Return to Transcripts main page

Quest Means Business

U.S. President Biden Arrives In Europe For Summit Talks; Dimon Urges Biden To Adopt A Marshal Plan For Energy, Moscow Stock Exchange To Partially Reopen Tomorrow; U.S. Declares Russia Committed War Crimes In Ukraine; Inside A Rare Meeting With A Russian General; Nickel Prices On The Rise; Nestle Faces Criticism, Pulls More Brands from Russia. Aired 4-5p ET

Aired March 23, 2022 - 16:00   ET



PAULA NEWTON, CNN INTERNATIONAL HOST: It is another day of losses for the Dow, rising oil prices are hitting sentiment again on Wall Street. Those

are the markets and these are the main events.

Moments from now, President Joe Biden will touch down in Brussels for high stakes talks with the NATO allies.

A Marshall Plan for energy. JPMorgan CEO says the U.S. needs to think big to solve the western energy crisis.

And traders are bracing themselves as the Moscow Stock Exchange prepares to reopen for the first time in four weeks.

Live from CNN Center. It's Wednesday, March 23rd. I'm Paula Newton, in for Richard Quest. And this is of course, QUEST MEANS BUSINESS.

Tonight in just moments, the U.S. President will arrive in Europe to speak with allies about a Russian war in Ukraine that unfortunately shows no sign

of ending.

Joe Biden is set to attend Summits with the leaders of NATO, the European Union, and the G7 nations. At those meetings, he is expected to announce

new sanctions against Russian political figures and oligarchs. The leaders will also discuss how to reduce Europe's dependence on that crucial Russian

energy, and of course, how to support Ukraine in its moment of need.

Now the NATO Summit comes first before it begins, Mr. Biden is set to check in with NATO's Secretary General Jens Stoltenberg. Now, the Alliance must

decide how best to deploy NATO forces on its eastern flank, and how to provide Ukraine with that all-important military support.

Now an announcement from the U.S. State Department adds new urgency to these Biden talks. The Biden administration today formally accused Russian

forces of committing war crimes in Ukraine.

Nic Robertson and Kaitlan Collins join us both now from Brussels.

Nic, to you first, it is fair to say NATO will be transformed after this week of diplomacy. What are the nuts and bolts of how this alliance intends

to try and shore up its defenses and of course, meet the challenge that Russia now poses.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: I think it very simple form. The nuts and bolts are numbers -- numbers of troops, for example, the

numbers have been ramped up in most of the eastern flank of NATO. Estonia 2,000 NATO troops, Latvia 1,700 right now, Lithuania 4,000, Poland ten and

a half thousand NATO troops.

Now this is a significant increase on what NATO current policy and planning had determined years ago. What they will be talking about this Thursday,

tomorrow, they will be talking about how many troops to keep there should these ramped up numbers remain? And it seems that the answer to that

question is likely yes that these numbers will remain, and therefore you have to talk about the equipment deployments that are in these NATO nation,

eastern flank countries.

The deployments there have been on a rotational basis with arms dumps, if you will, equipment supplies in those nations. How will that be managed

going forward? Will these be less rotational and more permanent, and it will all be to send that clear message of deterrence to Russia.

So that's, if you will the top of the list for NATO. There will be other details, of course to come in other discussions, as you say specifically

about how these NATO allies can support Ukraine to keep up its fight against Russia, what weapon systems can be supplied, how they can be

supplied, what numbers and how quickly?

This is less now about the rush to get troops in place and less about the rush to get those weapon systems in place. But how you maintain that going

forward and what your long term posture is.

So we are entering a longer term phase of the planning with that urgency that the equipment and defense supplies need to be there now to be used now

to hold Russia's forces back right now.

NEWTON: Right. Yes, Kaitlan, you have been really reporting on a lot of those nuts and bolts and what the Biden administration has been trying to

get together. There is unprecedented unity that Biden has been able to manage with these E.U. allies, but the issue still remains, right? Russia

hasn't really changed its actions. What more does the President want to do? What more is he proposing?

KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, and that's a big concern for the White House. So, President Biden has said previously,

you know, you can impose the sanctions. It doesn't necessarily mean it's going to stop what Putin is doing. So, they are certainly trying to squeeze

him while he is doing it.

And so you are going to see a certain number of deliverables as they call them when they come out of this summit. Those are the concrete actions that

you can see world leaders take away and say this is what we were doing in response to what Putin is doing.

And of course, we know that is going to come in the form of the sanctions on hundreds of Russian lawmakers in the lower house of Parliament something

that President Zelenskyy has called for. It is also going to come and potentially the opportunity or the announcement from President Biden of

additional U.S. forces in NATO countries.


That is something you've seen ramped up, certainly quite a bit since Russia's invasion began now a month ago, and it is something that we could

hear President Biden and other NATO Allies say that they're trying to bolster these forces even more.

We know the NATO chief said that that is expected, but the details of what that looks like how many forces are going where still remains to be seen,

though, it does come as a cause of concern, because the White House has said, you've seen these NATO allies on the eastern flank, who are on this

border with Ukraine or with Russia, very concerned by Russian aggression. And so that is why they are responding in this way.

So we will see those takeaways from this. Of course, there are other potential happenings here, given the conversations that are going to happen

behind the scenes between the President and his team, and so that all remains to be seen if there is anything additional on top of that, but the

White House plans to announce those sanctions, sanctions on the oligarchs, potential troop movements, and also they say they are going to ramp up

enforcement measures to make sure countries aren't helping Russia avoid the sanctions that they put in place.

NEWTON: Okay, chief White House correspondent Kaitlan Collins, thank you. Again to you, Nic, we've said it before, right, the Alliance is in fact a

defensive organization. I want to hear from you a little bit more about those red lines. I've been having trouble getting any detail from anyone at

NATO or the E.U. to tell me: Look, what does that look like? What does the response to Russia crossing that red line look like?

And you'd have to think that they're going to be doing this over the next few days.

ROBERTSON: Well, Poland has called for NATO peacekeepers, both Dmitry Peskov, President Putin's spokesman today and Sergey Lavrov the Foreign

Minister today both said that that will be reckless, it would be dangerous, essentially a red rag to Russia. It would be putting NATO forces against

Russian Armed Forces is how Sergey Lavrov framed it.

So NATO peacekeepers is something that needs further discussion for European partners that understand what it is that Poland is talking about.

So Russia is saying that would be a red line for them.

The use of NATO member states supplying fighter jets to Ukraine is something that has been floated by some nations, Poland included, that

seems to be off the table. On the table potentially and off the table, because that would be potentially seen by Russia, as a red line of NATO

nations directly engaging in the fight, however, the movement of those aircraft will manage.

But potentially what is, if you will, within NATO's ability to do without crossing a red line is potentially supplying more defensive weapon systems,

certainly the stinger missiles, certainly the javelin anti-tank missiles, the stingers, of course, the man shoulder-launched surface-to-air missiles,

but more sophisticated surface-to-air missiles like the S-300. Certainly not a manned movable piece of equipment, a large piece, a very technical

equipment that can shoot down aircraft at a long range.

Where that should come from within the sort of NATO countries, how it should be supplied, who should backfill with replacements, how it should be

brought into the country, because remembering Russia has said that it will target supplies, military supplies coming into Ukraine. So how do you

manage the transfer a movement of those supplies across the border into Ukraine without NATO members being perhaps targeted by Russia, and then an

escalation because that would draw NATO much closer into a direct confrontation with Russia.

So some of the some detail here is technical, but what of course, is completely ruled out at the moment is providing a no-fly zone, because that

would cross a red line, no-fly zone for Ukraine, and putting NATO troops directly into Ukraine to support their forces. That also is a red line for

NATO because again, that would put NATO in direct confrontation with Russia and Russia has indicated that's a step too far.

But this conflict, it seems very sadly, and unfortunately, is still at an early stage. So there is a long way to go and a whole range of a whole

range of possibilities still on the table. But the red line, as you say really it is avoiding NATO forces facing off directly by mistake or

directly intentionally with Russian forces because that would precipitate potentially a much bigger war, World War Three.

NEWTON: Nic, as you've been speaking, we see Air Force One. President Biden has now landed in Brussels ahead of those meetings. As we've

discussed before, a lot at stake here and they have to move in lockstep as allies. That is key.

And again, NATO's redline has not changed, right? They do not want to take on Russia during this conflict.

Nic Robertson for us in Brussels. We leave you there as we see Joe Biden arriving for the Summits ahead. Appreciate it.


Now, NATO officials say the Alliance plans to send more troops to its eastern flank. You just heard Nic talk about that.

Secretary General Jens Stoltenberg says NATO must make long-term changes again to its deterrence and defense posture. At a news conference in

Brussels, he said NATO leaders this week will discuss those tentative first steps.


JENS STOLTENBERG, NATO GENERAL SECRETARY: I expect leaders will agree to strengthen NATO's posture in all domains with major increases or forces in

the eastern part of the Alliance.

The first step is the deployment of four new NATO battle groups in Bulgaria, Hungary, Romania, and Slovakia.


NEWTON: For more analysis on this, we want to bring in former Spanish Foreign Minister, Arancha Gonzalez Laya. She is now the Dean of the Paris

School of International Affairs at Saints-Peres.

Thank you so much for joining us, and we are going to get to so much that they will be discussing around that table in the days to come.

But before that, I do want to talk to you about the passing of Madeleine Albright. She, of course, was the first woman U.S. Secretary of State and

quite a champion of a lot of the issues that we were just discussing. Given your commitment to gender equity and diplomacy specifically, I mean, what

are your reactions?

ARANCHA GONZALEZ LAYA, FORMER SPANISH FOREIGN MINISTER: Well, it a very sad day, Paula. It's a very sad day to hear the passing of Madeleine. The

Transatlantic Alliance has lost a staunch supporter, someone who believed and practiced democracy and freedom.

I personally have lost a friend and a mentor. I still remember a year ago when she joined us in the launch of Spain's first feminist foreign policy

with her usual energy and her commitment.

It's a sad day, but the best thing we can do, Paula, all of us is follow on her steps, follow her on the defense of democracy, freedom and women's


NEWTON: Yes, and it brings us unfortunately to the conflict at hand as we watched Joe Biden arrive there in Brussels. To put it simply, NATO and its

allies are trying to stop this war. That has not happened yet. There's no evidence that we're even close.

Now, I have argued that sanctions are the long game and not necessarily going to help the civilians being bombarded at this very hour in Ukraine.

What do you propose that NATO allies could do to really move the needle here?

LAYA: Well, unfortunately, this is a very complicated situation, and I think the only thing we can do is continue on the triple track, with the

start date as the war started. First, obviously, is limit the ability of Vladimir Putin to continue financing the war. This is what the sanctions

are about, limiting his ability to get the financial means to spend on this very expensive war.

Number two, we have to keep helping Ukraine with military equipment, and more importantly, with Intelligence. This is a lot of what NATO allies and

friends around the world are doing to help Ukraine with this war.

And number three, let's not forget is welcome all these Ukrainian refugees that are coming to Europe, over four million now to help them resettle in

Europe while this war lasts.

NEWTON: Yes, and that's true, it is not to be forgotten. Really, it is unprecedented what Europe is doing right now, certainly in the last few

decades, and much has been asked of them, and now, they will ask much of Joe Biden to try and give them aid in order to help in this effort.

I want to ask you, though, in terms of the NATO alliance itself, some might think it looks impotent at this point because it is not doing more. You

argue that NATO can't do more, because the stakes are too high in terms of entering the conflict directly.

LAYA: Well, I don't think NATO can enter this conflict on a military front. This would be two nuclear powers fighting against each other and

thus, we know what it would lead to. But it doesn't mean that NATO cannot help. NATO is already helping. NATO has been training the military in

Ukraine to be able to fight back.

NATO and its allies are providing the necessary equipment for Ukraine to fight back. And again, let's not underestimate the power of intelligence

that all our allies are sharing with Ukraine in order to identify the best means to take Russia by surprise and the best means to respond to Russia's


This is what we can do. We have to do more of this in a committed manner because the Ukrainian fight today is the fight of all of us who believe in

democracy and freedom.


NEWTON: Yes, and going back to how we started this conversation that is certainly the legacy that Madeleine Albright would want for this alliance.

Madam Arancha Gonzalez, thank you so much for being with us. Appreciate it.

Now, Jamie Dimon has an idea for President Biden through all this. The bank executive says the U.S. and Europe need to tackle energy security with a

new Marshall Plan. We will take a look at what that could mean, next.



NEWTON: And we are back.

You're looking at live pictures from Brussels where U.S. President Joe Biden has just arrived, of course for some very important Summits. To start

with, that NATO Summit, where he will push for more aggressive sanctions against Russia. But also crucially today, the U.S. determining that the

Russian military in its estimation from its investigation had committed war crimes.

Again, not just NATO, but the E.U. and the G7 upping the ante here and trying to put more pressure on Russia to end this conflict. Joe Biden, you

will see him there 9:18 PM local time in Brussels. He is gearing up for several days of high stakes meeting. We will continue to bring you the

latest from Brussels as that unfolds.

Now, meantime, here, oil prices are up today, as the U.S. and Europe look for new ways to sanction Russia. Now, a barrel of Brent crude is up five

percent and more than 10 percent in the past week.

German Chancellor Olaf Scholz told lawmakers in Berlin that cutting off Russian energy too quickly, could of course plunge Europe into a full blown



OLAF SCHOLZ, GERMAN CHANCELLOR (through translator): We will end this dependency as quickly as we possibly can. But to do that, from one day to

the next would mean plunging our country and the whole of Europe into a recession. Hundreds of thousands of jobs would be at risk, entire branches

of industry would be on the brink.


NEWTON: So apparently, Jamie Dimon has a bit of a solution to that. He says, the U.S. and Europe need to think big and spend big on energy


The head of JPMorgan Chase apparently urged President Biden to think of it as a new Marshall Plan during -- that was during a White House meeting with

business leaders.

Now, the original Marshall Plan was adopted by U.S. President Truman to rebuild Europe after World War Two.


UNIDENTIFIED MALE: The Marshall Plan, a program that is checking the red advance on many fronts.



NEWTON: The U.S. invested in fact more than $12 billion. That is equivalent to $141 billion today in Western Europe. And that, in fact,

changed the course of history.

You're going to be seeing here, those are live pictures, again, of Joe Biden arriving in Brussels for what will be several days of meetings, not

just with NATO allies, but with the E.U., and the G7 leaders, again, looking for more aggressive sanctions against Russia, but also to

brainstorm not just about how to put more pressure on Russia, but as well, on what to do to try and take the European dependence on that Russian

energy and to make sure that Europe does not remain vulnerable to the actions of Russia. We will continue to keep an eye on this.

And in the meantime, bringing in our Matt Egan, who has been looking at this idea of a Marshall Plan that Jamie Dimon first suggested.

Matt, good to see you. You know, what he's talking about here is for the U.S. government to support with cash, the energy industry and expand

output. I mean, can you lay out what that modern day Marshall Plan might look like?

MATT EGAN, CNN REPORTER: Well, Paula. This feels like a consequential moment in history and Jamie Dimon, one of the most influential CEOs in the

world, is calling on government to really rise to the occasion, and I think the goal here would be to make the United States and Europe less dependent

on fossil fuels from countries that are not always all that friendly to Western democracies, in this case, namely, Russia.

So what would this Marshall Plan actually look like? Well, a source familiar with the matter sort of laid out Dimon's thinking around four key

areas that that he thinks the government could do more on? Firstly, building out natural gas in the United States, doing more to produce

natural gas in an environmentally friendly way, building out liquefied natural gas facilities in Europe so they can receive some of the natural

gas from the United States, also investing in new technologies like hydrogen and carbon capture, and streamlining the permitting process for

renewable energy like wind and solar.

And what is interesting is we actually heard the President's top energy official today in Europe echo this Marshall Plan branding for energy.

Secretary Jennifer Granholm the Energy Secretary, she said at the I.E.A. today in Paris, she said that, you know, the West needs to ask what our

version of the Marshall Plan for energy in 2022 and beyond will be and Granholm -- and this is important -- she emphasized that this plan must be

both clean and secure.

NEWTON: But how do you strike the balance between, you know being clean, but also in her words, we want that industry to ramp up production where

and wherever they can right now. That is again exploiting fossil fuels. I mean, how do they square that?

EGAN: Paula, it is striking to hear, you know, just over a year into the Biden presidency, Biden officials just coming out and saying, you know,

they want to drill more fossil fuels. And I think it speaks to this underlying tension between the climate ambitions here and the economic


And I think that economic reality has forced the shift in tone from the administration. You know, instead of only focusing on raising environmental

standards, and introducing new rules and phasing out fossil fuels, they are actually talking about trying to encourage more production here in the

United States.

And that is not going to sit very well with environmentalists nor progressives. You know, some of whom are calling for the banning of

fracking or banning exports of natural gas and oil. But we're hearing, you know, a different message from the White House. And I think that's because

of the fact that energy prices have just gone up so much. It's really causing a lot of economic anxiety in the United States and around the


And now you have the situation where Europe is dependent, to some extent, on Russia, for energy. And I think that this whole situation has sort of

made people more aware of these energy security issues and how important it is to try to get at that, even though at times that is going to run counter

to those climate goals.

You know, Paula, no one said this energy transition would be easy.

NEWTON: No, and unfortunately, it's going to have a completely different timeline if they are going to be able to deal with this conflict in the

middle of Europe right now.

Matt Egan, thanks for that information, as we saw, Joe Biden there at the airport getting ready for those Summits in Brussels. Appreciate it.


Now, the economic damage caused by Western sanctions will be on full display when the Moscow stock market reopens. Yes, it's reopening after

four weeks.

Here is what trading looked like before it was suspended on February 28nd. Russia's Central Bank says the exchange will partially reopen -- that is

important -- Thursday morning in Moscow. Trading will resume in 33 stocks only and that includes major names like Gazprom, Lukoil, and VTB Bank.

Timothy Ash is the senior strategist for emerging markets at BlueBay Asset Management, and he joins me now from London.

Good to see you to weigh in on this. You argue that no matter how dramatic the reopening will be, it's not a free market right now. It has controls

that are firmly in place.

So what are you expecting from that reopening? And what in general will be the investment or environment around that market in the weeks and months to


TIMOTHY ASH, SENIOR STRATEGIST FOR EMERGING MARKETS, BLUEBAY ASSET MANAGEMENT: I think, the short term volatility around this is not really

that important. You know, short selling is not allowed. It'll be heavily managed, if anything.

The key story here is that long term, it is very hard to be constructive Russian assets in general, foreigners just don't want to hold Russian

assets, because the sanctions risk, it is like toxic waste. Now, they're trying to get out, if anything. And I think because the longer term outlook

for the Russian economy is now so dire, even with a peace deal in Ukraine, even if it is reached this week. Sanctions will be very slow to moderate.

Western business, I think has decided just to get out of Russia. I mean, the geopolitical risks are too high. Self-sanctioning has been pretty

remarkable, you know, in recent days, big companies -- Renault, SocGen, big banks -- are all deciding, you know, it's too high risk to do business in

Russia, they're all getting out.

So long term, borrowing costs will be higher, investments lower, growth weaker, and living standards will be declining pretty rapidly because of

sanctions. And because ultimately, of Putin's intervention in Ukraine.

NEWTON: Yes. And you just laid out there the kind of effects that those sanctions are having on Russia, and yet can Putin manage to evade some of

those sanctions to lessen the blow? I know, you've mentioned, you know, Russia forcing payment, for instance, in rubles for its energy, how

significant is that?

ASH: Well, they're trying to force international business to trade with Russia. At the moment, even activities that are non-sanctioned, not

actually sanctioned, Western international businesses just doesn't want to do anything to do with Russia.

Energy is not sanctioned, but many international companies just don't want to have the risk of trading with Russia. So this push to basically force

companies to transact in rubles for energy is trying to make companies do the deal, do the transaction in rubles and make them transact with Russian

markets. Even then, I don't think people will really want to. The sanctions risk are too high.

NEWTON: You know, you talk about an energy war if a conventional one fails, what does that look like?

ASH: Well, look, Putin has made it pretty clear. He said Russia is at war with the West. This is a battle for -- a system battle between Western

liberal market democracy and kleptocracy and autocracy. Putin has made it that way by the invasion of Ukraine.

I think if we think our systems are worth defending, there has to be a cost of sanctions. We have to be willing to bear some of that cost, and the

price will be higher energy prices.

And you mentioned you had the piece earlier with Jamie Dimon from JPMorgan, talking about we need to invest in energy diversification. I think that is

absolutely correct.

This is about our security, the security of Western liberal market democracy. Putin is challenging that. And, you know, energy should not be

off limits for sanctions.

NEWTON: Yes. And I guess there should be a price to be paid at times in order to uphold a lot of those western values whether they have to do with

the economy or just humanity, quite frankly.

Before I let you go, what is your opinion on a Russian default? It has been, you know, talked about certainly, perhaps by mid-April, but what do

you think?

ASH: Well, the Russians are playing a game of chicken. They had money that was beyond the limit of O.F.A.C., the U.S. Treasuries sanction of the

Central Bank Reserves, they still probably have got a couple of hundred billion they could pay. I think they were again, trying to threaten

default, and force the issue that portfolio managers would lose money to get them to push the U.S. Treasury to moderate the sanctions regime.

In the end, they figured out that if they pushed too far, actually, they went into default, that's terrible for Russia long term. You know, a

default will mean Russia will be closed out of the international capital markets for a decade until Putin goes, so they've kind of bottled it in the

end. It could still happen. May 25th is the date when the general license provided by Treasury to allow that service ends, but the U.S. Treasury may

just decide that this is leverage they're going to force through.

And ultimately, they are going to push Russia into default to impose a big cost on Putin for the invasion in Ukraine. It could still happen.

NEWTON: It could still happen, but perhaps weeks away. Timothy Ash, thanks so much. Really appreciate it.

Now, still ahead for us, the Ukrainian military pushes back against Russian invaders. We look at the state in the battlefield.




ASH: And ultimately they're going to push Russia to default, to impose a big custom (INAUDIBLE) for the invasion in Ukraine. It could still happen.

NEWTON: Could still happen but perhaps weeks away, Timothy Ash, thank you so much, we appreciate it.

Still ahead, the Ukrainian military pushes back against Russian invaders. We look at the state of the battlefield.




NEWTON: Hello, I'm Paula Newman, there's more QUEST MEANS BUSINESS in a moment, when we'll speak to CEO of London Metal Exchange about the wild

swings on commodity markets driven by, of course, the conflict in Ukraine.

And Nestle pulls more product from Russian shelves after pressure from Ukrainian President Volodymyr Zelenskyy.

Before that, though, the headlines this hour.


NEWTON (voice-over): Madeline Albright, the first female U.S. secretary of state, has died. She was 84 years old, Albright helped push the eastern

expansion of NATO under President Bill Clinton. She was known as advocate for human rights and democracy around the globe.

The U.S. says it's easing tariffs on British aluminum and steel. In return, the U.K. will drop retaliatory tariffs on U.S. bourbon, agricultural and

other goods, to take effect June 1 and bolster transatlantic trade.

Prince William and Kate, the Duchess of Cambridge, facing protest on their tour of the Caribbean. Demonstrators in Jamaica called for apologies and

reparations for the monarchy's historical role in the slave trade. The royals on a tour celebrating Queen Elizabeth's 70 years on the throne.


NEWTON: The Biden administration is formally accusing Russian forces of committing war crimes after evidence is mounting on an hourly base. This is

what's happening on the ground in Ukraine.


Kharkiv, the nation's second largest city, is a picture of devastation. Its mayor says more than a thousand residential buildings have been destroyed.

To the south, of course, we have Mariupol, which is also in ruins. New aerial footage you see there shows the devastated landscape, still

smoldering and battered.

In the capital, Kyiv's mayor says Ukrainians are ready to fight for every building and every street.

Here's evidence of fierce fighting earlier, as Ukrainian forces tried to regain control of some territory near Kyiv.

Our senior national correspondent, senior international correspondent, Sam Kiley joins us now from the Ukrainian capital.

Sam, good to see you, can you give us a little more clarity here on what the state of play is?

Ukraine continues to say they are mounting successful counterattacks.

What evidence have you seen of that?

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Paula, I think the main evidence is the police in Irpin, a town in the northwest, a sort

of satellite feeder town for Kyiv, on the northwestern edge of the city, that had been the scene of some of the more tragic images emerging, of

refugees fleeing across a broken bridge, perilous flight out of there about two or three weeks ago, has been recaptured, according to the Ukrainians.

Eighty percent of that town they are saying is now back in their hands. It has been a very bitter fight. We know that because we can hear and see some

of the explosions that are coming from that location, which is at least 10 miles from where I'm standing.

There was very heavy shelling also further north and around in arc, essentially around the north and west of the country. These images, though,

are coming from the eastern bank. This is a combat operation, conducted by some Muslim unit in Ukrainian forces against Russians there.

And that is an area that, where Ukrainians are concerned that the Russians may be regrouping in, as part of an attempt to try to force, once again,

their way into the east of the city.

But at the moment, the Ukrainians are saying they're on the front foot, they've been able to push the Russians back from Irpin, back from other

locations, and they're hoping to set up three lines of defense.

And this all coming at a time, of course, when the NATO sources are telling CNN that the numbers of dead Russians number somewhere between 7,000 and

15,000 -- Paula.

NEWTON: Yes, quite a wide range there and yet they say evidence of even, if you were at 7,000, right, Sam, that would be quite a loss in a little

under a month.

You know, we're talking about the capital, Kyiv, we're seeing the fighting there on the outskirts. It does remain in Ukrainian hands. We talk about

U.K. intelligence assessment that what they expect is that Russia is just regrouping here for another large-scale offensive.

Are Western allies having success in arming Ukraine quickly, right?

They need that lethal aid to come in very quickly at this point.

KILEY: They do. There has been some reporting. But I think CNN has effectively found that there's been some reporting by other media, that

there was a shortage of weapons. That doesn't, certainly in view of CNN sources, to be the case. Very large amounts of weapons already being

shipped from the United States, United Kingdom but also other nations.

United Kingdom due to promise yet more lethal aid and the real need for the Ukrainians is in the tank-killing equipment and surface to air missiles.

But they are also dangerously, in the end, going to be short of manpower if the Belarusians join the fight. The forces that attacked this capital came

in from Belarus. But they were all Russians. If the Belarusians join the fight, that could tip the balance quite significantly against the

Ukrainians, because we know the Russians are running short on personnel.

We know that because they're trying to recruit Syrian mercenaries. We know that because they've lost at least five generals in this fight. We know

that because their logistics chain has been badly interrupted and they've been unable to capture cities, like Kharkiv and Mariupol -- Paula.

NEWTON: Yes, Sam, thank you for that analysis as we continue to see what transpires there in the capital, Kyiv. Appreciate it.

Now as Sam was just talking about, the fact of the kinds of casualties that Russian forces have taken, a U.S. readout obtained exclusively by CNN is

providing a rare look inside Russia's military, as it, of course, struggles against Ukraine's forces since launching the invasion last month.

In the document, U.S. officials describe what they say is a revealing moment from a Russian general, during a face-to-face meeting between

American and Russian military officials last week. As our Barbara Starr reports, Defense officials say this could hint at growing morale problems

inside Putin's armed forces.



BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): With Russia's war in Ukraine stalled and the U.S. saying morale is a problem for Russian

forces, CNN has learned of a rare meeting in Moscow between U.S. and Russian military officials, which, according to a U.S. readout of the

meeting, contained a, quote, "revealing moment" from Russian major general Yevgeny Ilyin, a general with extensive experience dealing with Americans.

As the meeting ended, the readout says an attache on the U.S. side casually asked about Ilyin's family's roots in Ukraine. According to the readout,

the U.S. official said the general's stoic demeanor suddenly became flushed and agitated.

Ilyin replied he was born in Ukraine and went to school in Donetsk and then said, according to the readout, "The situation in Ukraine is tragic and I

am very depressed over it," before walking out without shaking hands.

The attache wrote in the readout, "The fire in his eyes and flustered demeanor left a chill down the spine."

Meetings with Russian officials are typically scripted but the two attaches said they had never witnessed such an outburst by Russian counterparts at

an official meeting. The readout by the officials concludes, "At the very least, it is clear that morale problems among Russian forces are not

limited to front line troops."

The readout describes only the impressions of the U.S. officials and does not definitively explain Ilyin's behavior. Such readouts are typically too

sensitive to be made public.


COL. CEDRIC LEIGHTON (RET.), CNN MILITARY ANALYST: Readouts of this type are important because they give us an insight, a potential insight into

what the Russians are really thinking. But it also shows that there is some kind of a morale problem within the Russian hierarchy. And it extends,

possibly, all the way up to the top.


STARR (voice-over): The Russian ministry of defense did not respond to a CNN request for comment on the meeting or the readout. But the Kremlin has

denied reports of low morale among its forces in Ukraine.


DMITRY PESKOV, PUTIN SPOKESPERSON: He would probably have to doubt this information. You have to doubt it and you have to think twice whether it is

true or not.


STARR (voice-over): As Russia faces stiff resistance from Ukrainian forces, if the Americans are correct and morale is an issue, it's a

challenge the Russians can ill afford.


ADM. JOHN KIRBY (RET.), PENTAGON PRESS SECRETARY: We've seen increasing indications that morale and unit cohesion is a problem. And yes, that

absolutely translates into potential military effectiveness issues.



NEWTON: Thanks to Barbara Starr for that report.

Now commodities are surging again in response to the crisis in Ukraine. London Metal Exchange's chief executive joins us next to discuss nickel's

wild swings and whether the chaos is over yet.





NEWTON: So nickel prices are rising again after trading at its lower limits in the past days. Nickel surged 15 percent on the London Metal

Exchange and hit its upper limit. Nickel made a chaotic return to the LME last week after the venue suspended trading, yes, suspended trading for six


A controversial move to a broken market, which saw the price of nickel go vertical and trade at over $100,000 a ton.

Matthew Chamberlain, chief executive of the London Metal Exchange and joins us to discuss these unprecedented moves.

You know, chaos doesn't begin to cover this, it's true, it's not exaggeration, the nickel market broke, literally broke. It was up more than

2.5 times in just over a day, billions in losses, many still picking up the pieces here.

What did happen?

And what is still the fallout from this?

And I will say, I am letting you off easy by just getting you to explain it and get it off your back right now.


So I think we have two elements here. The first is a commodities market across metals and other commodities, which is tight, given a scarcity of

commodities and of course, given the horrific events in Ukraine and the natural implications of that for Russian commodities and commodity chains.

But then, with nickel, there was another element, which is that a large client of the market had built up a short position in the over-the-counter

market, not on the exchange, I will emphasize, but in the over-the-counter market.

And it became obvious as that price, you know, as you say, hit $100,000, that there was a very real problem, which was not related to market

fundamentals. It was related to this technical over-the-counter market. And that's where we had to intervene.

NEWTON: It is still unnerving, as you know, you had to push pause, close the market, the thing is you canceled trade. That was unprecedented and

traders are still angry at you for this.

What do you say to them?

And I will add other people thought that look, given the systemic risk that this was a good defensive move.

But what do you say?

CHAMBERLAIN: I absolutely understand the concern and the anger of many people given the actions that we had to take. I think the scale of our

action, the importance of that action demonstrates just how important we felt this was.

And had we not done that, had we not closed the market and canceled trades, we felt there would have been very systemic problems in terms of reducing a

price disconnected from physical reality, which would have been a huge problem for the physical market in terms of requiring aid at levels that

wouldn't relate to real prices and probably causing some significant systemic problems.

So I understand the anger and all I would say is I think the scale of the action we took demonstrates the scale of the problem that we had to deal


NEWTON: And I understand that and makes me even more worried, as we discuss systemic risks. Getting U.S. intelligence for weeks that this

invasion could happen was likely to happen, you and I both know the importance of Russia to the commodities market.

What do you do now to make sure you are in more of a defensive position?

Remembering, this was not a natural disaster; this was telegraphed.

CHAMBERLAIN: Well, as I say, I think it is important to separate the two elements. So the views and the understandable concerns around taking

Russian commodities, you know, given the situation in Ukraine, is one element.

And that's impacted all of our methods. That's impacted aluminum, copper, impacted nickel. But that effect, has been manageable within the context of

the market.


CHAMBERLAIN: We haven't seen the aluminum market, for example, blow out in the same way the nickel market did. So obviously the market has reacted to

events in Ukraine and the expectations, perhaps, of Russian metal being less available.

But that, I think, has happened in an orderly manner. It's important to note that the nickel situation is totally different. The nickel situation

is a technical situation, driven by a particular client in the OTC market, who got themselves into a position that threatened the systemic stability

of the market.

So I think it's important to separate the two.

NEWTON: OK, I have to go.

But do you think you'd have to do this again?

Because that doesn't give me a lot of confidence this won't happen again. You have to have transparency, right, a look-see into the system. Sorry,

not a lot of time but I'm give you an opportunity here.

CHAMBERLAIN: Absolutely, so the important thing is we have put in a daily price limit, which the LME has not had before. Those price limits are now

in place, they're going to stay in place.

And that protects us and we will also go and look more at the OTC market, where we have been rebuffed in the past, because we have to know what is

opening in the OTC market to protect our exchange.

NEWTON: Fair enough, Matthew Chamberlain, I appreciate you getting that through with us.

Pressure is mounting for companies to halt business in Russia. Nestle is the latest bit name to cave but the CEO says it will continue to provide,

quote, "essential products." That, after the break.




NEWTON: Nestle is pulling more products from Russia in response to mounting pressure. The world's largest food company is facing criticism

over its ties to the country, including from Ukrainian president, Volodymyr Zelenskyy.


VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): Good food, good life --

ZELENSKYY (through translator): This is a slogan of the Nestle company, your company that still refuses to leave Russia, even now, now that it is

threatening other European countries, too.


NEWTON: OK, a bit of response here, Nestle said it is halting the sale of Nesquik and Kit-Kat among other brands. However it will continue providing

items it considers essential, like baby food and medical nutrition items.

Paul La Monica is here to go through it.

There has been a lot of pressure on Nestle to do it.

But how significant is this?

We heard other companies announce pullouts but are actually still operating in Russia through local agreements.


PAUL LA MONICA, CNNMONEY DIGITAL CORRESPONDENT: Yes, that's a great question, Paula. I think what you have in the case of Nestle, this is not a

restaurant company or a retailer doing business with local franchisees.

So it is presumably easier to pull products from the shelves. They are doing that now with the exception of baby food and other medical products.

But you look at companies like Burger King, owned by Restaurant Brands, and Papa Johns, they want to get out of Russia or they say they want to get out

but they have these franchisees continuing to operate stores there.

And despite pressure and the fact they're cutting off some resources, those companies, those franchisees still have the right and the ability to

operate those branded restaurants in Russia. And that's why they're being criticized.

NEWTON: Yes, and, Paul, given the pact that we do have companies still operating there, like Papa Johns, Koch Brothers staying there, how much do

you think the pressure can stay on them in the coming weeks?

LA MONICA: I think, given that we are now looking at almost a month since the invasion of Ukraine began, I find it difficult to imagine that, if a

company hasn't already bowed to the pressure and pulled out, that they're going to suddenly find religion, so to speak, you know, and make a change

of heart.

But obviously, you know, the West is mounting a lot of economic sanctions against Russia. And that will continue. So eventually it may come down to

the fact the Russian consumer is hurt so much it doesn't make sense to stay in the country.

NEWTON: That is a good point. Perhaps the business of it will force them out. Paul La Monica, thank you.

Now trading has closed on Wall Street, the final numbers for you after this break.




NEWTON: Broad selloff for Wall Street today, fears over inflation outweighed yesterday's optimum. The Dow Jones industrial average, down

nearly 450 points. It opened lower in the morning and dropped over the course of the session.

All the major averages finished down. Chevron is one of the few winners today, thanks in part to that surge in oil. A barrel of Brent went up 5

percent today and more than 10 percent in the last week alone. The summits in Europe raised the prospect of more sanctions on Russian energy. That is

QUEST MEANS BUSINESS, I'm Paula Newton. I'll be right back here tomorrow.