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Hala Gorani Tonight
Greek leaders ask for another bailout; Remembering the victims of Tunisia massacre; Scorching temperatures at Wimbledon; Lead second could disrupt financial markets; Military plane crash in Indonesia kills at least 86 people; Examining Growing US Presidency Candidate Field
Aired June 30, 2015 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:11] HALA GORANI, HOST: Tonight Greece on the brink with a deadline just hours away now.
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GORANI: The country says it will not pay putting Athens on course for a default. We're live in the Greek capital.
Plus new details this hour emerge about the past of the gunmen who shot and murdered dozens of tourists at a Tunisian resort.
And coming up at least 70 people are dead this day after a military plane crashed in Indonesia. And Donald Trump gets fired himself.
The American Network NBC sends the American Presidential candidate packing, we will explain why, this hour.
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GORANI: Hello, everyone, I'm Hala Gorani, we're live at CNN, London. Thanks for being with us. This is the World Right Now.
Well it's down to the wire. It is just hours away. Just under three hours away this deadline. Greece appears to be on the brink of financial
collapse despite months of bitter negotiations.
The Economy Minster says this country will not make a $1.7 billion loan payment tonight. The Eurogroup President spoke moments ago to CNN about
another bailout request from Greece. Here was his answer.
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JEROEN DIJSSELBLOEM: We received this afternoon a letter from the Greek Prime Minister, Prime Minister Tsipras basically requesting for a new ESM
program for financial support and requesting an extension of the old program ad we discussed that this evening in the Eurogroup meeting by
phone.
The political circumstances and the political stance of the Greek Government doesn't seem to have changed. We are still of course awaiting
the referendum in which the Greek Government is still campaigning no. So the political context hasn't changed. The practical circumstance is that
the old program expires tonight at 12 and practically and legally there's little we can do. But as I said also the political circumstances, the
political stance of the Greek government hasn't changed. So unfortunately the old program will expire --will expire tonight.
GORANI: The old program will expire tonight. In simple terms it means Greece will not get the money from its lenders as part of the second
bailout program.
You can hear the full interview with Eurogroup President Jeroen Dijsselbloem next hour on Quest Means Business.
Right now in Athens, Greece -- Greeks in the streets are showing their support for the European Union, their future seems uncertain though, banks
remain closed.
Let's find out what this all means in Athens for stock markets around the world as well.
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GORANI: Isa Soares is covering the demonstrations in Athens. Tadhg Enwright is with me in London tracking how global markets are reacting.
Let's start with Isa first of all. What's going on right now in Athens because the country's just a few hours away from being the first developed
economy to default on an IMF loan repayment. What's the mood now?
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ISA SOARES, CNN INTERNATIONAL CORRESPONDENT: Good evening, to you Hala. It's been a day of twists and turns pretty -- pretty much a lot of Greek
drama happening tonight. We saw a lot of people taking to the streets, I'd say thousands of people taking to the streets just behind me here in
Sant'Agnese Square. They are pro Europe supports. (inaudible) we saw the anti-austerity pro Government, (inaudible) supporter today is the other
camp. The people who want to really say we want to stay in the Euro.
Thousands of them turned out but because of the rain many have dispersed. You probably can feel them saying yes, screaming yes, just behind me. But
as you heard from President Dijsselbloem we spoke to (inaudible) exclusively just minutes ago basically saying the current bailout expires
in 2 hours. There's no extension to that. That is the end of it. In 3 hours Hala, IMF is due and then we already heard from the economy minister
also speaking to CNN saying they will not pay. And now what we have is Greece throwing an olive branch of sorts, coming to the table saying to
Europe actually we could do with another bailout and a two year bailout and this will be coming from this all singing, all dancing (inaudible) bailout
fund.
And although it's going to take some time to really find out what the terms are and the (inaudible) because it is quite complicated, quite convoluted
to be completely honest with you, it gives Greece some time to come up with a plan, a strategy. And really what it does Hala, and I think this is
probably the most important part given that banks are closed, it will be interesting to see if the ECB who has already put capital controls in place
whether now they've got to request (inaudible) whether ECB will then start putting more money, throwing more money into the banking system. And it's
quite the move by Alexis Tsipras, who some say could be clever or it could be just highly disastrous, time I'm sure will tell.
(END VIDEO CLIP) GORANI: All right, absolutely, we have that referendum scheduled for July
5th. The question is a very long one by the way, yes or no. Isa Soares, we'll let you go for now, she's live in Athens, part of our team of
correspondents covering this important story on the ground.
What about world markets? Tadgh Enwright joins me now in the studio with more. And I'm seeing behind you Dow Jones Industrial average only briefly
dipped mid-day but right now we're higher. What's going on I thought it was a disaster looming here for world markets?
TADGH ENWRIGHT, CNN INTERNATIONAL CORRESPONDENT: The Dow - the Dow Hala, is shrugging it off a little bit. You know U.S. investors have other
things to be thinking about.
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ENWRIGHT: You've got U.S. consumer confidence figures out today also, a little bit better than expected. The Dow currently trading a quarter of a
percent up. But we are told that it is a depressing sentiment overall.
It is of course on the Eurozone markets where the Greece prices is being most reflected. You can see here the Paris CAC closing down one and two
thirds percent today. The Xetra Dax in Frankfurt down by one and a quarter percent.
And that of course comes on top of much bigger, much more pronounced falls yesterday. The Dax lost three and a half percent yesterday. The CAC three
and three quarters percent. Because it's reported since yesterday that investors were really pricing in the likelihood that this payment would be
missed.
On Friday there was still some optimism that a deal could be done to ensure Greece makes this payment today on time but you know developments over the
weekend, we had the referendum. Come Monday morning markets started tanking because they knew that it was looking very unlikely this payment
would be made. There was a brief rally across the breakeven line in the middle of the day when we heard about the Greek application for another
bailout. As soon as Chancellor Merkel though started poo pooing that request saying it was simply too late we saw sentiments turning back into
the red again, Hala.
GORANI: So, but what you see here are markets still at historically high levels. I mean we're not seeing panic by any definition of the word spread
especially the Dow being up today. Why is that?
ENWRIGHT: There is a sense that this time around the potential of it, that the consequences of a Greek default would be concentrated, mostly
concentrated within Greece. The fact that the - you know Greece owes its money this time around to the IMF, to the European Central Bank, to the
European Commission. It's not like last time where you had money actually owed to the type of people, the banks who lend to countries. So there
isn't the same concern that - there isn't the same concern this time around and we can see that reflected on the markets. There isn't the same concern
that there will be a shockwave across the bond market. And the likes of Ireland which of course has now exodus its bailout program would come under
pressure once again. It's seen as a safe bet now.
And also you see the chaos in Greece right now. That's another reason why it's said that the likes of Spain, the likes of Italy wouldn't hold Greece
as an example of what can happen when you defy the Eurozone because look, it's not working. That's why the fear of contagion is not the same this
time around, Hala.
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GORANI: Thanks very much, Tadgh Enwright with world market reaction. We'll see tomorrow once the default in fact indeed happens at midnight
local, how markets will react. But the expectation is that that's the way the country is headed.
Banks inside Greece are under pressure. Let's speak to a person at the center of Athens economy, Constantine Michalos, The President of the
Chamber of Commerce. He joins me now live from Athens.
Mr. Michalos, first of all, where do you stand on what the Greek Government should be doing right now. Do you agree with their approach?
CONSTANTINE MICHALOS, PRESIDENT OF THE CHAMBER OF COMMERCE: Well we not only agreed but we urged the Government to sit round the discussion table
with our partners and lenders quite a few days ago and find a solution. They need to find an honest and mutually beneficial agreement with the
European partners simply because the Greek economy cannot stand on its own feet.
This is not a productive based economy and therefore if we return to a national currency it would be absolutely disastrous.
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MICHALOS: We've had the first samples of what might happen with the banking system having closed down for 48 hours and the business community
can't simply make any move whatsoever apart from those -- those transactions that take place internally.
[15:10:01] MICHALOS: But not being a production based economy we are highly reliant on import trading to the tune of 65% of our trade business
and we simply cannot transact with any foreign country at the moment. So it's a Greek tragedy ...
GORANI: But do you think it was a good idea?
MICHALOS: ... re-written all over again.
GORANI: A Greek tragedy a lot of people would agree with you on that one. Do you think it was a good idea for your Prime Minister to take this
gamble, to call for a referendum after talks broke down with the lenders in Brussels? Do you think that was a good idea or is it too risky for Greece
now?
MICHALOS: Absolutely not. This was a blast that wasn't calculated at all. The actual question which is set to the Greek Electorate is absolutely
ridiculous. I've called this referendum a charade referendum even if it does take place. Constitutionally they've not followed the rules at all.
Just to give you an example the Constitute, the Greek Constitution stipulates that five days before the execution of the referendum, i.e.
today, earlier on this afternoon, all the valid papers, envelopes, all the material concerning the referendum should have been distributed to each and
every polling station around Greece. Nothing has happened. They don't have the necessary legal representatives that are going to be attending
this referendum as per the Constitution.
So this is a charade and the question itself is absolutely ridiculous. If Mr. Tsipras and his Government had the guts they should have asked the
outright question; yes to the euro or no to the euro. And the answer would have been, the vast majority of the Greek people would have voted for the
euro, because Greece has suffered a great deal to become members of the European Union and a great deal more to become members of the Eurozone and
we want to maintain this European identity.
GORANI: But Constantine Michalos, you know critics of the bailout, the two bailout programs, possibly the third one if talks end up in some sort of
deal between Greece and its lenders say. The lenders did nothing but request austerity, budget cuts, belt tightening from Greece to shift most
of this bailout money away from private banks to public institutions when the Government itself got almost none of it to help reboot the Greek
economy.
Do you want to sign up for more of that?
MICHALOS: All I can say is that successive Governments over the last five years haven't carried out the necessary deep reforms that the Greek economy
requires.
I've often said that austerity measures in the way that they were implemented was not the right recipe. And it was mostly IMF and the
European Union through their individual commissions that have produced the results of their study two years ago pointing out that it was indeed the
wrong mixture of economic policy that was being applied.
What we need is deep reforms especially in the public sector. We need to combat this dreadful phenomenon of tax evasion and you can only do that by
introducing a very strict auditing mechanism such as the IRS in the states or the Inland Revenue in the United Kingdom and therefore be able to reduce
the rate of taxation for businesses so that we can become more competitive.
At the moment we're not competitive, we've got an oversized public sector and we are paying the price for it. We need a serious national Government
that will be able to address this very important issues and we need it soon.
GORANI: All right and the Greek economy needs to grow and people need to be put back to work to get out of this miserable situation.
We appreciate your time, Constantine Michalos, the Athens Chamber of Commerce and Industry President with us from the Greek capital. We hope to
stay in touch as well, thank you sir.
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GORANI: All right we'll have a lot more on Greece coming up but now to some major developments in the investigation of the beach resort massacre
in Tunisia.
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GORANI: Authorities say the gunman who killed all these people on the beach had ties to a Libyan terrorist organization. They say that he
trained at the very same terror camp as the men who attacked Tunisia's Bardo Museum in March.
ISIS is claiming responsibility for both of those attacks that killed dozens of foreign tourists. Meantime authorities are searching for two men
believed to be accomplices in Friday's beach massacre. Their pictures were released by the Interior Ministry, there they are on your screen.
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GORANI: Now Tunisia is set to deploy 1,000 armed police to help protect beaches and other tourist destinations. Unclear how tourists might react
to just having armed guards all over the place when they're just trying to get a tan on the beach.
Our Nick Paton Walsh visited the scene of the massacre in Sousse. He spoke with a witness who gave a dramatic account of the gunman's final moments.
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NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT: This is the last time he's seen alive, running away from the beach, but then gunman Seif Al
Rezgui seems calmer accepting his death perhaps.
(Fati) was working on this house and threw a brick down at him which he says hit the gunman making him drop an grenade and fire up at them. Then
he watched him die.
It didn't look like he had time to reload his weapon he tells us. He shows us the calm way he held that gun and down on the street below the slow jog
he made towards four cars of police.
The only open fire when he got closer to police who feared he was wearing a bomb. Here they shot him. He fired back and was finally killed.
He was waiting for the bullet to die (Fati) tells us like he'd finished his mission. And now in a town still telling its tales of horror here come the
cavalry. Beach police now what stands between Tunisia and stopping the tourist's needs going home.
There's security like you can see they tell us and come tomorrow there'll be more than this. Sousse will be safe and (ANT) won't be able to get in.
Confidence is what beachgoers need but also visible protection. We stood meters down the beach from where the attack happened and over a six minute
period, the time the Imperial Marhaba Hotel attack lasted didn't see a single armed policeman.
They are there, around town, but it's far from pervasive. It's as picturesque 'cause it seems to be endless but this coastline is now
wrestling with perhaps the hardest question of all. It's lined with luxury hotels, complex alleyways between them and then there's the sea with jet
skis, speed boats, anyone could seemingly gain access here. So how do you provide security without removing any sense of fun?
A question that darkens Sousse once happy world as it searches for the answer and peace.
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GORANI: Well Nick joins me now live from Sousse in Tunisia with more. What's the situation now at the hotel, at the Imperial Marhaba Nick?
WALSH: Well there are now still six Britons continuing their holiday. We've spoken to most of them and a lot of questions still unanswered. But
some of the broader picture of who Seif Al Rezgui Hala now clear. A startling admission by the Tunisian Interior Ministry here. They say that
he was trained in Libya at the same time as the two gunmen who attacked the Bardo museum in the capital Tunis back in March killing 20.
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WALSH: That is remarkable Hala, because it raises the prospect that we're talking about a cell here potentially. That may be, it's not clear at this
stage, but possibly these people travelled back to Tunisia together, unclear if they communicated whilst here, but now that the police are
looking for accomplices roommates questioned, arrests made, university students and their potential if they've radicalized the gunmen being
investigated. People must of course ask are there others out here potentially who may also have been part of that group who may also carry
out attacks.
These questions, the answers to them, are known. We know that they are looking at the cellphone he threw into the sea as he ran away, his laptops,
his documentation. We know that he went to Libya and is said to potentially have had ties to either Ansar Al Sharia, an Al-Qaeda affiliate
or maybe ISIS themselves who claim this attack.
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WALSH: Many questions yet to be answered but that chilling admission that he was trained along with the Bardo gunmen at the Bardo museum attack
inside Libya, that is something that surely has people trying to secure these swathes of tourist beach deeply concerned, Hala.
GORANI: Nick Paton Walsh, thanks very much with all the latest updates from Tunisia.
A quick break here on the World Right Now. When we come back an horrific scene in Indonesia today.
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GORANI: A military plane crashed close to a residential neighborhood. The death toll is very high. We'll be right back.
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[15:21:37] GORANI: Well this was a horrific scene on a Japanese train. Police believe that a man doused himself in a flammable liquid and set it
on fire today.
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GORANI: The blaze killed the man who committed the act and one other passenger. At least 10 people were injured on the train which was
travelling from Tokyo to Asaka. The crew eventually put out the fire.
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GORANI: Also at least 70 people have been killed after a military transport plane crashed in Indonesia.
The flight left Jakarta with 113 people on board. It isn't clear though how many were there as it crashed as it had made two stops along the way.
With the story, here's Manisha Tank.
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MANISHA TANK, CNN INTERNATIONAL CORRESPONDENT: A huge fireball engulfed a built up area around lunchtime turning out plumes of black smoke visible
for miles around after a military aircraft crashed in the Indonesian city of Medan.
The Hercules C-130 plane came down shortly after taking off from a nearby airbase. One witness described what happened.
UNIDENTIFIED MALE: (As translated) It was about 12:00 p.m. the flight appeared to have lost its power and started to descend. When it hit the
residential area I was at home at the time and saw the flight crash.
TANK: The aircraft hit several buildings when it made impact. Local media says they were under construction and therefore mostly unoccupied. But
it's feared that there were people on the ground when it hit.
As dozens of body bags flooded into a local hospital hopes faded for the chances of finding any survivors.
The flights purpose was to transport supplies to military bases around Indonesia. But sometimes Indonesian civilians also hitch a ride on these
military flights to get to islands which might otherwise be inaccessible.
The aircraft was built in the United States in the 1960s and had been checked and cleared to fly before it took off. It's not the first time
that Hercules planes have come down in Indonesia. There was similar crashes in 1991, 2005, and 2009. Manisha Tank, CNN.
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GORANI: We've been talking a lot about that Greece deadline. Well there was another deadline that came and that went.
Today was supposed to be the deadline for reaching a nuclear agreement on Iran's capabilities but once again it has been extended, this time for a
week a until July 7th according to a U.S. State Department official.
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GORANI: The two sides have been in discussions in the Austrian capital of Vienna where the Iranian Foreign Minister seemed confident saying "I'm here
to get a final deal and I think we can."
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GORANI: A lot more ahead on the World Right Now. A major American network drops a Presidential candidate in the United States.
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GORANI: It is another blow for billionaire, Donald Trump, and his Miss America franchise, we'll explain after this.
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[15:25:19]: GORANI: Well if you thought a lot of Republicans were running for President already more than a year out, here's one more today. A man
who has gained a reputation as a tough talker. The New Jersey Governor Chris Christie wants to take that spirit to the White House he says.
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GORANI: The Republican officially announced his runnings for President and he is now the 14th member of his party to seek the nomination.
CHRIS CHRISTIE, U.S. PRESIDENTIAL CANDIDATE: We must tell each other the truth about the problems we have and the difficulty of the solutions. But
if we tell each other the truth everybody we recognize that truth and hard decisions will lead to growth and opportunity tomorrow for every American
in this country.
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GORANI: All right, we'll see how he polls because of some scandals in the past that have hurt his popularity in New Jersey. We'll see that.
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GORANI: Now, here's another man, you see his picture behind me, very recognizable around the world, Donald Trump. He called some Mexican
immigrants "rapists." Now Mexico is telling Donald Trump it will not send a contestant to Miss Universe an event that he co-owns.
In fact broadcaster NBC Trump's partner in the pageant earlier announced that its cutting ties with the U.S. Presidential Candidate. But if you
think he's going to back down from his statement do not hold your breath, he's doubling down. Here's Athena Jones.
ATHENA JONES, CNN INTERNATIONAL CORRESPONDENT: NBC Universal has cut its ties with Donald Trump citing his derogatory statements, calling Mexican
immigrants rapists, drug dealers and criminals.
DONALD TRUMP: Somebody has to come out and tell it like it is.
JONES: The real estate mobile stood by those comments before a packed house in Chicago calling a report by Fusion, owned by Saanich language
channel (inaudible) and ABC.
TRUMP: They think it's like Mother Teresa's coming across the border OK. This one says 80% of Central American women and raped crossing into the
United States. Well I said drug dealers, I said killers, and I said rapists.
JONES: NBC says it will no longer air the Miss USA or Miss Universe pageants partly owned by Trump following a similar step by Univision, which
also dumped the event. Trump is threatening to sue.
TRUMP: I'll be suing Univision, maybe I'll be suing NBC too.
JONES: NBC was facing growing pressure to respond. With more than 200,000 people signing onto a petition on Change.org calling on the company to dump
Trump and angry protestors denouncing him outside the Chicago event.
The reality star and now Presidential candidate had already planned to give up his hit show The Apprentice. Amid the controversy Trump has been
surging in the Republican polls up to second place in the first primary state of New Hampshire.
Oozing confidence in classic Trump style he touted the latest CNN WMER poll.
TRUMP: This is a CNN poll just came in and they have interesting categories; who's the best on terrorism. That's a pretty important
subject. Trump, right at the top.
Who's the best on handling international trade? Like not even close, Trump is like almost double anybody else right. That's incredible.
JONES: As for the man besting him in that poll, former Florida Governor Jeb Bush, Trump says he's a nice guy who can't win in 2016.
TRUMP: Believe me, he will never ever in a million years (inaudible).
JONES: Athena Jones, CNN, Chicago.
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GORANI: Donald Trump for you. The latest world news headlines just ahead. Plus down the wire.
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GORANI: Greece could be penniless in just hours with the IMF. What will it mean for the people of Athens and beyond? We'll have thorough analysis
coming up. Stay with us for more on our breaking news story, we'll be right back.
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[15:31:23] HALA GORANI, CNN HOST: Welcome back, everybody. A look at our top headlines, and we start off with Greece. Leaders in that country have
asked today for another bailout just hours before they're expected to default on their IMF loan repayment.
Pro-Europe demonstrators are on the streets of Athens this hour as the world counts down to the repayment deadline that is now about two and a
half hours away.
Also among our top stories - at least 86 people have been killed after a military plane crashed in Indonesia. It happened close to a residential
neighborhood in Medan. It's on the island of Sumatra. Now, it is unclear how many people were on board. The plane did make two stops along the way.
Latest out of Tunisia - authorities say the gunman in the beach resort massacre, in fact, had ties to a Libyan terror organization. You'll
remember, in the beginning, they said he had no known ties. But they now say he trained at the same terror camp as the men who attacked the Bardo
Museum in Tunis back in March. ISIS has claimed responsibility for both of those attacks.
Barring a last-minute bailout - some people might say barring a last-minute miracle - Greece is on the verge of default. So what happens if Athens
does not pay back the $1.7 billion it owes the IMF? Tadhg Enright explains.
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TADHG ENRIGHT, CNN JOURNALIST AND PRODUCER: Investors have been triting (ph) in the likelihood that this payment would be missed since markets
opened on Monday. Because, while late last week there was still optimism of a deal, over the weekend the Greek government chose a different path.
And the economy minister told CNN's Richard Quest they wouldn't pay.
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RICHARD QUEST, HOST, CNN "QUEST MEANS BUSINESS": You're saying now you will not pay. There is not the money in Greece.
GIORGOS PAPAKONSTANTINOU (ph), FINANCE MINISTER OF GREECE: Exactly.
(END VIDEO CLIP)
ENRIGHT: When does a missed payment become a default? Well, experts in how the IMF works say that Greece is technically in arrears, and that a
default doesn't happen until the fund's board is formally told about the missed payment.
And the IMF chief, Christine Lagarde, has already warned she won't waste any time.
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CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: There is no grace period or two months' delay as I have seen here and there. On
July the first, payment's not been made.
(END VIDEO CLIP)
ENRIGHT: But she said that when there was no talk of a referendum. And pulling the plug on Greece before giving its people a vote on their future
would be bad P.R. Greeks are due to vote Sunday to accept or reject the troika's proposals.
But, as it stands, there's nothing to vote on. The troika has taken its proposals off the table.
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GEORGE PAPANDREOU, FORMER PRIME MINISTER OF GREECE: Now we're voting on something we really don't know what it is or what it could be. And it has
become, therefore, a vote basically of yes or no to being in the Eurozone.
(END VIDEO CLIP)
ENRIGHT: Assuming there is a vote and it's yes, expects the government to resign, and a new administration to try to restore the status quo. But if
it's a no vote, then others in Europe say that Greece is headed for the exit, even if Athens has threatened legal action to stay in the Euro. It
would be a currency crisis that world has never seen before.
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MICHAEL JACOBIDES, ASSOCIATION PROFESSOR, LONDON BUSINESS SCHOOL: It is extremely difficult to change the currency even in the best of times. We
do not have any example of a country in peace time that is changing its currency. It's a mess.
(END VIDEO CLIP)
ENRIGHT: That's an outcome neither side wants. And there are still backroom dealings designed to avoid it, testing resolve, diplomacy,
pragmatism and patience.
Tadhg Enright, CNN, London.
(END VIDEOTAPE)
GORANI: We wanna understand how this will impact Greeks and all of Europe. I'm joined by Panos Polyzoidis. He's a journalist in Athens tonight.
Michael Jacobides is with the London Business School - a professor there. He joins me in the London studio. Thanks to both of you for being with us.
Panos, I wanna start with you over there in Athens. Which way are you leaning in terms of the referendum this Sunday?
PANOS POLYZOIDIS, JOURNALIST, SKAI TV, ATHENS, GREECE: Well, it's too early to call. That's for sure. I understand that the no vote is
currently still leading, but the gap between no and yes has been narrowing over the last couple of days. So, I suppose it will a cliffhanger. It
will go down to the wire.
GORANI: I meant where are you standing on this? Have you made your decision yet?
POLYZOIDIS: I have, yes. I mean my - my decision had been made up long ago. I'm a pro-European. And I also think that - you know, despite
glitches in the European system, despite second thoughts that might have, going out of Europe - leaving Europe - would be extremely painful for this
country. And it would undermine its positon in the modern world.
And, also, I totally believe that the real question of this referendum is - the real question of the referendum is exactly that. It's a yes to Europe
or a no to Europe.
GORANI: Right. I'll get back to you in just a moment. But Panos Polyzoidis - and let me get to Michael Jacobides here - calls it glitches
in the system. Let's be honest here. This has been a disaster for the Greek economy. The Greeks are suffering like no other developed economy
because of austerity measures demanded by them from their lenders. Do you think this has been handled well by the creditors of Greece?
MICHAEL JACOBIDES, ASSOCIATE PROFESSOR, LONDON BUSINESS SCHOOL: Well, there's plenty of blame to go around. There's no question about that.
But there are some interesting questions about where the blame resides. And, if you think about what has happened from the beginning of the program
until now, the biggest lack of adjustment has been to the way that the Greek economy works. If you think about the public service, if you think
about the expenses that have not been rationalized or, if they have, it was just by cutting the salaries as opposed to trying to have a more efficient
(INAUDIBLE).
GORANI: I'm sorry, but no money in the same amount that it has made it out of private banks into public lenders like the IMF - the amount of money
that actually made it to the government to restart the economy was actually a minority of the chunk of bailout money.
JACOBIDES: Oh, absolutely. There's no question about that.
GORANI: How do you expect the government to abide by the rules if it is crushing its economy?
JACOBIDES: There are two very different things. The first thing is what happened with the money and why did we not restructure in 2010. If you
think about what happened, we all knew back then that we needed to restructure. (INAUDIBLE) would not have any of it because, if we did,
obviously the entire financial system and the European banks would collapse.
So, it was very easy to substitute private debt with public debt. What happened? When we restructured the debt, only the private debt was
restructured. So, 50 percent of the 50 percent was cut.
As a result, Greece had too much debt. There's no question about that. That is not the question that we have ahead of us. The problem right now
is what do we do today in terms of the options that might exist and that realistically sit on the table.
GORANI: And, Panos, let me ask you this. Do you think it was wise of your prime minister to call this referendum so quickly? Let me read the
question because I frankly - I have - I studied economics, and I don't understand some of it. I have a degree. I graduated and everything.
Here's a translation. Should the plan of agreement be accepted, which was submitted by the European Commission, the European Central Bank, and the
International Monetary Fund in the Eurogroup of 25.06.2015 and comprises of two parts, which constitute their unified proposal?
The first document is entitled "Reforms for the Completion of the Current Program and Beyond" and the second "Preliminary Debt Sustainability
Analysis." Yes or no.
JACOBIDES: No, sorry, let me correct you. It's not yes or no. It's no or yes with no following in the top and yes following further down. You will
have (INAUDIBLE) scientists telling you that that is called priming, and there's also a strong, emotive way in which no is perceived.
And it gets worse. It's half in Greek and half in English. Imagine an octogenarian Greek trying to figure out what on earth is going on.
Nobody's gonna get it.
GORANI: Panos, as I - let me get back to that question. Do you think it was wise for the government to call for this referendum so quickly?
POLYZOIDIS: I think that the prime minister has managed to entrap himself in a high-risk strategy - a ploy that all went terribly wrong. I think he
- he made the additional mistake of raising the stakes more and more and more and more. And, as a result, the situation spiraled out of control.
I think he's gonna go to the wire. He's gonna go to the end with it. And, frankly, I - I do not believe that there is any easy solution out of it
anyway.
GORANI: Michael, Panos is saying essentially that the Prime Minister, Alexis Tsipras, has boxed - boxed himself in. But you have a Nobel
economics prize winner, Paul Krugman. You have Joseph Stiglitz as well. All saying, you know what, the Greek government had no choice. They were
not given a good deal. They had no choice but to do this.
JACOBIDES: Well, there's a couple of things.
GORANI: They must have a point there.
JACOBIDES: They do have a point. I happened to be on the same panel with Paul Krugman in a meeting four years ago. We disagreed then. We disagree
now.
Paul Krugman does not see structural issues. He's a macroeconomist. If you look at the Greek economy and you look at the problems that it has,
they are primarily problems that are imposed by excessive bureaucracy and lack of investment.
If you think what is going to happen with a potential for exit (ph), the foreign exchange risk that exists you will not have capital flowing in. We
do not have an export (ph) economy. That means that the benefits from being as aggressive as Paul Krugman suggests might not materialize for
Greece.
GORANI: But Hans-Werner Sinn is a top-level economist. I'm sure you know him - also an advisor to the German government. He says it's actually a
better deal for Greece to cut ties with the Eurozone, because its currency would depreciate greatly - probably 50 percent. You would get a lot more
outside foreign, direct investment. The - eventually, the currency would go back up, and the economy would rebound, and employment would go up.
JACOBIDES: Let me return to what I said. Hans-Werner Sinn has built his career in saying that. So, of course, he would argue that. It's what he's
-
GORANI: But he believes it, and he has - he has - he - he backs it up with arguments, saying -
JACOBIDES: Let me - let me report with arguments then as opposed to simply saying what my belief is. The problem is that we do not have an export
economy. We have a closed economy. The main export is tourism and shipping to a lesser extent.
They have substantial import content. What does that mean? That you will not have as beneficial a shock (ph) as you would if prices simply went
down, and you were able to export -
GORANI: And you exports went back up?
JACOBIDES: Exactly.
GORANI: Let me ask you, Panos Polyzoidis, finally to you about the mood in your country right now. What is - and I see many people out on the street
tonight. What - what is the topic of conversation? How are people feeling right now in Athens?
POLYZOIDIS: I think they're still under a considerable amount of shock, because they do not have access to their money. They do not have full
access to their money. And this is something that is absolutely new for everyone - I mean, even for the octogenarians that I heard being
mentioned.
So, there is in some quarters of a great - a great amount of worry and concern. And, of course, some of the hard line government supporters think
this is the big-time for them. It is the time to change Europe.
But I think, as time goes by - as days go by - and as all the predictions that the government had made - that the Europeans would actually yield, as
they've all been refuted - I think there is more and more of a solemn attitude - a solemn atmosphere here.
GORANI: All right, Panos Polyzoidis, a journalist at SKAI TV, and Michael Jacobides, a professor at the London Business School. Thanks to both of
you. Great discussion. Really good having you on CNN.
And, by the way, you saw our Athens live shot there. That's where you will see Richard Quest emerge in about 15 minutes. "Quest Means Business" is
coming up at the top of the hour with much more, including the full interview with the Eurogroup President, Jeroen Dijsselbloem, the head of
the Eurogroup.
Coming up on THE WORLD RIGHT NOW - a tribute to the victims of Friday's attack in Tunisia. We'll have that coming up. Stay with us.
(COMMERCIAL BREAK)
[15:41:42] GORANI: A young fiancee, a grandmother of four, a married celebrating their retirement - all among the 22 Britain's confirmed dead so
far in the Tunisia massacre. Thirty-eight people were murdered overall.
Atika Shubert tells us more about those who lost their lives and the grieving loved ones they are leaving behind.
(BEGIN VIDEOTAPE)
ATIKA SHUBERT, CNN CORRESPONDENT: The faces of those killed in Tunisia. Many were pensioners enjoying what was supposed to be the golden days of
their retirement. Seventy-two-year old Bruce Wilkinson had liked Tunisia so much he came back again. In a statement, his family said he was a kind
and compassionate man with a dry sense of humor. A devoted husband, father and grandfather.
Lisa Berbidge, in her 60s, leaves behind four grandchildren. One of them posted this tribute on Facebook - my angel, my best friend. Love you
always, grandma. Rest in peace.
There were married couples and long-time friends. Jim and Ann Maguire had just retired and were taking a break from serving at their local church.
They were gunned down on the beach.
Steven and Cheryl Mellor sheltered together and told each other I love you before the gunman turned on them. Cheryl survived, with gun shots to her
arm and leg. Steven, who tried to block the bullets, did not.
Others were with friends, enjoying a hard-earned break. Trudy Jones, 51, was a care-home worker on holiday. Her children released a statement. She
was the rock of our family and kept us all going.
Some were young. Carly Lovett was just 24-years-old. A beauty blogger who tweeted about her holiday manicure and packing for Tunisia. She was
separated from her fiance, Liam Moore, in the attack. He survived, but she was killed.
The attack also killed three generations of one family. Adrian Evans, 49, was there with his father, 78-year-old Patrick, and his 19-year-old nephew,
Joel Richards. All three were fans of the Walsall Football Club. Fellow fans laid their scarves down outside the stadium in mourning.
Conor Fulford began a desperate Twitter campaign looking for his mother, Sue Davey, and stepfather, Scott Chalkley. He confirmed on Twitter that
both were killed. He wrote, love you always, Mom. I've got my teddy bear you got me tonight. Rest easy.
There are sadly too many victims to name, and more remain injured - in critical condition. Nothing can describe the grief they leave behind. But
these photos - their smiling faces - are the way their loved ones wish to remember them - not their brutal and senseless deaths so far from home.
Atika Shubert, CNN, London.
(END VIDEOTAPE)
GORANI: We'll be right back after a quick break.
(COMMERCIAL BREAK)
[15:47:09] GORANI: Parts of Europe are in the middle of a heat wave, with temperatures pushing the 40s in France, Spain and Portugal. Even here in
London it's pretty darn hot. All this scorching weather coincides with the capital's iconic tennis tournament, Wimbledon.
Pristine tennis whites are not enough to keep the heat off the players', and temperatures above 30 degrees Celsius mean that a rather specific, new
rule is implemented.
Christina Macfarlane is here. You were out at Wimbledon today.
CHRISTINA MACFARLANE, CNN "WORLD SPORT": I was, and I was very hot I can confirm and set to get hotter.
GORANI: Yes. Now, let's talk. There are rules when it gets even hotter, and it's expected to reach 35 - that's the air. On center court, it's even
hotter. There are different rules for men and women.
MACFARLANE: That's right. Now, it sounds horribly sexist, but the ladies are allowed to take a heat break, but the men are not. And this all stems
from the fact that the WTA, which is the women's governing body, have a rule in place that allows the women to take breaks throughout the year when
the temperature rises above 30.1 degrees.
The ATP, the men's governing body, do not. Therefore, during the grand slams, they following the governing body so the women can take those heat
breaks, but the men can't.
Back in Australia in 2014 - remember back last January - they had a heat wave. So, this is the only exception to the rule. The Australian Open is
the only grand slam of the year which allows both men and women to take that break.
Wimbledon is following protocol, even though this week temperatures are expected to rise and exceed the highest ever recorded here at Wimbledon
back in 1976 when it was I think 34.6 degrees. But they say they're still gonna just let the women take the breaks and not the men.
GORANI: So, what happens when temperatures - because if temperatures - the air temperatures above 35 Celsius, which is the expectation for tomorrow -
center court we might see, what, 40 degrees. How does that impact the game? They must be used to it having played in Australia and other grand
slam tournaments.
MACFARLANE: Yes. Firmly (ph) enough, the players really aren't that bothered about it. Rafael Nadal was tweeting today saying, hey guys, it's
nothing compared to the Australian Open. I spoke to Serena Williams' coach today. She's on court tomorrow. And he said, actually she prefers the
heat, because it affects the other plays and, therefore, she's got the edge on her opponent.
So, a lot of these top players it's not gonna bother them. But the way they measure the heat is quite interesting, Hala. What they do is they
take a raising (ph) of the humidity in the air, the surface level of the court, and the ambient (ph) air in the court. And that's how they come to
the conclusion as to whether these players can request a heat break.
And the temperature needs to exceed 31.5 degrees. Now, we're expecting on court tomorrow the temperatures to be as high 40 degrees C, but those
breaks will only be taken if the players request them. And they can only do so between the second and the third sets. So, it's very particular.
But I don't expect that we will be -
GORANI: So female players can only request the break between the second and third?
MACFARLANE: Between the second and the third set - only for 10 minutes.
GORANI: Oh, OK. Well, you know, that - do you have an opportunity to leave the court, or do you have sort of - what's the - how does that -
MACFARLANE: You can leave the court. You can take what they call a bathroom break. But you can - you only have within 10 minutes to take that
break.
GORANI: And do women usually take advantage of their right to request a break?
MACFARLANE: Women do. They - Maria Sharapova was - you know, former Wimbledon champion - she was talking about it yesterday. And she said, I
don't think there's anything wrong with it. If we're given this opportunity, we should take it.
And they have done in the past. And actually the last time they had a heat break here was back in 2009. And in that instance they even removed the
retractable roof a few inches, but only to cover the royal box - not to cover the players and the fans, which was kind of controversial.
GORANI: All right. Well, you know, some people have privileges that others don't.
Stand by for just a second because finally tonight, apparently, it's that time of year - it's that time of year when we enjoy long summer days in
London and the rest of the northern hemisphere.
Today is even longer. Scientists are adding an extra second to midnight. It's called the leap to keep atomic clocks in sync with the earth's slowing
rotation. But the 61-second minute could make computer systems go haywire. Several major companies say they're implementing fixes to avoid havoc
there.
So, you get an extra second, Christina, today.
MACFARLANE: Wow, an extra second.
GORANI: What are you gonna do with it?
MACFARLANE: I'm probably gonna spend it eating because I love food.
GORANI: I'm gonna throw in an extra eye roll. It takes me about a second, you know, maybe a second or a second and a half. Anyway, it's interesting
because every several years you have to kind of reset all the clocks so that we're all - we're all in sync with the - with the cosmos. So now we
are, and that's great. We're on track again.
Christina Macfarlane, have fun at Wimbledon. Are you going tomorrow?
MACFARLANE: I am. I'll be there all day.
GORANI: Good for you, and carry a fan or something.
This has been THE WORLD RIGHT NOW. I'm Hala Gorani. Thanks for watching. "Quest Means Business" is in Athens.
END
