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QUEST MEANS BUSINESS
EU Leaders Pledge Billions Of Dollars To Tackle Climate Change
Aired December 11, 2009 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INT'L. ANCHOR, QUEST MEANS BUSINESS: The real deal, EU leaders pledge billions of dollars to tackle climate change.
About time, too, the Airbus A400M finally takes to the skies.
And meet, Merlin (ph), Eric (ph), Baldrick (ph) and Thor (ph), we introduce you to our four calling birds. It is part of the festive world at work.
It may be Friday, I'm Richard Quest, and still, I mean business.
Good evening. They came. They talked at length and at least for now, they seem to have reached a deal on how to tackle climate change and the amounts necessary.
On the show tonight, for you, you are going to hear from the president of the European Union, Jose Manuel Barroso, on what has been achieved and the hurdles that remain.
Also, Muhtar Kent, he is the chief executive of Coca-Cola. How his company is embracing green ideals.
And from the boardrooms of Copenhagen to the runway in Seville, we are going to hear from Tom Enders, the chief executive of Airbus, the A400M has finally taken to the skies.
Now a deal that may help move things along in Copenhagen has been finally put together. After two days of difficult talks in Brussels EU leaders have agreed on a deal that would help poor countries fight climate change.
The European Union will commit $3.6 billion a year until 2012. Britain, France, and Germany, will each contribute 20 percent of that money. The U.K. is promising the most at $650 million, a sizable amount for a country that is firmly just coming out of recession, with a budget deficit of 200 (ph) percent.
The money is going towards a global $10 billion fund to help developing nations, particularly, in Africa, adapt to the effect of global warming. The pledges come with strings attached. Other countries have to make their own pledges.
EU commission President Jose Manuel Barroso told me the European Union will wait and see what other developed countries do. I spoke to President Barroso and asked him, if the money is conditional then perhaps why is the cause so important?
(BEGIN VIDEO CLIP)
JOSE MANUEL BORROSO, PRESIDENT OF THE EUROPEAN UNION: Precisely because this is money for helping developing countries to adapt to climate change. This is not the current development aid programs. So, I think it is very important that we understand that if every one contributes to the targets of limiting global warming we can also help. And the developed world has a duty help the poorest countries. So far, everybody speaks about the United States, about Europe, about China. But we should not forget that the majority of countries of the world are developing countries, some of them extremely poor and very vulnerable to the effects of climate change.
QUEST: So, if the other countries and the other blocs do not come in with their money, are you saying you would be in favor of revising the $3.6 billion.
BARROSO: This is only in case we have an agreement. This was clearly stated today by the (UNINTELLIGIBLE) states and government of the European Union. Because this is money specifically for the implementation of an agreement and what you can do now is to urge all partners to commit to the success in Copenhagen in fact, I think that this position of the European Union has kick started the final phase of negations. Now, we have concrete figures on the table so that everybody can join in an agreement because this is the kind of agreement that needs a global support. I cannot only be a part of the world.
QUEST: But is the money that Europe is offering, is it conditional on a total agreement of COP15 or -if it is all so important to help the developed world, why not just give it anyway?
BARROSO: Let's be clear. We already have and the European Union is by far the largest donor of the development aid. You already have aid programs. What we are going to do now is in case there is an agreement to fight climate change, we need to put new money on the table for helping countries to adapt to it; namely the most vulnerable, the poorest countries of the world. So, if there is no agreement, we don't need to put that money, because they are not going to adapt to an agreement that does not exist.
QUEST: George Soros says for $10 billion, I know it is a lot of money, but he says it is not enough. More money needs to be put on the table. Now, I feel a bit like the person that is biting the hand that is feeding, you know, you put $3 billion, but the critics are already saying there needs to be more.
BARROSO: Look, we are in a negotiation, of course, I understand that everybody now is going to say that we need more. But the fact is this is already agreed. It is $3.3 billion, in fact, according to my estimate. This is a lot of money. Honestly I was not expecting such a big figure at this stage. Because as you know there are very important difficulties in many budgets, also here in Europe, but it is an important amount. And I have been speaking also with the leaders in the developing world, in Africa, and privately they were telling me that this figure will be indeed an important contribution.
So, of course, if others can do some, let's say, equivalent offer, that would be great. Anyway, this is not a beauty contest in terms of seeing who is giving more. This is not a beauty contest. This is something we have to do together. We only have one planet and everybody has to contribute. The European Union is making a good offer, a commitment, let's hope that others make proportionate commitments.
QUEST: Let's just briefly, finally, talk (AUDIO GAP) about Greece, and the plight facing the Greek economy. I've seen your comments. And I've seen the Greek prime minister's comments. And when all is said and done, do you expect the European Union, or the commission, or the European central bank to have to bail out Greece or do some form of extra activity?
BARROSO: I have never making comments on hypothetical situations, in fact, we are not expecting that situation to be there. We fully trust that Greece will take the necessary measures, of course, it is a matter of concern. The situation is not (AUDIO GAP) in Greece. We have heard the prime minister of Greece make a clear commitments to our colleagues, just now. And we believe he is going to implement the reforms he announced to all of us.
QUEST: President Jose Manuel Barroso, of the European Commission, talking to me earlier.
European stock markets, they ended the week high. They were boosted by strong retail sales numbers from the United States.
Investors in London, clearly had the festive season n their minds. Shares of Thomas Cook and Tui soared more than 3 percent on the back of a buy recommendation from the broker, Panmore (ph). The miners Beatrix (ph) Billiton and Rio Tinto (ph) also had a good day. Strong tradings industrial data lifted metal prices. There you see the numbers.
The New York market is open and doing business for just a couple more hours, where stocks have been -well, now look at that! Stronger than expected consumer spending and sentiment has given the market a boost. The dollar has put a limit on gains. The dollar has been reversing some of its losses. So, I think that looks rather like a healthy bounce that we are seeing for the end of the week. Up just over 0.5 percent.
Max Foster joins us now at the CNN News Desk to bring us up to date with CNN News.
QUEST: In a moment, after budget blowouts and lengthy delays the new Airbus military transporter, the A400M takes flight. On this program you are going to hear from the chief exec Tom Enders.
QUEST: Now that is a sight to behold. After years of delays and massive budget blowouts, Europe's largest defense project has finally taken off. It is the Airbus A400M transport plane. It is nicknamed the Grizzly for its hulking appearance. And it made its maiden flight in Seville in Spain. It is the first in a planned three-year test program before the program will go into service the 2012.
Seven European NATO countries have already committed to buy 180 of these planes, which is designed to carry, it can carry helicopters, troops, all sorts of armament. It is an extraordinary large project.
Now, the mission to build the A400M has been dogged and plagued by problems, whether it is cost overruns, budget overruns, and simply delays. Four years late, two years behind the schedule for the test flight. And the reason is these propellers apparently. The propellers and the transmission system, all of those have been the main reason why it is so badly over date.
But problem in all of this, the 2.3 billion overspend. Now this is interesting. Airbus signed a contract with the European governments in which Airbus agreed to supply the planes at a fixed price. Now Airbus is saying to the countries involved, no, you need to pay more. But they can't agree how much. And that is where the current state of play is at the moment.
Tom Enders is playing a really tough game. Mr. Enders is basically negotiating with the European governments to get them to pay part of the overcosts. And agreement is expected perhaps at least by the end of the year.
On for Airbus' share price, or EADS the parent company, by the close of play tonight, up 2 percent, 12.36 was the closing price. Up 1. - just about 2 percent.
For Airbus and military, the new plane is an important project. But it is another example of cost overrun. So, I asked Tom Enders earlier today, what would happen? Was the sustainability of the project in doubt?
TOM ENDERS, PRESIDENT & CEO, AIRBUS: As you can imagine, a day of great joy and pride for all of us at Airbus, and the many partners that have been working for years now on this program. The path has sometimes been a little bit painful. But I think it was worth it, so after six and half years we have our first flight. And, Richard, that is absolutely comparable with other big military programs.
But, indeed, we have some hurdles to overcome yet, to continue the program and to make it a roaring success for our air forces, and that is the discussions with all governments about the financial base-lining, or rebase-ling of the program.
QUEST: Is the program in doubt if agreement is not reached?
ENDERS: Well, you know, I don't want to speculate about it. It is something you need to ask, I guess, the government representatives. I think they convinced themselves a couple of months ago that, indeed, this is still the product that they want. This is a product with unrivaled capabilities. However, as you know, we calculate that program a little short on the financial side and we need a contribution from the governments. We will certainly bring our fair share to the party. There is no doubt about it. But we find agreement here and this is tough, this is difficult and I hope that in the coming weeks we see progress.
QUEST: This could be an interesting case of a technological marvel and a plane that everybody loves, but a difficult negotiation. And yet you are still hoping to reach agreement, perhaps by the end of this year or early next year?
ENDERS: My target is still the end of this year. I hope we can find a, what we call an agreement in principle. We'll see if we can get this objective. It is too early to speculate about what, if not, the target is the target. And, yes, it would be a pity but on the other hand we are at a time where defense budgets are scarce all over Europe. And I had a lot of understanding for a governments who don't want to, you know, pay additional money, for a technological marvel, as you said.
QUEST: We saw what happened with the 380. Next week Boeing is going to fly the Dreamliner several years late. This project, the A400M is late. So what lessons are you learning, and want to push forward, as you look at the 350XWB?
ENDERS: Yes, well, obviously, we need to take lessons away from that. I mean, on the A400M fairly and squarely we have been over optimistic as far as the budgets are concerned. We have been over optimistic with respect to the time line. And this is very sad. But as I say, if you compare that with other programs, this program is absolutely on track.
We should not underestimate the technological challenges. This is a project, the A400M, for instance where we really pushing new ground. It is a highly complex aircraft, a highly versatile aircraft. And I think it is very, very difficult to enter into fixed price contract as we did on this aircraft.
QUEST: That is the Chief Executive Tom Enders of Airbus.
Your ice cold drink could be warming up the world. The boss of Coca- Cola tells me that Coke is going green and he believes it is in everybody, including the company's very best interest.
QUEST: Global leaders aren't the only ones who are making green promises. The soft drink giant Coca-Cola says it is phasing out the use of potent greenhouse gases in all its vending machines and coolers. The Chief Executive Muhtar Kent joined me earlier from the Copenhagen summit, when I wanted to know whether Coca-Cola's eco-friendly policies, let's face it, they are in business, are going to pay dividends?
MUHTAR KENT, CEO, COCA-COLA: You know, I think they are paying dividends for the environment and our carbon footprint now. So that is not the issue. But I think this is a journey. We are taking a leadership role in this journey in sustainability. We have selected and focused on a number of platforms, water, being one of them; packaging, being another one of them, refrigeration equipment being another one, and distribution and our transportation being another one.
And so we have clear goals on each of those platforms and we are moving ahead with our global partners to ensure that we have a leadership role and playing an important catalyzer (sic) for awareness across the whole business world, for sustainability and climate change.
QUEST: You see, the interesting thing about it is, because also one of your goals at Coca-Cola is to grow the company, which you recognize and you are being successful at. And also, put the consumer first. Do you see an apparent potential conflict between those two goals?
KENT: Not at all. I think they are - growing our business, and ensuring that we do not grow our carbon footprint are absolutely compatible. They are not mutually exclusive. We believe it can be done. We believe that you have to have a very transparent ways of measuring your carbon footprint. You have got to be sure that you have the right -you embed sustainability into your planning, into your business. That it is not a nice thing to have on your corporate social responsibility report, but today consumers are increasingly resetting their goals. Consumers in the world are demanding more and more action from companies, from business, from government leaders.
QUEST: Finally, it wouldn't be an interview with you if I didn't ask you, what are you seeing in your business at the moment? Do you get the feeling that when we talk about global economic growth now, we have turned the corner and things are looking better in your business?
KENT: Well, I thought that you were going to ask me that question when I saw you in Davos But let me just say I think that we are seeing different things going on in different parts of the world, Richard. I think what we see in North America and Western Europe, Japan, is a much slower recovery. What we are seeing in the emerging countries if Latin America, China, Indonesia, Asia, India, much faster recovery.
I do still think that there is much more stability in the financial markets today than we would have estimated at the beginning of this year. So that is a good sign. But I think the consumer is still uneasy, the consumer is still partly confused and we still, I think, will need a little bit of more time.
QUEST: Mr. Kent of Coca-Cola, and of course, he doesn't get off the hook that easily, we will be talking to him, hopefully, in Davos at the World Economic Forum. That is in January.
When I come back in just a moment, which countries are cracking down on bankers' bonuses? And what EU leaders may have in store to help buck up against future market crisis.
QUEST: Good evening, I'm Richard Quest, QUEST MEANS BUSINESS, this is CNN.
Europe is upping the pressure to force banks to pay for funding the economy into mayhem. At an EU summit in Brussels, its leaders have urged the international monetary fund to consider a global tax on financial transactions. It is often nicknamed the Tobin tax, it comes as France is following the U.K.'s lead and putting a tax on banker's bonuses.
The French President Nicholas Sarkozy says bonuses above $40,000 a year will face a 50 percent levy. And what's more it mirrors the plans outlying by the British Treasury Secretary Alistair Darling, earlier in the week.
It is also France and Britain want similar taxes imposed right across Europe. The idea being, of course, that the capitals are competing on equal terms, but apparently there may be legal constraints on such a thing happening in Germany.
CNN's Jim Bittermann has been speaking to the French Finance Minister Christine Lagarde, about the stricter financial regulation and if global governments are going to have priority over independent commercial operations.
JIM BITTERMAN, CNN INT'L. CORRESPONDENT (On camera): I think the arguments that have been going on about regulating and stricter regulation involving the financial community, basically surround the question of global governments. Our government is going to have priority over independent commercial operations. And to what extent do you think you are winning that battle?
CHRISTINE LAGARDE, FRENCH FINANCE MINISTER: Now that growth is picking up a little bit, there are two tendencies. One is for a lot of people to say well, let's go back to business as usual, let's carry on paying bonuses, reorganizing the business, optimizing our strategy. And the other tendency is well, the world has changed and we need to reassess and we need to pause, maybe, for a second to determine where is the balance and what role should the states play going forward?
It seems to me that in financial matters, in environmental issues, in relation to competition, we need to have good, solid coordination and we need to frame the world in which economic actors must continue to play and operate in a free market economy.
BITTERMAN: When many of these government support systems were put into place a year ago, there was the promise that governments would eventually step back.
So is that going to happen now?
LAGARDE: The state -- I'll take the example of France. As everybody else, we launched this big stimulus package. But clearly, by the end of 2010, we have to withdraw the stimulus package, because hopefully the growth will have picked up and companies will have begun to invest yet again. So in that sense, the state withdraws. But in terms of regulation, in terms of framework, in terms of governance, we need to set the rules. Clearly, self-regulation didn't work. Soft regulation or light regulation, however you call it, demonstrated that it was inefficient.
So without over regulating for the sake of regulation, we need to set the framework.
BITTERMAN: There are plenty of examples where governments themselves seem to have a difficult time running a tight financial ship, in the case of the Eurozone, for example, Greece comes to mind.
Is there anything to suggest that governments are any better at running finances than independent businessmen?
LAGARDE: Once -- once you've gone through the unpleasant experience of not having received the right numbers, you're a little bit more cautious. And I'm certainly confident that The European Commission will be more cautious in reviewing facts and figures. It -- it's doing a thorough job.
(END VIDEO TAPE)
QUEST: The French finance minister, Christine Lagarde.
Now, one footnote, rather, on this for development this evening, the U.S. pay czar has laid down the law in the United States. Kenneth Feinberg has clamped down on the pay of hundreds of top employees at the companies which were bailed out by the government. The ruling hits out at 75 of the highest hundred paid employees at four companies. They include AIG, General Motors, Citigroup and, of course, the financing arm of G.M. GMAC. No employee will receive base compensation -- a base salary of more than half a million dollars this year in cash and stock, with a handful of exceptions.
Kenneth Feinberg was asked if he's being too lenient.
(BEGIN VIDEO CLIP)
KEN FEINBERG, PAY CZAR: I understand that concern. I would balance that concern against the concern, on the other side, that says I'm being much too harsh, I'm inhibiting the ability of these seven companies to compete in the marketplace. I think if both sides think that I'm being a little bit unfair, maybe I'm doing the right thing.
(END VIDEO CLIP)
QUEST: And one post-postscript, if you can have such a thing, the U.S. Treasury, apparently officials have said they have no plans to impose a bankers' bonus like Europe, as many countries have.
The big board, a quick look and see what's happening, update you -- up 63, up .5 percent, 10469. Stronger consumer spending and sentiment is what's really putting (ph). A strong dollar, of course, is easing that off somewhat.
When we come back in just a moment, a famous centuries-old legend -- it's so important, even the British government is forking out money to keep it alive. You won't want to miss the next installment, the festive World At Work, in a moment.
QUEST: Now, on QUEST MEANS BUSINESS, we've been giving our series, the World At Work, that wonderful festive twist. It really doesn't matter which festivity you're so -- enjoying at the moment, there's plenty to be enjoyed in our festive 12 Days of Christmas.
We're following that traditional song, "The Twelve Days of Christmas".
Now, you'll remember, on day one, my true love bought for me a partridge in a pear tree. And we met Mike Johnson, who makes traditional pear cider, known as perry.
The second day of Christmas where my true love was feeling generous, the dove breeder, Cathy Anderson. Now, she shared her World At Work with two turtle doves.
Day three was tricky -- three French hens. We did that, of course, with a French chef, Helene Darroze, who just so happened to be cooking up some French hens.
Tangential or what?
But if that's not all lost on you, here's a snippet of the song you might remember.
This is sung by the beautiful, wonderful Bach Choir.
So we're up to four calling birds. Now, originally that was four colly birds. That was a slang name for the blackbird -- calling birds, colly birds. It proved a bit of a struggle to come up with a World At Work around blackbirds. Hah. That was before a bright idea from the QMB team gave me the excuse to return to the world famous fortress and that prison, the Tower of London.
Clever or what, huh?
Let me introduce you to Ray Stones. He's the raven master who looks after nine very large, very important colly birds -- black ravens. It's his World At Work.
RAY STONES, RAVEN MASTER, TOWER OF LONDON: Good morning.
Hello Erin (ph).
Good morning, Marly (ph).
Hello, Grulem (ph).
Hi, Lizzie (ph).
Good morning, Nugen (ph). Come on in.
There you go.
QUEST: Why did you say good morning to them?
STONES: I always say good morning. I always say it like -- like any human or any -- they -- they have brains, they have feelings. They can also hear my voice. They know it's me. They know it's dad.
OK, Merlin, you have a nice day. Come on in.
I've been working as an assistant to the retired raven master for about seven years. Officially, the raven master position I took over in July of this year, 2009.
QUEST: Tell me about this legend.
STONES: Ah, the old legend. It goes back many centuries. The legend is that if the ravens ever leave the Tower of London, the white tower in the center you see there will crumble to dust, the monarchy will lose her crown and a great disaster beheld on England. So we keep a minimum of six here. But like any good football team, we have a couple of substitutes, as well.
QUEST: You actually sort of load the dice in your favor a little bit, don't you?
STONES: We don't like to tempt the old legend, so the idea is to slightly trim one flight wing. We take just a little area of one wing so they cannot fly away. They can't get the lift too high and it keeps them here. Mind you, (INAUDIBLE) say to them.
QUEST: Do you like the ravens?
STONES: I like the ravens very much so because they're very inquisitive, very intelligent. Of course, we keep them most 98 percent wild, because that is their natural habitat. So they tolerate me. They've trained me more than the other way around.
Come on in, Merlin. There you go, Merlin. Come on. There you go. Come on.
A nice heart (ph) today.
The idea is, is always keep them away from your face. In the olden days, they loved eyes and lips and things -- the heads that were on spikes. I like my eyes, so I tend to keep them at an arm's distance all -- all the time.
QUEST: So there's absolutely no way I should be offering him my finger?
STONES: I wouldn't offer your finger for obvious reasons. It's nice and juicy, they love meat and they all love it very much. So I wouldn't stick your finger anywhere near it.
QUEST: Let's feed him.
STONES: (INAUDIBLE). Come on in. (INAUDIBLE) good lad.
QUEST: Looking after ravens, do you have to have a passion for it, do you think?
STONES: Definitely. Early starts, sometimes half past four in the morning until late night, half past nine, at night when you're going to bed.
There you go, Everin (ph).
There you go, Baldrig (ph).
And it's 24-7. You can't have a day off, so you have to look after them all the time. Sometimes I'm tired, but to go over there and see them and see them play is a great honor.
QUEST: There's no danger of the ravens leaving, the kingdom crumbling, the legend coming true -- not as long as Ray is here in his World At Work.
(END VIDEO TAPE)
QUEST: And on Monday, we continue with five gold rings. We visit London's very fashionable New Bond Street.
The festive World At Work with five gold rings.
The weather forecast now for a busy weekend.
Guillermo is at the CNN World Weather Center.
GUILLERMO ARDUINO, CNN METEOROLOGIST: Excellent story. I really appreciated it, Richard.
And the weather wasn't bad. And the weather is not going to be bad this weekend in terms of rain, right?
We're not going to see it here in the south. We'll see fog, like we saw today. We'll see frost, like we have seen today in many parts, especially in the north.
Now, I can't promise a lot of sunshine, but I promise that high pressure to linger a little bit.
Now, I'll take you from here down into the southeast, right behind this CNN -- CNN bug, as we call it. We see this low here that is moving in southern parts of Turkey. It is bringing the rain. Nothing compared to the snow that we see in Germany, but is it going to generate some snow in other sections, so I'll tell you where. And apart from that, we will have temperatures not only this section, but to the north going down.
So watch out with the precipitation in Turkey, in the Middle East and the cold here with high pressure.
That cold is going to affect Britain, as well. But it will be bitterly cold into the west, the east and the northern sections. Istanbul at 11. The rain in the south gradually moving into Cyprus. And that's the problem.
And then we will see more snow in Germany, as I was saying now, in Zurich, in Austria. It's actually snowing right now -- well, mixed rain and snow in Nuremberg. Berlin is going to be snowy and Paris with some fog, as well.
So, Richard, things are a little bit cold this weekend for many.
QUEST: Well, then we'll keep warm.
Many thanks, Guillermo.
ARDUINO: Thank you.
QUEST: That's QUEST MEANS BUSINESS for the end of this week.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I hope it's profitable.
"MARKETPLACE MIDDLE EAST" is next.
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