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Quest Means Business
Pentagon Gives Update On War In Ukraine; German Economists Fear $238 Billion GDP Loss Without Russian Gas; Ukrainian Units In Besieged Mariupol Say They've Joined Forces As Russia Claims Advances; E.U.'s "Seize And Freeze" Team Hunts Oligarchs' Wealth; Yellen Sends Warning To Countries "Indifferent" To Russian Sanctions; U.S. Airline Stocks Rise As Delta Forecasts A Return To Profit. Aired 3-4p ET
Aired April 13, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
REAR ADMIRAL JOHN KIRBY (RET.), PENTAGON PRESS SECRETARY: ... would fully expect that there'll be additional such roundtable discussions going
forward with these CEOs and perhaps others as time goes on.
QUESTION: Okay, thank you. And then one more, if I may.
Can you confirm the reporting that's out there that the Biden administration is moving to significantly expand Intel sharing with
Ukrainian forces that can potentially help them?
KIRBY: I've talked about this before, Carla (ph). As the fight has changed, as the geographic concentration has changed for Russia, and they are
focusing more on the Donbas, you heard the Secretary talked about this in testimony that we felt it was important that we needed to update the
guidance on Intelligence sharing with the Ukrainians, based on developments on the ground, and we're doing that, yes.
QUESTION: Can I ask about the helicopters? How are they actually getting into Ukraine? Is that Ukrainian pilots basically pick them up and fly them
in there, or --
KIRBY: We are still -- I mean, they will be shipped over into the region, and then I don't know whether there'll be trucked in or I don't have the
specific, you know, data on exactly how each helicopter is going to get inside Ukraine.
QUESTION: Would there be U.S. pilots at all?
KIRBY: No. There will be no U.S. pilots flying the helicopters in Ukraine.
QUESTION: Also on the nuclear protective equipment, following up the question, was that in response to anything specific that we've seen that
Russia would consider to do in Ukraine, when it comes to --
KIRBY: We believe actually, the Ukrainians believe, it is the prudent thing to do. We have talked about this. We have talked about indications we've
had in the past, weeks ago, that the Russians might resort to the use of chemical or biological weapons. And so based on talking with the Ukrainians
about protective gear, and again, keeping in mind that we're looking at operations in a much more confined space now, the Ukrainians asked for
this, and we have it, so we're going to provide it.
Is it based on a specific, credible threat of a use in a neighborhood or a particular area? No. But it is certainly based on longstanding concerns
we've had about the potential for the Russians to use these kinds of weapons. And again, everything on this list was a result of a conversation
with the Ukrainians themselves about what they needed. I can't stress that enough.
We're not foisting stuff upon them because we just think it's a good idea. This is all stuff that we've talked about with the Ukrainians.
MIKE STONE, REUTERS: The Howitzers --
KIRBY: Who are you?
STONE: I'm Mike Stone. I'm from Reuters.
STONE: The Howitzers, are those M-777s from the Marines? And how did the number 18 get arrived at? Should we look at additional tranches?
KIRBY: I mean, I don't have anything to speak to with additional tranches. I mean, this one's just now getting announced, I'm not going to rule out
the possibility of additional Howitzers.
I don't have the exact variant available for you, but they are artillery pieces, as you know, very capable ones. And again, the Ukrainians have made
it clear that in this fight that's coming, artillery is a critical need, not just the artillery piece itself, but the rounds that go with it.
You can see there's 40,000 rounds that are going on with this, and we will be in an iterative conversation with them going forward, and if they need
additional artillery rounds, clearly the United States will do what we can to fill those needs.
Yes, in the back there.
JOE GOULD, DEFENSE NEWS: Joe Gould from Defense News.
KIRBY: Hey, yes.
GOULD: Also on the artillery, we've seen Russian forces using standoff range --
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: So there we have the Pentagon briefing. The Press Secretary, John Kirby, giving us an update, essentially
a list of more armaments and weaponry that the U.S. is going to be sending to Ukraine.
A list was presented and it includes 40,000 rounds of ammunition, the armaments, the helicopters, the Howitzer missiles -- all of which will be
sent to Ukraine at the request, and at the discussion and other consultation and agreement with the United States. More details of that as
A good evening to you. Our economic agenda tonight. We've been giving you the military details, let me go through the economic fallout that is now
becoming ever more clear.
We're getting fresh numbers on the cost, if you will, the economic cost of the war in Ukraine.
Germany's top economists say that Germany risks a sharp recession if the E.U. were to ban Russian gas, and those economists say it would shave $230
billion of Europe's second biggest economy.
Rising fuel prices are causing more pain. In the U.K., inflation there has hit seven percent. Remember in the U.S., it is eight and a half percent.
In the U.K., British authorities say households are now facing the worst cost of living squeeze since records began in the 1950s.
And more effects, today on Wall Street, JPMorgan said the war and the retaliatory sanctions have cost the bank more than half a billion dollars,
$500 million plus.
QUEST: Anna Stewart is with me on these various economic issues. Let's deal with this, start with Germany.
The somewhat perplexing thing, the refusal of Germany to -- I mean, they say that by the end of the year, they'll have weaned off Russian gas. But
in the meantime, they're still buying.
ANNA STEWART, CNN REPORTER: They are still buying, and this report from economists today paints a really bleak picture and perhaps gives Germany
some political cover in their continued opposition to an immediate embargo on oil, and particularly, of course, gas because, according to their
estimates, were there to be a gas embargo from Russian gas, that will see GDP growth of just 1.9 percent this year, and then a very sharp recession
next year, a contraction of 2.2 percent.
You mentioned that would cost $240 billion to the economy and wipe out hundreds of thousands of jobs. So that is the picture in Germany right now,
and you can imagine then, there will be pressure on Olaf Scholz, the Chancellor, not to bend to the will of increasing pressure within the E.U.,
as well as outside of it to join the U.S. and the U.K. in initiating a much quicker embargo on gas and oil.
QUEST: All right, but Anna, there's also the question, this rising inflation everywhere. The U.K. perhaps is the -- outside of the U.S., the
U.K. is perhaps the worst for the moment. But this rising inflation, if oil and gas continued elevated levels will get worse?
STEWART: Of course, it will, and I think we've already seen oil prices between January march up about 45 percent. This is what is fueling such
huge inflation, and we have had three days now of really dire economic reports from the World Bank, from the W.T.O., from German economist, from
Oxfam, just going to show that it is the higher price of commodity and particularly energy that is pushing up prices across the board.
QUEST: That energy. Thank you, Anna Stewart.
Germany isn't the only country opposed to Russian gas embargo. Austria's Chancellor says his country also depends on it, and Chancellor Karl
Nehammer told Becky Anderson, the E.U. sanctions need to be targeted carefully.
(BEGIN VIDEO CLIP)
KARL NEHAMMER, AUSTRIAN CHANCELLOR: We should think about sanctions now, in a more intelligent way, how we can hurt the Russian Federation, but not
hurt us. I think this is the main important thing.
You know, there is a decision in the European Union that we try everything to become independent from Russian gas, and it's also the will of Austria
for sure, but it's not possible now. It will take time. And in this time, we had to decide about other sanctions, as I said who will hurt Russia more
than the European Union.
(END VIDEO CLIP)
QUEST: Other sanctions and how to be helped, Colombia's President told me his country stands ready to help the world, particularly the E.U. overcome
the energy disruptions from Russia, particularly if there is a ban.
Colombia is South America's largest source of coal and second largest source of oil.
President Ivan Duque Marquez told me, the country is ready to help make up for any loss of Russian supplies.
IVAN DUQUE MARQUEZ, COLOMBIAN PRESIDENT: Many countries in Europe and around the world are suffering from the energy shock, and they know for
sure that they can no longer rely on the energy supply from Russia.
Now Colombia can contribute to the solution to the responses? Yes, in three ways. I think we now have the potential to keep on expanding our oil and
gas production, but the other thing is that Colombia is now leading the energy transition in Latin American in unconventional renewables, and that
means we can be a leader in green hydrogen.
And last but not least, I think Colombia today immediately can also have an increase in the coal supply for many countries that need to take immediate
decisions not to depend on Russia.
QUEST: Right. So that coal is what is interesting, of course, bearing in mind the E.U. deciding to completely stop imports from coal from Russia. So
you would expect besides warm words and good wishes, you would expect Colombia to be able to play a practical part in the solution.
MARQUEZ: Indeed, and maybe the best way to describe it is that we have one of the biggest reserves of coal in the world. We have also another
important thing, is that we don't use thermal coal in Colombia in an intensive way, which means that we have the capacity to supply the needs of
And actually, I spoke with Chancellor Scholz last week, and we are now increasing our supply to Germany, and we are willing even to expand it and
in the case of the United States, Colombia represents roughly speaking 85 percent of the U.S. coal imports, they come from Colombia.
So I think at this moment, we have the opportunity to bring more investment, expand some of the mines and be able to have a short supply of
that coal, based on the needs of other countries.
QUEST: The economist, Jeffrey Sachs is the Director of the Center for Sustainable Development at Columbia University, a good friend of this
program, the author of a book called "The Price of Civilization." Jeffrey Sachs is with me now.
It is a classic dilemma in the true sense of the word. Do you cut your nose off, and stop your oil and gas? Or do you have to continue buying Russian
oil and gas because otherwise the economic effects will be worse at home?
Which do you do Jeffrey Sachs?
JEFFREY SACHS, DIRECTOR OF THE CENTER FOR SUSTAINABLE DEVELOPMENT, COLUMBIA UNIVERSITY: Well, let's start at the beginning. These sanctions are not
really going to change the course of events in the war. They are not going to change the regime in Russia, they're not going to stop the war machine,
they're really not even going to be enforced in large parts of the world.
So the fact of the matter is, they're not really much of an answer to anything, and they do a lot of damage to the economies that are imposing
the sanctions and even more than that, they're doing a lot of damage to economies all over the world that say, we're not part of this war and yet,
we are suffering the consequences of higher food and energy and fertilizer and other prices.
So my view is that, as much as we hear in the western capitals, well, there's unity and look at how much we're doing to hurt Russia, I'm a
skeptic. I just don't think that they are changing much of anything except creating a lot of pain in a situation that was already painful because of
COVID. And in a context that was already inflationary, because of a more fundamental underlying set of decisions of the major Central Banks over a
period of many years.
QUEST: In your recent article, last month, so obviously, circumstances have changed, and you may have changed your view to an extent. You said, "It's
crucial for Ukraine and NATO to formulate cogent, prudent, reasonable peace terms now." And as I read them, it's all to do with the idea that
basically, a lot of the gains would have to be Crimea, for example, de facto not the -- a lot of the gains would have to be ceded, the east to
Russia. How do you do this without rewarding the aggression?
SACHS: Look, Ukraine is going to be destroyed in the coming weeks, unless a deal is reached. And so the first point is, the loss of lives and the
destruction that could happen within the next few weeks, and that has already happened, is so huge, peace must be the central aim and nothing
that we are doing right now, none of the threats, the sanctions and so forth are going to stop the mass destruction, but peace talks could.
And the core of this issue, Richard has been, in my opinion from the beginning, the NATO enlargement into Ukraine, the U.S. desire to have
Ukraine on our side, as it were, has been so provocative that we should have negotiated a long time ago, on some very basic points and I hope that
we do now, before there's complete destruction of this country.
QUEST: Let me jump in that then. On this idea, Finland said today that they hope to make a decision on NATO membership. Now, bearing in mind Finland is
well and truly in the western camp, member of the E.U., et cetera et cetera.
Would you -- but the same argument applies? With Finland, you take NATO's border closer to Russia. Would you be in favor of Finland joining NATO?
SACHS: I think it would be so reckless and provocative at this moment, rather than having some prudence and pushing on the diplomatic line to get
Russia out of Ukraine, and to agree that NATO is not going to enlarge into Ukraine.
You know, halfway around the world in a tiny little island in the Pacific, in the Solomon Islands. The Solomon Islands has drafted a security pact
with China. It's a tiny island, and yet the United States is going out of its mind, sending senior National Security officials to the Pacific.
How dare you saying this thing? The threat that this poses.
You know, this is how America feels about a small island signing a security pact with China, but that when it comes to the United States pushing into
Ukraine in NATO, we say well why is Russia concerned about that at all? And what we're doing by this is not finding the path to peace to get Russia out
And so we say we're defending Ukraine, but actually Ukraine is being destroyed in this process in the name of something that isn't defending the
country at all and isn't solving any problems and is creating an increasingly severe global economic crisis.
QUEST: Jeffrey Sachs --
SACHS: That's the problem.
QUEST: Jeffrey Sachs -- Jeffrey, we'll talk more, I hope, sooner rather than later.
SACHS: Thank you.
QUEST: Thank you, sir.
SACHS: Thank you.
QUEST: It's QUEST MEANS BUSINESS tonight.
Mariupol is key to Russia's military strategy. Ukraine says its last remaining Marines are putting up a fierce fight. They're disputing the
Russian claims that the city has fallen. We'll discuss and we'll look at that after the break.
QUEST MEANS BUSINESS.
QUEST: Commanders of two Ukrainian units are issuing a statement from the besieged port city of Mariupol.
There are reports that the fierce battle for the city could be coming to an end, and yet in this video statement, the Commander say their units were
able to join forces. That said, they acknowledge some Ukrainian defenders did surrender.
Earlier Russia said, a thousand Ukrainian Marines have surrendered. CNN, we're not in Mariupol and we can't confirm the claims on one side or the
other. But we do say and we know that Mariupol is key to Russia's offensive.
So why? Look at the map. It's quite simple. You see where the Crimea, which of course was annexed in 2014. And there you have Mariupol in the port
So now you imagine you take Mariupol and then you manage to link it up with the Russian-backed separatists in the controlled eastern parts of the
Suddenly, you have a direct lineage from Russia, up from Crimea, through the Sea of Azov right the way through Mariupol and 80 percent of Ukraine's
coast is on the Black Sea. So it cuts off further trade and isolates.
Ed Lavandera is in Odessa. That's in the west of the country.
Ed, I mean, so much importance has been invested upon Mariupol, but so much misery has been rained upon it.
ED LAVANDERA, CNN SENIOR NATIONAL CORRESPONDENT: Yes, in fact it's almost unimaginable to think about the stories that will emerge from the city once
independent journalists can safely get into this besieged city, if that ever happens to determine exactly what has unfolded, because every day that
goes by Richard, it's another reminder of just how dire the situation is there.
We are hearing reports tonight from Ukrainian officials that the two Ukrainian combat units that were inside the city -- that are inside the
city, but had been separated, have somehow managed to break through and unite and join forces there together.
How much time that will buy them? What that will mean in terms of them continuing the defense? It's unclear at this point, but those military
units inside the city, they will continue to fight until the very end.
There is some video of Russian forces in the city that has emerged today, and as you mentioned off the top, we should be clear and transparent that
CNN is not in Mariupol and not embedded with Russian forces.
But Russian military officials are saying that they have taken control of the sea port there. We're unable to verify those claims. But it really is
as the military sides of this battle over this key city in Southeast Ukraine, it is the humanitarian disaster that we can talk about that we
probably don't have a full grasp of just how horrific it is.
We are told that about 120,000 people are still -- civilians -- are still inside the city that need to be evacuated, another 60,000 or so in the
region around it as well, and that is a situation that has been very dire as humanitarian corridors have been blocked throughout the day today --
QUEST: Okay, Ed, but if Mariupol falls and is taken by Russia, does that create the land bridge that Russia is seeking? And related to that, does
the falling of Mariupol, if it happens, does that dramatically alter the equation?
LAVANDERA: It's easy to see a scenario where that might happen. If you look at the map of where we believe Russian forces to have control right now,
that extends just north of Crimea, west toward -- just past to the city of Kherson, close to Mykolaiv, and that if they can -- Russians can hold that
and withstand Ukrainian forces from pushing them back that would create that land bridge that we have been talking about so long.
But these are still the other -- we know that there is frontline fighting going on in those areas as well. But right now, the key as you mentioned,
seems to be Mariupol, but the Russians do have a strong foothold in that area in South Ukraine just north of Crimea.
So that is why that initial area in those frontlines there are so key right now.
QUEST: Ed Lavandera. Ed, thank you.
The picture of what's been coming and what's been going on, President Biden has called what's happening in Ukraine, genocide.
U.S. officials do say, a legal review is underway and a formal declaration would have to come only after that's completed. Speaking on Tuesday, the
President said he does not regret the choice of word, "genocide."
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: Yes, I called it genocide. The evidence is mounting.
It is different than it was last week. More evidence is coming out of the - - literally the horrible things that the Russians have done in Ukraine.
(END VIDEO CLIP)
QUEST: This morning, Colombia's President told me he agrees with President Biden, Russia is committing genocide.
The Colombian President said the U.S. should not turn to other autocratic regimes like Venezuela for help with the energy crisis. Instead, he
believes democracies need to craft a united response.
MARQUEZ: Richard, I think we all have to call things by its name and what's happening in Ukraine is a genocide. This brutal genocide has to come to an
end, and I think we all have to raise our voice to denounce and maybe decide on all the possible sanctions because this is insane.
QUEST: Do you see any shift in U.S. policy towards Venezuela, recognizing the role that Venezuela can have in increasing energy?
MARQUEZ: No, and the reason why I don't see any happening is because I think the United States government, the Biden administration, as we also
believe, is our values of defending democracy is not available for a bargain.
So we know that the only way Venezuela can improve the way of living of its people and get rid of the poverty is by accelerating the path to democracy.
Now you mentioned about oil, the fact is, Venezuela has destroyed so much its own oil industry that in order for them to get back to the production
lines they had 10 to 15 years ago, it'll take about three to four years.
MARQUEZ: In our case, and that's something I said to the Biden administration, Colombia can accelerate even much more its energy supply in
order to be part of the solution better than Venezuela in the short term.
QUEST: But on a geopolitical issue, there are the scintilla of overtones to Iran and Venezuela, that if you produce more, you will find the U.S. more
welcoming, more accommodating, and more open.
MARQUEZ: Richard, in my opinion, I don't think there can be a possibility to have some sort of a swap between, give me more oil, and it'll be more
tolerant with your dictatorship. That's not going to happen. Because I think what Maduro has done to the Venezuelan people, is the same thing that
Putin has done to the Ukrainian people, and they both have created the biggest migration crisis in modern history.
QUEST: What's the one thing that your country needs in terms of -- in terms of coordinated international policy?
MARQUEZ: I'll tell you one, and this is what worries me. In a country like Colombia, Richard, more coca means less peace, and we have done a lot to
control the supply side. But I think on the correlation responsibility around the world, we have seen the consumption rates of cocaine skyrocket
in the last three years, we need more core responsibility so that we can really make our efforts on the supply side, but also have others on the
demand side. With that, I think we can allow Colombia to make big transformations in the economy, and also affect the current structures of
QUEST: Finally, how long have you got left?
MARQUEZ: Four months, but I'm working three shifts. So --
QUEST: I don't think people fully understand that there is that moment for an elected official, when you walk into the room, all powerful, and you
walk out of the room with no power.
MARQUEZ: But I think that's the beauty of democracy. In my opinion, that's the beauty of democracy.
QUEST: Are you ready for it?
MARQUEZ: Yes. Yes, I'm ready for it, and I have a conviction in my life that I will continue serving in other ways. And one of my plans, maybe
we'll see it early next year, is to have a foundation that will be devoted to climate action strategies, protecting the Amazon, supporting countries
in the energy transition, and at the same time, trying to connect two concepts, net zero, nature positive.
QUEST: That's the President of Colombia. We've got them all for you tonight.
After the break, the European Commissioner for Justice, Didier Reynders will be with us.
Now, he is the man responsible for the seize-and-freeze of oligarchs' assets, at least from the E.U.'s point of view. Can they get more than the
$30 billion that they've already got? And where are they going to find them? And what happens afterwards?
In a moment.
QUEST: A short time ago, police made an arrest in New York after Tuesday's subway shooting; 62-year-old Frank James is now in custody, arrested
And a gun purchased by James was found at the scene. The police say they believe James is the man who set off smoke grenades, then opened fire on
passengers during the busy rush-hour commute. He's suspected of shooting 10 people.
(BEGIN VIDEO CLIP)
KEECHANT SEWELL, NEW YORK CITY POLICE COMMISSIONER: Frank Robert James was stopped on the street and arrested by members of the New York City Police
Officers in response to a Crimestoppers tip stopped Mr. James at 1:42 pm at the corner of St. Mark's Place and First Avenue in Manhattan. He was taken
into custody without incident and has been transported to an NYPD facility. He will be charged with committing yesterday's appalling crime in Brooklyn.
(END VIDEO CLIP)
QUEST: CNN's Brynn Gingras is on the scene.
Well, there we are. Fascinating, I mean, A, the way it all happened.
And exactly what did happen?
So it was a member of the public?
BRYNN GINGRAS, CNN CORRESPONDENT: We know it was a Crimestoppers tip. So yes, it appears so. Basically what we're learning is, not too long ago, in
a part of Manhattan, really in plain sight, the Crimestoppers tip came in and police, patrol officers on the street were able to take him into
We have a video of that, really without incident, no issues. And right now he is at a New York precinct. And I got to tell you Richard, it was just
incredible police work. They detailed a lot of it in that news conference.
But if you actually tick through the criminal complaint that's been released, police did an incredible job pinpointing where he purchased the
gun that was used in the incident, to the fact of doing search warrants of storage facilities, of apartments he once rented, his locations around the
city after the attack, before the attack.
I mean it is all detailed in that criminal complaint. And now will be facing federal charges for this act.
And, of course, they're also just learning more about who he was. He does have a criminal history in several states. And I got to tell you, a lot of
this investigation is going to rest on if he says anything to police while in that custody.
Right now, I mean you can imagine he might, since he was very vocal on many things on YouTube videos, social media, of course, also things law
enforcement are going to be continuing to comb through as they continue to build this case against him.
QUEST: And you're continuing to watch, thank you. Brynn there in Manhattan.
The island of Jersey says it has frozen more than $7 billion worth of assets belonging to Roman Abramovich. He, of course, amongst the oligarchs
sanctioned last month by the U.K., E.U. and others, as a result, Abramovich has been disqualified from owning the Chelsea Football Club and his yachts
have set sail for safer harbors.
All across Europe, the E.U.'s freeze and seize task force is enforcing sanctions against people and entities linked to president Putin's regime.
So far 30 billion euros' worth of assets in only a month, says the scheme.
It includes the boats, the helicopters, the fine art, the properties and it's blocked nearly 200 billion euros of transactions. Didier Reynders is
the E.U.'s justice commissioner and is with me now.
So a good start, a strong start but now you need to go further, deeper and be more precise in a sense.
What's the next stage for the E.U.'s freeze and task force for when you meet on April the 22nd?
DIDIER REYNDERS, E.U. JUSTICE COMMISSIONER: First of all, it's to continue the freeze assets, so like you said, real estate, money, the yacht, all
kinds of things like (INAUDIBLE) and art works. So we try to continue to seize more and more and to freeze more and more assets.
Because the case in 50 member states and we tried to do the same in the 27, and to don't give any safe harbor for the oligarchs, in order countries
like in the other European countries around the European Union.
The next step is to go to a confiscation, not on the freezing of assets but the real confiscation by justice. And that's in part because, if there are
criminal activities in relation with the action of the oligarchs, it's possible to confiscate, not only just to freeze but to confiscate no more,
at least (INAUDIBLE) treasury (ph).
But due to that, it's possible to transfer first to a common friend, to support a trade. So that's the real next step, not only to freeze, with an
administrative process from the treasury but then to organize confiscation if there are criminal activities and to give the money back to the victims,
to the Ukrainian people.
QUEST: How far are you prepared to go to put pressure on other countries that are not doing seize and freeze?
For instance, the Maldives, where many of these yachts have gone, because there aren't extradition treaties, et cetera, et cetera. But let's face it,
the E.U. has a huge influential ability, since so many of European citizens go on holiday to the Maldives, to actually put pressure on places like
REYNDERS: No, no, we have start to put pressure on the different third (ph) countries with such a kind of possible behavior. And we are not only doing
that alone, because we are working with our G7 partners.
And I will say, we have organized the way to freeze assets was, to give an example, our U.S. colleagues, we have seized and freeze a yacht worth $90
million in Spain on the request of the minister of the Department of Justice in U.S. and we try to push Russia together, on other countries, to
avoid, again, safe harbors for oligarchs in such a way.
And there are many ways to do that, of course, to push pressure, to explain that if it's not with the good collaboration, we will take some initiative
to give a reaction on this.
QUEST: What initiative?
That's exactly the point, because the U.S. Treasury Secretary, the U.S. Treasury Secretary, Janet Yellen, today you'll have seen it, says we are
not indifferent to those countries or third parties who do not support the sanctions regime.
You've just said we will take some initiative against them.
So what's waiting for those countries that don't follow suit?
REYNDERS: Of course, they need to be on our side. If they are not on our side, of course, we'll take some decisions in relation with that.
The first one, of course, is to engage a dialogue and to ask to follow the same rules to apply the sanctions and at least to don't give the
opportunity to the oligarchs to sit on (INAUDIBLE) the sanctions. That's first element.
But just to give example, if there are some actions to have the oligarch to bypass the sanctions, it's become to be criminal activities. So we are
still ask to the justice system to prosecute the people doing that and follow states. Of course, we will take consequence of such a kind of
And there are many possible consequences, all financial (INAUDIBLE) those countries, above the falsification (ph) for visas and so on. So we have a
lot of pressure possible on all the different partners.
But for the moment, I will say we have a good collaboration with a lot of European partners out of the E.U., to give example, Switzerland, obviously
Norway, with the countries in the Balkans.
QUEST: Sure, but they're on your doorstep and would suffer tremendous economic repercussions if the E.U. got nasty.
I guess what I'm asking you, Commissioner, is, can you say tonight, that, if you have to make an omelet by breaking eggs with relations with other
countries in the prosecution of E.U. sanctions, will you do that?
REYNDERS: Of course. I said we are very ready to say that there are countries on our side, not only the side of European Union but the side of
the G7 countries, because we have put to the same task force at the level of the G7.
And if they are not on our side, we need to take some decisions to give a consequence to that. Of course, it's the big enough the process, the most
important element, of course, is to take more and more partners on all sides.
And I will say, we are not just working on the task force to freeze and seize some assets. We are also working on war crimes. You know, (INAUDIBLE)
at your level. And (INAUDIBLE) the International Criminal Court and the prosecutor (ph) general of Ukraine, (INAUDIBLE).
REYNDERS: To say that we want to collect, together, evidence of war crimes, maybe crimes against humanity or genocide, because it's the competence (ph)
of the ICC and we will organize the best way to secure and to save the evidence, to give the possibility to the prosecutor ICC to organize
prosecutions and one led to a trial and maybe condemnations.
QUEST: Commissioner, thank you, sir, kind of you to come on tonight. Busy days, I realize, and I'm grateful to be able to talk to you on QUEST MEANS
BUSINESS. Thank you sir.
REYNDERS: Thank you.
QUEST: Now coming up, Treasury Secretary of the U.S. has a warning for China: I just said, didn't I, that the U.S. is not indifferent to those
countries that don't support it. She says, for China, support for Russia could come back to haunt it.
QUEST: We've been talking about the financial shocks of the war, now sanctions are reverberating through Wall Street. JPMorgan shares are
considerably lower, they're off -- but better than they were.
The bank said sanctions against Russia cost it over $500 million, a 42 percent profit drop in Q1.
And the U.S. Treasury Secretary Janet Yellen has warned, anyone trying to get around U.S. sanctions, doing business with Russia, is not a good long-
term move. It was at an Atlantic Council event, when Treasury Secretary called out China specifically, saying its actions could haunt it in the
(BEGIN VIDEO CLIP)
JANET YELLEN, U.S. TREASURY SECRETARY: Whatever China's geopolitical aims and strategies, we see no benign interpretation of Russia's invasion nor of
its consequences for the international order.
China cannot expect the global community to respect its appeals to the principles of sovereignty and territorial integrity in the future if it
does not respect these principles now when it counts.
(END VIDEO CLIP)
QUEST: Rana Foroohar is CNN's global economic analyst, who spoke to Janet Yellen after Yellen made her speech.
The Treasury Secretary talked about not being indifferent in those countries, those third parties.
But what does that mean?
You might have just heard Didier Reynders of the E.U. Justice Commission, talk about there being consequences. Everybody is fudging around it.
So what did you think she meant by, they're not indifferent?
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Well, you know, this was part of a larger speech, Richard, that was, in some ways, particularly for
someone like Janet Yellen, a pretty full-throated cry for a new Bretton Woods.
She basically said, the world order as we've known it in the past has changed. She acknowledged that China was essentially on the wrong side of
the West and allies that are fighting back against Russia's war in Ukraine.
And she made an interesting comment, referring to the special friendship that had developed, even prior to the war, between Russia and China. She
said that she hoped China could make something useful of that relationship, which was a little bit of a jab, again, particularly for Yellen. She's not
given to harsh words.
This is about as far as you can imagine U.S. Treasury Secretary coming to saying we're in a bipolar world. Now to be fair, she also put forward a
number of ideas, about how she wants to work next week at IMF and World Bank meetings with allies along the same lines she has in terms of coming
up with a new global tax agreement.
She wants a new agreement transatlantically for liberal democracies (ph) for tech and trade. So I think she's laying a line in the sand and saying,
you're with us or you're against us here.
QUEST: Right, but I get the -- and those who are not with us are against us. But you know, at a time of war, the issue becomes, what's your
sanction, pardon the phrase, what are you going to do to the Indias, not necessarily to the Chinas but to those countries that you are turning
around and saying we expect you to be with us?
FOROOHAR: Yes, well she made an interesting comment about modernizing the trade system and using something called friend sourcing. Friend sourcing,
Richard, so no more just trade for trade's own sake; WTO rules as usual but, in the future, the U.S. will look at allies, based on whether they are
with us in scenarios like Ukraine, based on whether they have liberal democratic values and will make decisions about where to source things
within the supply chain.
Friend sourcing is quite a ways away from efficient supply chains that can go anywhere, as we've known in the last 40 years.
QUEST: We'll talk about it with the IMF; hopefully you'll be there, we will certainly be there, down in Washington for the week for the meetings. And
we'll -- Rana, always good, thank you.
Now as we continue tonight, U.S. airline stocks, just look at them, doing fairly well, up 3 percent, 4 percent, 5 percent; in some cases, American's
up 10 percent.
What's driving the share price and why?
QUEST: U.S. airline stocks are up, on Delta's report it expects to turn a profit this quarter, so you have them all, the big four with the best gains
seen by American Airlines, up more than 10 percent.
Delta's case, Ed Bastion said demand was soaring so strongly despite a sharp rise in prices, and the U.S. airlines aren't the only ones. In
Europe, the chief executive of the largest low cost carriers, Ryanair and easyJet, telling us they're looking at good months ahead.
(BEGIN VIDEO CLIP)
MICHAEL O'LEARY, CEO, RYANAIR: We expect to grow by about 10 percent this year, we did 150 million passengers pre-COVID and if there are no more
COVID-19 disruptions this year, we think that could grow to 165 million passengers.
JOHAN LUNDGREN, CEO, EASYJET: There's doubt that we're still coming out of this with this pent-up demand now starting to be real. We are seeing that
in bookings, seeing that in trading. And that is primarily because the travel restrictions has been removed.
(END VIDEO CLIP)
QUEST: Now Brian Kelly is with me, chief executive of The Points Guy, joins me from New York. We know the U.S. very much got into this earlier, middle
of last year. Omicron took its toll. But we are seeing a global resurgence with the exception of Southeast Asia and China.
BRIAN KELLY, CEO, THE POINTS GUY: Absolutely, Americans are ready to travel. But we're not going to see our full demand spike back up until the
testing requirement to get back into the U.S. is lifted. Right now, a lot of people I know, especially those with kids, say, I just can't go
international and risk getting stuck abroad if that test comes back positive.
QUEST: All right, now, how are the airlines balancing it?
Because they're bringing back capacity; in some cases, over 100 percent to where they were in 2019 but, at the same time, we have Ukraine; the oil
price going up.
KELLY: Absolutely. You know, they're really doubling down on domestic. In many routes in the U.S., we have now up to 15 percent more passengers to
places like Cancun and the Caribbean in general.
So the airlines are betting on it. And they're also betting on premium travelers, JetBlue launching their new Mint Studio and Delta, you know,
American Airlines leaked that they have a new premium plane coming.
So I think they're seeing past this spell and the return of the business traveler, hopefully later this fall.
QUEST: Right, now that's an interesting aspect, the business traveler. So I suppose as we came out of the pandemic, many of us thought it would be --
business travel would be down about 30 percent and that loss would be -- the day trip to Paris, the Cleveland to Detroit for the day, that sort of
thing had gone.
Are we getting any visibility on that yet?
KELLY: You know the numbers aren't clear, because so much of business travel now is mixed with leisure. People are working from abroad. But yes,
certainly the consulting trips, the Monday through Thursday, they are back and happening.
Consultants are back on the road, you know; engineers who need to do those factory visits, people in sales. So it's not quite off a cliff like people
But I think especially once that testing requirement is lifted and, you know, I think businesses will feel more comfortable sending people out, but
it will come back but it will look a bit different than what we're used to.
QUEST: Take a look at the product and the services. So you got the Gulf 3, where they pretty much restored all their fine services. Europe, too; the
U.S. has been slower in doing it.
But if you take those three markets, if you like, the Gulf, Europe and the U.S., how do you see international travel breaking up?
KELLY: Well, I mean, of the Gulf 3, we've seen Etihad come back as a much, much smaller carrier. But Emirates and Qatar have remained quite strong and
their in-flight product is now back, pretty much fully. U.S. airlines are now almost back to their prepandemic service levels in terms of in cabin.
But until Asia reopens and, you know, business travel is back, that's where the airline -- yes, they've got a long way to go to replace the profit.
They may have passengers but they're mostly domestic now.
QUEST: And finally, getting a bargain, you know, even the low cost on the ULCs are raising prices -- and it's not just, Brian, because of oil
surcharges or fuel surcharges; demand, classically, Economics 101, demand is raising prices.
KELLY: Absolutely. It's demand first and foremost, I think also currently, young children can't be vaccinated in the U.S. But once that authorization
is given, I think we'll probably see more demand. So in order to get a deal, book now. Whenever that testing requirement is lifted, we'll see a
shoot-up in demand, especially international.
And we're projecting at the point sky that airfare will continue rising steadily into June. It might taper off but, you know, we'll see. But in
general, booking last minute is not a smart bet in 2022.
QUEST: Brian, good to see you, sir, I appreciate it. Thank you.
I'll show the markets quickly before we take a break. Strong day, look at that, almost at the best of the day. I think just off the top of the best.
Triple stack is even more encouraging if you will, up 2 percent on the Nasdaq.
And if you do look at the Dow 30, there is a sea of green, there you have it, not surprising, JPMorgan Chase, well, you know the reasons for that.
Boeing having a strong day and that really boosts the Dow.
We have a "Profitable Moment" after the break.
QUEST: Tonight's "Profitable Moment": on this program, we heard two views on sanctions; firstly Jeffrey Sachs. He basically said that they're a waste
of time, will hurt those who they're aiming to assist, will hurt those they are targeted against and won't have any result at the end regardless.
And then you have the view of what happens to those countries that don't follow the sanctions?
For instance, those third parties that work. Well now, the U.S. Treasury Secretary says we're not indifferent to those people. So we will remember
them, if you will. And on this program, you heard the justice commissioner saying, there will be consequences for those parties that don't.
Now I guess everybody is going to try to persuade the recalcitrant countries to go along with you. But if you can't persuade, then eventually
you're going to have to bully. That's the reality of this. Let's not get nicey-nicey and misty-eyed.
To those countries that don't want to go along with what the sanctioning countries believe is right, eventually it's our way or the highway. Because
that's the way sanctions work. Well, I never said it was pretty.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Bells ringing for a strong day on Wall Street. So whatever you're up to in
the hours ahead, I hope it's profitable.
"THE LEAD WITH JAKE TAPPER" starts right now.