only for the simple reason that we worked very hard to get the viral transmission rate down. We don't want to see it
go up because a lot of people come into this region and they could literally bring the infection with them.
(END VIDEO CLIP)
QUEST: It's called the commuter corridor, which it goes up from New England down to New York and down below to New Jersey. Alexandra Field is
our correspondent covering this from New York.
I get the idea, Alexandra, I see what's supposed to happen, and I can see how it can happen if people get off planes, but since you can drive over
borders and driver to distances, how realistic is this quarantine.
ALEXANDRA FIELD, CNN CORRESPONDENT: You point an excellent point, Richard. Look, this isn't a blockade as the Governor was quick to say. They aren't
stopping people to come into New York, New Jersey or Connecticut. They are simply asking that when people arrive into these states they would go ahead
and comply.
The Governors appeal to people saying that it was their individual responsibility to do this. So how do the states actually enforce this?
Well, it will be up to each state to enforce it as they see fit. The Governor of New York saying if you have found to be in violation of the
quarantine say perhaps you are pulled over in your car and you've have got say maybe South Carolina plates and it is discovered that you have come
from South Carolina, there could then be consequences for violating the quarantine such as fines to the tune of thousands of dollars and then a
mandatory quarantine that would be directly enforced.
But really, they are asking people to just go ahead and respect the law and do it, respect the travel advisory.
QUEST: Now, so far we don't know whether any of the other states are going to try to claim this to be unconstitutional or against the law. But it is a
fairly dramatic action taken by these three states, which were amongst the worst affected at the beginning of the crisis, but now showing the best
results, sustained results?
FIELD: Yes, it is a very dramatic turnaround, because of course, Richard, just a couple of months ago we were talking about New Yorkers really as
being the travel pariahs both within the country and beyond the borders.
There were a number of states that were looking at ways to keep New Yorkers out of their communities for fear that people would bring the virus from
the epicenter to other states.
Now, you have got a completely different scenario. You know, back a couple of months ago, Governor Cuomo had insisted that a blockade would have been
unconstitutional. He sees nothing wrong with the fact though that people can still come in to New York, they just must quarantine once they get
here.
But truly, a stunning turnaround when you consider where New York was compared with the fact that now, you're looking at a positivity rate on
test results of only about one percent.
QUEST: Good to see you, Alexandra Field with our story there.
The E.U. is considering travel bans that might block U.S. visitors from going to Europe. It is a proposal at the moment. It's in draft form. It is
a list of countries that the E.U. says will not be allowed -- their citizens will not be allowed to travel or if you do come from those
destinations, then you'll have to stay in quarantine.
Reports coincide with the White House visit by an E.U. leader, the Polish President who is on a state visit. The Secretary of State, Mike Pompeo
responded to the E.U. reports of a travel ban.
(BEGIN VIDEO CLIP)
MIKE POMPEO, U.S. SECRETARY OF STATE: We certainly don't want to reopen the play that jeopardizes the United States from people traveling here and
we certainly don't want to cause problems any place else.
I am very confident in the coming weeks we will figure that out, that's between not only the United States and the E.U., but the United States and
other parts of the world, too.
(END VIDEO CLIP)
QUEST: The Greek Minister of Finance, Christos Staikouras is with me, he joins me from Athens. Good to see you, sir.
Are you in favor of a travel ban from the U.S.?
[15:15:00]
CHRISTOS STAIKOURAS, GREEK MINISTER OF FINANCE: While a member of the European Union, so we have to wait and see what will be done. However, us,
Greeks, as a Greek state, we have provided a coherent plan in order to attract tourism. We strengthened healthcare statutes in tourist
destinations. We offer safety to visitors and employees through the application of hygiene protocols of the whole cluster.
And at the same time, we support businesses that directly or indirectly rely on tourism.
Until now, the gradual reopening of the economy to tourists has been successful, with measures to limit the contagion of the virus efficiently
implemented as part of this coherent policy.
Thus, from the hygiene perspective, we are proceeding in a satisfactory way, and the big challenge ahead is to make the economic sector fully
operational again.
QUEST: Right. But obviously for tourism at this time of the year, we are talking about bubbles, and corridors, and it seems as if Greece has done a
very good job in putting those in place. But when you look at the situation in the United States, how concerned you?
And hear what Gita m-- and you may not have heard Gita, the Chief Economist of the I.M.F., the recession has been deeper and the recovery will be
slower. So Minister, what more can you do to add stimulus to the Greek economy?
STAIKOURAS: Let's start from what we have done. Indeed, as you mentioned before, uncertainty is great, and unprecedented. Many times, many
institutions like the I.M.F. yesterday revised their estimations or provided a wide range of projections.
We estimate a significant recession in 2020, which, after the implementation of the expansion of fiscal measures will be reduced
addressing as much as possible, the social and economic consequences and challenges of the pandemic.
Until now, since the beginning of the COVID-19 crisis, the top priority of the Greek state was to protect human life and public health and then to
support --
QUEST: I understand that. I get that, sir, but I am more concerned -- I'm more concerned to hear from you, you know, what more you think is going to
be necessary, bearing in mind that so far, all the forecasts have always ended up on the downside.
STAIKOURAS: First of all, at the national level, we are implementing a coherent plan. A comprehensive and dynamic package of policy measures to
support public health, to support liquidity in the economy, to support social adhesion.
Among others for example, we have deferrals. We have special allowances. We have certain employment schemes. We have one of the VAT reductions. We have
business financing either through a fund of advance payment or through state guarantees.
What is needed is a coherent plan at the European level. So the proposal that was done by the European Commission, we believe that is ambitious. It
is rational. It is flexible and we support it in order to provide more liquidity in the European economies. It is mainly based on grants without
loans --
QUEST: Minister?
STAIKOURAS: Yes, please?
QUEST: Minister, thank you for joining us, I appreciate it. We will talk more as the summer moves on and we start to see the numbers from Athens.
It is called a carousel of tariffs. It goes from olives to wine to whiskey. It's never ending. It is a powerful way to put tariffs on a country or a
region. The U.S. is now slapping or considering slapping such tariffs on the E.U.
The head of Diageo is with us to respond.
(COMMERCIAL BREAK)
[15:22:01]
QUEST: Tonight, the United States is weighing new tariffs on Europe. $3.1 billion worth of tariffs. It all goes back to the aircraft subsidy row
between Boeing and Airbus over the subsidies provided to Airbus by European governments.
The U.S. has been approved to put tariffs on. And now, it looks like those goods under consideration include French wine, British biscuits, German
camera lenses, scotch and whiskey.
Now, Diageo, the global British based alcohol company, their brands could be at risk. The shares are down 3.5 percent in London. The CEO, Ivan
Menezes is with me, joining me from London via Skype.
We will talk about your plan to help British pubs in a moment. First, though, Ivan, you stand to be clobbered by this carousel of tariffs coming
from the United States. Are you prepared?
IVAN MENEZES, CEO, DIAGEO: Hello, Richard. As you said, we have been dragged into this aerospace dispute, little scotch whiskey, and other
products. And we are already, right now, a bottle of lager bull going into the United States has a 25 percent tariff already.
So we clearly want to deescalate it. And I would say particularly in light of the current environment. When you look at the business of bars and
restaurants and hospitality, they are a sector that needs to recover and these tariffs are not going to help both sides of the Atlantic.
So, we are hoping sense will prevail across the U.S. and the E.U. not to escalate this further.
QUEST: You are being clobbered from all sides in a sense, because in the United Kingdom, the reopening of sorts that's taking place, yes, pubs can
reopen, but you can't stand and drink. Which means of the pubs selling your booze -- well, I mean, they will be starting to ask whether it is worth
reopening. It is not really good, is it, for you?
MENEZES: Well, what we are encouraged by is just yesterday the U.K. government announced the reopening of pubs on July the 4th, with conditions
of safety and hygiene, which we fully, fully support.
We are encouraged. You know, we have done surveys around ten countries around the world and the two things consumers look for the most, people are
looking for, one is to reconnect with family and friends, and the second is to go out to a bar or a pub.
And we think governments supporting the hospitality industry to open responsibly is a good thing. And I can't wait to get out on July the 4th
and get my first pint of Guinness after many months at my local pub here in London.
[15:25:03]
QUEST: Well, hopefully, your local will have taken part in your raising the bar. It is $100 million that you are using to assist or to help bars in
major destinations, New York, London, Edinburgh and so forth. New jobs program, practical equipment -- I mean, at the end of the day, what these
people need is real practical help. How does raising the bar help them?
MENEZES: Well, that's exactly what it's designed to do. If you look at the economic impact of the pandemic, one of the sectors that's been really hit
terribly is the bar and restaurant and hospitality sector, and it is a big employer. One in ten jobs in the world comes from this sector. And it's
mostly young people, right?
Most of have at some point or another worked in a about or a restaurant early in our career. So, what we put in place is digital tools and support,
and depending on the market, we will support with equipment for hygiene, for mobile bars to take automated reservations.
We want to support the recovery of bars and pubs reopening safely. And that's what we announced with the $100 million recovery fund that we are
committing to the industry.
QUEST: finally, and briefly, the way in which you have had to run the company with the thousands of employees, are you now rethinking your entire
working from home, colleagues working from home, strategy of large business with large property footprints or do you believe in the fullness of time,
it will all be back to square one?
MENEZES: Well, we have had a lot of very interesting learning through the last few months. Our company has been used to flexible working and remote
working. And we have been adopting the technology for a couple of years before this hit.
Obviously, our distilleries and breweries are operating and we put the right practices in place there. But what we have actually found on the
positive side is the speed of decision making, the sharing of ideas and best practice -- there is a lot of good gains that we also have seen
internally within the company.
QUEST: Right.
MENEZES: So, I don't think we will go back to the old normal. It will evolve. However, we also believe the importance of human interaction in
work with customers will never go away. So, there will be a shift in the balance.
For example, our sales forces are operating mostly virtually right now. I suspect some of that will stay. Instead of driving to visit 12 bars a day,
you probably will go visit that customer maybe once less a month and do a virtual conversation with them. So there will be changes in the way we
work, and I think for the better.
QUEST: Ivan, I heard you at the beginning of the show talk about missing going to your local for a point of Guinness. I tell you what, when we are
both back and socially distanced of course, the first round is on me. There you are. I will even contribute to your profits.
MENEZES: Thank you.
QUEST: The first round is on me. Ivan, good to see you, Ivan. Always good to see you. Thank you, sir.
Now, it is QUEST MEANS BUSINESS. President Trump welcomed an E.U. President, the President of Poland today. Meanwhile, the E.U. is thinking
of banning President Trump's citizens from going on a holiday.
So, there is a rum business. We will talk about it after the break.
[15:30:00]
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS for you in just a moment. Donald Trump will be giving a press conference with the Polish
President in the Rose Garden. They're preparing for that at the moment. When that happens, we will take it and bring it to you. Particularly, of
course, there'll be the question of the -- potentially E.U. travel ban on U.S. citizens. South Africa's government is warning of a looming debt
crisis. More stimulus is needed, but the budget simply can't cope with it. So, we'll hear from that from our correspondent in South Africa, all of
which comes after we've had the news headlines because this is CNN, and on this network, the news always comes first.
More than 34,000 new cases of Coronavirus were reported in the U.S. on Tuesday. It marks the third highest number of cases reported in a day. This
as the WHO, the World Health Organization, says there are no magic answers to get rid of the virus. Senate Democrats have blocked a Republican police
reform bill on Wednesday, calling it inadequate. House Democrats say they want to square their own bill with Senate Republicans, but top Republicans
say the issue may be dead for a year after their proposal's failure in the Senate.
A NASCAR driver Bubba Wallace says he's angry that some people are questioning his team's account of finding a noose at an Alabama racetrack
(INAUDIBLE). The FBI says there's no evidence of hate crime. And says the rope had been there for months. NASCAR says it was found to be a garage
door pull. Wallace says it was clearly a noose.
Donald Trump's welcoming the Polish President, President Duda to the White House. A joint press conference is going to happen any moment now. And when
it does happen, we'll take you to it, of course. The Polish President is hoping to gain a boost with an election just four days ago -- four days
away, I should say. He's the first foreign leader to visit since the pandemic began. Boris Sanchez, our correspondent in Washington is there.
But Boris, the question to the president surely will be, you know, first of all, tariffs on Europe, which will hit people like the Polish President,
and also a travel ban on American citizens going to Europe over the summer.
BORIS SANCHEZ, CNN WHITE HOUSE CORRESPONDENT: Yes, absolutely, Richard. The economy and security at the forefront likely of the discussion between
President Trump and President Duda right now. The President has yet to directly answer questions about the European Union, considering a travel
ban on Americans to the continent, considering the spike that we're seeing in Coronavirus stateside. Of course, just a few months ago, President Trump
initiated his own travel ban in a number of European countries, preventing residents from that area to enter the United States.
[15:35:06]
The President really eager to try to turn the focus away from Coronavirus. The fact that this visit is even happening is evidence that President Trump
wants to show that things are returning to normal in the United States, that the U.S. is ready for an economic rebound, and a reopening. The
President, just yesterday, was out campaigning; he was doing the same this weekend despite evidence on the ground revealing the contrary, the
president really wants to push forward his transition to greatness because he knows that his reelection effort is staked on the United States' economy
rebounding.
For President Duda, as you noted, he faces an election in four days. He's eager to show a closeness with the United States. He is expected to bring
up the idea of moving some nearly 10,000 troops, American troops stationed in Germany to Poland. The White House officials here have yet to
specifically weigh in on that idea, but it's something that President Trump has talked about doing, drawing back a number of U.S. troops in Europe.
This potential ban could exacerbate that process. Richard?
QUEST: Now, Boris, what about the New York, Connecticut, New Jersey decision to quarantine those citizens or self-isolate, self-quarantine for
those citizens coming from those states with a higher, less 14-day trend? And the President, it's not really up to him in that sense, because this is
a state matter. But to your point about the president wanting to turn attention away, very difficult to do that. But this is also on the cards.
SANCHEZ: Yes, nearly impossible, especially considering that we're seeing rising cases in places like Texas and key election states like Florida,
recording record numbers. The President recognizes that his poll numbers have been slipping. Joe Biden in the latest New York Times CNN college poll
with a 14-point lead over President Trump. That's the third poll this month that shows the former vice president with a 10-point advantage, 10-point or
more advantage over President Trump. So, at this point, he's really eager to show that the United States is ready for a reopening to put on the
facade of normalcy, even as he does not wear a mask to greet the Polish President. He still is not reckoning with the reality that Coronavirus is
nowhere near gone in this country, Richard.
QUEST: Boris, thank you. Boris Sanchez in Washington. We will take you to that resident. Right, two charts to show you now. First of all, let's go
back to that chart that we were just looking at, the one of the number of Coronavirus cases and where we can see how the number of Coronavirus cases
is actually rising in the United States. In fact in some cases, at 34,000, it is the most number of cases -- the third number. Now, that is the seven-
day-moving average. From that, we can go to today's Dow Jones, and you can see exactly why the Dow Jones is down as much as it is. Because as the
seven-day-moving average has gone up, so the warning, if more close downs, lockdowns, shutdowns, or problems is now being reflected in the market. And
that's where we join Clare Sebastian. The correlation is clear.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Richard, I think it's clear this market is moving on those numbers of cases. But I think it's
interesting that the stocks are definitely off their lows of the day. The impulse of this market seems to be to try to move up whatever happens,
perhaps that's because of the policy responses we've seen so far; the promise of the Fed to do whatever it takes. But, yes, clearly, they are
very worried that we're now seeing an uptick in cases in a number U.S. states. Not only that, we got the IMF downgrade of global growth today;
we've got the news around lunchtime, which caused a little bit of a dip that New York, New Jersey, and Connecticut would be -- would be
implementing quarantines on incoming visitors.
And, of course, the threat from the U.S. of more tariffs on Europe over that dispute over aircraft subsidies, which raises the threat going into
the sort of final straight before the election, over transatlantic sort of tit for tat trade war. All of that is weighing on the market today, but
again, Richard, last half hour of trading still off the lows of the day.
QUEST: And that in itself shows the resilience. I wouldn't say brilliance, but just the resilience to bad news. It is almost as if the markets do not
wish to believe that things could get worse in the U.S.
SEBASTIAN: Yes, and actually, that was one of the things that the IMF warned about today that this disconnect that we're seeing between the
markets and the sort of fundamental realities of global economies is something that could eventually sort of end and lead to sharp tightening of
financial conditions.
[15:40:03]
But, Richard, looking at a couple of different stocks today is really interesting. We're seeing sharp declines for cruise lines, Norwegian is
down double digits at the moment. They got a downgrade today, but they had been rallying quite sharply off the March lows. Retail is down sharply.
Simon Property Group, the biggest mall owner in the U.S. Boeing not just COVID worries hitting travel, but also the potential for more tariffs on
aircraft between the U.S. and Europe. There's a lot of different things, a lot of different areas being hit today. It is a broad base decline.
QUEST: It's Clare Sebastian. Clare, thank you. In just a moment, South Africa's -- a new budget for South Africa at a time when there's not much
money to help stimulate the economy; and the number of cases in South Africa tops 100,000 in a moment.
(COMMERCIAL BREAK)
QUEST: South Africa's finance ministers warning of a potential sovereign debt crisis on top of the health crisis, as the number of cases in South
Africa rises dramatically, it's now over 100,000. Eleni Giokos is with us. The South African economy is expected -- it's in recession, expected to
fall by 7.2 percent. The country is in the worst position for some 20-odd years, if not more. And there's simply not the money required.
ELENI GIOKOS, CNN BUSINESS CORRESPONDENT: Absolutely, Richard. I mean, the finance minister was so clear in his message today, that the country's
spiraling debt levels is a harbinger of things that could come. I mean, he cited examples like Greece and Argentina and even Germany in the 1920s. And
he basically said in the lead up to this emergency budgets, that they went to cabinet with two options, basically the active option, which it relates
to taking very tough decisions to try and get debt to GDP levels coming down. And also, that includes a zero-based budget approach where you've got
departments coming in at zero levels. And then, starting from that base and looking at priorities spending, so you're talking about budget cuts.
Then, the second road he spoke about, the passive approach, where you keep debt spiraling to the level that it's at right now. And this is the warning
that he said will probably happen if we don't take action. Take a listen.
(BEGIN VIDEO CLIP)
TITO MBOWENI, FINANCE MINISTER OF SOUTH AFRICA: The wide gate opens to a path of bankruptcy. As sovereign debt crisis happens. The sovereign debt
crisis is where they can no longer pay back the interest of principal on his borrowings. Was there some way away from that? But if we don't act now,
will shortly get there.
(END VIDEO CLIP)
[15:45:15]
GIOKOS: Right. We all know too well, Richard, that the cataclysmic and, of course, the impact of unsustainable debt levels that we've seen around the
world. I mean, he mentioned Greece, we know what happened there. We know what that means. When you have to push back on spending, and especially
during a time of crisis, where of course, even the IMF says that you need to start spending more. South Africa just does not have the space to do
that.
It needs to go to the IMF, and other financing institutions to raise $7 billion at this moment. And, of course, we also know that debt servicing
costs right now, unsustainable. We are spending the same amount on debt servicing costs as we are on the health sector, so it's a fine balancing
act. And you've got a third of the population currently, sitting on social government grants, you definitely don't want to be taking a more austere
approach. But South Africa doesn't have much of a choice.
You also have unemployment sitting at 30 percent. The stimulus package not enough to put a dent in the lockdown impact that we've seen over the last
few months. So, Tito, but when he talking about a Herculean task for the government and for himself, and of course many people are very worried
about what that new budget would look like.
QUEST: Eleni Giokos, thank you. We continue. Some people stuck at home because of the coronavirus, while hundreds of thousands of seafarers are
stuck on the high seas. Their goods are much in demand and their goods are offloaded. But they are not allowed on shore. In a moment.
(COMMERCIAL BREAK)
QUEST: Breaking news to the White House, the Rose Garden and the President.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: And I want to thank everybody for being here with us. We all know what a wonderful country and a great
country Poland is. And it's my honor to have a friend of mine here, President Duda of Poland, who has done an incredible job, and I do believe
he has an election coming up, and I do believe he'll be very successful. So, thank you very much. And all of your representatives, thank you very
much for being here.
This is the third time that we've hosted President Duda. The First Lady and I also cherish our remarkable visit to Poland three years ago, that was an
amazing event. We had an event because it was a speech and a lot of people watched that speech. But it was a very historic moment and an important
moment for our two countries. The American and Polish people enjoy one of the world's oldest, strongest and most enduring friendships. Polish
patriots battled by our side to secure American independence.
American and Polish warriors fought and died together to defeat the Nazis in World War II. The United States stood shoulder to shoulder with Poland
and its courageous struggle against communist oppression. Our bond has been forged in battle, sealed in blood and strengthened by our shared cultural
values used. The United States and Poland are united by our firm conviction that Western civilization is advanced, really, and very much advanced.
I think I have to add the cause of human progress beyond measure and that it must be strongly defended and will at all times be strongly defended,
and we will defend it together. In our meeting today, President Duda and I reaffirmed the vital alliance between our nations. Last year, we signed two
joint declarations to increase our security collaboration. And we look forward to signing a defense cooperation agreement.
[15:50:13]
TRUMP: Poland recently purchased 32 brand-new state of the art F35. fighter jets, the best in the world. And Poland is one of only eight NATO members,
the others, some of them haven't done so well, in terms of what they're supposed to be paying to NATO. I tell them all the time and we've gotten
them up a lot, but not enough. But Poland is one of only eight that is current with the money that they are supposed to be paying. That's the two
percent, two percent is a very low number.
But we have a large number of countries that haven't paid -- they're delinquent. Let's put it that way. They're delinquent with respect to their
dues, the money they're supposed to be paying for defense. So, the United States is defending a lot of countries. They're delinquent on what they're
supposed to be paying. And I never feel too good about that. But I will say, I spoke with the Secretary General. And he said, we've done a great
job.
But I said, we haven't done good enough. We haven't done a good enough job. We have secured over $400 billion in new pledged defense spending from NATO
members, which is something that no other administration has come even close to. I would say they're off by many, many hundreds of billions of
dollars. Something the newspaper doesn't like writing about, that the media doesn't like talking about. But we will be only satisfied when all members
are paying their fair share.
Again, only eight members plus the United States is paying what is considered a fair share. I also applaud Poland and the Polish people for
its devotion to safeguarding their country's borders, very strong borders, and I just left our border. By the way, the wall is moving along rapidly
and our border is about as strong as it's ever been, our southern border. Last year, we were able to add Poland to the Visa Waiver Program. And they
wanted that very badly and we gave it to them because they really deserve it.
It's a testament to Poland's vigilant efforts to uphold the rule of law. The United States and Poland have recently signed several long-term
contracts for U.S. liquefied natural gas, they are a big purchase of our energy to enhance Poland's energy security. And we're working to conclude
an agreement that would facilitates -- facilitate Poland's development of nuclear energy plants throughout the purchase.
They're going to be purchasing with one of our very big, very good companies, technology to do civilian nuclear energy. I want to congratulate
Poland for its leadership in the Three Seas Initiative. A crucial energy partnership that will provide a reliable source of energy for Eastern
Europe. And it will be free from the threat of foreign extortion. Poland understands foreign extortion very well. The Three Seas Initiative relies
on fairness, transparency and mutual benefit. Our nations have also collaborated on protecting our critical infrastructure and technology.
That's why we've signed a 5G joint declaration.
And Poland is leading the way in Europe by using trusted providers and provider equipment and supply chains for its 5G network and we're working
along with them and they're using our companies. The United States and Poland cooperate across the truly wide range of fronts that were both very
much involved in.
Here today is the head of a Polish medical team, very advanced team, very brilliant team, fighting the coronavirus alongside of American doctors,
Captain Siewiera. Captain, thank you very much for being here, Captain. And we're making great progress. I hear we're making great progress and we're
working together. But we are making great progress on therapeutics and vaccines. Thank you very much. Appreciate you being here.
The American and Polish people have been true friends and trusted partners for almost 250 years. We are forever united by our shared belief and family
faith, law, liberty, democracy and justice. As the old Polish motto goes, we will stand together in the name of God for our freedom and for yours.
President Duda, let me express once again, our gratitude for your visit and friendship. We have had a very, very special relationship.
Our alliance is powerful and a very powerful testament to what free people can achieve together. And I believe that the greatness of our relationship
lies ahead. Thank you very much. President, please. Thank you.
ANDRZEJ DUDA, PRESIDENT OF POLAND: Thank you very much, Mr. President.
[15:55:09]
DUDA (through interpreter): Ladies and gentlemen, first and foremost, I would like to thank very warmly, I'd like to thank very warmly, to
President Donald Trump, to the President of the United States of America. Thank you very much for inviting me, here to Washington, to the White
House, to take part in this very important meeting to us. This meeting is important for many reasons to me, as President of the Republic of Poland.
This meeting is important because Poland is the first country after the coronavirus pandemic, which has been invited to the meeting in the White
House to discuss the most important matters concerning the future, concerning how that relations will look between the United States and
Poland, in terms of economy, what those relations will be like in the military sphere and what those relations will be like in the sphere of
health protection, all those elements which are of key importance today.
And a very big part of our discussions today with Mr. President and our collaborators were dedicated to the coronavirus to what the situation looks
like in Europe and on the global stage as concerns fight against the coronavirus also in the United States. But first and foremost, we're also
thinking about what measures to take in the future.
But first and foremost, thank you so much, Mr. President for your declaration that we are going to cooperate, that also our scientists are
going to cooperate and collaborate on conducting research concerning the vaccine and therapy drug against coronavirus, everything that will be
conducive to finding the coronavirus. So, I do believe -- thanks to this collaboration. Those therapeutical medicines will be available also for
polls for my compatriots as soon as possible.
Thank you so much, President, for that because all of us know very well how high level of medical research is in the United States. And this
declaration and the will of cooperation on part of the United States on part of the President of the United States is of crucial importance to us.
So, thank you very much for that. But ladies and gentlemen, we also discussed the cooperation in the spirit of economy and military. Let me
first mention our economic cooperation.
As the President has just mentioned, we're developing it both industry of energy, in building energy security. Today, we can say that the United
States is cooperating in the sphere of creating energy security, not only that energy security of Poland, but also the energy security of Central
Europe. The President has just mentioned the Three Seas Initiative. Yes, all the investments that are being carried out in Poland today, the
extension of the capacity of LNG terminal Swinoujscie.
We're increasing its capacity by 2.5 billion cubic meters. We also plan to construct another LNG terminal in the port of Gdansk. All of that is
conducive to being able to receive LNG gas and provide its deliveries not only across Poland, but also for the countries of Central Europe. The vast
majority of those countries of Central Europe are still dependent on Russia and creating a true alternative. In other words, diversification of
supplies is of key importance for their security.
Thank you, Mr. President for this cooperation. I do believe that we're going to further develop it. Today, we have got those supplies guaranteed
until 2023, by the end of 2023, but I know that we are also going to enter into further contracts in this respect. Even more so that for sure our
demand is going to increase. But ladies and gentlemen, we also discussed conventional energy and nuclear energy cooperation.
In the nearest future, an agreement will be signed between the governments of the United States of America and the Republic of Poland. And thanks to
this agreement, we'll be able to start designing the large design of introducing conventional nuclear energy for the production of electricity
in Poland. The entities which will participate in this project have already been selected. And the agreements are very advanced.
On the Polish side, we have got Minister Piotr Naimski, who's in charge of those negotiations right now. The appropriate intergovernmental agreement
is about to be concluded and finalized. We can expect that to happen in the near future. But ladies and gentlemen, I also want to mention the
contribution of the United States into the Three Seas Initiative. And first and foremost, the financial contribution to the fund of the Three Seas
Initiative. Mr. President got interested in that fund some time ago.
This is an element of vehicle, which enables the development of this cooperation. Thank you, Mr. President, for your activity. And thank you for
appreciating this cooperation, which takes place in Central Europe within the framework of the European Union. And the goal of this cooperation is to
develop extended infrastructure. Thank you for noticing the possibility of developing cooperation in the transatlantic zone between the countries of
the European Union and the United States.
And of course, from my point of view, this cooperation with Poland is extremely important to me but also in the economic sphere. We're speaking
about increasing military cooperation between Poland and the United States.
END
