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Quest Means Business
Netanyahu Defiant Despite Biden's Call To Deescalate; Main Market Indices Close Lower On Inflation Fears; WTO Head: Vaccine Inequity Is Hurting Africa's Recovery; Crypto Carnage; E.U. Agrees To Open Doors To Vaccinated Foreigners. Aired 4-5p ET
Aired May 19, 2021 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: And a good evening to you. It's an extra hour of QUEST MEANS BUSINESS tonight as the diplomatic pressure
builds over the situation in the Middle East. And that is where we will begin. Benjamin Netanyahu seems to be defying a call by the U.S. president
to de-escalate attacks on Gaza.
Now, the Israeli Prime Minister says attacks will continue until the objective is achieved. For more than a week, the White House says it's been
working quietly in the background to get both sides to curb violence, that sort of working quietness went out the way.
Now the disregard for Joe Biden's call to move towards a ceasefire is straining arguably U.S. patience. Kaitlan Collins is at the White House.
Really simple, Kaitlan. Will they regard -- will they regard Netanyahu's comments that it will continue until all is done as being a slap in the
face to Biden, even if he says he's my good friend?
KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: I think they're going to sit back and watch to see what Netanyahu actually does and what
transpires over the next few hours and what does the level of rocket attacks and the violence look like, does it look similar to what we've seen
for the last ten days, or does it seem to de-escalate in a way that can meet Biden's, you know, stated deadline that he had in that earlier readout
And I think that's something that the White House isn't sure yet. That's why they had not really called for a ceasefire earlier this week despite
other U.S. allies, lawmakers doing so. Because they knew that once they called for a ceasefire, if the ceasefire doesn't actually happen, you lose
a little bit of leverage there.
So I think that is something that the White House is waiting to see. You know, does this actually get to that path to de-escalation that he called
for? He said significant we should note, not just a little bit. And so I think that's what remains to be seen. And of course, we know that the
National Security adviser Jake Sullivan has also been making calls on this --
QUEST: Right --
COLLINS: Throughout the day.
QUEST: The political side though, Republicans will bash him over the head and tell him -- I mean, the more pressure he puts on Israel, the more the
Republicans will say you're -- you know, you're messing around with our top ally. And yet, there's a left wing in the Democrat Party that is more vocal
and is likely to give him a hard time there, too. He really is in a no-win.
COLLINS: That's true. And I think, I mean, he gets a lot of criticism from Republicans anyway. They often try to frame his -- former Vice President
Mike Pence yesterday was framing him as someone who doesn't stand with Israel. Of course, Biden hasn't had a very favorable stance towards Israel
for decades since he's been in politics.
But I do think that what we are seeing that's fascinating when we get to the end of this and we look at what this -- the end result of this is, is
how this really is exposing a massive rift inside the Democratic Party. And that's that progressive wing, you know, the Alexandria Ocasio-Cortezs, the
Ilhan Omars, Rashida Tlaibs who are saying that the president needs to be more critical of Israel.
They want him to condemn Israel and the violence that they've participated in over the last several days. And so what that policy looks like going
forward will be fascinating to watch --
QUEST: Yes --
COLLINS: Because you've seen Biden shift his, you know, more moderate tone often with climate, with other progressive ideas that they would like to
push. Does he do it here? I don't think we know the answer to that yet.
QUEST: If you had to sum up the way in which the White House is looking at this, would it be one of frustration, exasperation, worry that it could all
get out of control -- I'm talking about from a purely President Biden point of view. What will be their view?
COLLINS: I think it's a little bit torture because, of course, this is an issue that has plagued presidents for decades. It is not something new that
has happened under Biden, but this is a massive level of violence, something that we have not seen since 2014 in this area.
And it wasn't really something he planned on engaging in or putting at the forefront of his agenda list when he took office a few months ago. And now
of course, that is the number one thing he's been asked about by reporters for every single day for a week. And so, that is it, but also, you know, a
lot of these people were people who also worked in the Obama administration and were around for that very icy relationship between Netanyahu and Obama.
And I think that this White House is trying to be very clear, they don't want to see another round of that. But they're also not going to be
engaging in the exact same way that you saw --
QUEST: Right --
COLLINS: Former President Trump do.
QUEST: Always excellent to have you with us. Thank you, Kaitlan Collins at the White House, I appreciate it. A U.S. official says that Israel appears
to be running out of fixed targets in Gaza after ten days of fighting. And the Israeli defense forces say it's prepared to keep going for days.
An airstrike on Wednesday hit what it said was a weapons depot in Khan Yunis, and also struck a command and control center, according to the IDF
in Rafah. Sirens in Ashdod in Israel with incoming Hamas rocket fire, and that also went up almost as high as Haifa in the north. In the end, the IDF
says four rockets were launched from southern Lebanon.
Nic Robertson is our diplomatic editor in Ashdod, not far from Gaza. Let's do politics and diplomacy here. You were listening to -- unless you, please
let me know if there's any problems that require you to attend to safety first.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Just listen to the -- just listen to the fighter jets overhead, Richard, you might be able to
hear the Israeli fighter jets overhead. This is the third time they've come around in the last ten minutes. That's what we're listening to here. That's
your metric of what's happening in Gaza. These are the fighter jets on their way there.
QUEST: And what do they -- they go over there, release the missiles and then the next thing you see is the explosions?
ROBERTSON: From here we can't see the explosions. Sometimes you can hear them. But when the jets are flying, you know, hard and fast past here, the
next thing, generally, in previous nights when there have been those very intense periods that the Israeli defense forces talk about the following
day, that 20-minute, 25-minute, 30-minute period of intense bombardment, we witnessed it here as this intense over flight of aircraft. And there's been
the third passage of two --
QUEST: Right --
ROBERTSON: Different fighter jets together. You see the lights, you hear the engines, you know where they're going.
QUEST: Nic, the president -- sorry, the Prime Minister says we'll keep going until we've done what we need to do, I'm paraphrasing there, but
that's the gist of it. But at the same time, the U.S. President says significant de-escalation and work towards a ceasefire. Now, are those two
statements between President and Prime Minister, are they mutually exclusive?
ROBERTSON: So, let's judge this by the foot power of the Israeli population of Ashdod where we are. Just over my shoulder there, you can see a tower
block. Now, we've watched that every night. We do. There were many more lights on it tonight than there were last night.
When we were driving back from where we were close to the border with Gaza before, there were a lot more cars on the road. What we are seeing around
us here is the metric of people that seem to be sort of coming back into life a little bit more in this town where they've been running for shelters
has been hit several times a day by missiles in several different locations.
There seems to be a confidence in people emerging here that there's a sense for them that this is coming to an end. So they would not see a disparity
between what their prime minister is telling them, that he's going to deliver them and he won't stop until he's delivered them their safety and
And what President Biden, which he's saying, you know, a de-escalation today and a path to, you know, a path to resolution here. So, I think
there's a real potential, and of course all of this with those jets flying overhead. I think there's a potential here for, yes, some more strikes
tonight, but the confidence of the population is returning. And that seems --
QUEST: Right --
ROBERTSON: To indicate, they think, that there's a resolution nearer and it could all change. But that's where we are at this moment.
QUEST: We'll leave it there, Nic, because if that's correct, then a whole raft of further questions follow on. But let's wait until we get there, and
we can ask them. Nic, good to have you as always, stay safe in Ashdod in Israel. Thank you, sir. Now, to the markets, a bit of a grim day.
They closed eight minutes ago, lower for a third-straight day. The Dow is off at session lows, inflation fears and a big sell-off, although it was
well off the bottom of the day. Paul La Monica is here. Why were things so awful? Why have they been so awful for the last two or three days?
PAUL LA MONICA, CNN BUSINESS REPORTER: Well, a couple of things let's bring into perspective first, Richard. I wouldn't say necessarily that today was
awful. I may be being, you know, a little pollyannish here, but I'm encouraged by the way we closed, which is well off the lows.
The Nasdaq essentially finished flat, and the Nasdaq 100, the QQQs finished slightly in the green. Which shows that there's some appetite for those
beaten-up tech stocks that have been pulling the market down lately.
I think, yes, investors are worried about inflation, it is no secret that the economy is heating up, wages are rising, and that should lead to higher
inflation levels we've already seen obviously many consumers worried about prices in their -- you know --
QUEST: Right --
LA MONICA: Grocery store that are going up. But we did finally get a bit of a respite from that fierce selling as the market picked up at the end of
the day today, even though the Fed finally acknowledged what everyone knows, no secret, they have to start thinking about tapering sometime soon.
They can't keep buying bonds at crisis-era levels when the economic crisis is essentially over.
QUEST: And Larry Summers warning that the Fed's behind the curve and this is what happened yesterday when he gave his warning and then the market
really did fall very sharply as a result of that. Does he still have the -- I mean, he clearly still has the weight and the clout in that sort of
sense. But it's not very helpful for a democratic president when a former Democratic Treasury Secretary decides to put his boot in like that.
LA MONICA: Yes, I mean, clearly it probably didn't help in the same way that comments from current Treasury Secretary and former Fed Chair Janet
Yellen rattled investors when she talked about the potential need for rates to go up. And she was probably referring more to longer-term bond yields
than the Fed's short-term interest rates.
It is obviously the big challenge right now for Jerome Powell and everyone else at the Fed, to figure out when do they take their foot off the gas.
When is it time to say, you know what? The economy is on much better footing now, and it needs to be able to go off and do what it will do at
this unnecessary --
QUEST: Paul --
LA MONICA: Historic level of support. We can't have interest rates at zero forever. Yes, that may be wonderful for, you know, bitcoin bowls, but
that's not the reality that we're going to be in. At some point, the Fed has to taper, then start raising rates. It may not be until 2022 or 2023,
but it's going to happen at some point.
QUEST: From your --
LA MONICA: Yes --
QUEST: Mouth. From your mouth, thank you, thank you, Paul La Monica, although I'll save it for another day, but we do need to discuss the
difference between taking a foot off the gas and putting it on the brake. And you know, and there's an argument that tapering is one verse, but that
is an argument or a discussion, debate point that we need to get Matt Egan in on as well.
And we'll have you another day, good to see you, sir, thank you. Now, it's QUEST MEANS BUSINESS extra hour, bonus time. Kenya's health minister is
warning that Kenya could run out of vaccines in a matter of days. The latest from Nairobi after we take a short break. QUEST MEANS BUSINESS.
QUEST: The head of the WTO is warning though, vaccine inequity is hurting Africa's chance to rebuild from this pandemic. Ngozi Okonjo-Iweala spoke to
my colleague Zain Asher earlier. The director general said more must be done to get Africa back on track.
(BEGIN VIDEO CLIP)
NGOZI OKONJO-IWEALA, DIRECTOR-GENERAL, WORLD TRADE ORGANIZATION: First of all, let me say that before the pandemic, the continent was actually on a
growth trajectory. And it's a pity that the pandemic has resulted in the first recession in 25 years. And a lot more people going into poverty. And
I think what is at stake here, apart from lives being lost, is the fact that if we don't deal with the vaccine inequity, which we see in the world
now, we will not be able to recover. Africa will not be able to get back on a sustainable trajectory of recovery.
So, to solve this, we think that the best thing is access to vaccines. The vaccine inequity will result in the continent not being able to recover.
(END VIDEO CLIP)
QUEST: Now, Kenya is days away from running out of COVID vaccines. And its health minister telling us the country only has 100,000 doses of
AstraZeneca's vaccine left. So far, less than 2 percent of Kenya's population's been vaccinated, according to our world in data. Kenya, like
other African countries has been hit hard by shipment delays from India.
Now the health minister says it's very likely the continent could switch to J&J, Johnson & Johnson. Larry Madowo is in Nairobi and with me now. Larry,
what is the problem here? I mean, a lot of African countries were late to the purchasing, COVAX of course is providing a lot of them. But for
somewhere like Kenya, why -- what's the issue here?
LARRY MADOWO, CNN CORRESPONDENT: The issue, Richard, is that supply is almost entirely from COVAX, and therefore directly from the Serum Institute
of India, which says it will not be exporting vaccines internationally at least until the end of the year. So many countries like Kenya that rely on
COVAX, this World Health Organization initiative, are left scrambling now where to find other vaccines and how quickly to get in the shot into the
arms of the people that need it.
So that is where Kenya finds itself. The 100,000 doses left could be done within the next few days by Friday. And then after that, if they get more,
it's a big if. The Kenyan Minister for Health Mutahi Kagwe now says vaccine nationalism which has affected the rest of the world especially with rich
countries almost hoarding the vaccines they have while poor countries and most in need have nothing, that needs to change.
(BEGIN VIDEO CLIP)
MUTAHI KAGWE, HEALTH MINISTER, KENYA: I think that vaccine nationalism is something that has cropped up across the world. As a continent, we must
stop believing that there is anybody out there who is a good Samaritan, a biblical Samaritan, was just about to come and help us.
There's nothing like that. You know, this is a situation where we are seeing very clearly, it's everyone for himself or for herself and God for
us all clearly. And therefore going into the future, the local production, local manufacturing of pharmaceutical commodities and products is an
MADOWO: How bad is it for Kenya that the Serum Institute said on Tuesday that it will not resume vaccine shipments internationally until the end of
KAGWE: We are not just waiting for these donations that are coming to Kenya. We are in discussions with the Johnson & Johnson facility in South
Africa for what we think is going to be the new supply chain rather than relying on AstraZeneca.
Given what is happening in India and given the difficulties that the Indian people are going through and the population of India, it is very unlikely
that AstraZeneca is going to be the vaccine of choice for the African continent going forward. It is very likely that we are going to discuss and
agree on Johnson & Johnson.
(END VIDEO CLIP)
MADOWO: Like the Kenyan Cabinet Secretary for Health indicated, Africa is moving to Johnson & Johnson because of the single shot, there's a
manufacturing plant in South Africa, the African Union indicating now that they have ordered 400 million shots, 240 million expected this year. But
for a continent of 1 billion, that is still a drop in the ocean. And the economic devastation, Richard, of COVID-19 will be felt long after --
QUEST: All right --
MADOWO: The pandemic is gone.
QUEST: So, Larry, let's just demonstrate for a comparison here. I'm -- there are no masks now on the street in New York as we're going to hear in
a report. Pretty much everybody who wants -- I mean, there's vaccinations almost vaccine coming out of the taps almost now here in the United States.
Life is pretty much back to normal -- accepting that situation, tell me how life is in Nairobi in terms of masks, social distancing, lockdowns. Are
people -- what steps people are taking?
MADOWO: People are still required to wear masks in Nairobi and around Kenya, there's a curfew nationwide from 10:00 p.m. until 4:00 in the
morning. There's restriction on gatherings because most people are not vaccinated. Richard, I am fully vaccinated, but that's only because I have
been living in the United States.
My grandmother who lives in the west of Kenya who's 96 is still not vaccinated, and she doesn't know when she will be vaccinated because the
country just doesn't have vaccines. So people over the age of 60, anybody over the age of 60 in the U.S. can get a vaccine if they want it, some
people do not. There are people in this part of the world who are desperate for that protection and they just can't access it.
QUEST: But that's also going to have an effect once Kenyans -- I know, it could be Kenyans, South Africans, Zimbabweans, it could be any from
southern Africa. When you want to travel, now, you'll certainly obviously be able to do it on the basis of testing. But my understanding is that the
testing regime is not as rigorous or has as much integrity as it should have in the first place.
MADOWO: And so one of the things that's happened is vaccine passport that's already being introduced and rolled out across Africa. There's this trusted
travel of program the African Union is using in some major airlines on the continent, Ethiopian Airlines, Kenyan Airways are using to make sure that
tests are verified on this platform before you're allowed to travel.
But then that will mean that, again, African travelers are already at a huge disadvantage, cannot access some western countries because there's not
trust in their vaccines, especially their tests. But the bigger problem, Richard, is that vaccines mutate.
The longer people in Africa stay without getting vaccinated, then these vaccines, there might be new variants of COVID-19 that will make their way
around the world. We've seen that with variants from India, from South Africa and from the U.K. And so nobody is safe until everybody is safe.
QUEST: Larry, lovely to have you on QUEST MEANS BUSINESS tonight, it's late at night, I appreciate your time. Thank you, sir. We were talking there
about the opening up, and here in New York, we've taken a big step closer to normality. Now, the mask requirement -- there's a side of confusion
about it, but by and large, the mask requirement is no longer, and most stores now saying you don't need to wear it there.
And social distancing is not the case for those of us who are fully vaccinated. Most business capacity limits are also being relaxed. Today is
the first day, so Clare Sebastian has been out to see how it's all working.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT (on camera): A year ago, it would have been hard to imagine that this day could ever come. And for
those of us who lived through last Spring when the city was one of the global epicenters of the virus, it still feels like things are moving quite
As of today, pretty much all capacity restrictions on restaurants like these and retail stores, gyms, hair salons, offices are being lifted.
Really good news for those businesses. The city's subway is now back up and running 24 hours a day. And perhaps the biggest news of all is that New
York State is lifting its indoor and outdoor mask mandate for fully vaccinated people in accordance with CDC guidelines.
Now, that really puts the ball in the court of individual businesses. And I've walked up and down this stretch of Broadway, and we're seeing a
variety of different qualities. Some like this cafe behind me are still requiring masks, although it's like another down the block say they're no
longer needed. Now, we've spoken to New Yorkers and found a variety of opinions.
UNIDENTIFIED FEMALE: I don't believe that I love it right now because there are still people who haven't been vaccinated yet. And I feel like it's
putting a lot of people still at risk.
UNIDENTIFIED MALE: I've been vaccinated for about a month, while I was vaccinated, all their friends are vaccinated, so we're just waiting for --
waiting for everyone just to take their masks off and sort of get back and do it again.
UNIDENTIFIED MALE: I think it's time if you've been vaccinated. If you haven't, hopefully people will do the right thing.
SEBASTIAN: Yes, do you worry that they won't?
UNIDENTIFIED MALE: I do think that there are folks that possibly will not.
SEBASTIAN: Well, this isn't about going back to normal. This is about a new normal. All the outdoor dining, for example, that we've been seeing as
restaurants have built out onto the sidewalks to try to survive, well, a lot of that is likely to stay.
And if you look across the road at New York's iconic Lincoln Center, well, it has re-imagined itself as an outdoor performance space. Now re-opening
won't be easy, but with 39 percent of New York City now fully vaccinated, it's starting to look like New York post-COVID is finally taking shape.
Clare Sebastian, CNN, New York.
QUEST: And as we continue in our extended program tonight, Israeli and Palestinian violence is taking a devastating toll on those caught in the
crossfire. A special report in a moment.
QUEST: Air raid sirens sounded in northern Israel on Wednesday. As far north near Haifa, four rockets have been fired from southern Lebanon. The
Prime Minister of Israel Benjamin Netanyahu says Israeli attacks will continue until the country can restore quiet and security to its citizens.
After a day of airstrikes, mortar fired and sundry rhetoric, Hadas Gold shows us some of the human toll.
HADAS GOLD, CNN CORRESPONDENT (voice-over): Fear. Loss. Grief. Whether in Israel or Gaza, civilians paying the price. Israel pushing ahead with its
Gaza offensive, bucking growing U.S. and international pressure to back down.
BENJAMIN NETANYAHU, PRIME MINISTER, ISRAEL: (SPEAKING IN FOREIGN LANGUAGE)
GOLD: Israel defending last week's bombing of the building hosting the "Associated Press" in Gaza, saying it was also where militants were
researching and developing high-end capabilities for attacks against Israel. While admitting efforts to take out the leader of the Hamas
militant wing, have so far been unsuccessful.
At least a dozen now dead in Israel, following indiscriminate Hamas and Islamic Jihad rockets fired en masse. The Hamas-run Palestinian health
ministry in Gaza says hundreds have been killed. Civilian casualties of Israeli airstrikes and what it says are militant targets, but with
countless others wounded.
The Palestinian authority President now accusing Israel of committing war crimes.
MAHMOUD ABBAS, PALESTINIAN AUTHORITY PRESIDENT (via translator): What the occupation is doing in Gaza, including vicious attacks on civilians,
deliberate shelling of residential areas and institutions, destruction of infrastructure, as well as the killing of women, elderly and children is
organized state terrorism carried out by the Israeli occupation and war crimes punishable by international law.
GOLD: Tensions now spreading north, where Israel responded with artillery after incoming rockets were launched from a village along the Lebanese
Meanwhile, civilian suffering in Gaza showing no signs of abating, as international convoys in route to Gaza halted for the second day in a row
amid ongoing mortar fire, displaced families in desperate need of humanitarian aid, again, left waiting.
And harrowing statistic from one international aid agency have the more than 60 children killed so far in Gaza. 11 of them were taking part in a
trauma program for children who had already seen the horrors of war. Hadas Gold, CNN, Jerusalem.
(END VIDEO TAPE)
QUEST: Now into all of this, the United States now believes that Israel is running out of fixed targets in Gaza. A source says Hamas likely to lead
thousands more rockets in their inventory.
Oren Liebermann serves double duty, not only as our Pentagon correspondent, but also as our former Israel, Jerusalem correspondent. Oren, let's dissect
this. And what assumes that the intelligence relationship between the Israelis and the U.S. and the military level is quite high.
Therefore, when Israel says that that building of The AP and Al Jazeera was being used by Hamas, or this building was shielding rockets, the Americans
would know yes or no?
OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT: Well, there is certainly the sharing of information in this on this. I've heard from Israeli defense
officials who say that it was not only a phone conversation between high levels officials at the military and political level, but it was also
intelligence and information shared.
That being said, the U.S. is fully aware of how sensitive that specific target was, a building that houses not only the Associated Press, but other
foreign media outlets as well.
So even if the intelligence community between the U.S. and Israel is unparalleled, second to none, and incredibly good, incredibly strong, no
matter who's in charge of which country, this is no doubt a target that an attack that the U.S. wants to evaluate and is evaluating not only for the
Israeli Intel, but I think it's safe to say here the U.S. wants its own assessment because of what was in that building. That is the Foreign Press.
QUEST: So the idea of the latest of $750 million worth of military aid that the U.S. is planning, in your view, is it at all likely that the U.S. would
turn off that tap?
LIEBERMANN: Highly, highly doubtful, that was in the works before this fighting started. And even if this fighting put a speed bump on that road,
it is not more than that. The relationship will continue between the U.S. and Israel, between President Joe Biden and Prime Minister Benjamin
Netanyahu, and the sale will go forward.
QUEST: But then that just really begs the question, what leverage does the U.S. have over Netanyahu? If ultimately, you know, the Israeli Prime
Minister knows that the United States will not break with Israel?
LIEBERMANN: Frankly, right now, I think that answer is not all that much leverage. Netanyahu knows that Biden is a traditional pro-Israel Democrat,
and isn't going to come out strongly against Israel. He certainly doesn't fear or worry about Biden in the same way he worried or feared President
Donald Trump, spontaneously are having a knee jerk reaction and being angry at Israel.
And because of that Netanyahu knows the relationship is strong, even if there is some criticism and even if the calls from the U.S. are growing for
a ceasefire, this round of fighting isn't fundamentally changing the relationship, even if there are more progressive Democrats calling to
reexamine the aid Israel in the weapons sales.
QUEST: So let's go back to the military side. And this idea that the Israelis are running out of fixed targets. Somebody on this program, I
mean, you were saying, you know, they've got rid of save 30 miles of or kilometers of tunnels or 10 miles or kilometers of tunnels, but there are
dozens more to be done. So what does it -- what do the Israelis do here?
LIEBERMANN: Well, this is a tough situation and tough question both for the U.S. monitoring this and for the Israelis. The Israelis have made it clear
at this point. They're not going in on the ground, which limits what you're able to do. It limits how far you're able to dig into what's in Gaza and go
after, for example, Hamas or Islamic Jihad leaders.
And so the assessment from this end is from a U.S. official directly monitoring this. Israel is running out of the strategic targets, the Hamas
tunnels, the weapons manufacturing plants, and is now going after the mobile targets, the dynamic targets, mobile rocket launchers and elements
Does this continue? Prime Minister Benjamin Netanyahu has at least indicated yes. And yet the expectations are growing both here and in
Israel. And in Gaza, it seems that a ceasefire may be coming in the next few days.
But Richard, it is important to point out that a strike in Gaza, an Israeli strike in Gaza that kills a family, a rocket from Gaza that kills a family
in Israel, all of that could throw off any attempt at a ceasefire in the next few days.
QUEST: Oren, you're at the Pentagon. Thank you, sir. Appreciate it.
As we continue, Bitcoin is getting battered a look at the shape of things to come for cryptocurrencies and blockchain technology bearing in mind.
This is all because China's regulator said no.
QUEST: Bitcoins having a horrific week, it's down 10 percent today, and it's on track for its first losing month since 2018. It was almost a tweet
from Elon Musk on Sunday that triggered an 8 percent drop. The Tesla CEO responded indeed or suggests the company would dump its Bitcoin holdings.
He later clarified and said it wouldn't.
Now that was so far but crypto is under pressure from China, which caused price volatility and speculation in Bitcoin and in the markets a danger to
Kristin Smith is the Executive Director of the Blockchain Association. She joins me from Washington DC via Skype. Now between Elon Musk and the
Chinese regulator who's doing the most damage?
KRISTIN SMITH, EXECUTIVE DIRECTOR, BLOCKCHAIN ASSOCIATION: Well, yes, it's certainly been a rough day for Bitcoin prices and other cryptocurrencies.
But I do think it is important to put crypto prices in context. Yes, Elon's tweets over the past week have moved prices that were some reports out of
China that really were nothing new, by the way.
But I think there are multiple factors going on that are contributing to the prices today. And we've seen this not just with cryptocurrencies, but
also with stock markets and other commodities out there. But as the segment just before this discuss, there's a tremendous amount of geopolitical
unrest happening right now. We had a really bad report on inflation this week, and we also in the United States are very concerned about potential
So I think there's a lot going on, it's important to put it in context and realize that there are multiple factors that are impacting the markets
QUEST: Right. But if China, if China decides that crypto needs to be regulated, or at least there needs to be restrictions, for example, as they
have done financial institutions that being unable to trade deal or otherwise be part of, that's a black guy for crypto.
SMITH: Yes, I mean, listen, there's a lot of activity with the Bitcoin network and other cryptocurrency networks out of China. China is one of the
leaders when it comes to mining these currencies. They are very active in that process. There are restrictions about using cryptocurrencies and
payments, largely because they have their own central bank digital currency.
But, you know, crypto is more than just China that China is obviously a major global player and is important in any market, but we have a
tremendous amount of activity going on in the United States, in Europe and elsewhere. And, you know, I think that what happened this week really isn't
news, it is -- they're same policies that have been in place for some time.
QUEST: I do wonder, I mean, you know, you're obviously right in terms of the rest of the world is larger, they've used like the single market out of
China. But I do wonder now, at what point are we seeing a shaking out between Bitcoin and the other, the other currencies?
And at the same time, we are waiting for some say official euro crypto from the ECB or the way in which the established central banks are going to move
in? If they do does that kill off the rest?
SMITH: No, I don't think so. I think there's a fundamental difference between these central bank digital currencies, which are really centralized
as sort of digital forms of currencies, versus the other crypto networks out there, whether it's Bitcoin or Ethereum, or Filecoin, or any of these
networks, these are connected computers that are have open source software that are providing a kind of specific function or purpose. And some of them
are not necessarily designed to replace day to day payments.
In the U.S., we're seeing a tremendous amount of innovation around dollar back stable coins, like USDC, this is this is a token that is backed by a
dollar in a bank account. So, I think that there can be a lot of, you know, both sides can benefit from one another, and that -- that the central bank
digital currencies will not replace the innovation that's going on in crypto networks in other areas.
QUEST: How do you take the Wild West nature out of it? How do you give it an element of sobriety? Because at the end of the day, I look, I'm aware
that there are lots of speculators out there who are loving the Dogecoin roller coaster, but a serious investment requires an element of volatility
predicated by a certain amount of stability?
SMITH: Yes, no, that's an excellent question, Richard, and I think there's a very good answer to that. I mean, if you see, you know, stocks are down
today, commodities are down today, cryptocurrencies are down more than those other asset classes. And the reason for that is, especially in the
United States, there aren't futures or derivatives products in any kind of robust and meaningful way that can help with price discovery.
So I don't think we would have seen such dramatic moves in the market, in the crypto markets today if we had a robust features movement, because that
would provide some indication as to where prices are going and sort of with ease the transition there.
So I do think we have some work to do in terms of, you know, having better price discovery, but you know, these crypto networks, Bitcoins been around
for 12 years now, they're popular assets. And if you compare it to where we were a year ago, Bitcoin is up 300 percent. So that's a pretty, pretty
amazing thing. So if you can't just look at one day. You have to look at --
QUEST: No. No, I guest Of course, it depends if you got in last month, or this month.
QUEST: But that's the same --
SMITH: It's all right.
QUEST: -- every stock in the market. All right, good to have you. Thank you. We'll talk more. I appreciate it.
SMITH: Thanks. Thanks Richard.
QUEST: QUEST MEANS BUSINESS as we continue the French President Emmanuel Macron goes out for coffee and France reopens.
QUEST: After closing its borders for almost a full year, the EU is opening back up again. The bloc's agreed to allow entry to vaccinated travelers
from countries outside the EU, those that have low infection rates and the plan also allows for an emergency breakup wouldn't case of course,
infection numbers rise. There's no list of approved countries, and no date when all this might get into effect.
After six hard months of COVID restrictions France has today started to see a little liberal. As cafes, cinemas and galleries reopen their doors. In
Paris, customers were able to get their morning coffee again. Among them, of course, was President Emmanuel Macron. Melissa Bell, our correspondent
in Paris filed this report from the streets of the Capitol.
(BEGIN VIDEO TAPE)
MELISSA BELL, CNN PARIS CORRESPONDENT (on camera): A big day here in France after so many months of very tight COVID-19 related restrictions. Cafes are
once again open terraces preparing to serve food outdoors once again, museums, cinemas, theaters opening a sense of life returning to something
It's been since the end of October, that the restrictions have prevented us here in France from doing any of those things. And that, of course has had
a massive impact on the economy.
Europe wide what we've seen is recession that we're now officially entered into as a result of those two last quarters of contraction. The hope is now
that with these reopenings that should now improve.
You'll notice all around me here in (INAUDIBLE) actually how quiet it still is because although things are reopening what's really missing and what you
tend to have around these parts of Paris are tourists.
The good news is that what should happen from the ninth of June is that people from outside the European Union, Americans, Chinese Japanese
tourists, if they have certificates that show that they've been vaccinated, they should once again be able to travel here to enjoy at long lost with
the French, the sights, the sounds, and the flavors of Paris. Melissa Bell, CNN, Paris.
(END VIDEO TAPE)
QUEST: 30 percent of the French population has now had at least one vaccine dose. In Hong Kong, there's no shortage of COVID vaccine. The problem is
convincing people to take it. CNN's Kristie Lu Stout to explains why.
(BEGIN VIDEO TAPE)
KRISTIE LU STOUT, CNN CORRESPONDENT (voice-over): Brian Tam wants nothing to do with the vaccine. The worst public health disaster in the last 100
years may still be raging. His business hit hard by pandemic restrictions, but the restaurant owner just won't take the COVID-19 job.
BRIAN TAM, RESTAURANT OWNER (via translator): I've never even thought about taking it because I don't trust the government and his data.
STOUT: Hong Kong should be an easy vaccine success story. It's secured 22.5 million doses from Sinovac, Pfizer, BioNTech and AstraZeneca, more than
enough for a population of 7.5 million. In orderly rollout has been underway since late February. And it's free.
STOUT (on camera): But most people here are choosing not to get inoculated. As of mid-May, only 12 percent have been fully vaccinated, and experts say
at least 70 percent need to be inoculated to reach herd immunity.
STOUT (voice-over): Public health experts say one factor behind vaccine hesitancy is the low perceived risk of COVID-19 given the region's early
containment success. Another is fear. Reports of a handful of deaths after vaccinations have spooked many though experts have found no link between
the deaths and the vaccine.
CARRIE LAM, HONG KONG CHIEF EXECUTIVE: I do confess we could do much better in terms of vaccination. We have enough supply I said that we have
administered 2 million doses, but we have another 2 million doses in our storeroom.
STOUT: Unused COVID-19 vaccines are also piling up in Japan due to red tape, poor planning and vaccine hesitancy.
ELAINE TSUI, LECTURER, HONG KONG BAPTIST UNIVERSITY: This vaccine hesitancy is happening everywhere. It relating to how much that we trust the
information we receive.
STOUT: But in Hong Kong, there's another dynamic at play. Deep mistrust of the government during a time of tightening Chinese control
JOHNSON LI, CHEF (via translator): Basically, all my friends are pro democracy. They don't trust the government and will not take the vaccines.
STOUT: As infection skyrocket in India, vaccines are in high demand. Some countries in Africa feared they could become the next India is vaccine
supplies dwindle there, is unused doses accumulate in Hong Kong, the government is rolling out incentives like a Cannes (ph) to visit bars and
clubs until 2:00 a.m. for those who have taken the job, but Lee is unwavering.
STOUT (on camera): Do you know what people in India would give to have access to a free COVID vaccine?
LI: In India if you don't take the vaccine, you will die. But in Hong Kong, if you don't take it, you might not die. We are not at that point where we
have to gamble.
STOUT: Again and again, health experts say until every city is safe from COVID no city is safe. But that's not enough to sway these vaccine
holdouts. Christie Lu Stout, CNN, Hong Kong.
(END VIDEO TAPE)
QUEST: International Olympic Committee says the Tokyo games will be safe for athletes as well as the community hosting them. The IOC chief says he
expects 80 percent of the people staying in the Olympic village to have been vaccinated but some Japanese towns are ditching plans to host the
athletes regardless. Blake Essig reports from Tokyo.
(BEGIN VIDEO TAPE)
BLAKE ESSIG, CNN CORRESPONDENT (voice-over): Things were different when Belize's national band last visited Yokoshibahikari.
UNDENTIFIED FEMALE: It is unthinkable now. Nobody is wearing masks.
ESSIG: That was nearly two years ago. Back then he and (INAUDIBLE) Akiba threw a party at their resort after inviting the band. To celebrate the
town's decision to host athletes from the small Caribbean nation in the build up to the Olympic Games.
UNIDENTIFIED FEMALE: This is a small town and we have very little chance to communicate with people from abroad so we were looking forward to it.
ESSIG: But COVID-19 had other plants with cases on the rise across Japan and seemingly no end in sight to the pandemic, Yokoshibahikari's mayor was
forced to make a choice, the health of his people or the Olympics.
HARUHIKO SATO, MAYOR OF YOKOSHIBAHIKARI, JAPAN (via translator): My biggest mission is to protect the town people's life and health. So I made this
decision without any hesitation.
ESSIG: Part of the reason to pull out his host, his town has no PCR testing, which is a requirement in the Olympic playbook outlining COVID-19
countermeasures. In addition, he says medical resources are limited and the public hospitals aren't capable of treating patients requiring treatment
SATO: We hear about the medical collapse in Osaka, and I'm afraid the same thing may take place here.
ESSIG: Well disappointed. Dr. Akita Tagawa (ph) says he understands the decision was made to avoid potential risk.
DR. AKITA TAGAWA (ph), YOKOSHIBAHIKARI DOCTOR: This hospital is the only inpatient facility in town. So if this hospital was tied up with COVID
patients, we cannot operate regular medical care at all.
ESSIG: So far at least 45 out of 528 host towns and Olympic teams have pulled out from participating in the program because of the pandemic, with
some officials saying more are expected to follow.
NAOMI OSAKA, PRO TENNIS PLAYER: It's putting people at risk.
ESSIG: Superstar athletes have started to cast doubt. Recently medical professionals, business leaders and the majority of the Japanese population
have called for the games to be canceled. But will it make a difference? Olympic scholar John Horne says it already has.
JOHN HORNE, PROFESSOR, WASEDA UNIVERSITY: I think the criticisms from athletes and from elsewhere do matter because they leave a mark on this
this Olympics but it's going to be impossible to remove.
ESSIG: Reputational damage that Horne says could be amplified if the games are held.
HORNE: We don't want it to happen, but say there is a spike in COVID cases as a result of the games. Well, it will be devastating.
ESSIG: An Olympic story that for now is dominated by the dark cloud of COVID-19. Blake Essig, CNN, Tokyo.
QUEST: And we will take a profitable moment which will come to you after the break.
QUEST: Tonight's profitable moment, there was real pleasure in being able to report the reopening in New York and having Fred Dixon on the program
and the reopening in Paris and things starting to move again. Coupled with JetBlue, which is going to start flying to London. And I promise you prices
will come down. JetBlue is a fine first class airline, and it will drive demand and drive prices on the busiest routes in the world.
But then we also heard tonight from Kenya, where they're going to run out of vaccines. And it all became horribly clear that they are we are rapidly
moving into a two speed world, those who are vaccinated where there's reopening, where tourism gets underway again, and a developing world, which
is still mired in COVID misery and likely to be so for some years to come.
I don't say that as being poor me and poor them and gosh, it's dreadful. I just say it because it's something we need to be aware of as we move
forward. We can only be safe when everybody is safe in a global economy.
If there's nothing else, nothing else that COVID taught us is that what happens in one side of the world eventually comes home to roost in another
and that's why we celebrate the reopenings and at the same time, we look forward to helping others at the same time.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it is profitable. Closing
bell rang, the Dow is down. Jake is next.