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A Downgrade, A $20 Billion, And A Public Flogging On Capitol Hill, BP's Earth Shattering Week

Aired June 18, 2010 - 14:00:00   ET


RICHARD QUEST, CNN INT'L. ANCHOR, QUEST MEANS BUSINESS: A downgrade, a $20 billion, and a public flogging, BP's earth shattering week.

A vote of confidence, Spain gets a visit from the IMF.

And anyone for tennis? The head of the Woman's Tennis Association, tonight, gives us a heads up for Wimbledon.

I'm Richard Quest, it's the end of the week, but I still mean business.

Good evening.

A credit rating agency has delivered a new blow to an already battered BP. Moody's is giving investor yet another reason to dump BP shares. The culmination of a week of which has seen the company take a very public beating. In just a few moments we're going to be talking to two U.S. congressmen, who were involve d in the sharp questioning of Tony Hayward.

We'll get to that in just a moment. Bringing you up to date with the latest developments from the BP downgrade. Join me in the library if you will. Moody's credit rating cut from A2down-to A2, down from AA2. Now Moody's says the spill will have an impact on BP's finances for a number of years. And that's the crucial part. It is a $20 billion that has to go into the escrow account that will have a long-term impact on the finances. You'll remember, of course, Fitch has already downgraded BP to just two notches above junk bond status.

Every point of extra costs BP about $16 to $20 million in refinancing costs. The compensation fund for clean up, compensation, and for dealing with the spill, $20 billion has been arranged, as President Obama made absolutely clear, that is not an absolute cap. It will be administered by Kenneth Feinberg, who manned the 9/11 compensation fund. And today Mr. Feinberg said he hoped and expected the first claims to be paid within 30 to 60 days of them being made. That is not something that, of course, that we reached that outer deadline yet. Moody's today said it was mildly positive that there had been an ease in U.S. government pressure.

But, of course, the big story of the week was the way in which Tony Hayward was kabobbed on Capitol Hill by congressmen. He was accused, by the congressmen, of stonewalling, it was a blistering seven-hour grilling, with basically, time and again, being questioned about what he-it was a real case of what did you know and when did you know it?

Congressman Sullivan put this particular exchange to Mr. Hayward.


REP. JOHN SULLIVAN, (R) OKLAHOMA: The CEO of a major company-


SULLIVAN: Looking back, looking back, Sir, do you think that they cut corners?

TONY HAYWARD, CEO, BP: I believe we should await the results of the investigations before we draw conclusions.

SULLIVAN: But, Sir, you have had to looked at some of the results of any kind of-your internal investigation, internally, your investigation, did it show any kind of breakdown?

HAYWARD: It has shown us that-

SULLIVAN: Things that you wouldn't have liked, that you, with your protocols you said you put in place, were any of those short-cutted (sic)?

HAYWARD: The investigation is still ongoing, as you know. It has identified seven areas: the cement, the casing, the integrity pressure, well control procedures, and three failures of the blow out preventer. And when the investigation is completed, we'll make a judgment.


QUEST: Congressman Sullivan joins me now on the line from Tulsa.

Good afternoon, Congressman. Thank you for talking to QUEST MEANS BUSINESS.

We just heard that exchange with Mr. Hayward. What did you hope he was going to say? Because isn't it reasonable that he says wait for the results of the investigation?

SULLIVAN: Well, you know, there are a lot of safety violations that you can see over the last five years, that BP has accumulated, a lot of them willful. And when you compare BP to other companies in the industry, for example, let's say, Sunoco. The next one that had the most violations it was eight, compared to 760 with BP. So, I wanted to see if there was a cultural deficiency in their safety standards there. And, since he took over, he did state that he has tried to revamp that.

But, as you can see, some of the failures that happened in this well, there seems to still be that kind of culture, unfortunately.

QUEST: Congressman, I suppose watching from afar and watching the relentless and remorseless attack on Mr. Hayward yesterday, one was-and let me preface my next question by saying nothing, of course, to denigrate the terrible spill that has taken place, but was it fair, in the way in which that committee just beat up on the man?

SULLIVAN: Well, there were some people that asked some tough questions, there is no doubt about that. But you have to understand the American people are very upset right now. There is a lot of devastation that is going on. This is the largest ecological disaster that we have ever faced in American history. We're going to be dealing with this for many, many years. And people are very concerned about it and they're speaking through their representatives, and I think that it was, you know, something that had to happen.

QUEST: Well, when Mr. Hayward says that he didn't have any knowledge of this particular well, until it went horribly wrong, being the chief executive of a major corporation, that is a reasonable answer to say, isn't it? I mean, you don't know everything that is happening in your state at any-or your district, at any one moment, do you?

SULLIVAN: Well, I mean, he is the CEO of a major corporation. He should have some grasp of this. He did say one of the things he did when he took over as CEO of BP, that safety was a big concern for him. He changed a lot of that. And I wanted to know what he had done. And you know, I think on this issue he did answer a lot of questions with, "I don't know", "I don't know", "I can't recall". I mean, you know, this is a huge disaster, he should have, at that point, looked at the data and been able to answer those questions better.

QUEST: Right. Would you be in favor-now there is a little bit of confusion tonight about how quickly Bob Dudley, of BP America, is going to take over the management of the spill. But would you be in favor of Bob Dudley taking over the management of this spill, sooner rather than later?

SULLIVAN: Well, I think that we probably need a different approach. You know, it is still leaking, we are two months into this. We want to get that thing plugged. I hear they're very close on the relief well, right now. And that's good news. I think that is the only way we are going to plug this. But having a different approach, with a different person in there, might be a very good idea. And I welcome that.

QUEST: Many thanks indeed, Congressman. Please, you have a standing invitation on our program to come and talk about these matters with me. We are very grateful to have you on this evening.

Now, on the line, also, one of the other U.S. lawmakers on the committee, which questioned Tony Hayward; Congressman Peter Welch of the House of Representatives, he represents a district in Vermont.

Peter Welch, good evening to you as well.

Uh, do you think that it is time that Mr. Hayward packed his bags and left that top job, even in the middle of a crisis?

REP. PETER WELCH, (D) VERMONT: Well, for the good of BP I would say yes. He became identified as the face of failure in the Gulf Coast. And as John Sullivan said, there is just an immense catastrophe here, and everybody who is affected really has some pretty hard feelings. And I Mr. Hayward just has not been successful in giving people confidence that this is going to be resolved. So it is probably better to get a fresh face in there.

QUEST: Right, but are you wanting rid of him because he did a bad performance, or because he isn't doing a very good job. Because, frankly, it is not unreasonable for a chief executive to say, well, I didn't know about this until it happened.

WELCH: Well, my concern is not Mr. Hayward, I mean, you could replace Mr. Hayward and still have that culture of cutting corners on safety. Clearly it is part of BP's legacy and it is not something (AUDIO GAP). And when you had four of the five oil companies sitting in the hearing two days before, and each one of them was very critical of the way BP did this well. You are getting oil experts-people who know how incredibly careful you have to be, particularly at that critical moment when you are capping a well. They all criticized them.

QUEST: Congressman, there is one point that we mustn't forget in all of this, it is in nobody's interest, you would accept, I believe, that BP goes under, goes out of business, goes bankrupt?

WELCH: That is absolutely correct. And you know, it is really tough on-there are all kinds of victims here. Starting with the fisherman and the tourist industry, and of course, the wildlife and marine life, but a lot of people who are losers are shareholders of BP who have dividends. And I in the U.K. that is a huge number of people, but it is half of that of BP that is held in the United States. So, shareholders who have been depending on good management, I think, are among the line of victims and have every bit as much reason to be very upset about that failure of procedures.


QUEST: Are you concerned, though, Sir, that if the rhetoric, I mean, you know, BP is doing what it is and in the fullness of time they will be judged on whether they have done a good job, or a bad job, or a shocking job. But if the rhetoric is not wound down, then as we have seen in the markets, the share price is collapsing and the bonds are headed toward junk status.

WELCH: Well, you see, I think is not about rhetoric. It's about reality. I mean, this is the biggest catastrophe, environmentally, on the Gulf Coast. And, of course, it is spewing out about 60,000 barrels of oil a day, and the damage goes on. And, of course, they do have a legal responsibility and have accepted it, but they have to pay the cost of clean up and (UNINTELLIGIBLE)

QUEST: Right.

WELCH: So a lot of what you are seeing in the market is trying to figure out how much that is, and it is the facts not the rhetoric that is accountable for the share price.

QUEST: A final question, Congressman, and BP has from day one said that it will make good and it will pay all legitimate claims. What part of that do you not believe, do you think?

WELCH: No, I thought that BP has been very straightforward about saying they will accept responsibility, and then when they met with President Obama, and actually agreed to fund a $20 billion independent escrow account to make good on that, they took a very solid step so that their deeds match their words. And you know, I'm going to take BP at their word, especially after the put $20 billion into an independently administrated escrow account. So that is a good thing. That was a positive step that BP took.

QUEST: Congressman, again, a standing invitation to you to come and join us at anytime to talk about these important issues. Many thanks, indeed. Congressman Welch from Vermont, joining us on the line.

Now, one of the big issues of course, was the chairman of the company, Carl Svanberg, who tonight is report to have said, that Bob Dudley will now be taking over operational control. There seems to be some difference of whether he just misspoke, it wouldn't be the first time that Mr. Svanberg has misspoken because of his English. You remember, that after the White House meeting he said that was the small people BP was concerned of. Well, I spoke to the chief executive of Sony Ericsson, Bert Nordberg, of course, Ericsson was Mr. Stenberg's former company. I asked Mr. Nordberg if he had sympathy for the way BP's chairman was being beaten up?


BERT NORDBERG, CEO, SONY ERICSSON: Yeah, I think, Carl Svanberg, has been a very good friend for me, for many years. He's been my boss for eight years. I know that he is very, very, very solid person with a great sort of view of the sustainability, and is warm in his heart. So, I think they couldn't have a better person leading the company in these times.

QUEST: I don't know if you saw yesterday, of course, "the small people" comment, are you familiar with this?

NORDBERG: Yeah, but you know-

QUEST: Is this just a linguistic misfortune?

NORDBERG: Yeah, I think the journalist has a responsibility to talk about the real problem, not if you are a perfect English speaking person. I don't think you should make-it's very important to me that you don't sort of combine perfect English with intelligence.


QUEST: The chief executive of Sony Ericsson, defending Carl Von Svanberg.

If you are getting tired of the sound of a 1,000 plastic trumpets at every World Cup match, relief is at hand, the major tournament where it is acceptable to say, shhh, quiet, please.

Wimbledon is nearly here. It will be holding court with tennis royalty, in a moment.



QUEST: Well, the nets are up, the courts are green, even the sun is out, for now. That won't last! Next week, of course, it will be abysmal, because after all the Wimbledon Tennis Championships begin on Monday. And when it is Wimbledon, the rain will follow through-well, maybe not.

For the players, there is more at stake than simply a game set and match. It is an event with potentially huge financial rewards. Of course, there is the prize money that they will receive for winning and that is not small beer. The prize money is only just part of the story.


QUEST (voice over): Tennis royalty has come to London at the annual pre-Wimbledon party the elite athletes of the women's game serve up all the glamour of a sport on top of its game.

Underpinned by fierce competition on court, and a raft of sponsorship deals for Woman's Tennis Association, or WTA Tour, has never been so financially healthy.

In 2005, Sony Ericsson became the tour's title sponsor; $88 million, over five years. It is the biggest deal in woman's sport. And happy with a return on their investment, the partnership has just been extended for another two years.

NORDBERG: We do business in 176 countries in the world. So you have to look for a global sport that fits every part of the world.

Tennis has become one of the sports you an sponsor , if you want to sponsor globally.

QUEST: In 2009, 40 female players made more than half a million dollars. Eight players conceded $2 million.

One of those was Caroline Wozniacki, the new it girl of women's tennis. At just 19 years old, the world No. 3, is all too aware that her talent with a racket, makes her much more than just a tennis player.

CAROLINE WOZNIACKI, PROFESSIONAL TENNIS PLAYER: I am a brand I'm helping the companies to sell some of their products. I'm just actually mostly just thinking about the results on court. And the rest just comes naturally.

I enjoy doing things off the court as well. And I think that it is fun to have different things on your mind then just tennis, tennis, and tennis.

QUEST: One place ahead of Wozniacki, in the world rankings, Venus Williams. Talking to me yesterday on her 30th birthday, she something of a veteran by comparison. She has five Wimbledon titles to her name. And she has amassed career earnings of $200 million.

About 85 percent of that comes from commercial exploits off the court.

VENUS WILLIAMS, PROFFESIONAL TENNIS PLAYER: My main business is tennis on the court, holding those trophies. I can't ever forget that, but I'm in fashion design, and I have a line called, Eleven. And I have a company called V Star Interiors. My goals is to definitely do commercial design, and to also have my own line of house wares, and enjoy myself and the things that I love, just like I do now.

I just see myself, after tennis, dong the things that I love off the court and making a business out of it. So, I'm using that platform as we speak.

QUEST: So, you are not going to suddenly find, do you think, one day you'll wake up and think, oh, that bits over, what do I do now?

WILLIAMS: Well, I was raised to think about my life after tennis, which is different from most athletes, so my parents have been a huge influence in letting us know who we are off the court, and to pursue that, and to go for it now.

QUEST: Players like Venus Williams, have laid the foundations for their future and that of their sport. They have globalized the brand of women's tennis and with new markets opening up in countries like China, the WTO tour is looking very strong. A bit like Ms. Williams' forehand.


Stacey Allaster is the chief executive of the WTA tour. Stacy is with me now.

Women's tennis, and I'm not being sexist, for years was the Cinderella of the sport, wasn't it?

STACEY ALLASTER, CEO, WTA: Well, there is no question that women's tennis has come so far and so fast. When Billy Jean King started the tour, in 1973, back when it was 300,000. Today it is $85 million between the Slams and the Sony Ericsson WTA Tour.

QUEST: So what changed? Was it women getting better shape (ph), or was there a realization that there was money to be made and that actually it was an attractive game?

ALLASTER: It was both. Without question each generation has taken the sport to another level. If we just look at the athleticism of the athletes today compared to the early days, the athletes have just gotten better. And also the game has become truly global. If you look at out Top 100 we have 37 nations represented, and we're playing in 33 countries. We started out as an American tour and now we are truly global.

QUEST: If you look at, though-I mean, I'm trying desperately hard not to sound sexist here. But the numbers are still in the men's favor, aren't they? In terms of the sponsorship, not the prize winning, but in terms of the viewership, the viewing numbers?

ALLASTER: Well, look, because of inscrutable (ph) nature, the appreciation for woman's sport, we're still catching up in some markets. You know, we are a very mature market in North America, where attendance is quite similar for a men's and a woman's event. But in other markets we are catching up.

QUEST: When Sony Ericsson decided to put the best part of a $100 million your way, that was a massive deal, wasn't it? Massive!

ALLASTER: Largest sponsorship in the history of tennis. Not women's tennis, but tennis. So they truly saw the marketing platform that women's tennis provided their brand.

QUEST: OK, Stacey, how much do you feel you have an obligation, though. You feel the weight of responsibility? Because you are basically saying that your game is as good, both commercially and athletically?

ALLASTER: No question.

QUEST: You have a responsibility?

ALLASTER: This organization that Billy Jean King founded, I take great responsibility and pride at taking women's tennis to the next level, with great respect, and integrity and monetization. You know, we're at $85 million today and we'll be at $100 million in the very short future; $100 million for female athletes. Venus Williams is nearing $200 million. Maria Sharapova is the highest paid female athlete in the world, earning $26 million a year, in her on-court and her off-court.

QUEST: This off-court relationship, Venus alluded to it. Do you have to-I mean, the coaching that has to go into learning how to handle that, for any young athlete is phenomenal when that sort of money starts rolling in.

ALLASTER: That's what makes our athletes incredible. Because they truly are the best female athletes in the world, combined with being incredible sports ambassadors off the court, for youth and corporate brands. Look at today, Maria Sharapova just announced a very cool partnership with Avian, and that is just the testament to the strength of Maria Sharapova as an athlete and as a brand.

QUEST: OK, finally, Wimbledon starts on Monday. The rain will arrive, of course.



ALLASTER: They have the roof so there is no more rain.

QUEST: Roof, roof, in the rain.


Who is going to win?

ALLASTER: Well, it is wide open on the woman's side. You know, Venus and Serena are number one and two in the world. And they have owned that center court. But there are some great challengers. Kim and Justine are back. Maria is playing well, Sam Stozer (ph). So, I think it is one of the great things right now in women's tennis, it is pretty wide open.

QUEST: You're a diplomat, as well as-the rain is going to arrive. Shall we have a bet on that?

ALLASTER: We'll see.

QUEST: All right. Many thanks, indeed.

Lackluster more than blockbuster, summer box office takings have disappointed Hollywood so far. "Toy Story 3", is it going to be a good movie for the box office, or is it going to be put to the back of the toy box? In a moment.


QUEST: Just practicing a bit of, well, tennis.

Hollywood's summer blockbuster season is well underway. Takings in the U.S. have been disappointing so far. In recent years the rise of 3-D and events movies have tempted people away from DVDs. Industry watchers say the film business needs a shot in the arm. "Toy Story 3" is the one that they are perhaps hoping is going to deliver it.

It is a glorious day in New York and that is where Maggie Lake is at Columbus Circle, for us this evening.

Does "Toy Story" cut the mustard?

MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT: It's going to have to, Richard. And you're right, it is absolutely glorious here.

Take a look. You've been in this spot. You know what it is like this time of year in the U.S. Summer weather, beautiful sunshine, you'd think everyone would want to be outside. But the truth is starting last night they started pouring into the theaters to check out "Toy Story".


LAKE (voice over): A preview screening of one of the year's most anticipated films. In the grip of a marketing blitz, "Toy Story 3" is being released by Disney Pixar across the United States this Friday.

UNIDENTIFIED FEMALE: I'm so excited. I've been waiting for so long to see this.

UNIDENTIFIED MALE: It is part of my childhood brought back.


ACTOR: Buzz Lightyear, at your service.


LAKE: Expectations are running high. After a sluggish start to the summer blockbuster season when Hollywood earns some 40 percent of its box office.

PAUL DERGARABEDIAN, EDITOR, HOLLYWOOD.COM: A lot is being put on "Toy Story 3" to really put an emphasis on going back to the movies and getting the box office back on track. This could potentially be the first Pixar movie to open with $100 million.

LAKE: The film is being shown in 3-D, which is enjoying a renaissance in the wake of films like "Avatar" and "Alice In Wonderland". And it is being shown in IMAX cinemas, which project sharper images onto curved, room-filling screens.

A Canadian company once confined to museums IMAX's so-called event movie experience has been credited with luring viewers away from DVDs in recent years.

RICHARD GELFOND, CEO, IMAX: I think there are so many movies coming out and they say it is IMAX, it must be really special. And I think since we do deliver a premium experience and it is so awesome and awe-inspiring, and we hope to think even, mind-blowing, that we do cut through the clutter when people come it brings them back to movie theaters.

LAKE: At their U.S. headquarters in California, IMAX staff are preparing to distribute the latest "Twilight" film, "Eclipse". Dozens of rolls of film are still used for one movie, but that is changing. IMAX films can now be stored on smaller, cheaper hard drives, and then transferred onto digital projectors, making it quicker and cheaper to get movies into the marketplace. But quantity does not equal quality. And critics warn audiences won't turn out if the story isn't compelling.

IMAX CEO Richard Gelfond says technology is opening up new possibilities.

GELFOND: More and more it has become the filmmakers. So to use Tim Burton, when he did "Alice In Wonderland" he said, I want it on a IMAX. Chris Nolan, when he did "The Dark Knight", filmed a half hour with special IMAX cameras because it was (UNINTELLIGIBELE) better. So we'd like to say the secret sauce and the mix is really the filmmaker. And why not? If you were a filmmakers and you could paint on the most impressive screen in the world, why not take out your brush?

LAKE: IMAX tickets come at a premium, but Hollywood is banking on audiences paying up to be transported.


ACTOR: Look, guys, I don't know where I am!

UNIDENTIFIED FEMALE: We're either in a cafe in Paris, or a coffee shop in New Jersey.


LAKE: They are irresistible, Richard. Interestingly, one of the New York papers actually giving it a good review; 3 and a half out of 4 stars. So it looks like "Toy Story" is going to be a hit. And in terms of IMAX, they are really hitting their stride. The CEO saying, you know, with the technology it is all really coming together for them. They are expanding aggressively internationally. Just today, in fact, announcing they are teaming up in an expansion deal with Wanda Cinnamon Line, in China and Major Cineplex, in Bangkok, Thailand. And the CEO, right before we talked to him, off on a world tour himself, Richard.

QUEST: And Maggie Lake in New York, go and start your weekend in that glorious weather and enjoy it. She needed no further encouragement.

When we come back, Spain gets the thumbs up from the IMF. The country's stock market -- we'll tell you how it reacted.

And then markets to economics -- the Economic World Cup -- Germany and Serbia, in a moment.


QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.

This is CNN, where the news always comes first.

Two thousand people may have died in ethnic violence in Kyrgyzstan. That's the new estimate and it's much higher than we've heard previously. It comes from the interim leader, Roza Otunbayeva, who visited the southern city of Osh on Friday -- a flashpoint of recent clashes between Kyrgyz and ethnic Uzbeks. U.N. agencies now estimate more than one million people may have -- need aid, many of them refugees taking shelter in Uzbekistan.

The convicted killer, Ronnie Lee Gardner, was executed by a firing squad in the U.S. state of Utah shortly after midnight, local time. He was the third person in 33 years to be killed by a firing squad in the U.S. Gardner was sentenced to death for the murder of an attorney during a botched escape attempt from court 25 years ago.

There was tight security in Capetown ahead of England's World Cup match against Algeria, which kicked off just a few moments ago. England fans hope the squad will rebound from a disappointing opening match, a draw against the United States. Algeria lost its opener to Slovenia. In earlier Group C action today, Slovenia and the U.S. played to a two all draw.

Spain has got a vote of confidence from the IMF, even if its football isn't that good at the moment. The head of the International Monetary Fund says recent measures taken by Madrid absolutely go in the right direction. Dominique Strauss-Kahn was visiting Spain on Friday amid speculation that Spain would follow Athens and ask for a bailout. Spain's prime minister has denied the speculation. At a news conference with Prime Minister Zapatero, Mr. Strauss-Kahn gave his backing to Spain's austerity moves.


DOMINIQUE STRAUSS-KAHN, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: I'm really confident, really confident in the -- the prospect, the medium-term and long-term prospect for the Spanish economy, providing that the efforts, which have to be made, will be made. And what I see today is that these efforts are underway.


QUEST: Spanish stocks finished the week strongly. The IBEX Index closed up 2.25 percent. Bank shares rose for a second day after E.U. leaders promised to publish the results of their stress tests on European banks. Europe's big four had a pretty flat day. They've been rising for more than a week. Only the 40 in Paris, the CAC quarante, managed to close higher this session.

So, the markets to economics and from economics to football, with the QUEST MEANS BUSINESS Economic World Cup.

In South Africa, we have one of the genuine surprises of the World Cup. It happened in Port Elizabeth. Germany going down 1-0 at the hands of Serbia. The Serbian goal came a minute or two after Germany had been reduced to 10 men. And as striker Miroslav Klose was penned off, the second game of the day is being described as one of the best in the tournament so far. The U.S. met Slovenia. Both sides with a chance to go onto the second stage of the competition.

Now, Slovenia raced to a two goal lead in the first half. The USA fought back to a 2-0 draw and very nearly won and a late effort is alive.

So that's the way the -- the World Cup, if you like, looks on the pitch.

But if you look at the economics of it, as we are tonight, then back to Jim Boulden.

JIM BOULDEN, CNN CORRESPONDENT: I can't get over that (INAUDIBLE) goals. It's really hard for me to keep focused.

QUEST: Are you in mourning?

BOULDEN: To focus.

QUEST: Are you in mourning?

BOULDEN: Well, a draw is a draw, so you get a point, you know.

But anyway, that's the football. Economics.

QUEST: Economic.

All right, let's go through the -- the matches that we saw.



BOULDEN: Yes, Germany and Serbia, you won't see them here, because they were from a different group. But they were the first game that played today.

QUEST: Right.

BOULDEN: Germany, the fourth largest economy in the world, arguably; Serbia much, much smaller, the 75th. The unemployment rate in Germany more than half less than Serbia's.

QUEST: Yes, but...

BOULDEN: Serbia nears 17 percent; budget deficit not doing too well. So Serbia has got a lot of problems, economically, at least.

QUEST: Serbia, economically, should have been wiped the floor with by Germany.

BOULDEN: Yes. Exactly. Exactly.

QUEST: And they weren't.

BOULDEN: And they weren't.

QUEST: And they weren't.

BOULDEN: That makes it even more of a shock, if you ask me.

QUEST: But if we look at the Serbian economy, war torn and still recovering...

BOULDEN: Exactly.

QUEST: -- and still having problems integrating into Europe. That's an even more -- I mean that -- that this was what happened then.

BOULDEN: And it's very different from, say, Croatia or what Slovenia has been going through, where they have a -- they've been able to do this quicker. Slovenia, if you remember, did an extremely good job.

QUEST: Absolutely, the other match that -- so I think I'll -- to make a point on the Germany-Serbia game...

BOULDEN: Serbia, yes.

QUEST: -- our Economic World Cup seems to -- Germany should have won that economically.

BOULDEN: Yes. Absolutely.

QUEST: Hands down, not even a (INAUDIBLE).

What's the next one like?

BOULDEN: So with Slovenia, a neighbor of Serbia...


BOULDEN: -- you know, it was a fantastic match. So we'll -- you know, we'll look at that. Actually, a better unemployment rate than the U.S. at this moment.


BOULDEN: Very integrated into the European Union.


BOULDEN: You know, a -- a country that's -- I -- I should mention the -- you know, this is about football. The largest economy in the World Cup, the smallest economy in the World Cup, the smallest country in the World Cup, as well, very, very tiny. So in that sense, you look at Slovenia, you saw not great growth this year...

QUEST: But it's showing that these smaller economies...


QUEST: -- have a very significant role to play in the world economy.


QUEST: And you can't -- and the fact that they held them to a 2-0 and to a two all draw...


QUEST: -- shows that small is not necessarily out of the game, economically or football wise.

BOULDEN: Correct. And, you know, and -- and it's done very well with like tourism, Slovenia. So people love to go there. It's -- it's very cheap, in some ways, to go there. And so Slovenia does so many things right that the others around there are trying to emulate.

QUEST: Finally, and very briefly, Algeria and England are...


QUEST: Don't chuckle. It's my home team.

BOULDEN: No, I know. I know.

QUEST: You -- you're allowed to support your home team. England and Algeria, economically, who wins this?

BOULDEN: Hugely different economies, you know, different parts of the world. For me, it would be England hands down.

QUEST: If England does not win this tonight, let's ignore the World Cup. It means that we'll...


QUEST: -- our Economic World Cup is in deep trouble.

We've got -- and, of course, as we go further into the competition, then it gets more and more difficult...

BOULDEN: Absolutely.

QUEST: -- and we'll be looking at the economies.

In just a moment, Stockholm is giving visitors the right royal treatment. It wants them to feel a love as the crown princess gets ready to say, "I do," to a man of the people. We'll be in the Swedish capital in a moment.


QUEST: Forget World Cup parties, Sweden is about to play host to its biggest royal bash for decades. Crown Princess Victoria is preparing to exchange vows with Daniel Westling, a fitness coach.

CNN's Per Nyberg joins us live from Stockholm, a city that wants visitors to feel the love.

PER NYBERG, CNN CORRESPONDENT: Yes, you're right, Richard.

We're now less than 24 hours away from tomorrow's royal wedding, as Stockholm literally screams love at all the visitors that have decided to come to Stockholm during these days. And you could say that love is in the air, but it's all thanks to effective marketing that's taken advantage of this unique event in Swedish royal history.


NYBERG (voice-over): In the wake of the economic downturn, the city of Stockholm has found an opportunity too good to miss. With the slogan, "Love Stockholm," the Swedish capital is inviting tourists to come and visit.

ASA NORBERG, SOUVENIR SHOP OWNER: We hope that the wedding is going to be very good for us and good for Stockholm.

NYBERG: Asa Norberg runs a souvenir shop in the heart of Stockholm's Old Town. After losing almost a third of her normal customer volume in the financial crisis, she hopes the royal wedding will turn things around.

NORBERG: I think the people stay home, the American people, when the crisis comes. So we want them to come back again.

NYBERG: And wedding merchandise is set to generate big business worth $300 million, according to estimates. For Stockholm to send out the message of love, it's had to invest about $1 million.

STEN NORDIN, MAYOR OF STOCKHOLM: We think it's good for the city and for local business. But the most important, when we invest in -- in such events, is the long-term marketing of Stockholm.

NYBERG (on camera): It's not just city hall that sees this wedding as a big marketing opportunity. The future prince of Sweden is also aware that this event could have a positive impact on the city.

DANIEL WESTLING, FUTURE PRINCE OF SWEDEN (through translator): And we are, of course, very happy and proud that Sweden has chosen to go big on our big day and that it's seen as an opportunity to show Sweden and Stockholm to the world of tourists. And we think it will be a fantastic day.

NYBERG (voice-over): Though the celebration seems to have gotten off to a slow start. The organizers believe the number of visitors will double this June compared to last year.

HENRIK HULDSCHINER, FINANCIAL JOURNALIST: A representative from the royal court has argued that for every dollar spent on this wedding, Stockholm and Sweden gets $100 back. Now, I don't know about that calculation, but that's -- I think it's safe to say that all the money spent on this wedding is -- is well invested.

NYBERG: And in Asa's shop, the line of official souvenirs is ready for the big weekend.

NORBERG: When they have seen the wedding and they come back and they will want a souvenir home. So we wait for them after the wedding.

NYBERG: A wait that won't be long, as the wedding now is less than a day away.

Per Nyberg, CNN, Stockholm.


NYBERG: Yes, Richard, tomorrow is the big day. All the main royalties all across Europe are all here in Stockholm now. They're all

QUEST: Don't you dare return to London without bringing me a souvenir mug.

Many thanks, Per Nyberg in Stockholm.

And that is QUEST MEANS BUSINESS for tonight.

I'm Richard Quest in London.

I'm away next week.

So whatever you're up to in the week ahead, I hope it's profitable.