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Quest Means Business

Pompeo Ramps Up Pressure On Beijing Over Huawei & Hong Kong; WSJ: China May Target Nokia, Ericsson if E.U. Bans Huawei; E.U. Leaders Strike $2 Trillion Deal to Rebuild Europe's Economy; Uber Battle Over Workers' Rights Hits U.K. Supreme Court. Aired 3-4p ET

Aired July 21, 2020 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:24]

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: There is an hour left to go for trading on Wall Street, and the way things are looking, it's

going to be the best trading day in a week, a resurgence of buying has come in to the market, as you can see, up.

And once again, I always say this, what's interesting and the significance is it's out of the gate higher and it's held on to the gains, and that

shows that it's a solid market.

And of course, the NASDAQ is similarly higher, and that's at a record high at the moment. The markets -- and that's the way they're looking. This is

what is actually happening.

Europe is united, as the E.U. agrees on a huge recovery fund. I'll be speaking to Italy's Finance Minister in just a moment or three.

The U.S. Secretary of State, Mike Pompeo is visiting London, looking for a united front against Huawei.

And Amazon is delaying Prime Day even with its share price near all-time highs.

Live from London, it is Tuesday. It's July the 21st. I'm Richard Quest and I mean business.

Good evening. Tonight, it is a historic deal that's been put together to rebuild E.U. economies battered by coronavirus. It's aimed to breathe new

life into the European project with a budget over the next seven years of more than a trillion euros. That seven-year budget and the short term plan

being put forward together, took days to finally reach an agreement.

The numbers, $2 trillion dollars in total spending power has been agreed, $850 billion recovery fund grants and loans. That was the controversial

part, a $1.3 trillion new budget through until 2027.

And the significance, the 27 collectively can now borrow as a union through the Commission. First time there's been this mutuality of debt.

The Frugal Four will get more money back. That's something they've been looking for. It's known as the rebate, and the winners -- the big winners,

Macron and Merkel. It means closer integration and Bruno Le Maire, who is the French Finance Minister describes it as the birth of a new Europe.

(BEGIN VIDEO CLIP)

BRUNO LE MAIRE, FRENCH FINANCE MINISTER (through translator): I think it's a great agreement, a good agreement and the birth of a new year. Hence,

it's a historic day because for the first time in its history, Europe is agreeing to jointly borrow debt.

(END VIDEO CLIP)

QUEST: For those European countries and members in the southern part of the continent, this money couldn't come too soon enough, and it is exactly

the relief they need as they try to recover from coronavirus with economies that were already weakened.

Barcelona, for example, in new measures that it's having to take because of the virus, Barcelona is reducing beach capacity. The response to a series

of outbreaks, embers, a firestorm whatever you want to call them, but they're all around the Catalonian capital, and Spain is one of the worst

hit nations.

CNN's Atika Shubert is in Spain for us tonight.

(BEGIN VIDEOTAPE)

ATIKA SHUBERT, CNN CORRESPONDENT (voice over): This summer Spain hoped its beaches would be the safest holiday destination in Europe.

Now at the height of the holiday season, some three million residents are being urged to stay home to curb a major outbreak on the streets of

Barcelona and in surrounding areas.

SHUBERT (on camera): Over the weekend, almost 3,000 new infections were detected in the Catalonia region. Now according to one epidemiologist we

spoke to, 75 percent of those cannot be traced back to any known cases of COVID-19.

That suggests, uncontrolled community transmission.

SHUBERT (voice over): How did Barcelona become the epicenter of the new outbreak?

Critical lack of staff to trace and isolate COVID cases, says epidemiologist Helena Legido-Quigley.

(BEGIN VIDEO CLIP)

HELENA LEGIDO-QUIGLEY, EPIDEMIOLOGIST: We had three months to prepare and we have not done it. It's a good investment if we invest on those people

and paid that salary. It's much cheaper than having to lock down the whole city, which might happen in the near future.

(END VIDEO CLIP)

[15:05:04]

SHUBERT (voice over): By her estimate, Catalonia needs a minimum of 2,000 contact tracers. The government admitted to us it currently has less than

half of that.

(BEGIN VIDEO CLIP)

MARTI ANGLADA, CATALAN GOVERNMENT SPOKESPERSON: We should have double, Atika. We are trying to do so, but you should bear in mind that we are

preparing ourselves for an outbreak at the end of October-September.

We thought -- we have been told by experts that the high temperatures will slow down, will calm the virus.

(END VIDEO CLIP)

SHUBERT (voice over): No such luck for Barcelona, even though the government is urging people to stay home, it is not mandatory. Which is why

the beaches are full and cafes and shops are still open at 50 percent capacity. Residents are confused.

(BEGIN VIDEO CLIP)

CAROLINA FERNANDEZ, BARCELONA RESIDENT: It wasn't clear and also that people can go outside of Barcelona, but their recommendations is to stay at

home, but you can go to the beach, but you have to wear a mask, if you are in a terrace, you have to wear it.

(END VIDEO CLIP)

SHUBERT (voice over): Meanwhile tourists continue to stream in, though few seemed worried by news of the outbreak.

(BEGIN VIDEO CLIP)

GRAHAM PARKER, BRITISH TOURIST: If you were to catch it, you catch it here than the U.K. So, just be careful, you keep the distances, and the

facemask.

(END VIDEO CLIP)

SHUBERT (voice over): Barcelona's experience is a warning to other cities to get their monitoring systems up to speed now or face another lockdown.

Atika Shubert, CNN, Barcelona, Spain.

(END VIDEOTAPE)

QUEST: Roberto Gualtieri is the Italian Minister of Economy and Finance and joins me now.

Minister, thank you. Congratulations on getting this result. How much -- do you know yet how much Italy will be seeking by way of grants and loans from

this fund?

ROBERTO GUALTIERI, ITALIAN MINISTER OF ECONOMY AND FINANCE: Yes, we do know. We will have according to this agreement around a bit more than 81

billion in grants and around the up to 127 billion in loans.

So, it's paradoxical if one would say because the amount overall has been reduced. It is a bit more than in the original Commission proposal

especially in loans, but also the grants will remain unchanged.

QUEST: Bearing in mind the very difficult time that Italy had at the beginning and the way that -- the bad blood if you like, between yourselves

and then Commission over that. Do you feel resentful of the way this deal finally had to be hammered out against, and the teeth of the Frugal Four

and those other countries?

GUALTIERI: I think that's -- as I've always said -- we always said, it is a victory for Europe, but is not for a specific country because with a

challenge like this pandemic and the subsequent unprecedented economic crisis, Europe is moving forward and also doing something new, going and

borrowing on the markets and unprecedented level of resources in order to foster growth and convergence.

So it is something that will strengthen all of us, not one specific country, so it is a victory for Europe. And it was adopted unanimously, so

everybody understood that.

QUEST: On a wider question, in our morning meeting when we were talking about it, this idea that mutuality of borrowing will only be done in

exceptional circumstances. This is a one-off, do you believe that?

I mean, I can well see that the E.U., the Commission will be borrowing again at the next crisis, and they will not necessarily stop here.

GUALTIERI: I think first, we don't want to have a next crisis, we have to solve this one. And of course, this plan gives us the resources to do this

jointly. So to be jointly stronger.

Then of course, we are making some steps forward also in terms of deepening our economic and monetary union. So, it is also something that not for

emergency, but for moving forward with the process of European integration.

But for now, what is important and now, they finally made a response to the crisis that is up to the challenge.

QUEST: You know, everyone talks about this being a Hamiltonian moment. Well, that actually, if you go back and look at the Hamilton business --

that was actually when they agreed to the mutuality of debt before the Civil War.

Now, arguably, the Hamiltonian moment led to a greater Federal United States of America. Does this deal take you one step closer to some form of

Federation?

[15:10:12]

GUALTIERI: It does. It is a step towards a deeper economic monetary union. We have excellent competence at the E.U. level and the euro level of

monetary policy. But so far, very small E.U. budget and just coordination on national economic policy in front of such a challenge like the deeper

recession after decades.

It was evident to everybody because again, we agreed unanimously here tonight that it was something beyond this current construction of the

current EMU was needed.

So we are -- we are making important step forward and history would say, but indeed, this is a step forward. A closer, deeper European integration.

QUEST: Minister, I'm very grateful for your time tonight. Thank you, sir. I appreciate it. Busy days. I'm sure you didn't get much sleep while these

meetings were going on. Thank you.

Now, turning our attention to vaccines. AstraZeneca says that the vaccine may be available and may be ready as soon as September.

If you recall, we were talking about what date it might be in yesterday's program.

AstraZeneca is one of five companies before the U.S. House who has asked whether the hurried pace of development risks impacting safety.

(BEGIN VIDEO CLIP)

REP. DAVID MCKINLEY (R-WV): Are your companies insulted by an accusation that you could bring a drug to market that's not safe or effective. Is that

insulting?

DR. MENE PANGALOS, EXECUTIVE VICE President, BIOPHARMACEUTICALS R&D, ASTRAZENECA: Despite the speed that we're working on, we're neither

cutting corners and regulators are not lowering their standards.

DR. MACAYA DOUOGUIH, HEAD OF CLINICAL AND MEDICAL AFFAIRS, JANSSEN VACCINES: ... science, and we will continue to develop safe and effective

products as we always have.

(END VIDEO CLIP)

QUEST: With me is Dr. Richard Besser. He is the CEO of the Robert Wood Johnson Foundation, former Acting Director of the C.D.C. He joins me from

New Jersey. Look, I always get a bit queasy at this point when we talk about safety, because God forbid, but I can see a scenario 15 years down

the road, when the health risks become ever more evident.

And it becomes a case of, well, who knew what and what corners were cut? And yes, it made sense at the time. But now look at the carnage as a

result.

DR. RICHARD BESSER, CEO, ROBERT WOOD JOHNSON FOUNDATION: Yes, you know, I think it's critically important that any vaccine that's going to go into

harms, goes through the proper safety testing, the effectiveness testing so that there's confidence.

You know, here in the United States, we're seeing some increasing hesitancy among people to receive vaccination, and I want to make sure that anything

that goes forward, goes through the normal regulatory process, the approval process, so that you can feel comfortable that if you're getting this

vaccine, it's safe and effective.

And I think we're still quite a ways away from that.

QUEST: Well, quite a ways away from what? Being able to have such a vaccine or to be able to give that assurances because of the way it's going

so fast?

BESSER: Well, I think both of those pieces. You know, a number of the vaccines have been able to demonstrate that they give an immune response

and an immune response that we hope will protect people from the disease.

But I've yet to see published studies that show that a vaccine given to people has the ability to prevent COVID infection.

The other piece is that when you look at who is at greatest risk of COVID infection, of having severe outcome, it's elderly. It's people with a

number of underlying medical conditions, and you want to make sure that the vaccine has been tested in those populations who are at greatest risk,

where you're going to want to target those populations early on for vaccination to show it's both safe and effective.

And those things take time. It takes time to give it to enough people. It takes time to really see that it's effective.

QUEST: Dr. Besser, give me a blunt, straightforward answer here. Are we fooling ourselves -- the general public people like me -- are we fooling

ourselves into believing that we can have this vaccine within a year and it'll all be fine. And essentially, we'll be back to 2019 and it will all

have been a horrible nightmare.

BESSER: Yes, to me, that's the movie version of COVID-19 and that's not the reality. And what concerns me about that narrative is that it allows

some people to step away from doing the hard things that we have to do right now, in terms of changing behavior, in terms of wearing masks and

social distancing, in terms of governments providing all people within their borders, the resources they need to be able to protect themselves and

feed their families.

[15:15:14]

BESSER: You know, it's -- I think we're a long way from that. The other aspect, Richard, is that not all vaccines are the same. A measles vaccine,

we know, you know, provides 95 percent protection. Flu vaccines that we get every year are much, much lower than that. Some years, it is 30 percent,

sometimes it's lower than that.

So until we really know how effective a vaccine is, the measures that countries are taking to control this in terms of social distancing, staying

at home and being very careful. Those are what's going to get us through this.

QUEST: Good to have you with us, sir. I am very grateful. Thank you. We'll talk more about this particularly this idea of the way in which the new

normal, we're not quite ready in our own minds and psyches to live. Okay. Thank you. I appreciate your time.

Amazon has announced that it is delaying its Prime Days. We'll talk about that with Clare Sebastian after the break.

Bearing in mind, of course, Amazon has roared ahead with its stock price and its business. So why would they be delaying one of their biggest days

or their biggest day of the year?

(COMMERCIAL BREAK)

QUEST: The markets, now, they are trading and it is a bullish day, very much so as we've been talking about it. If you take a look at the market,

you'll see investors heading for a third day of gains.

The Dow is up some 260 point. That is back down again, it's down to 177 points. The positive earnings from IBM and Coca-Cola.

The triple stack shows that the S&P is at its highest level since February, and the NASDAQ is mostly flat, so there won't be a record there, at least

not if it finishes this way, but other markets are stronger, 27,000 on the Dow once again, looking highly likely.

Amazon shares are touching lower after postponing Prime Day in most countries, it is postponed until later in the year. Now, the event normally

takes place in July, and it'll still be held in August in India.

Demand has soared for Amazon during the pandemic. The shares are up 73 percent. Jeff Bezos's net worth has gone up by $74 billion. Clare is with

me Clare Sebastian. Why are they delaying Prime Day?

[15:20:05]

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Well, Richard, their statement left, you know, a lot of gaps in our understanding about this.

Basically all they said was that we'll be holding Prime Day later than usual, while ensuring the safety of our employees and supporting our

customers and selling partners.

Now, what we do know about Amazon, as you touched on, is that over the last few months, they have seen a huge surge in demand. And it did take them

some time to catch up in terms of their fulfillment network, they had to hire 135,000 people. You saw delays in terms of shipping for some products.

They are really sort of only just getting back to the sort of one-day, two- day shipping that they've spent the last year investing in.

So, I think perhaps part of this is to avoid an unmanageable surge in July and to wait until later in the year when their fulfillment network is

perhaps more ready to deal with this. That's one thing.

Perhaps also, you know, they say ensuring the safety of our employees. That's something they've faced criticism for recently, so perhaps that's

another thing that they are trying to avoid more of, Richard.

But this is the first time they've done this. Prime Day has been around for five years, and it's the first time they've split it between countries

holding it first in India and then later in the U.S. and the rest of the world.

QUEST: But to think about Amazon, I mean, we've all used it. I mean, since I've been hearing in the U.K., in quarantine, there isn't a day when

something or probably two or three items haven't been delivered to me by Amazon.

And yet it's the company that still people are feeling a bit disgruntled about.

SEBASTIAN: Yes, the backdrop I think of what we see happening at Amazon during the pandemic is a sort of bifurcation.

On the one hand, it's become more essential than ever, Richard and we see that reflected in the stock price. It's up some 70 percent so far this

year, but on the other hand, the backlash against the company has grown as well.

We see, you know, more activism from workers coming out and protesting in the country more than we've ever seen, and we're going to be talking again

about the issue of antitrust. That's coming up next week when the CEOs of big the big four tech companies, including Amazon are going to appear

before Congress.

So there is a zeitgeist around this company that I think perhaps presents some challenges and some risks to them going forward, and that's partly why

there's some volatility in the stock also heading into earnings next week - - Richard.

QUEST: Clare Sebastian. Clare, thank you. The price of gold, I should say has been rising extremely sharply on the international exchanges. And that

of course has given rise to opportunities.

Gold once again, becoming exceptionally popular whilst the pandemic has been raging. It's mixed blessings for Mark Bristow, who is the CEO of

Barrick Gold.

Mark, it is good to have you. I nearly use the old name of the company, but old habits die hard. I look at the gold share price, which I did have a

graph of here, and I see the wage has risen so sharply. Is that simply we all fear what's going to come next?

MARK BRISTOW, CEO, BARRICK GOLD: Well, a little bit -- hello, Richard, how are you? I understand you are locked down in London. Nice to talk to you.

A little bit -- well, a lot of it initially was on the back of the merger between Randgold Resources and Barrick. And you know, it couldn't have been

better time that transaction.

And then the fact that we've been able to keep our minds operating across the globe, and of course, as you pointed out, there's nothing like a

negative real interest rate and fear to drive the gold price.

QUEST: Mark, I also wonder on gold and how you're managing to mine all of this stuff, bearing in mind lockdowns and difficulties.

I saw the production numbers that you've come up with, that you've managed to come up with. So how do you mine gold in these circumstances at a time

we're trying to be safe as well?

BRISTOW: Well, it is discipline, Richard and education and keep the visibility of the virus -- keep the virus clearly visible so that you can

manage it.

And as you I'm sure witnessed, it is very important that we practice the only protocols we have to fight this virus and that is masks, social

distancing. Whenever there is any symptomatic person around or positive cases, we trace and isolate immediately and that's the only tools we have

to fight the virus once we've flattened the curve and that's what we've done with 40,000 people across 14 countries in Barrick.

[15:25:13]

QUEST: So once you've done this, is gold -- you and I have talked about this before, but in a time of pandemic, where people really are going to

catastrophic lengths in their mind and truly catastrophizing, does gold become that, you know, you can't eat it, but you can sell it and therefore

you better have some of it under the bed.

BRISTOW: Exactly. And you know, the important thing as you've seen, everyone is printing. Now, the printing presses are rolling, and the impact

of that is negative interest rates, devaluation, paper money.

And that very process drives the value of gold up because you can print it and you should have some in your portfolio. And by the way, if you look

back all the way to Bretton Woods in the 70s, whether you go back to the turn of the century, or just the last two years or five years, or 10 years,

gold has performed at the top end of all asset classes.

And you know, you will remember that late 90s, from 1999 to 2001, gold wasn't in favor, but then it's the only time we've sort of seen perfect

harmony across the globe, economically and socially and I am sad to say that we don't see any signs of that today.

QUEST: Mark Bristow, good to see you, sir. Thank you. I appreciate it.

When we come back to you in just a moment, U.S. Secretary of State is in London. He is actually sleeping at Winfield House, which is not more than a

mile or so from where I am.

We'll hear about Huawei and the pressure put on the U.K., and whether or not that actually is going to be something that other European telcos need

to worry about. In a moment.

(COMMERCIAL BREAK)

[15:30:00]

QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. The CEO of Ericsson will be joining me to discuss the tug of war

between Britain, the U.S., and China all over 5G, and where he believes he could -- or where possibly he believes he could get caught in the middle.

The E.U. has its Hamiltonian moment. We'll discuss with the former Finnish Prime Minister Alex Stubb. Before that, this is CNN, and on this network,

the news and the facts always come first.

Federal prosecutors have -- U.S. federal prosecutors have charged two Chinese hackers for a 10-year long intrusion campaign. Indictment included

the alleged theft of COVID-19 research. It also accused the hackers of targeting businesses and human right activists in several countries. A new

intelligence report shows the U.K. government badly underestimated Russian meddling in British politics. The cross-party committee says the Kremlin

inserted influence into a laundry list of British institutions including banking, real estate, and the Brexit movement.

In the U.S., presumptive Democratic presidential nominee Joe Biden has rolled out what his campaign calls his caregiving economy plan. The $775-

billion plan expands options for childcare and home care. It will be funded by taxes on high-income earners and wealthy real estate investors.

The U.S. Secretary of State Mike Pompeo is in London; he's staying tonight at Winfield House, the ambassador's residence. He's here to congratulate

and thank the British for their decision on Huawei, but also to up the pressure on China even further. They'll be discussing the Hong Kong

security law and the International 5G networks. There, you see him with the Prime Minister in suitably socially distanced in the gardens at 10 Downing

Street.

The British Foreign Secretary says, coordinating next steps with intelligence partners including Australia will be crucial. Now, the former

Australian Prime Minister Kevin Rudd joins me from the Sunshine Coast via Skype. Kevin Rudd, besides being former prime minister of the country, he's

also president of the Asia Society. Kevin Rudd, good -- very good to see you. The strategy that China is now employing to put pressure, you've

already seen the result of the -- of what it's done -- of what the U.S. sanctions on China has done. So now, what happens with Australia?

KEVIN RUDD, FORMER PRIME MINISTER OF AUSTRALIA (via Skype): What's important, Richard, to understand what's driving I think Chinese government

decision making, not just on the Hong Kong question, but more broadly, what's happening with a number of other significant relationships which

China has in the world. Since COVID-19 has hit, what many of us have observed is China actually doubling down hard in a nationalist direction in

terms of a whole range of its external relationships, whether it's with Canada, Australia, United kingdom, but also, over questions like Hong Kong,

the South China Sea, Taiwan, and look at what most recently has happened on the China-India border.

And so therefore, we see a much more hardening Chinese response across the board. And it's inevitable in my judgment, this is going to generate

reactions of the type that we've seen in governments from Canberra to London to other points in between.

QUEST: But is it -- is China in danger of fighting on too many fronts? It's got its enormous trade war with the United States. It's now, of course, got

the problems over Hong Kong, which will add more potential sanctions and tariffs to China. Now, it's got its round with the U.K., where and of

course, it's recent round with Australia. So, at what point in your view, does China have to start rowing back?

RUDD: Well, it's an important question for the Chinese leadership now in August, Richard. Because in August, they retreat to Beidaihe, east of

Beijing, for a month of high-level meetings amongst the extended central leadership. And a central question on the agenda for this upcoming set of

meetings will be A, the state of the U.S.-China relationship, which for them is central to everything.

[15:35:14]

And B, relationship with other principal countries like the U.K. And C, the unstated (INAUDIBLE) has China gone too far? In Chinese strategic

literature, there's an expression, just like you mentioned before, Richard, that is, it's not sensible to fight on multiple fronts simultaneously. So,

there's an internal debate in China at the moment about, whether in fact, the current strategy is the right one. And therefore, the impact of this

decision including the British decision most recently, but on Huawei, and the impending decision on Huawei and on Hong Kong will feed into that.

QUEST: But, Kevin, whether it's wise or not, and bearing in mind, that China has enormous problem at home, it's not as if President Xi has, by any

means, an electric populace, I should say, more likely that's entirely behind him. But he seems determined to prosecute these disagreements with

other nations, whatever the cost. And I suggest to you that's because he doesn't have to face an electorate like all the rest of them have to.

RUDD: Well, the bottom line is, however, Richard is that you then see the economic impact of China being progressively as it were imperiled in its

principal economic relationships abroad. The big debate in Beijing, for example, with the U.S.-China trade war in the last two years has been, has

China pushed too far in order to generate the magnitude of this American reaction, parallel logic on Huawei, parallel logic in terms of the Hong

Kong national security law. So, your point, though, is to whether Xi Jinping is domestically immune from pressure? Well, yes, China is not a

liberal democracy. We all know that. It never has been, at least, since 1949. And for a long time before that, as well.

But there are pressures within the Communist Party, the level of sheer pragmatism, and which is, is this sustainable in terms of China's economic

interests? Remember, 38 percent of the Chinese gross domestic product, or is generated through the traded sector of its economy. It has an unfolding

balance of payments challenge, and therefore, in terms of any potential financial sanctions coming out of the Hong Kong national security law from

Washington, in particular, China, therefore, experiences the economic impact which then feeds into its domestic political debate within the

Communist Party.

QUEST: Kevin Rudd joining us from the -- well, first of all, thank you for getting up so early on the Sunshine Coast in Australia, always good to see,

Kevin, I much appreciate it. Now, we were talking a great deal about China and Huawei and its policies. Mike Pompeo in London said that the U.K. was

right to ban Huawei from its 5G network.

(BEGIN VIDEO CLIP)

MIKE POMPEO, U.S. SECRETARY OF STATE: I think the United Kingdom made a good decision. But I think that decision was made not because the United

States said it was a good decision, but because leadership here in the United Kingdom concluded the right thing to do, was to make that decision

for the people of the United Kingdom. As respect to Huawei, we don't have an end state that we seek from Huawei. We have an end state for the people

of United States, which is to make sure that the datasets, the private data that belongs to Americans, doesn't end up in the hands of the Chinese

Communist Party.

(END VIDEO CLIP)

QUEST: China is now warning the European Union against taking similar action as the United Kingdom, and barring Huawei from its 5G network. The

Wall Street Journal reports, if E.U. bars Huawei, then Beijing is prepared to target European companies like Nokia and Ericsson. Ericsson President

chief executive is Borje Ekholm. He joins me now on the phone from New York. I'm not telling you anything that you haven't thought, debated, and

been concerned about. Are you worried that you could be on the receiving end of retaliation by the Chinese if the E.U. acts?

BORJE EKHOLM, CEO, ERICSSON: You know, Richard, it's good to be with you. No, I think the right way to look at this, you know, we need to go on with

our business. It's a speculative report in the Wall Street Journal. It was rebuked by Chinese authorities, as well. I think we need to go on focusing

on the customer, focusing on delivering the best 5G networks in the world. That's really what we do. And then, you know, the political questions,

we'll leave to others to (INAUDIBLE)

[15:39:58]

QUEST: Arguably, in an ideal world, that's what we would wish to do, but you have large business interests in China and you have the possibility if

you are in a position for the Chinese to do you harm if they wished. And I'm suggesting that that's something you have to take into account today.

EKHOLM: Oh, you take into account a lot of business risks. The reality is, we shipped the first equipment for China more than 100 years ago. We've

been there, and of course, we weren't there for a long period of time, but we've been there pretty much since it opened up. You know, we're having a

business there. We're actually the only foreign vendor selected for the 5G Ram network and the operators. So, for us, of course, it's an important

market. But not only that, I think, you know, the -- what you see in mobile networks is the usage draws or drive feature development, a requirement on

the network. So, what's going to happen now, as China builds out the network, they're going to need features that we will see used in the rest

of the world. So, it's really critical for us to be there. So, of course, that's a position we want to maintain.

QUEST: If we look at how Ericsson's trading during this crisis, and obviously, the numbers that you reported are not that meaningful in the

sense of a pandemic, but I'm wondering, are you or telcos or governments, are they still able to put money and invest in 5G infrastructure? Or, are

you already seeing companies cutting back or putting it on the cuts list?

EKHOLM: That's a great point. And what we see right now is it's -- that it actually varies across the globe. So, if you look at North America,

continues to deploy 5G at a high pace. Northeast Asia, so we're talking China, Japan, Korea, accelerating the pace. So, when you look at this, you

know, two big markets are accelerating, we see it possibly slowing down at least in the other parts of the world. So, Latin America, India, and a bit

slower in Europe, as well. But I also think the COVID-19 has proven why the digital infrastructure is critical for society.

QUEST: Good to speak to you, sir. We will talk more as the summer moves on. I appreciate you giving us time tonight. Thank you, sir. Now, the E.U.,

everyone says it's just had its Hamiltonian moment. But let's remember what Alexander Hamilton actually said about debt. And national debt will be a

national blessing, a powerful cement of our union. Has the Union just cemented itself in Europe with a trillion dollars of debt?

(COMMERCIAL BREAK)

[15:45:00]

QUEST: Our top story tonight is, of course, the E.U. has broken its four- day meeting stalemate. It's not the longest meeting they've ever had. That was in (INAUDIBLE) this one fell short by about 30 odd minutes, but a new

stimulus package has been put in place. So, and great comparisons about the talks are being made to another historic deal.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I, I want to be in the room where it happened. The room where it happened. I want to be in the room where it happened, the room

where it happened. I want to be in the room. In the room. Click boom. Hamilton

(END VIDEO CLIP)

QUEST: It's been called the Hamiltonian moment for Europe, In the Room Where It Happened. Alexander Hamilton led to what's known as the compromise

of 1790. Now, what happened? The U.S. government, the U.S., the federal government, assumed the debts of the states from before the Federation was

formed. It's cemented the union closer together by taking all those debts. Now, it's the E.U.'s Hamiltonian moment.

The E.U. can borrow as a single entity, it can raise capital from financial markets. Everybody agrees and you heard the Italian finance minister

tonight on this program say, it's a step closer towards union. Others would say, towards federalism. Alexander Stubb is with me, Professor and Director

of the European University Institute, former finance minister of -- and prime minister of Finland. He joins me from Porkkala in Finland. Forgive

the awful pronunciation, Alex, but it looks beautiful, where you are. It was this a Hamiltonian moment, in the sense, of the E.U. coming together

based on the back of debt.

ALEXANDER STUBB, FORMER FINNISH PRIME MINISTER: It was a quasar Hamiltonian moment, but if I recall my studies at Furman University in Greenville,

South Carolina, Hamilton wrote Federalist Paper number 10, and this was not Federalist Paper number 10. I would argue like Derrick Jones, this is a

little bit more of a Madisonian moment. In other words, we're unified and united in diversity. So, it's certainly a step toward some kind of a

federal union, but not yet the Hamiltonian moment.

QUEST: Did it -- did the rancor exhibit fault lines that are existential in the future?

STUBB: No, I don't think so. I mean, E.U. negotiations and I've been around for a few years and those are usually about it. You know, when it's about

money, it's quite often between the North and the South, when it's about values, about the East and the West. On some other issues, it's about new

and old, big and small. So, there always going to be fault lines, much like they are fault lines between the states in the United States. This is part

of European integration. The end results are always suboptimal, never perfect.

QUEST: And the comments, I mean, Macron got cross with Kurz when he left to take a phone call. All banned was rude to Mark Rutte, everybody seems

decided to turn on Macron in some shape or form, who was duly rude back again? With this more rude or ruder than usual?

STUBB: Well, you know, I've been in the room. I'm one of the rare breeds that I was actually a (INAUDIBLE) as a deputy on teach, you're taking notes

in the back room. And then I've been in the European Council as a prime minister. And usually, how would I say, the story is a little bit less

dramatic and a little bit more subdued than what people think. Of course, there's some tough discussions, but it never, very rarely, get sort of

uncivil or uncivilized.

But let me tell you one thing, Richard, I think in (INAUDIBLE) people came out of those negotiations. Some people were crying because they were so

tough. It was about power. This time around, people were smiling, most of them. I think that that's a lot.

QUEST: In a sentence, and I'm recording this, and I'll play it back against you in the future.

[15:50:06]

QUEST: Do you believe -- they say that they won't be borrowing again in the future, collectively, mutually? Do you believe them?

STUBB: No, of course they will. Remember, the European Investment Bank has existed for 60 years. That is the bank of mutualization. You have mutual

debt there already. This is just the first time the commission is going to do it. And of course, it's going to do it in the future, as well.

Hopefully, not in these types of crisis.

QUEST: 11:00 at night and it's all -- it's still, of course, daylight up in wonderful Finland. Thank you, Alex. It is good to have you. Thank you, sir.

I appreciate it. Uber drivers -- Uber drivers are facing another courtroom battle. The U.K.'s highest fight for better pay. It's all about the gig

economy and equality, after the break. It's QUEST MEANS BUSINESS live (INAUDIBLE) from London.

(COMMERCIAL BREAK)

QUEST: The U.K. Supreme Court is hearing a final appeal by Uber drivers, in a case over their employment rights. At heart, of course, is whether they

are employees entitled to benefits. Scott McLean reports.

(BEGIN VIDEOTAPE)

YASEEN ASLAM, LEAD CLAIMANT IN UBER UK LAWSUIT: So, yeah, we're just trying to do what's right. We're just trying to make sure that, you know, people

aren't being abused.

SCOTT MCLEAN, CNN INTERNATIONAL CORRESPONDENT: For years, Yaseen Aslam has been fighting for some of Britain's most vulnerable workforce, gig economy

drivers. His lawsuit against Uber is being heard this week in the U.K. Supreme Court. A win could force Uber to treat its drivers as employees,

entitled to the minimum wage and the right to unionize. Aslam says the timing of the case is ironic.

Protests demanding racial equality have brought millions to the streets around the world, using a range of tactics to voice their discontent.

Targeting police brutality, police funding and racism in old symbols, but largely unscathed, corporate America, which arguably holds the most power

to correct racial income disparities.

CROWD: Black lives matter! Black lives matter!

MCLEAN: Perhaps that's because one by one, corporate giants have lined up to echo the protesters' message, Uber the $57 billion ride hailing giant,

has been among the most vocal, declaring its stands with those peacefully protesting injustice, hatred and racism. It's also pledging a million

dollars to equality causes and giving a special perk to black-owned businesses, move some called the form of discrimination. Other said, it was

merely window dressing.

[15:55:06]

ASLAM: I think all Uber cares about is money. The way the model is set is all about mass recruiting drivers. It's all about exploiting the workforce.

MCLEAN: But if you follow Uber's public statements, they sound pretty woke.

ASLAM: Well, this is it with Uber, the way to go that, the PR, and that's exactly what they're doing.

MCLEAN: You think Uber is better at sort of token gestures than meaningful change?

ASLAM: That's correct.

MCLEAN: In London, 94 percent of all private-hired drivers are ethnic minorities. Uber, like its competitors, has long resisted legal challenges

in Europe, in the U.S., that would give more protections to drivers through measures like a minimum wage or guaranteeing paid sick leave.

DARA KHOSROWSHAHI, CEO OF UBER: I think that we're treating our workers as human beings, right? I think the number one reason why our drivers like

Uber, is because they have complete control and autonomy to do what they want, when they want.

MCLEAN: Aslam's nonprofit, found the net hourly income of even so-called top drivers in 2016, was just over five pounds per hour. The 2018 study

funded in part by Uber, down the median was more than 11. Aslam thinks improving pay would help black and minority drivers a lot more than

statements and donations.

ASLAM: It's just not good enough, just coming out, going to a protest and shouting out Black Lives Matters. The fact is, what are we doing to make

sure there's equality regardless of whether you're black, Asian, white, whatever race your from, there is equality, and there is no exploitation or

abuse of any kind of people.

MCLEAN: They could make a big difference.

ASLAM: That's exactly correct. So, Uber could make a big difference.

MCLEAN: Scott McLean, CNN, London.

(END VIDEOTAPE)

QUEST: And we will take a "PROFITABLE MOMENT" after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's profitable moment, was it a Hamiltonian moment or a Madisonian moment? Maybe it was a Washingtonian moment, who knows? But the

E.U. did come to a deal, and in doing so, have embarked on a road and set themselves off that they may live to regret. Now, I know Alex Stubb says

that they've been had mutuality before, but as a world of difference of mutuality through an AIB, or an investment bank, all this stuff and the

other, and mainlining it right from the commission itself, from the heart of the E.U.

Will they live to regret the fact that they have gone where they've never gone before? And if they need any lessons from the other side of the

Atlantic, where the debt is regularly up towards nearly a trillion dollars, and they owe 17 trillion if not more, 18, 19 trillion, I don't care whether

it's Washingtonian, Madisonian, Hamiltonian, even Trumpian. At the end of the day, the E.U. may have embarked on a process that will cost it very

seriously dear in the future. But then that's the nature of a pandemic.

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London, whatever you're up to in the hours ahead, I hope it is profitable. I'll see

you tomorrow.

END

END