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Quest Means Business

IMF Cuts Global Growth Forecast To 2.7 Percent In 2023; Spanish Government Touts Strength Of Economy; White House To Reevaluate Ties With Saudi Arabia; Second Day Of Russia's Revenge Missile Strikes; Ukraine Halts Electricity Exports; Dash To The Bell. Aired 3-4p ET

Aired October 11, 2022 - 15:00   ET

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

[15:00:27]

RICHARD QUEST, CNN INTERNATIONAL HOST: There is an hour left to trading on Wall Street, and if you look at the Dow, you'll see and make up your own

mind how you describe it.

We're down in the beginning, we got a really strong rally during the course of the day that looks like it's going to sustain, and then in the last

hour, it's evaporated, all of which needs to be discussed and debated in our hour together for those are the markets and the events that are

talking.

A grim message from the IMF, the worst is yet to come to the global economy.

The Bank of England, the BOE says there is still a material risk to the UK's financial stability.

And Ukraine's Energy Minister tells me Russian missiles have hit about a third of the country's energy infrastructure.

A very busy hour ahead. Well, we're still live from New York on Tuesday, October the 11th. I'm Richard Quest, and I mean business.

Good evening.

When it comes to the economics, we're going to be on nautical and weather forecast-y, because it's a gloomy forecast from the IMF, and the clouds are

growing ever darker or the skies are growing darker.

The IMF has downgraded growth for next year 2.7 percent it now sees. The Russia war in Ukraine, inflation, lockdowns in China, they are all part of

the mixture that has led to these numbers, and the fund -- this is important -- is warning of high downside risks. In other words, that's the

polite way of saying this number could get even worse.

It makes abundantly clear, storm clouds are gathering. This is how we look at them now.

There are strong warnings for policymakers to steer the ship through choppy waters. It says, "The worst is yet to come," and that next year will feel

like a recession to many around the world. We've said that many times on this program.

Central bankers are advised to keep a steady hand firmly focused on taming inflation, even amid concerns of raising rates too fast and if that wasn't

bad enough, batten your hatches, the emerging markets are told, batten down the hatches as the dollar strengthens, because it could be too late.

Rahel Solomon is with me.

At one point, in one way, they are -- it is a statement of the bleeding obvious. If rates are going up, then things are going to get worse and we

are really only a few months into the rate rising process.

I guess, there had been too many rosy scenarios painted.

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Well, that's a great way to put it right, Richard? It does sort of feel like an acceptance and

accepting of reality that up until now maybe we hope that we would get a bit of good luck. A bit of good news on the sort of supply chain front,

certainly, maybe some good news on the war front. But obviously, neither of those two things have happened. And so it does seem to be coming to terms

with what we are experiencing both here in the US and around the world.

So in addition to those global growth forecasts that were revised downward for 2023, Richard, I want to just paint a picture of some of the other

forecasts for the years ahead.

So for the US, for example, the IMF saying it now expects growth for 2023 for the US to reach just one percent. Not better in the Euro area. Growth

for the Euro area coming in for 2023 at 0.5 percent.

Richard, if there is any silver lining, and it is hard to find, certainly in this report, but if there is any morsel of good news is that the IMF

expects global inflation to peak this year before starting to fall next year and the year below that does not however, apply to the UK.

QUEST: All right, so we'll do the UK on its own. I'm looking at the numbers now. And I'm going through them what I find encouraging though, is

that inflation in the US is forecast by the end of next year to be down at 3.2 percent or 2.2 percent, and the Euro at 4.6 percent. So, things are

coming down. The medicine, albeit painful, is working.

SOLOMON: The medicine is working, albeit painful, albeit bitter and the question perhaps now Richard is once we get to that three percent inflation

target or that three percent inflation level, does the Fed stop or some would say pivot.

[15:05:10]

Up until this point, the Fed has been clear that they are sort of laserly focused on two percent. We'll see what they actually do in the years to

come if in fact, we do start to see joblessness increase, which we are hearing, we will likely see.

QUEST: The UK looking at the numbers, their inflation remains at 6.3 percent until the end of next year, and their growth forecast is -- well,

it was obviously revised upward as a result of the policies of the Chancellor. The projection for next year is reasonable -- I mean, it is

better than it was, I'm just looking for the UK and the Chancellor. It's better than it was, but still not very good.

No, in fact, you know, I know you're going to talk about the UK a bit more, clearly a bit later in the show. But yes, I mean, the picture in the UK,

certainly for inflation. Not looking pretty, right? I mean, 2022 and 2021 - - or 2022 and 2023, rather are practically at the same level because of the war, because of the energy crisis and because of supply chains.

QUEST: Rahel Solomon, in New York, I'm grateful. Thank you.

The Bank of England says there is still material risk to the UK's financial stability, and the bank stepped in to calm markets. The third time since

the government's mini budget, led to panic. The IMF says the Central Bank's fight against inflation has been complicated by the government's package of

tax cuts and a cap on energy prices and growth will probably be faster in the short term, but will eventually grind to a halt next year.

Clare Sebastian is there. Look at the numbers, I mean, I guess the Chancellor would argue, Clare Sebastien that if the IMF is forecasting 0.3

percent for next year, allowing for his measures, it would have been a far worse number had he not done what he is going to do?

CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, so what the IMF actually said, Richard, is that the forecast for growth would be somewhat higher in the

near term, if they had been able to factor in the fiscal package, the survey they did was done on September the 12th, so about 10 days before the

fiscal package came out.

But that it was complicating the fight against inflation, as you say, and I want to pull up some of the numbers that came up because the UK is forecast

to be doing far worse than most other -- than all other developed economies, and most other countries in Europe by the end of 2023.

Just look at that, the UK inflation rate is set to be 6.3 percent, still triple the target by the end of year, while the US, as you were noting with

Rahel at 2.3. Germany not doing so well; as we know, they are suffering because of having to transition away from Russian gas on which they were so

reliant, but France doing a little better.

So the UK really in the doldrums there and that could be made worse by the fiscal package, which of course, is very inflationary given the level of

borrowing that underpins it.

QUEST: So what did the bank have to do? The Bank of England have to do?

SEBASTIAN: So, they had to step in over the past two days, Richard, by expanding first of all the daily limit on bond purchases, and then today,

they stepped in again, adding a different type of bond index linked bonds that basically bonds that track the rate of inflation, in terms of coupon

payments that are designed to hedge against inflation.

They have stepped in to buy those because they saw what they thought was a disorderly selloff in that in terms of pension funds. I think, Richard,

what the last two days have shown, though, is that the Bank of England is not on its own capable of calming down the gilt market. Gilts have been

rising, and I was going to tell you that, but then Andrew Bailey has, according to reports, Richard come out in the last hour and said it

himself.

There are multiple reports emerging that he has made comments in Washington, saying that they are going to get out of the gilt market as

expected this week and we are seeing the pound falling off the back of that -- Richard.

QUEST: But on this one, just remind us why the pension funds are selling gilts.

SEBASTIAN: So the pension funds because of the rise in these -- in gilt yields are getting, it's very complicated in the weeds, but they're getting

basically calls for collateral in some of their investments and in order to pay those cash calls, they are having to sell off other assets, and in many

cases, they are selling off long dated government gilts.

So that is why we're seeing a selloff. That is why the Bank of England is having to come in and buy up those long-dated gilts and other types of

guilts as we saw today, to sort of cushion the market against those selloffs.

But we are hearing, as I say, reports, that they are going to get out as planned at that market by Friday, despite pressure from some pension funds

and trade groups representing pension funds for them to stay in and --

QUEST: Right. A temporary . I'm seeing various reports of this in quotes now on the wires, but nothing is confirmed. So, let's not get into that,

but I'm glad that we do. We've sort of clarified.

Thank you, Clare Sebastian.

[15:10:02]

In Spain, the authorities know that they are not immune to the global economic headwinds, the numbers show it. The government's growth forecast

for next year has been cut to 2.1 percent.

The Central Bank has a forecast less optimistically, at 1.4 percent, citing high energy prices.

Spain's First Deputy Prime Minister joined me earlier and said that high investment and job creation are keeping the economy on track, and she won't

be taking any economic cues from the United Kingdom.

(BEGIN VIDEOTAPE)

NADIA CALVINO, SPANISH FIRST DEPUTY PRIME MINISTER: We are on track to meet our targets. I think that governments right now need to be doubly or

twice as prudent and responsible as in normal times, as in the context of uncertainty and volatility.

Fiscal responsibility is of the essence.

QUEST: But isn't that the contradiction that we're in at the moment? The fiscal prudence that you talk about that are counterbalanced by a slowdown

under a recession in some places that will require fiscal targeting of -- so which is it to be? Which is taking dominance and precedence at the

moment? Keeping growth moving or fiscal prudence?

CALVINO: Well, I would actually and respectfully disagree with the notion that reducing taxes on the rich is actually supporting growth. What we have

seen through practical experience is that reducing taxes on the richest parts of our society or the largest corporations only makes some parts of

our societies richer, but it makes inequalities grow and it doesn't support growth.

So, you know, our approach is one where we are taking measures, which are fiscally responsible, but trying also to support the most vulnerable parts

of our society.

(END VIDEOTAPE)

QUEST: Spain's Deputy Prime Minister, also the Economics Minister.

As we continue, the IMF has been sharply critical of the UK's budget plan. After the break, the fund's chief economist is with me, Pierre-Olivier

Gourinchas to discuss what and why and that quote, that the worst is yet to come. How much worse?

In a moment.

(COMMERCIAL BREAK)

QUEST: The stark economic forecast from the International Monetary Fund. We've heard the quote, the chief economist, Pierre-Olivier Gourinchas is in

one Washington, DC joins me now.

Good to see you, sir. I'm grateful for your time.

The quote of the day. The quote du jour is "The worst is yet to come out." When I look at the numbers, I can sort of see it getting worse, but in your

view, how bad is it going to get?

[15:15:17]

PIERRE-OLIVIER GOURINCHAS, CHIEF ECONOMIST, INTERNATIONAL MONETARY FUND: Well, thank you, Richard.

You know, our projections are that output growth is going to slow down globally to about 2.7 percent, something like 1.1 percent for advanced

economies, and inflation is still going to be high next year. We're projecting about 4.4 percent in advanced economies, 6.5 percent globally.

So, there is going to be an environment in which you still have inflation, the economy is slowing down, so that people dealing with the high energy

prices and food prices, and so it is going to feel worse than where it is right now.

QUEST: Where do you think we are in the monetary tightening cycle? I know that is how long is a piece of string when you look at the different

countries, but if we take the majors every day, for example, the US, the EU, UK, whatever? Where are you -- where are we do you think?

GOURINCHAS: Well, we think we're in the middle of a very important battle that Central Banks are waging to bring back price stability. It is a

very important fight because price stability, we view it as sort of the bedrock of macroeconomic stability going forward. So, it's very important

that we get back to a place where, you know, we don't have to worry about inflation, whether it's 1.8 or 2.2, no one really is going to spend too

much time thinking about that.

And that requires tightening monetary policy, and the Central Banks have really been focused on that since the beginning of the year.

Now, our view is that what they have announced, whether you're looking at the Fed, or other Central Banks, is sort of getting us there, maybe not by

the end of next year, but maybe sometime in 2024, we're going to get there. But it's important that we stay the course. If we start moving away or

pausing or even pivoting away from this, then inflation is not going to come down.

QUEST: Well, I know from your projection, you have the US at 2.3 percent by the end of 2023. Now, arguably, by the time it gets on a CPI basis, by

the time it gets to the end of their 2.3, would they be justified in easing on the monetary tightening?

GOURINCHAS: Well, they would, but you have to remember that we are starting from a position where many Central Banks were very accommodating

at the beginning of this year. We are starting from a position where you know, in the lingo of Central Banks, we were not at neutral, we were

really, Central Banks were still very accommodating.

So a lot of what you've seen up until now until very recently, I would say is sort of removing that accommodation is not really tightening. So, once

we get to two percent, and the economy is sort of moving along nicely, Central Banks should also stay closer to neutral.

So, we are not expecting to go back to the very low rates that we've seen, you know, implementing during the pandemic, for instance. There is no basis

for this.

QUEST: Right, now, related to that, as I understand it, we've really got two distinct processes at the moment, haven't we? We've got the process of

getting rid of inflation and then we've got what it all looks like afterwards.

Now one Fed Governor today, basically says that rates need to be more restrictive. If you take the UK with its high numbers and the EU and the

US, do you believe that rates do need to be much more restrictive?

GOURINCHAS: We don't believe that they need to be more restrictive than where they have announced to be going. So you know, if you look at what the

Fed has been saying and if you look at the projections in terms of their own projections, economy projections for where policy rates are going to

be, they are seeing more tightening going forward.

We don't anticipate that there is a need to do more than that. What we are guarding against is a view that there should be a pivot away or pivot

towards easing or pausing in terms of this path.

QUEST: On the UK, the language used initially by the fund, initially after the increase, the Chancellor's policy, basically saying you're wrong,

and now, the language used in the WEO, was the much debate about how critical to be?

GOURINCHAS: Well, look, I think our position here -- and let me not be is talking specifically about the UK because our position is very general.

Our view is, fiscal policy in the energy crisis and food price crisis that many countries are facing has an important role to play.

It needs to be protecting vulnerable households and potentially protecting important parts of the business sectors. Now, it cannot do that in a way

that would be working at cost purpose, with monetary policy, so we've been concerned when we are seeing fiscal packages wherever they might be coming

from that might be adding sort of to the inflation fire, and that in a sense should not be recommended.

[15:20:14]

QUEST: To the extent the UK is obviously a G7 country, G20 and an important shareholder in the fund. Is it difficult for the fund, when a

major developed economy, like the UK, appears to be putting in place policies that really go counter to everything you think should be done at

the moment?

GOURINCHAS: Well, look, we have a very strong relation with the UK here at the IMF, and we have an ongoing dialogue. So we are not worried about

having exchanges with the authorities, as we are.

QUEST: Now, I want you listen in. Last one on the UK, and then we'll move on to emerging markets and spillovers, but have a listen to what the

Chancellor said today in Parliament.

It was a novel way to take your comments or the WEO's comments, and turn it to his and spin it as advantage. Have a listen.

(BEGIN VIDEO CLIP)

KWASI KWARTENG, BRITISH FINANCE MINISTER: The IMF said today that actually the plan, the mini budget has increased the forecast for growth. That's

exactly -- that's exactly -- that is precisely the opposite of what the Honourable Lady has said, and it is very clear where we stand on this.

We've got pro-growth, pro-enterprise, pro-business, conservatives on one side and the anti-growth coalition on the other side.

(END VIDEO CLIP)

QUEST: Now, ignoring the politics, let's look at the economics. You've got to admit that was a sharp way of turning what you said to his

advantage?

GOURINCHAS: Well, look, it's clear that, you know, measures that would support long term growth or desirable, it is clear also that measures to

protect businesses and households in the context of the energy crisis are also desirable, and it is also the case that, you know, countries have a

limited fiscal space, and they need to do it in a way that doesn't necessarily work at cross purpose with monetary policy.

So, we're just outlining these broad principles, and I think, you know, within that context, we're very much looking forward to, you know, seeing

with the UK fiscal event, at the end of the month, where this is going, we're going to have more details on this is, it going to be discussed.

QUEST: The emerging markets. I guess I get -- I can't remember the number of times now I've heard warnings about spillover effects, but the

reality is nobody is listening. The developed economies are making policies, perhaps rightly for their own economies. But whether it was food

security on Ukraine and Russia, or now monetary policy, that's basically sucking out investment from developing economies.

How concerned are you?

GOURINCHAS: Well, there's a number of futilities in emerging markets and low-income countries. I mean, a number of low-income countries are in

situations where they have debts that are not quite sustainable. They are in situation of debt distress. And we really encourage a number of these

countries to really start discussions with their creditors to bring back their debts to sustainable level that will unlock access to fund financing

and fund resources, because that's what we're here and we can help with.

Now, it's true that monetary policy in advanced economies is tightening financial conditions around the world and it is leading to a strong dollar,

for instance, which is weighing down on the number of emerging market economies.

But we are saying in this context is a lot of the strength of the dollar is related to fundamental forces the fight against inflation we've discussed

already and the energy crisis. And in that environment, it is important to sort of target to have your monetary policy, target your domestic

objectives, and then let the exchange rate to the extent you can, let the exchange rate adjust because some of the adjustment is fundamental.

QUEST: Many thanks, we will be in Washington with you tomorrow, and indeed on Friday at the IMF and World Bank annual meetings. And of course,

we have the debate as well, which we're looking forward to as well.

Many thanks for joining us tonight to talk this through. I'm grateful. Thank you, sir.

Now, the White House says Joe Biden is reevaluating the US relationship with Saudi Arabia. It follows OPEC's decision to cut oil production. The

State Department spokesperson said, OPEC has aligned with Russia's war aims.

(BEGIN VIDEO CLIP)

NED PRICE, US STATE DEPARTMENT SPOKESPERSON: The President has been clear all along and actually going back to the time before he was elected

President that we need a different sort of relationship with Saudi Arabia.

I think the events of the last few days just put that in fairly stark relief. The decision last week on the part of OPEC to align itself and to

align its energy policy with Russia's war aims against the interests of the American people, it underscores what we have said all along.

(END VIDEO CLIP)

QUEST: Now the prospect of more energy out the ground, Israel and Lebanon says they've reached an agreement on their maritime borders ending

years of dispute over undersea oil and gas fields in the Med.

The crisis on energy has prompted the two countries who are technically still at war to put aside some of those differences.

CNN's Hadas Gold is in Jerusalem.

(BEGIN VIDEOTAPE)

HADAS GOLD, CNN CORRESPONDENT (voice over): It looks like a Mediterranean paradise, but this is one of the most tense and dangerous places in the

world, the Israel-Lebanon border.

This stretch of sea has long been disputed between the two enemies technically still at war, even more so over the past decade with lucrative

gas deposits at play. On Tuesday, after years of start and stop negotiations, a breakthrough.

Lebanon and Israel have agreed to a compromise mediated by the United States, the first of its kind in decades. Israel will now be able to

develop the Karish oil and gas field and Lebanon the Kana field.

BENNY GANTZ, ISRAELI PRIME MINISTER (through translator): I commend the announcement by the Lebanese President accepting the agreement.

ELIAS BOU SAAB, LEBANON'S DEPUTY PARLIAMENT SPEAKER AND NEGOTIATOR: What more can secure stability on this border than having both countries at the

same time producing guns.

GOLD (voice over): With Russia's war in Ukraine disrupting natural gas supplies for Europe, there were enormous incentives and pressures to reach

a deal and drill.

And the strain wasn't just economic. Hezbollah, the powerful Lebanese militia backed by Iran released this video over the summer, threatening to

target gas facilities Israel had already put into place if they began pumping before an agreement was reached.

The Israel Defense Forces said in July that they shot down three Hezbollah drones headed toward Israeli installations.

(HASSAN NASRALLAH speaking in foreign language.)

GOLD (voice over): Hezbollah's leader Hassan Nasrallah is likely to take the agreement as proof that his threat worked.

Lebanon, led by a caretaker administration is beset by years of extreme inflation, corruption and political instability. Its President, Michel Aoun

will welcome the desperately needed cash that the gas will bring, although it will take years to see a cent.

It's a political boon to the Israeli Prime Minister Yair Lapid, who faces an election in just three weeks. His chief opponent, former Prime Minister

Benjamin Netanyahu, has tried to use the gas deal as a political bludgeon, accusing Lapid of surrendering to Hezbollah.

US President Joe Biden will likely take a victory lap as it was the US mediator, Amos Hochstein who got the deal over the line when others

couldn't. Officials now believe those gas rigs and this new border will make for a much quieter neighborhood.

(END VIDEOTAPE)

QUEST: As we continue, Ukraine's Energy Minister tells me around a third of his energy infrastructure has been destroyed after a barrage of Russian

missiles.

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[15:30:00]

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QUEST: Welcome back.

President Biden is leading the charge to give Ukraine more advanced defense systems. The president is working to deliver two NASAMS missile systems.

The announcement follows the G7 which faced renewed pressure to increase their support to Ukraine.

The leader strongly condemn the attacks by Russia on civilian areas and energy infrastructure, reaffirming their commitment to support Ukraine for

as long as it takes.

Russia has admitted to targeting energy facilities in a wave of missile attacks and airstrikes across the country, an act of vengeance ordered by

President Putin in retaliation for the bombing of the bridge linking Russia to Crimea.

As the missiles continue to land, Ukraine's president made his case for better air defense systems.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): I am asking you to strengthen the overall effort to help financially with the creation

of an air shield for Ukraine. Millions of people will be grateful to the Group of Seven for such assistance. When Ukraine will receive the

sufficient number of modern and effective air defense systems, the key element of Russian terror, missile strikes, will cease to work.

(END VIDEO CLIP)

QUEST: Fred Pleitgen is in Kyiv.

Is he likely to get them?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think the Ukrainians will get them, Richard. But I think it is going to take time. We

are looking at some of those orders that have been placed for some of the systems.

Some of them, quite frankly, have to be built. If you look at the U.S. systems, obviously the United States wants to get two there very quickly. I

think one is actually already in Ukraine but that came from the Norwegians.

NASAMS system was developed by both the U.S. and Norway. The U.S. wants to get them there as fast as possible as well. But a lot of these things still

have to be constructed, really, and then brought here.

The Germans, by the way, Richard, they are also speeding up the delivery of the IRIS-T system, that would also be quite effective they believe in

targeting cruise missiles. The Germans are going to deliver one very quickly, they said, if they haven't already. And then three more as well.

So the Ukrainians certainly are going to be able to beef up their anti- aircraft capabilities but it still seems to be falling short of what they have been actually asking for. One of the systems that the Ukrainians have

been asking for is the Western Patriot system, which is a very modern long- range anti aircraft system.

So far that is something that has not happened. One of the big issues that the Ukrainians say that they have, Richard, is they have all the systems

that they are using quite effectively, Soviet systems, like one known as the S-300.

They say they are running out of rockets for those. They don't have a sufficient quantity. If there is one weakness that these air defense

systems have, it is when they get overwhelmed by a lot of missiles like what the Russians did yesterday.

Ukraine says they fired more than 80 cruise missiles in a single day. That can overwhelm even the best systems if there are simply not enough

interceptor rockets to counter those missiles that are being launched.

The big question then is, how many of these long range missiles do the Russians actually have left?

I think we heard from the U.K.'s spy agency today, they believe the Russians are also running short on that, Richard.

QUEST: Today, the head of NATO said he described NATO as not a party to the war but supports playing a key role in helping Ukraine. The more

advanced weaponry that they provide, let's face it, they are basically giving it on whatever terms they want. It takes NATO pretty much to a

party.

PLEITGEN: I think it makes it closer and closer. I think one of the things that the Russians have also been saying is, they have been saying exactly

that.

[15:35:00]

PLEITGEN: They believe that NATO and especially the United States are very close to crossing what Russia believes is a red line. The Russians haven't

defined what exactly that red line is.

I think for NATO and for the U.S. specifically, they are obviously the strongest member of NATO, they are saying that as long as they don't have

any troops fighting on the ground in Ukraine, they believe that they are not a party to the conflict.

They believe that they can stop or not be a party to the conflict while at the same time delivering these weapons and delivering modern weapons. Of

course, it does two things.

On one hand, of course, it helps the Ukrainians right now on the battlefield, which is certainly not something that the Russians like to

see. But it de facto also moves Ukraine closer and closer to being very compatible with NATO.

Obviously, having those Western systems and moving their army from a former Soviet style of weapons to Western styles of weapons, also of course,

technologically, moving them quite close to being in the vicinity of NATO at least as far as the capabilities are concerned.

So the Russians are talking about that but, at the same time, NATO and the U.S. are saying, unequivocally, they are not part of this conflict.

QUEST: Fred Pleitgen in Ukraine, thank you sir.

Ukraine itself says the country will no longer export energy after its electric grid was so badly damaged this week that it can't send any more

power to Europe. Ukraine connected Europe's grids soon after the war began and exported energy since July.

Halting it could make Europe's precarious situation even worse as both the Ukrainian energy minister told me 30 percent of the country's energy

infrastructure had been damaged.

(BEGIN VIDEOTAPE)

HERMAN HALUSHCHENKO, UKRAINIAN MINISTER OF ENERGY: Today is the second days of shelling and yesterday they shelled something more than 80

missiles. Today it's something around 40. Of course, that is really worrying, the heavy shelling to energy infrastructures. We feel that

something around 30 percent of energy infrastructure was hit.

QUEST: You can't repair 30 percent of the energy structure very quickly.

So what are you going to do?

HALUSHCHENKO: Of course, we are repairing. All these days, 24 hours a day, we are doing this job. We are trying to reconnect quickly from the other

sources, from the other operators.

In fact, we are doing this work. And I must say that we quite succeed on this. Of course, we understand that taking this into account, yesterday we

asked our citizens to understand that, in some regions, we need to stop supplying electricity for a number of hours to help to stabilize the energy

system.

QUEST: Recently in the last few months you joined, you were allowed to join and become part of the European energy system, which allows for the

transfer of energy between Ukraine to the E.U. and back again.

Are you going to get extra energy that you require from Europe?

HALUSHCHENKO: That is one of the topics we discuss with our partners. Of course, the synchronization of Ukrainian grids with E.U. systems gives us a

possibility to not only export but also we increase electricity to Ukraine. That is one of the options on the table.

QUEST: The problem is Russia can continue to target key infrastructure weak points, if you will.

What can you do against that?

Bearing in mind these missiles are coming hundreds of kilometers away. If they continue barraging your infrastructure, eventually it will collapse.

HALUSHCHENKO: In fact, after so strong shelling, today and yesterday, the Ukraine system is still stable. And that is what we see. We managed to

maintain it.

I'm sure that what is very important, that our partners should provide us the air protection system and air protection systems which really could

help us to protect our infrastructure, that is very important.

QUEST: When would you hope to restart electricity supplies to Europe?

HALUSHCHENKO: It depends, of course, on the situation. But it depends also on the situation with Zaporizhzhya nuclear power plant, which is now under

occupation.

[15:40:00]

HALUSHCHENKO: We are in negotiation with IAEA, Mr. Grossi and so of course we are looking for any possible solution on Ukrainian terms. And that is

very strongly connected to the facilities of Zaporizhzhya. Of course, that will be changed because the situation changes every day.

(END VIDEOTAPE)

QUEST: One quick programming note to bring to your attention, Jake Tapper will sit down with the President Joe Biden to talk about the war in Ukraine

and the midterm elections.

That is at 9 pm Eastern, 2 am in London.

That is QUEST MEANS BUSINESS for a moment. I'll be back at the top of the hour. Together we will have a dash to the closing bell.

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("AFRICA AVANT-GARDE")

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QUEST: Hello, I'm Richard Quest.

Instead of our usual dash to the bell, I must bring you the sad news that the legendary actress, Angela Lansbury, has died aged 96. The London born

star wound her way into public hearts in more than eight decades. She will be remembered for a wide range of roles on stage and screen.

Perhaps among the best known, a witch in Disney's "Bedknobs and Broomsticks," Jessica Fletcher in "Murder, She Wrote," and Mrs. Potts in

"Beauty and the Beast." Stephanie Elam looks back at the extraordinary life.

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STEPHANIE ELAM, CNN CORRESPONDENT (voice-over): The British actress made the role seem effortless and earned 12 Emmy nominations during the show's

successful run.

(VIDEO CLIP, "MURDER, SHE WROTE")

ELAM (voice-over): Born in October 1925 in London, Lansbury got her big break as Nancy in the 1944 film, "Gaslight."

She earned her first best supporting Oscar nomination for her work opposite Ingrid Bergman.

"The Picture of Dorian Gray" garnered Lansbury her second supporting Oscar nomination in 1945. She worked steadily throughout the '50s and then "The

Manchurian Candidate" came along in 1962.

(VIDEO CLIP, "THE MANCHURIAN CANDIDATE")

ELAM (voice-over): Lansbury gave a tour de force performance as the villainous Mrs. Iselin. She scored her third Best Supporting Actress

Academy Award nomination.

In the 1971 musical, "Bedknobs and Broomsticks," the versatile performer showcased her singing chops.

(VIDEO CLIP, "BEDKNOBS AND BROOMSTICKS")

ELAM (voice-over): She also shined (sic) in several musicals on Broadway, including "Sweeney Todd" and "Gypsy." The gifted performer earned five Tony

awards throughout her career.

In 1991, a new generation of fans discovered Lansbury when she voiced the character of Mrs. Potts in the animated film, "Beauty and the Beast."

(VIDEO CLIP, "BEAUTY AND THE BEAST")

ELAM (voice-over): The distinguished actress received a Lifetime Achievement Award from the Screen Actors Guild in 1996 and was also given

the National Medal of the Arts the following year.

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ANGELA LANSBURY, ACTOR: Medal in honor of the arts given at the White House, that was a tremendous honor to me.

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ELAM (voice-over): The mother of three returned to the big screen in 2005 in "Nanny McPhee" and again in 2011 opposite Jim Carrey in "Mr. Popper's

Penguins."

(VIDEO CLIP, "MR. POPPER'S PENGUINS")

ELAM (voice-over): It turns out, Angela Lansbury was the tenacious one, getting accolades for her work on stage and screen over seven decades.

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