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Quest Means Business
Russia Cuts Off Gas Supplies To Poland And Bulgaria; Hungary Insists Russian Gas Payments Will Continue; Poland Asserts There Will No Gas Shortage; Russia Denies Gas Cuts Are Blackmail; Profitable Moment. Aired 3- 4p ET
Aired April 27, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN BUSINESS ANCHOR: The markets says an hour to go and after the last few market sessions, well, you'll be looking for a bit of
relief, and you've got some -- a rebound, oh dear, well, I said that before I saw what has happened. We were down and now up 195, but we were much
higher 400 or 500 points earlier in the session.
So I'm guessing, anything could happen between now and four o'clock, which is 59 minutes away. The markets remain disgruntled and the main events of
the day are serious.
The E.U. accuses Russia of blackmail after Gazprom cuts the supply of gas to Poland and Bulgaria.
Tonight, Hungary's Foreign Minister is with me to explain why his country seemingly breaking with the E.U. on Russian oil and gas in spirit, if not
actually in fact.
And investors are worrying Big Tech running out of steam.
Good evening. Live from New York, Wednesday, April 27th. I'm Richard Quest, a busy hour together and I mean business.
Tonight, temperatures in Warsaw, Poland will be close to freezing and there is no more Russian gas being piped to heat people's homes. Gazprom says it
is halting supplies to Russia and Bulgaria because the country won't pay for it in rubles.
A dramatic escalation in the economic war between Russia and the West. The E.U. is calling Russia's move, blackmail.
Ursula von der Leyen said Russia is using energy as a weapon.
(BEGIN VIDEO CLIP)
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: That's Trump's announcement that it is unilaterally stopping gas deliveries to certain
E.U. member states is another provocation from the Kremlin, but it comes as no surprise that the Kremlin uses fossil fuels to try to blackmail us. This
is something the European Commission has been preparing for in close coordination and solidarity with member states and international partners.
Our response will be immediate, united, and coordinated.
(END VIDEO CLIP)
QUEST: Now Russia's decision while significant in Poland and Bulgaria, as the Commission President was making clear is more of a warning to the rest
of the E.U.
CNN's Clare Sebastian with this from London.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Well, after weeks of threatening, Russia has now deployed its most powerful economic weapons,
shutting off its energy exports.
Well, as of Wednesday morning, Poland and Bulgaria are no longer receiving Russian gas through these pipelines, the TurkStream for Bulgaria, and up
here at the Yamal Pipeline for Poland.
Well, the E.U. says any impact on consumers will be minimized. Poland has reassured its public that it has been preparing for this and has
alternative suppliers. But this is now a warning to the rest of Europe, which relies on Russia for 40 percent of its natural gas. Russia clearly
doubling down on its insistence that European countries pay for gas deliveries in rubles, something the E.U. says could be in violation of
sanctions. Many European countries have said they just won't do it.
Well, experts say the European response will be critical.
SIMONE TAGLIAPIETRA, SENIOR FELLOW, BRUEGEL: I think the European answer should be coherent, should be unanimous, and should be we don't want to
stick to these rules, we stick to what is written in the contract, and therefore we will keep paying in euros or dollars as written in the
That is the signal that Europe has to give, because otherwise, what Russia is trying to do is that divide and rule strategy. It is try to create
fragmentation among European countries and is trying to leverage this fragmentation in a geopolitical manner.
SEBASTIAN: The Kremlin today rejecting E.U. accusations that this is blackmail, but there is no denying their leverage, especially because
Europe is not yet united on what to do about its reliance on Russian energy, and her is why.
This graphic shows just how reliant some European countries are on Russian gas as a percentage of their overall energy consumption. Russian gas is
shown there in red and you can see for Poland over here and for Bulgaria, it is relatively small 11 or 12 percent. That is why they can stand firm
and refuse to pay in rubles.
For Hungary though up here, it is a quarter. They are currently the only European country to have openly agreed to pay for their gas in rubles. And
there is a lot of focus on Germany, Europe's largest economy, where Russian gas accounts for about 14 percent of its energy consumption.
The Central Bank there recently warned if Russian gas supplies stopped, it would tip that country into a recession. That of course, could spell more
trouble for the rest of the continent.
Clare Sebastian, CNN, London.
QUEST: So to the situation in Poland, where the state energy company said it's making changes that will ensure the gas keeps flowing; supplies and
other areas, other sources for example, like the Czech Republic, and Germany. However, the German Economy Minister has said it's important that
Europe remains together.
(BEGIN VIDEO CLIP)
ROBERT HABECK, GERMAN ECONOMY MINISTER (through translator): The only thing important to me is that Germany doesn't pay in rubles and does not
give into the blackmail, and that we act in European unison.
(END VIDEO CLIP)
QUEST: So this gas shortage, you and I have talked about it many times, pretty much since the invasion earlier this year, severe consequences
economically because it does affect all of Europe.
The Bundesbank in Germany says an immediate embargo on Russian gas would cut the country's growth by five percent. That would of course, tip into
ING says a wider gas ban would drive inflation higher and a recession across Europe. I happen to think a five percent reduction in Germany's GDP
would certainly push the rest of Europe down as well.
Katharina Utermohl is the Senior Economist for Europe at Allianz. She joins me now from Frankfurt.
As we are discussing this, I think the single most important thing I need to understand, and perhaps our viewers, too, is what is the effect if Putin
turns off the tap?
KATHARINA UTERMOHL, SENIOR ECONOMIST FOR EUROPE, ALLIANZ: Hi, Richard.
Yes, that is the big question I think that we're all trying to answer. Clearly, what Russia has shown yesterday with the announcement that it will
turn off the tap to -- it has turned off the tap to Poland and Bulgaria is that it is ready to hold E.U. energy imports or exports to the E.U., and so
it is a warning shot in the end.
And now, you know, it's a warning shot in the sense that the immediate economic impact for those economies will not be large.
But of course, next in line could be Germany and Italy, but Germany, what we would expect is clearly a recession in the second half of the year.
QUEST: So if that were to happen, let's say Germany does go into recession and one imagines that Italy wouldn't be too far behind if they were cut as
well, can the rest of Europe withstand recession with Germany down?
UTERMOHL: No. So in this scenario, which is our downside scenario, we actually did not expect Russia to go that far necessarily, it has -- and
never jeopardized energy flows to Europe, not even during the height of the Cold War. And in this downside scenario, which we call blackout, we would
expect the whole Eurozone, in fact, the whole E.U. to slip into a recession.
QUEST: How close are we bearing in mind monetary tightening later on and slow down post pandemic et cetera, et cetera? How close are we skating to
recession in Europe?
UTERMOHL: Well, we have to factor in that already the threat of such a blackout scenario. And, you know, we saw it yesterday, gas prices went up
today by 20 to 25 percent. That is pushing up inflation, that is weighing on consumer confidence. It is hitting the margins of firms that can pass
this on to consumers. It's already hurting the economy.
So in any case, even if we remain in our baseline scenario where sanctions do not include energy exports, we would only see many growth rates in
Europe this year.
So they are already very close to a recession, so it would not take much. However, if E.U. energy imports from Russia would also be covered by
sanctions from Russia, then we would see very grave contraction laces in Q4 when the winter comes.
QUEST: So, one other point, various people have mentioned, we talked about it at the I.M.F. last week. If there is a slowdown because of higher
inflation and higher oil prices, does the ECB still need to work as hard with higher interest rates if there is a natural slowdown as a result of
higher energy prices? It is the old implied versus forced slowdown.
UTERMOHL: Yes, it's a very good question. So, we are more pessimistic on the economic outlook. We are below the consensus forecast for this year and
particularly for next year. If you look at what market economists usually expect is some sort of rebound next year, and we don't have that even in
our more optimistic baseline, we are below two percent growth, and a lot of that also stems from a carryover from last year.
So what does that mean, for the E.C.B.? As we saw today, consumer confidence in Germany hitting a record low today. We expect a lot more
negative news on the economy as we head to the middle of the year, and therefore we will also see hawkish expectations become a little bit tamer
and the E.C.B. not having to raise rates, you know, to 1.5 percent as widely expected by next year.
QUEST: We'll talk more as this happens. We know all are going to take place and we'll need you to help us understand it, very grateful for your
The European markets, they were higher despite concerns over what's going on. Germany was behind the other major averages. You can see the numbers
there. But, frankly, after the pummeling that markets have had, over the last few weeks. We take up the gain, a bit of green, but one shouldn't make
too much of it.
Coming up next, Russia is punishing two E.U. members for refusing to buy gas with rubles. With me after the break, Hungary's Foreign Minister, why
is he prepared to pay for gas in rubles, when others won't? After the break.
QUEST: The E.U.'s top leader says Europe stands united when dealing with Russia on energy. Ursula von der Leyen said the continent is committed to
becoming energy independent.
(BEGIN VIDEO CLIP)
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: Today, the Kremlin failed once again in his attempt to sow division among Member States. The
era of Russian fossil fuel in Europe is coming to an end. Europe is moving forward on energy issues. Thank you very much.
(END VIDEO CLIP)
QUEST: Hungary it would appear to be is charting a different course. It says, it is willing to go along with Russia's scheme to convert gas
payments from euros to rubles through Gazprom Bank.
Clare Sebastian showed us earlier, Hungary relies more than most E.U. countries on Russian gas. And the country says Slovakia is paying for its
gas in the same way. That's 22 percent.
Joining me now is Peter Szijjarto, who is Hungary's Foreign Minister.
Minister, I don't necessarily want to get into -- I don't want to parse words with you, with me saying this and you say, well, that's not true and
that and the other.
I want to get to the spirit of the thing, and the spirit of the thing is that country that the rest of Europe seems reluctant; indeed, opposed to
buying Russian oil and gas, you seem to be very willing to go along with Vladimir Putin's Gazprombank scheme.
PETER SZIJJARTO, HUNGARIAN FOREIGN MINISTER: First of all, good afternoon, and thank you so much for the invitation. Again, I'm happy to be back,
The thing is the following that gas supply and oil supply of a country is not matter of philosophy, or communication or ideology or politics. This is
matter of physics.
The fact is that we are determined by infrastructure, 85 percent of our gas supply comes from Russia and 65 percent of our oil supply comes from
Why? Because this is being determined by infrastructure. This is not for fun, we have not chosen this situation. Simply, this is the physical
situation in Central Europe. There are no alternative gas sources, no alternative delivery routes, which would make it possible for us to get rid
of the Russian oil and Russian gas in the upcoming couple of years.
We have done a lot in order to diversify. We have built all the interconnectors with the six of the seven neighboring countries. So, in
case there is a new gas source being explored somewhere in the neighborhood, we would be happy to buy gas from there.
If ExxonMobil had made its final decision to exploit gas from the Black Sea in Romania, now, we would be in a much better situation, but since there
have been no new gas resources, and no new gas was explored in the last few years. Unfortunately, we have no other choice than rely on the Russian
energy sources in the upcoming couple of years.
But this is once again, that's not for fun. This is the physical determination for our country.
QUEST: But there is a feeling, there is a view a sort of a perception that Hungary's position is not as united with the E.U., as other countries or
indeed with NATO, for example.
And we think, for example, the transmission or the distribution of military weapons through Hungary, which until now, you have not allowed to take
place. The view is Hungary is not united with the rest.
SZIJJARTO: You know, I think you've made it very rightly, at the beginning, because you said it is a perception. It's a view, it's a
feeling. But this is not the reality.
Hungary has given its consent to all the five packages of sanctions so far, in the European Union. We have given our consent. We just made it very
clear, that since this physical determination, I tried to describe to you in my previous answer, in order to preserve the European unity, do not come
forward with sanctions, which would stop our country and stop our economy to operate.
On the other hand, when it comes to NATO and when it comes to delivery of weapons, I want to make it very clear that Hungary stands for the
sovereignty and territorial integrity of Ukraine. We are helping Ukraine a lot on the humanitarian side, the biggest ever humanitarian action of
Hungary has been made. And 640,000 refugees we have received from Ukraine so far.
We supply them. We give them accommodation, we offer them jobs, and we help them as much as we can. And when it comes to weapon deliveries, we made it
very clear that we are not delivering weapons, and we do not allow the transit through Hungary because --
QUEST: But that is what Ukraine --
SZIJJARTO: I'll tell you why. I will tell you why --
QUEST: No. Minister, that is what Ukraine says it needs. That's what the U.S. has said more of its allies and partners need to provide. So whilst
one can admire the humanitarian effort, what Ukraine is asking for is help is the very thing you're refusing to do.
SZIJJARTO: Yes, I understand that, but if you look at the list of the E.U. member states and if you look at the list of the NATO member states, you
will see that not all of us, not all of the E.U. member states neither all of the NATO or the E.U. member states are delivering weapons.
The fact is that, you have to see what is the most important duty now for the Hungarian government is to make sure that we can guarantee the security
of Hungary and the Hungarian people.
And in case there are weapons deliveries from Hungary, in case there are weapon deliveries through Hungary, we take the risk of being involved in
the conflict which we definitely would like to avoid and we would like to avoid the situation that the Russians shoots to the Hungarian-Ukrainian
border, or to parts of Ukraine which are populated by Hungarians.
This is something that we really would like to avoid. That's why we made it clear that we are not delivering weapons, but we are standing for Ukraine,
and we are carrying out the biggest humanitarian action of our history ever in order to help the Ukrainian people.
QUEST: So when you look at the actions in Moldova and the breakaway region of Moldova, and you see the way Russia is alleged to be fomenting dispute
amongst Russian speaking people. Now, look at the map, it shows quite clearly.
I mean, Hungary, you've got Romania between the two of you, but this -- do you believe that President Putin is doing his damnedest best to sow as much
discord, disarray, and chaos amongst Europe as possible at the moment?
SZIJJARTO: Well, look, we spoke very clearly. We condemn this war. We condemn that Russia has attacked Ukraine. We stand for the territorial
integrity and sovereignty of Ukraine, and we will stand as we are standing for the territorial integrity and sovereignty of Moldova as well.
We hope there is going to be no attack on Moldova. And we do hope that this war is going to be over as soon as possible because there are people dying
on a daily, hourly, minute basis. Unfortunately, it's really heartbreaking to see families torn apart, fleeing to Hungary and other countries.
So we do hope -- we do hope that this war is going to come to an end as soon as possible and we condemn -- and we condemn this war started by the
QUEST: Let's talk about your own domestic problems. So the E.U. says in a letter. Well, you may -- well, we haven't gotten so far.
The E.U. says about -- the Commission says, "The issues and a repetition talking about issues of rule of law in Hungary demonstrate a systemic
inability or failure or unwillingness on the part of the Hungarian authorities to prevent decisions that are in breach of applicable laws."
Now, a process has begun, first time, that could end up with your budget being fined, sanctioned, or cut. You've been warned about this, Minister.
You have not taken the necessary actions and the E.U. is going to get tough.
Richard, this is a clear political debate. This is a blackmailing against Hungary. These are false accusations. These have nothing to do with
You know, I think it's very visible. You know, the day this procedure has been launched against Hungary was like one or two days after our elections,
where we won again, landslide, a record support to the government after 12 years in office. We have never had so many MPs so far. We have a
constitutional majority on our own, and we understand that the liberal mainstream in Brussels cannot digest this.
The fact is that the people are supporting what we are doing, and if you do what your people support, it means that it is a clear and true democracy.
So all these accusations against us are purely political. This is not the rule of law. This is the rule of blackmail against Hungary, I am telling
you very clearly and loudly.
QUEST: Oh, no. No, no, no.
SZIJJARTO: Yes, it is.
QUEST: That's that with respect, Minister. That argument is like, you know, if you ask children, do they want ice cream? They'll say yes, we'll
have it all the time. But that's not the way you necessarily --
SZIJJARTO: No, no, no. I don't agree with that.
QUEST: So what happens when the policies you are promoting, even if they are liked by the people or your supporters in country are against E.U.
values as the Commission, the Council, and the Courts have found they are?
SZIJJARTO: But they are not against the European values. They are not liked by some bureaucrats and some political leaders in Brussels. This is
We act according to the national legislation and according to the European legislation as well. We are debating about political issues. We are
debating about perceptions. They have never put forward one concrete issue which we could discuss whether this law in its concreteness is being
against the European values or not.
They speak about perceptions like you have just quoted. The fact is that they cannot digest that the Hungarian people did not want the liberal
mainstream to rule and govern Hungary. They wanted us, this Christian Democratic government to continue in office and they have to respect --
they have to respect the will of the Hungarian people.
This is very anti-democracy that they do not respect what the Hungarian people want as a future of our country.
QUEST: I want to finish with a quote from your Prime Minister, if I may, sir. He said after the election victory and congratulations on the fourth
term, he said that -- the Prime Minister Orban said, "We never had so many opponents, Brussels bureaucrats (which is what you've just been saying),
the international mainstream media, (I guess I am included. Well, who knows what you might include?) and the Ukrainian President (talking about
Is it appropriate? I mean, is it appropriate to call President Zelenskyy an opponent when he is fighting a war against Russia, a war, which you are
also basically saying are against as well, and at the height of this, your Prime Minister describes the President as an opponent.
SZIJJARTO: In order to understand why Prime Minister has made the statement, you should be aware of what happened during the last one or two
weeks, just prior to our elections, how the Ukrainian government or some actors on behalf of the Hungarian government, sorry, the Ukrainian
government tried to interfere into the elections in Hungary and the statements made by President Zelenskyy at the very end of our election
campaign, which are pretty hostile to us were absolutely inappropriate.
He shouldn't have -- he shouldn't have made that. We understand his struggle. We are standing for Ukraine, as we said. We are receiving the
refugees from Ukraine. And in this context, what he has said about us how, they tried to interfere into our election campaign was totally
unacceptable. That was the reason -- that was the reason why Prime Minister has made this statement.
QUEST: In a word a yes or no, or maybe will do. Do you support Ukraine's membership for the E.U.?
SZIJJARTO: We made it already very clear when the eight Presidents of certain European countries in Central and Eastern Europe has initiated it
in a letter, we made it very clear that we support this initiative. We made it very clear it was sometime in February as far as I remember.
QUEST: Minister, it is good to see you. Thank you as always. You're very kind to turn up and discuss these matters in forceful manner. I'm grateful.
SZIJJARTO: Thank you so much, Richard. Thank you.
QUEST: It is QUEST MEANS BUSINESS tonight from New York. So Moscow is now blaming sanctions for its gas to rubles ultimatum. A former Russian
Minister gives us a perspective, in a moment.
QUEST MEANS BUSINESS.
QUEST (voice-over): Hello, I'm Richard Quest, we have a lot more QUEST MEANS BUSINESS tonight. Live in Warsaw, where the government's promising
Polish homes will not run out of gas and minutes away from more tech earnings.
The Nasdaq's recovering from Tuesday's horrible sell-off. We'll get all of that but only after I give you the news headlines because, this is CNN and,
on this network, the news always comes first.
After three years in Russian detention American Trevor Reed is on his way home to the United States. The former Marine was released in a prisoner
swap involving a Russian drug smuggler. Reed was serving a nine year sentence for allegedly harming a Russian police officer, a charge he has
Russia has sanctioned almost 300 British lawmakers, including the Speaker of the House of Commons. The move bans them from entering Russia and comes
after Britain imposed similar measures on Russian lawmakers last month.
The British prime minister Boris Johnson said the new sanctions should be worn as a badge of honor.
The United Nations World Tourism Organization has voted to suspend Russia in an extraordinary session. It is the first ever suspension of a country
from the organization. The U.N. WTO says Russia decided to withdraw hours before voted out.
More than 1,000 people, including diplomats and leaders from around the world, were in Washington's National Cathedral for the funeral of Madeleine
Albright. The former secretary of state died last month at the age of 84.
President Biden delivered the eulogy, calling her, "a force of nature who turned the tide of history."
In Myanmar, a source says Aung San Suu Kyi has been sentenced to five years in prison after being convicted of corruption. The 76-year-old Nobel Peace
Prize winner was accused of accepting bribes, which she led the country before last year's military coup. She denied the charges against her.
QUEST: It is a clear and chilly night in Warsaw this evening. This is the weather over Europe and you can see over the Polish capital, where it's
brisk and barky. But it still is only sort of late April, spring if you like.
Now imagine without Russian gas and Poland's climate minister has promised legal action against Gazprom and says there'll be no shortage of gas in
Polish homes. Michael Sznajder is an anchor for Polish news channel TVN24, which is now our sister network, as we all are part of Warner Brothers
Welcome, it's good to be all together and to have such great resources as yourself in Warsaw to talk to us tonight.
So why did Poland not go along like Hungary did or Germany said it's going to, with this complicated system of opening a ruble account and playing
MICHAEL SZNAJDER, TVN24 ANCHOR: Good evening, well, first of all thank you very much for your invitation. It's a matter, when you talk the talk you
have to walk to walk. Poland has been a forefront of the discussion about how significant it is to not only punish Russia but make it difficult for
them to be able to finance their war, to make it difficult for them to exist, as they have been existing so far, after their attack on Ukraine.
QUEST: And in that scenario, what will Polish people -- I mean the minister says that the gas will stay on. And huge efforts are being made to
find gas elsewhere.
Will the lights stay on, is there a feeling the government has this under control?
SZNAJDER: Well, the Polish government has been in total reassurance mode in the past 24 hours or so. And the good news is that there are in fact
supplies. The Polish gas supplies are in 76 percent full. So that is good information.
And depending on the weather, it'll actually give us 40 or even 180 days of gas. Also soon new capabilities will become operational; that is, in
October, the pipeline from Norway, the one from Lithuania should become operational even sooner.
There is also the liquefied, LNG, thermal energy (INAUDIBLE). So those are options that can be used. But to your point, Richard, there's also this
question of uncertainty.
Because this new piece of negative information does add to myriad bad information for the Polish households in the recent months. We have a
double digit inflation, a lot like the American Fed is raising the rates right now.
So when you pay for your mortgage, for your home, people are paying an increased amount of money. Of course, there's the war, the Russian invasion
on Ukraine. So there's also this mood or mood factor, quite negative outlook in terms of the future, the financial future.
QUEST: The E.U. today, the commission started its proceedings against Hungary and told took them to the next level on the budgetary issue. Poland
of course, is also in the bad books with the commission on rule of law issues.
But is there any suggestion or feeling that the Polish government is softening or modifying its stance, being willing to be more within the E.U.
spectrum, if you will, not being so, basically following the line?
Now it realizes the danger of what's happening with Russia, are they being better behaved?
SZNAJDER: Well, in this case, I think it's a matter of interpretation. But one could say that it's the other way around, that perhaps the ruling party
in Poland, the Law and Justice Party and their coalition partners, in fact they see an opportunity to get their way, because there are some voices
coming from the government that perhaps right now this is the moment that the European, the Western European partners, that Brussels, they should
back off, they should stop being so intense that things like perhaps the rule of law and other things or the budgetary aspects.
Should the rules perhaps be changed or not, as stern as they have been recently, because the bonus has been saying that there is such a large
number of Ukrainian refugees, there is a war. And this is not a priority subject, the rule of law subject.
So I would say that there has -- at least I have not seen anyone taking a step back.
SZNAJDER: Michael, thank you for joining us this evening, we are extremely fortunate to have you now as our new siblings and part of the larger
family. And I can assure you, you'll be staying up late frequently to talk to us on QUEST MEANS BUSINESS. At least we certainly hope that you will.
Thank you very much.
SZNAJDER: My pleasure.
QUEST: As we continue tonight, the U.S. calling Russia's gas cuts blackmail. The Kremlin response, we have no choice. The Russian foreign
minister will be with me after the break.
QUEST: Russia's rejected the E.U.'s accusation, it's blackmailing Bulgaria and Poland by cutting off gas. The Kremlin says it had no choice but to
switch to billing in rubles. Sanctions by unfriendly patients left it no alternative. Andrei Kozyrev was Russia's foreign minister under Boris
He wrote the book, "The Fire Bird," joins me now.
So how do you assess the situation now on the economic and financial front?
I mean Russia ratcheting it up, this is a warning to the rest.
So what happens now?
ANDREI KOZYREV, FORMER RUSSIAN FOREIGN MINISTER: Well, Russia is in desperate position, even before any sanctions because the economic policy
and the policy in general was disastrous for Russia of the Putin regime.
Remember that they wanted -- and we wanted actually even and even Soviets wanted to limit or actually get free from this dependence on oil and gas
exports. And yet, this dependence on Russian economy grew up in 22 years that Putin is in power.
So he is playing with double edged sword. If he stops serving Europe, he will not have any reasonable -- I mean, like tangible source of income. So
remember that this blackmail, is just like nuclear blackmail. It's just blather (ph).
QUEST: Except he can do -- nuclear is a little more difficult perhaps but with this one, he can do both. He can stop, he can threaten, he can, in
doing, so push the price up; thereby, A, making more money when he does sell but also he can throw us, the West, into recession.
He can make our work, a bad economic situation worse merely by threatening.
KOZYREV: Actually, I don't think it would be a recession even if, in the worst-case scenario which you described, it will be probably slow down. But
the economic might of the West and Europe even is 10 times, at least 10 times, is bigger than Russia.
So the endurance of both sides could afford is incomparable, despite that Europe is probably easier to scare. And that's the problem. The problem is
QUEST: Andrei, this business with Moldova.
Is this another case of, let's agitate the local speakers so that we can say we're going in to rescue them?
Do you believe that there is an ambition here to invade or at least take part of the territory Moldova?
KOZYREV: Ambition, yes. It's long time ambition of the Putin's regime. And if they can cut to Moldova through the Eastern Ukraine, then they will
probably try to do it. And there are some forces in upper Estonia (ph), -- what we call prehistoria (ph) Transnistria -- who will welcome that like
small group of bandits, actually in the Eastern Ukraine.
QUEST: Where does it end?
I mean, at what point do you believe -- one assumes Putin does not want an all-out battle with a NATO country, however close he may get to it.
So in your view, with your knowledge, where does his territorial expansionism end?
KOZYREV: That's very difficult to say. They are speaking of so-called Russian mir (ph), which is the main religiously (ph) backed and very vague
territorially. And he fights against NATO, at least that's what he says.
So as far as the West allows him to go, he will go. That's why weapons to Ukraine is much more important than anything right now because, if you try
to buy cheap, you know it as you follow the markets, you buy twice.
So if they don't do it now, they will pay twice tomorrow.
QUEST: We'll have you back again, sir, if you'll come back. We'd love to have you again because the excellent insight you've given us tonight, I'm
grateful, thank you.
KOZYREV: Me, too. Thank you.
QUEST: Thank you sir.
Now the World Bank is warning that there's high food and energy prices could last for years because of the war. As global trade's has impacted
Africa is finding itself a frontier market for food producers. Tonight's "CONNECTING AFRICA," Egyptian entrepreneurs have exported produce like
citrus fruits around the world.
In the last few years, they've expanded across key markets on their own continent. Eleni Giokos with this report.
QUEST: In the United States, stocks have clawed their way back at the market, we sort of -- we're in a range today, we're down 157. But the
selloff may not be over.
QUEST: Well, I warned you about the way the day might go, choppy trading. And you look at the numbers now. The gains have evaporated. This is the
last trade before the market closes in nine minutes' time.
And the Nasdaq, if you take a look there, you will see also the Nasdaq is now negative. I think it's highly likely that the Dow might go negative in
the last nine minutes. But you just don't know. There's a couple of support levels there. CNN's Business correspondent Rahel Solomon is with me.
It's all about earnings.
RAHEL SOLOMON, CNN CORRESPONDENT: Uncertainty, yes, it's all about earnings. it's the busiest week of earnings season. Lots to sort through
but, Richard, there is some themes emerging. We want to show you four stocks and they're telling us a lot about the economy.
Let's start with Visa, it's up today. That's after strong earnings.
What did they talk about?
A strong consumer, a consumer who still is willing to spend on travel, going out to eat and spending on retail.
Take a look at Microsoft. Also up about 5 percent today, 4.8 percent. Microsoft talking about in their earnings report, strong business spending,
their cloud business.
Now on the other hand, you have Alphabet, Google parent company, down 4 percent today, citing weaker ad spending.
What does that mean?
Companies essentially maybe not spending as much as they normally would on advertising, on sites like YouTube.
And Boeing's wrapped up in a whole sweep of macro issues. Take a look at this. Boeing reported a disappointing quarter and cited things like
delaying their newest passenger jet. They're going to take a $1.5 billion hit from that, Richard.
Also citing a $660 million charge due to higher supply costs and a $212 million hit due to business disruptions due to sanctions on Russia. So lots
of earnings, Richard, but certain themes are emerging.
QUEST: Those companies, they've got specific problems like Boeing, that are unique.
But is there a common thread that, if you take post pandemic, post pandemic, war in Ukraine, high inflation, blah, blah, blah, is there a
SOLOMON: Yes, in fact, actually I asked a portfolio manager about this today, Jonathan Petridis (ph). Essentially he said that the theme is that
macro issues right now are much more important than micro issues. Some of those issues you've already pointed to, Richard, but also saying that, you
know, inflation won't ease until supply chains improve.
The Fed can't do anything about easing supply chain issues and that means that some of the price hikes that we're experiencing likely won't ease
until supply chains can start to improve.
QUEST: Finally, the way in which the market's reacting, these lurching, stomach-churning, seeming -- I see Netflix was down today again. Netflix
again, Netflix still down even more. The market has -- I guess the market doesn't appear to have capitulated yet.
SOLOMON: Not yet. It appears that there could be more to go. In fact, I also spoke to Petridis (ph) about this earlier.
And he says investors may have short term sight. In fact, we get these breathers but the trend that we've seen is that there is still perhaps more
to go. Netflix in particular is down about 67 percent year to date. So buckle up, Richard.
QUEST: And interestingly I saw you saying don't buy on the dip, which many of us have done. To our cost thinking, it's so cheap, it can't get any
worse. And it probably did. Rahel, thank, you
"Profitable Moment" after the break.
QUEST: Tonight's "Profitable Moment." I hope you're listening closely to this tonight because you've had many different views. Some heated like with
the Hungarian foreign minister but that's fair enough, he's used to it.
In fact, when we talk about Hungary at the moment, you see the difficulties facing Europe at the moment.
On the one hand, there was a very full throated condemnation of Russia, its invasion and the need for an end to stop the war and sovereignty of
borders. And then on the other hand, well, no, Hungary comes first. We need our oil and gas and if that means we've got to buy it from Russia, so be
By the way, that position is not very different to that which we heard from the Austrian finance minister on this program on Friday. The difference to
me seems to be, Hungary is wanting it both ways.
It's refusing to let NATO move military equipment through its country to support Ukraine. It seems to want the best of both, a friendship with Putin
but the unity or at least within NATO and the E.U. And that's not going to wash in the long term because as President Zelenskyy said, it's all a fine
argument until you lose.
If you haven't provided us with the means to fight the war, then what good is it all at the end of the day?
The oil and gas from day one was going to be the difficult sticking point. And so it is proven. And it will, if Russia plays its cards as it is, drive
a wedge through Europe like nothing else can.
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 if it is profitable.
Closing bell is ringing. Hold on to the gains for the Dow. "THE LEAD" is next.