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QUEST MEANS BUSINESS
Egypt's New Finance Minister: Protesters Have Legitimate Grievances; Interview with German Finance Minister
Aired January 31, 2011 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: He calls it a serious situation in Egypt. Tonight the new finance minister says it will be expensive for the economy.
Tunisia's new central bank governor tells me his priority is to keep the money flowing.
And united in their defense of the Euro Zone the French and German finance ministers on their collective determination.
It's a new week. I'm Richard Quest. For an hour I mean business.
Egypt's President Hosni Mubarak has announced his new government after pressure from protests. Tonight on this program we hear from the new finance minister, Samir Radwan, who tells me his responsibility is to respond to the people's demands.
After seven days and seven nights of protest the crowds keep coming. It's just after nine at night in Egypt. In what could be a pivotal development the Egyptian army has issued a statement, saying the demonstrators grievances are legitimate, that troops won't use violence against them.
Thousands of people are defying the countrywide curfew. They remain on the streets. This was the scene a few hours ago, Cairo's Tahrir Square. On Tuesday activists said they will stage a 1 million man march, despite growing disorder and disruption, President Mubarak shows no sign of giving up power. The reshuffled cabinet, Egypt's new finance minister is Samir Radwan, who was sworn in earlier today. A short while ago, he joined me on the line. And I asked the new finance minister what were his priorities and how he is going to get a handle on the financial situation
(BEGIN VIDEO CLIP)
Principally, Minister, what is your priority going to be? How are you going to get a handle on this?
SAMIR RADWAN, FINANCE MINISTER, EGYPT: Well, my priority, of course, is to show that this is a government that responds to the demands, the fair demands, I would say, of the people in Tahrir Square. This is not rhetoric, Richard, this is a very true assessment of the problems of the country. And the ministry of finance, of course, is very important in responding to those demands.
QUEST: I realize it is very early days, but do you have any policies, particularly, that you are going to introduce in the very near future? Or any particular movements?
RADWAN: Certainly, I mean, you know, as you said quite rightly, it is too early to say. But at the same time the priorities are very clear and they have explained out in the letter of appointing this cabinet. First, number one, is that we should not sacrifice the reforms, we should not sacrifice the gains that Egypt has made in the economic arena that enabled it to stand the form of two successive crisis, the food crisis, and the financial crisis.
Second, it is really to use public expenditure to achieve some sort of social justice, and a better distribution of the fruits of growth to the bottom 40 percent of this country.
QUEST: If we talk about the economy, it's early days, but how much damage do you think is taking place within the economy? What would you expect to be the affects?
RADWAN: I think the damage is extensive. It has been extensive in the stock exchange, which is the most vulnerable to such shocks. Also, the question of tourism, as you know, is a very important source of income to Egypt. It has suffered. Thankfully (ph), the SVI (ph), foreign investment, I think, there have been no signs that it has been negatively affected yet. There are concerns from foreign investors. And indeed, domestically also, but we could not see any negative affect yet. So we have to stop, we have to stop the drop immediately.
QUEST: Finally, Minister, the situation seen from the other side, seems to be sweltering, bordering on out of control. How close do you believe it is to being out of control?
RADWAN: It is a serious situation. And anybody who tells you it isn't is not telling you the truth. And the question is, how do we respond to it? How do we genuinely send the message to those people that their demands are fair, that we care for their demands, but we should not throw the baby with the bath water. We should not sacrifice the whole country for short-term, you know, problems.
QUEST: And one other point does occur to me, you have been very kind. There is one other point. The credit rating of Egypt, downgraded, how concerned are you that the rating agencies will now continue that downward spiral, which of course will boost borrowing costs quite considerably.
RADWAN: Yes, well, certainly the rating has gone down for understandable reasons. That is why we are putting the emphasis on restoring law and order, on bringing back calm, on opening channels of dialogue with the young people and assuring them that their demands are fair. That is the way to go back to the previous rating, which was not bad at all.
QUEST: And on a personal note, Minister, my final question, on a personal note. Do you have any qualms about joining a government with President Mubarak, who has not said whether or not he will run again, or has not made any long-term commitment to the transformation of government?
RADWAN: See, my writings for the last 13 years, and my views, which are known to everybody, show that I care for the real problems of this country, the real economic problems of this country. And I am going to do- my response here, is trying to do my bit for this country.
QUEST: Minister, we are very grateful, as always sir. Thank you very much for joining us.
RADWAN: Thank you.
QUEST: I appreciate you giving me time, Sir.
RADWAN: Thank you.
QUEST: That is the new Egyptian finance minister talking to me earlier. Whilst we have been on the air listening to the minister, the White House Press Secretary Robert Gibbs was talking at the White House. He says the White House is pleased with the restraint being shown at the moment. The White House says it is not picking between the Egyptian people in the street and those in government. Other comments, it says, it urges meaningful negotiations among a broad cross-section of groups in Egypt. This is according to Reuters, including opposition groups. And crucially, they say, the grievances of the Egyptian people have to be addressed.
Which of course, is exactly what the finance minister was alluding to just a short while ago. That is the White House briefing going on at the moment. If there is something new or revolutionary coming from the White House briefing, we will, of course, return to it and bring that you.
Meanwhile, the story, of course, remains still in the Egyptian capital, in Cairo. Where tens of thousands of people have been on the street, in scenes of disorder, at times. CNN's Ivan Watson is in the Egyptian capitol.
IVAN WATSON, CNN INTERNATIONAL CORRESPONDENT (voice over): One of the world's most famous landmarks now guarded by army tanks.
(On camera): Soldiers have been deployed all around this city, and the tanks are even parked here at one of the ancient wonders of the world, the Great Pyramids of Giza.
(Voice over): An army officer insisted the pyramids are still open for tourists, but the soldiers wouldn't let us come any closer. On Monday, the troop presence was dramatically increased in Cairo. Soldiers trained to defend their country from foreign enemies, now taking on the duties of largely absent police; an effort to restore law and order in a frightened city, bearing the scars of several days and nights of unrest.
(Voice over): This is part of what has Egyptians so scared right now. A number of hotels and cabarets and casinos, like this, that were torched and looted in the first days of the protest. Most of the businesses in town are still closed. With the normal working day cut in half by a curfew that started at 3:00 p.m. Egyptians had a few short hours to shop for groceries. Among those foraging for food in largely empty streets, this family from Taiwan, stranded while on vacation, hoping to catch a flight out of the country on Tuesday.
After a week of sweeping historic changes, some Egyptians taking it upon themselves to clean up the debris left by days of protests.
(On camera): There is a civic-minded dimension to this protest movement here. We've come to the street and ordinary people, they're not being paid to do this, these are volunteers, students, demonstrators who are out cleaning up the streets.
Is somebody paying you to clean these streets?
UNIDENTIFIED FEMALE: No, no, no. No somebody pay me. I'm just volunteer. No money. No.
WATSON: Why are you volunteering?
UNIDENTIFIED FEMALE: Because this is my country. No reasons. This is my country. I want it clean.
WATSON: What is going to happen to your country?
UNIDENTIFIED FEMALE: I don't know, but I want it better. That's all I want, to be better and to be -- to have a God presence.
WATSON (voice over): After years of fear, these Egyptians are no longer afraid to repeat this simple demand -- they want a better government. Ivan Watson, CNN, Cairo.
QUEST: Ivan joins me now from Cairo.
Good evening, Ivan. Let's begin with just a brief up sum, please, for the situation in Cairo at this hour.
WATSON (via telephone): I am in Tehrir Square, and we are having some technical difficulties here, Richard, but there are thousands of people in the square behind me. And what has been a demonstration with chanting is evolving into more of a sit in now, after days and nights of these gatherings here. With now, tents behind me and people lighting campfires under the palm trees of the Tahrir Square, Richard.
QUEST: The mood, obviously, must move between sort of aggressive and peaceful, and backwards and forwards, but Ivan, when we-how widespread are these protests in this uprising, if you take Cairo, starting from Tahrir Square, and working your way out?
WATSON: Really this is the focal point, so this is where the people are gathering. This is where they are waving the signs and the flags. And a funny thing, Egyptians coming here and they will just stand in the middle of the road, holding up a sign, with their demand with that Hosni Mubarak resign.
But as you move away, that thins out, and then you start to see, as we did on today, largely empty streets, shops that are closed; people running around trying to find an open shop to buy some food. They say that food prices are starting to go up. The costs of this demonstration is starting to hit, and the costs of the hardships, is starting to hit ordinary people now, where even the price of cigarettes, I'm told, are starting to go up. And you also see some of the signs, the scars of the unrest, the burned tax building, for instance, that is just a few blocks from where I am, the police stations that have been torched.
And further on out, and then another sign is those barricades that the vigilante groups, the neighborhood watch groups that have sprung up, have erected on their streets to block criminal elements from being able to penetrate in there, to rob their businesses and homes, and threaten their families.
The protests in Cairo, that I have seen so far, have been confined largely to this area of downtown Cairo.
QUEST: Ivan Watson, who is in Cairo, Tahrir Square, for us tonight. Many thanks, indeed. And we'll return to you, if and when there are changes there.
Now, before we look at the markets on this whole aspect, I do need to remind you again, of what's been said by the White House press secretary. They do, of course, Robert Gibbs has actually said that there needs to be, the Egyptian government needs to engage in meaningful negotiations with a broad section of civil society, including opposition groups. It also goes on to say, of course, that there needs to be more change and more advanced change. But that does not necessarily mean, in their words, Mubarak, has to go. So that is the message coming from the White House at the moment, where the White House has also praised the Egyptian government for-and both sides for the restraint.
What is happening with the markets, and the turmoil, is making the oil market very nervous. If you come with me to the wall, you will see exactly what I mean. Now, the price of Brent has surged above $100 for the first time in more than two years. Brent, which is used to price two-thirds of the world's oil supply climbed on concerns. And the reason, because you will be reminded, of course, that Egypt virtually has no oil reserves of its own. But if what happened in Egypt spreads to other more crucial oil supplies in the region. Then, of course, you would start to see some serious rises on Brent. But we are over $100 and that will take its toll.
The Dow Jones industrials have taken a slight backseat. The Dow is up nearly 32 points, under 11,900. And I think that gives you an idea, the backseat for investors who are focusing on better than expected earnings from ExxonMobil, the world's biggest oil company.
The Euro bourses, and that is how we ended the session. The CAC Currant was up just a tad. Hardly any real serious movement. All the markets particularly overshadowed by political unrest in Egypt. The energy stocks jumped, were lifted by, of course, particularly energy in London, by what we saw with Brent crude.
Inflation in the Euro Zone, it is above the European Central Bank's target. When we come back the German Finance Minister Wolfgang Schauble about pricing pressures and the French finance minister.
QUEST: Prices in the Euro Zone are rising at the fastest rate in two years. Inflation through the zone is running at an annual rate of 2.4 percent. Now that is over the ECB's target rate of 2 percent. It is the second month in a row that it has been in that position.
And it has put pressure on the European Central Bank. Of course, the European Central Bank has at its core mandate price stability and the controlling of inflation. It is thought they will ratchet up the rhetoric rather than raising rates in the short term. But those sort of numbers are a sign of the competing tensions at the heart of Europe. Inflation on one hand, economic decline on the other; and it all depends on which part of Europe you are sitting. The policy levers are getting more difficult to know which one to pull.
On Saturday I spoke to Germany's Finance Minister Wolfgang Schauble at Davos. I asked the minister if he had any doubts about defending the euro.
WOLFGANG SCHAUBLE, FINANCE MINISTER, GERMANY: No, I think there can be no doubt, every European member state, every member state has a common currency, especially France and Germany, they are committed and they will do whatever will be necessary to defend and prevent that euro will remain a stable currency. There is no doubt. And we are doing a lot of progress in increasing the instruments for making the euro more stable.
QUEST: Germany is committed to finding the extra money, or assistance, and paying its part in finding the strengthening for the $440. Do you think more will be needed?
SCHAUBLE: No. We think-we are all decided that if we stick to the original $750 package, which includes the $440 billion, that will be sufficient.
QUEST: Does Germany stand ready to assist any other country in the Euro Zone that needs help?
SCHAUBLE: If it is necessary we do. But, of course, it is not only a matter of -- a question of Germany. (INAUDIBLE) it is a matter of all 70 member states of the euro.
QUEST: When we look at the competitiveness question, at the moment. The tables are being turned. People are suggesting that a lot of the problems because Germany has become so much more competitive. During the good years Germany improved its competitiveness, but that has come at the expense of other countries in the union.
SCHAUBLE: It is not true. The imports from European member states to Germany have been-have much more increased in the last year, than the export from Germany to other European member states. We are a driver of European growth. We are not the ones who are guilty for problems of other member states. And we have to improve the competitiveness in other member states. We have not limited German competitiveness. And by the way, 3.6 growth in the last year, has to be seen under the preconditions that we had a minus of 4.7 in 2009.
QUEST: Next year's growth forecast you have just given?
SCHAUBLE: That's 2.2, 2.3.
QUEST: Are you satisfied with that?
SCHAUBLE: Yes. In a sustainable-if you look at what is sustainable for a country with a demography like Germany, about 2 percent is sustainable.
QUEST: What do you believe, Sir, finally, is the biggest issue that you and the Euro Zone will face as it deals with this sovereign debt crisis?
SCHAUBLE: Every member state has to deliver what has been agreed. And we have to convince the societies, the voters, in all member states that Europe matters and the Euro Zone is worth to be defended.
QUEST: That is the German Finance Minister Wolfgang Schauble. Every country must deliver on what it has promised, he says. Later in this program, you will hear from the French Finance Minister Christine Lagarde, as she describes the situation facing the euro and what needs to be done to strengthen the European Stability Facility. That is in about 10 minutes from now.
In a moment, the city built on a lake. Mexico City's water problems have produced a feat of engineering and a new kind of hero. It is Mexico's capital in tonight's "Future Cities".
QUEST: We are all familiar with that sinking feeling, better than anywhere, Mexico's capital has been feeling that way for about five centuries. And a dicey drainage system has accelerated the problem. Now, faced with the threat of running out of clean water, Mexico City is building the world's biggest sewer. It even has its own brand of heroes. They are known as the sewer divers. And we caught up with the chief frogman. It is a Herculean commitment, but rebuilding Mexico's sewers, a dirty task is what makes Mexico City, a "Future City".
QUEST (voice over): This is Julio Cou Camera, he learned how to swim when he was a boy, here, in Mexico City. Now he swims everyday, but not in the sea, or in a sanitized swimming pool.
JULIO COU CAMERA, SEWER DIVER (through translator): When I tell people that I am a diver, they always think I mean in the sea, with fish. But no, I swim in the drains.
QUEST: Julio swims through sewage, he's the city's chief sewer diver.
CAMERA (through translator): I've been doing this job for 28 years and I love it. It is a job that requires 100 percent of human involvement.
The smell doesn't reach me inside my helmet. I can't smell anything. Once I'm zipped up, my suit is hermetically sealed.
QUEST: He goes down into the depths of the city. Feeling his way around in the murky water, clearing blockages. Today he's trying to plug a leak with sand bags.
CAMERA (through translator): The water is so dirty that we can't see anything. Not with lamps infrared lights, or anything. We can't see a thing down below.
QUEST: Mexico City's sewer system is at breaking point. The capacity of the drains here is 30 percent less than it was in 1975. To make matters worse, the population has doubled to more than 20 million people.
This is the answer, says Mayor Marcelo Ebrard, the most important project of his government.
MAYOR MARCELO EBRARD, MEXICO CITY: The main risk in the city is about the management of the water. So we are going to build a tunnel in order to serve the city.
QUEST: The Emisor Oriente, a new deep drainage tunnel and a monumental piece of engineering.
OSCAR GUSTAVO ALVA NIETO, CONAGUA: We are in the Emisor Oriente, we are 50 meters below the ground and this is the biggest sewer system in the world.
QUEST: Sixty-two kilometers in length, seven meters wide, it can carry 150 cubic meters per second of waste water, charging through its depths. The tunnel will help cope with floods, a major issue.
In February last year, 29 people died in this area. Part of the problem was an open sewage canal, which overflowed in heavy rain.
JOSE MIGUEL GUEVARA TORRES, EMISOR ORIENTE, CONAGUA (through translator): In order to give the city a future, the least we have to do is to sort out the drains.
QUEST: There are 12,000 kilometers of pipes in Mexico City. Many of them now run backwards. That is because the city is sinking, by up to 24 centimeters each year. For instance the Angel of Independence Monument has had 14 new steps added.
TORRES (through translator): The drainage canals originally had a slope going down out of the city. But the sinking has reversed that slope and now the canals are of no use.
We as humans have very recklessly decided to build a city on what used to be a lake. And every year nature tries to claw back the land and reconstruct the lake. We are fighting nature.
MARTHA DELGADO, ENVIRONMENT SECRETARY, MEXICO CITY: We have, now, to deal with the city of the past, but also with the city of the future. And the city of the past was a city that used to be in a lake. This was a lake 500 years ago. So water always wants to be here.
QUEST: Building on the lake was started by the Aztecs. It was finished by the Spanish. Ground water supplies below the city are the main source of fresh water for the people and the reason that the earth is compressing.
TORRES (through translator): It is foolishness which has lead to more than 20 million people living in this valley, 2200 meters above sea level, which then creates the problem of bringing fresh water in, as well as taking waste water out.
QUEST: Such foolishness now means the whole city depends on pumps to force out their waste water. Part of which Julio, the sewer diver, has to keep clean.
CAMARA: Cigarette stubs, car parts, microwaves, fridges, tires, tree trunks, dead animals -- we can find everything in the drain.
QUEST: On the other side of town, the new tunnel will double the drainage capacity of Mexico City's sewers.
UNIDENTIFIED MALE: We're inside a tunnel under -- in Mexico City. Our workers are excavating using that tunnel boring machine and inserting the fuse lining (ph).
QUEST: The first part is expected to be finished in 2012. It will be fully operational by the end of 2013. The tunnel is being constructed up to 150 meters below ground to escape the damaging effects of the sinking earth.
MIGUEL CARMONA, DRAINAGE SYSTEMS DIRECTOR, MEXICO CITY (through translator): Since 1521, that's been the story of Mexico City -- confrontation with water, the battle for water.
QUEST: Obviously, it's too late to relocate Mexico City. Water has always been a challenge in this mega city and that's not going to change any time soon -- bringing it in, pumping it out. At the moment, it's Julio, the sewer diver, who's keeping things running.
(END VIDEO TAPE)
QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN And here, the news always comes first.
So I must update you immediately. The head of Egypt's armed forces, who says he's aware of protesters' legitimate demands and that his troops will not use violence against the people. Activists are planning what they're calling million man marches in Cairo and Alexandria on Tuesday. Many observers regard today's demonstrations as the calm before the storm. Large crowds ignored the new earlier curfew and they spent the day protesting peacefully.
The Egyptian president, Hosni Mubarak, has sworn in three new cabinet members today and he's directed the new prime minister to restore Egyptians' faith in the economy. Many protesters say they'll only be satisfied when Mubarak himself quits.
Israeli Prime Minister Benjamin Netanyahu says he has some real fears about the situation in Egypt. He was meeting with the German chancellor, Angela Merkel, in Jerusalem. Mr. Netanyahu said he's worried fundamentalists could take advantage of the political chaos and Cairo could end up with a radical Islamic regime.
Sudan's vice president says the government accepts the outcome of a secession referendum in the South. Early results show 99 percent of Southerners voted to break away and form a new nation. Southern Sudan is expected to declare independence by July. Some major issues have to be first worked out, including border lines and how to share oil revenues.
The uprising and unrest that we are now seeing, of course, started -- in Egypt -- started in Tunisia. Today, Tunisia wants the world to know its financial system is safe, secure and is doing business. The country that lit the spark in Egypt says new democracy is very much on its feet. The central bank governor told me in Davos that Tunisia is not only open for business, it's gearing up for elections.
Mustapha Kamel Nabli is in the job less than 10 days when I spoke to him after protesters ousted the president and the government.
Now, Nabli says the ruling family's assets have been frozen and the political changes will root out cronyism. But he's critical of agencies that downgraded Tunisia's credit rating. Mr. Nabli is asking the business community to give Tunisia some time after all the unrest. Given the recent rapid fire events, I asked the man running the finances about his number one priority today.
MUSTAPHA KAMEL NABLI, GOVERNOR, TUNISIAN CENTRAL BANK: The first focus was to ensure that the financial system remains functioning, the payment system was functioning, the banking system was functioning and so on. That was the major -- the major first task.
And I think we have succeeded in the last few days to ensure that.
QUEST: Because there isn't a gov -- a functioning, necessarily, government as such. There is still huge uncertainty over what the complexity of that government will look like.
NABLI: Yes, except that you know that two days ago, there is a new government and remember...
NABLI: -- remember, this new government has come out of a political process, the first time this happens. The first time, the first democratic process has succeeded in Tunisia now, because after 10 days or 12 days of change of regime, there is a new government that has been formed, which is the result of a political process without a single casualty. Don't -- don't forget that.
QUEST: But that new government is -- is -- is relatively weak at best, you'd agree with me on that?
NABLI: And should be. It should be.
QUEST: As it still works out whether it will survive...
NABLI: Because -- because it has two functions, essentially, to do, to ensure that the economy continues to work and -- and the stability returns, and then to prepare elections. So it is not a government that's going to take major reforms or major initiatives. It has to prepare elections, free elections and transparent elections.
QUEST: Which means in this vacuum, people like yourself have a -- have a greater role and responsibility than one might otherwise have expected.
NABLI: Absolutely. Absolutely.
QUEST: You're running the economy today?
NABLI: And the central bank -- I wouldn't say that. But I -- the central bank has a major role, because you want to make sure that the fundamentals remain solid, as I said, the banking system, the financial system, the companies, the economic firms.
For instance, I'll give you an example which might of -- be of interest to you. We have a lot of firms, companies which were controlled by the former cronies of the regime, OK. And we're ensuring to distinguish between the ownership of these firms and their role as companies. So we want to make sure that these companies continue to function, continue to exist and pro -- you know, provide employment, provide exports and things, but, on the other hand, not allow the former owners to interfere with the management of these companies.
QUEST: But it is very -- you've just put your finger on the most -- one of the most difficult issues...
(INTERVIEW ENDS ABRUPTLY AND PROGRAM GOES TO COMMERCIAL)
QUEST: One of the most important things that you heard from the Tunisian central bank governor was the significance of keeping the payment system operating to making sure that the money continues to throughout the Tunisian economy at the time of the crisis.
Well, now Egypt's economy is beginning to suffer as protests and curfews bring business grinding to a halt. It's becoming harder to get your hands on cash. All banks are now closed. ATMs are not operating. Activity at Egyptian ports is slowing down at the moment.
The Dubai-based port company, DP World is suspending its operations in Egypt as a precautionary measure. The Dutch shipping group, A.P. Moller- Maersk, has also halted its port terminal operations in the company and closed its shipping operations.
Now, the Suez Canal, that has brought -- that remains open for the time being. Traffic is continuing as normal. The Canal is the quickest route between Europe and Asia. It carries 8 percent of global sea-borne trade. Crucially for Egypt, it generates more than $4 billion for Egypt in toll receipts.
Egypt's national airline, Egypt Air, is canceling flights during Tuesday's curfew. Other outlooks, Thomas Cook and Touhey Travel (ph) are continuing to fly tourists into the Red Sea resorts within the country, mainly, of course, in the south. However, both operators have canceled flights to Luxor and excursions to Cairo, not surprisingly.
For more perspective on all of this, John Defterios of CNN's "MARKETPLACE MIDDLE EAST" joins me.
He was also in Davos, incidentally. And he got a very good chance there to understand what's happening and the possible ripple effects in the economy.
JOHN DEFTERIOS, CNN CORRESPONDENT: I spoke to some businesspeople today who have operations in Egypt. And right now, they said commerce has ground to a halt. It's very hard to have business with intermittent mobile phone service or no Internet service. This is what's happened at the Suez Canal, as well, people don't know if their ship is going to be passing through the Suez.
So near term, they have a real clear problem, is that is it open for business or not?
And that's the number one priority.
The second message is this is a new cabinet, a new prime minister, Mr. Shafiq. People don't know him outside the country, so he has a -- a sales job to do. And I remember during a conversation at the World Economic Forum this weekend with the trade minister of Indonesia, she said after the financial crisis and political crisis in 1997-98, it took nearly five years to rebuild confidence in the country. That's not something Egypt can afford right now.
So they have to move forward with some clarity.
QUEST: It's going to be very difficult to do that with the -- the, you know, the demonstrations on the street. Businesses are closed. Tourism, which, to some extent, is continuing, because it's a long way -- the tourist destinations are some way away.
The finance minister said that it was -- could have significant and serious impact for the economy.
DEFTERIOS: Yes, another businessman I -- I spoke to today said that he thinks there's two distinct paths going forward for -- for Egypt. They could take a hard right turn and go the Iranian model -- and this is not what the business community is looking for, where the...
DEFTERIOS: -- Islamic movement takes complete control.
Or do you have a power sharing agreement more on the Turkish model, right?
And this has been able to attract investment. You have the voice of the people, the Islamists and the military in a power sharing agreement.
QUEST: I suppose the core question, to put you on the spot completely, is just how risky is the economy at the moment?
DEFTERIOS: Well, many thought this was a very low risk economy and that's why the stock market has gone up nearly 120 percent in five years. It's very risky now because we don't know how this is going to play out in the next two weeks. We don't know how it's going to be in the next two months.
But more importantly, are they going to have open presidential elections in September, as planned?
And who's going to sit for those elections by then?
We don't know that answer right now.
(END VIDEO TAPE)
QUEST: Europe, of course, has to decide how it's handling the issues in relation to Tunisia, into Egypt. But it is doing so at a time when it has problems of its own, not least of which, about the future of the euro following the bailouts of Greece and Ireland.
In Davos last week, I turned to the French finance minister, Christine Lagarde.
And we needed to know whether the recent measure that had been taken by euro ministers would actually help the situation in the long run.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, FINANCE MINISTER, FRANCE: I think the situation is much better for two reasons. One is we've been able to respond to the crisis. You know, it was Greece, it was the facility itself. It was in Ireland. And we have a collective determination now to actually strengthen it. And we are all driven by the same goal -- make sure that the Eurozone is solid and that we can all, you know, defend our currency.
QUEST: But the question of jobs in Europe -- I mean I've spoken to the Canadian minister, I've spoken to the head of the World Bank. And you're going to tell me the same, that job creation must be a priority for you.
LAGARDE: It is a priority. And -- and I always told my compatriots that we would turn the corner when the economy would start creating jobs. And it did in 2010. We had plus 74,000 net new jobs. That's, to me, not a great number. I would like it to be 10 times as big. But at least it's turning the corner.
QUEST: Can you say, as we look at Algeria and now we look at Egypt tonight, that must also be another concern of yours, in the sense of instability is -- is on the rise in those parts of the world.
LAGARDE: It is a concern. Equally, it's a source of, you know, sort of not trepidation, not excitement, but to see that the Tunisian people are, you know, aspiring to more democracy, more representative -- representation of people, is -- is a good thing. We need to -- we need to help. We need to support. We need to be available for that process to unfold in -- in the most peaceful fashion.
QUEST: And finally, on the old question of why Davos, I mean do you...
LAGARDE: Well, look, you know?
QUEST: I know. But do you think it still works...
QUEST: -- the magic of coming here?
LAGARDE: Yes. Yes. Yes. I'll give you one example.
LAGARDE: The major -- one of the two major automotive constructors in France, yesterday I saw him. And it was his first time to Davos.
And I said, "Why do you come?" "Well, I didn't know for sure, but I had bumped into those people in the digital business, in the new order and supply business and they gave me great ideas so I'm going home and I'm going to change a few things that we do at home.
(END VIDEO TAPE)
QUEST: Christine Lagarde.
"PIERS MORGAN TONIGHT" is ahead with the answer to the question, does God want us to be rich?
I think I can answer that, perhaps.
Six hours from now, a special edition of Piers' show with the latest on the uprising in Egypt, 9:00 p.m. Eastern, 6:00 in the morning in Abu Dhabi, 10:00 in Hong Kong.
And in about an hour from now, "CONNECT THE WORLD" continues our coverage of the uprising in Egypt.
Will there be regional ripple effects if Hosni Mubarak goes?
Who replaces him as president?
"CONNECT THE WORLD," that's all still to come on CNN this evening.
QUEST: Welcome back, QUEST MEANS BUSINESS.
Now, the window for Europe's football clubs to complete their latest and last transfers is due to close in just a few hours from now. Across the continent, chairmen, mergers, agents, players are trying to cut deals ahead of tonight's deadline, the biggest moves so far. Liverpool say they have agreed to terms with Newcastle United for the striker, Andy Carroll. Newcastle had been asking for $56 million for a transfer fee. Carroll is currently undergoing a medical -- well, for that sort of money, you've got more than a medical, I'll tell you.
Earlier this month, the Bosnian, Edin Dzeko, joined Manchester City, from the German club, Wolfsburg, for $43 million.
What do you get for $43 million?
But there's still plenty of time left for last minute moves.
Kate Giles is here.
The clock is ticking.
KATE GILES, CNN SPORTS CORRESPONDENT: It certainly is. And, you know, the big name that we're watching is Fernando Torres. That's the one that everybody wants to know if that one is going to go through. And it's actually -- it's looking a lot more likely now. I think earlier on in the day, you would have thought maybe not. But what has now happened is that Liverpool has put on their Web site that they have agreed a fee with Chelsea and they've given him permission now, to talk -- to talk to the club. So they have to go...
GILES: -- through some personal details.
QUEST: I know.
QUEST: When does the deadline close?
GILES: The deadline closes tonight at 11:00, 11:00 p.m. British time, so 12:00.
QUEST: So it's about three hours from now?
GILES: Exactly. Yes.
QUEST: So they've obviously been talking before now?
GILES: They've obviously been talking before now. And it -- well, I think Liverpool were very keen to have somebody in place to -- to make sure that they could replace Herris (ph), if he was to go. So they've now brought in Efconthru (ph). They've brought in Andy Carroll. Whether he's a replacement, actually, is a little bit questionable. I think certainly on the player's status sense, a lot of people would say that it's not a (INAUDIBLE) a like replacement by any means. But...
QUEST: What sort of money would you imagine the toss would -- would go for?
Any -- what sort of sums are we seeing?
GILES: We're -- we're talking here sums. We're talking record sums. I mean what they're saying is that Chelsea have offered 50 million pounds for him. Of course, it's all very much behind closed doors and you don't know exactly. But those are the rumors, 50 million pounds, which is, what, 80 -- $80 million?
QUEST: Eight, 50, 75, 80, let's not talk about it because there will be agents' fees and there will be other things involved, as well.
This transfer window, this mechanism that this hot house of negotiation that takes place, is it worth it to do it in this particular way, do you think?
GILES: Is it worth it in -- in what sense?
I mean I think that certainly for the spectators, it makes it very, very exciting, doesn't it?
And I think it's very important that you have this -- this winter period, which gives managers who are really struggling and -- and doing very badly, indeed, this kind of last ditch chance to try and turn around their seasons (INAUDIBLE)...
QUEST: If you've got the money...
GILES: -- enable them to buy the team. If you've got the money...
QUEST: If you've got the money.
GILES: -- that's the question. I mean you look at Real Madrid, not that they're doing badly, by any means, by Joseph Merino (ph), certainly, they're behind Barcelona, so they really want to -- to take some steps forward. And Joseph Marino (ph) was told they didn't have the money to -- to buy anyone. They obviously spent too much last time around on -- on Cacandra (ph) and now (INAUDIBLE) it was a loan.
So there's -- there's definitely a lot of pressure on them, but you have -- like you say, you have to have the fees.
QUEST: Right. And as you look at this particular transfer we've had, I mean I -- I'm not familiar with these things in the way that you are, but has it been a good one, a bad one, an indifferent one?
Is it a -- is it an exciting one?
GILES: It's actually been a very exciting one, I think.
QUEST: Oh, was it?
GILES: We've had -- you know, particularly this last day, because it's been such -- such a last minute deal.
GILES: The -- the (INAUDIBLE)...
QUEST: But it's always last minute, Kate (ph). It's always last minute. They always go right to the...
GILES: But to have a big, big name like Fernando Torres right up into the last minute, three hours away, and we still don't know if it's going to happen, that's pretty big. And with the record sums that we're talking about and all, that's pretty huge.
I think a player of that status, often, you might expect him to be -- to be put into place a little bit sooner.
QUEST: Are you a betting woman?
GILES: I'm not a betting woman.
QUEST: I was going to say, is it going to happen or not?
GILES: Oh, my -- is it going to happen?
Yes, I think it will happen, especially now that Andy Carroll has gone through, I think it will happen.
Thanks -- thank you very much.
QUEST: Some very nasty weather in the Midwest, possibly the worst -- the American Midwest.
Jenny Harrison is at the World Weather Center -- what -- what's so nasty?
How much are they going to get?
I mean it's been pretty bad so far.
Is it going to be worse?
JENNY HARRISON, CNN METEOROLOGIST: It's even worse, Richard. Yes, one huge bit storm which is developing right now. And in particular through Tuesday, we could be seeing as much as half a meter of snow accumulating in Chicago. Now, right now, on the radar, it doesn't look too bad, does it?
Nothing particularly unusual. We've got this snow coming down from the north. Very, very cold air coming down from the north. There's also this energy developing out in the Southwest, across the Four Corners Region. And then we've got all the moisture being pumped up from the Gulf of Mexico. So this is why we're seeing all this rain into the Southeast.
But once this sort of first round of snow has moved away, all those other three factors are going to come together to produce this huge, massive snowstorms. And very, very strong winds, as well as being cold winds, very, very strong. So we're looking at significant blizzards. And then, believe it or not, along the line of this cold front, some very strong thunderstorms. So tornadoes also a risk in the next sort of 48 hours.
Now, this shows you really clearly where the heaviest snow is going to be and where, of course, we've got that much milder air in place, that real dividing line. But it's the icing, as well, which is of huge concern. We could be seeing these -- this is a big, big ice storm, really, across in Missouri in particular. And you can see here, the snow the heaviest. And it could continue to go. Eventually it will get there.
Look at the totals just adding up. Now, if this happens, if we see about 50 centimeters of snow, half a meter, then this will be sort of one of the top five snow events ever in Chicago. They have about sort of 25 centimeters every three years or so, but not this amount. And, actually, the last time -- the last sort of big snow event was in 1967 in January. That was 23 inches of snow. So 58 centimeters.
But look at all the warnings that are in place. These warnings actually stretch all the way from New Mexico right their way up into Massachusetts. That is a distance of just over 3,000 kilometers.
So we've got a blizzard watch in place and those warnings stretching all the way toward the Northeast, because, of course, this storm isn't done when it just hits the Midwest. It's going to carry on to the Northeast.
There aren't many delays already showing up as we go into Tuesday, because we know what's going to happen. There will be many airports that actually have no option, really, but to cancel many of their flights. As I say, this really is a huge storm system and many people, of course, being prepared for that.
Tuesday, the temperatures, again, that dividing line, minus five in Chicago, probably feeling colder because of the wind. Meanwhile, in the Southeast, a fairly sort of mild day.
Now, the conditions are changing across in Asia. This is good it means that that really bitterly cold air pulling out of the picture. And the reason it's good, we've got high pressure extending very nicely across much of Southern China. And just look at this. This is just one of those images, Richard, we talk about this every year, an estimated 230 million Chinese people in the next couple of days on the move back home because it's the start of the lunar new year.
QUEST: I love it. You can tell the time by that -- by -- well, obviously, it's the lunar year -- can't you -- Jenny?
HARRISON: I guess. The Year of the Rabbit. The Year of the Rabbit, as well, just so you might need to know that.
QUEST: Is it?
HARRISON: Um-hmm. Um-hmm.
QUEST: The Year -- the Year of the Rabbit?
HARRISON: Yes, apparently so.
QUEST: well, I think we'll leave that one where it lies. I mean not the rabbit, but -- all right, thanks, Jenny, as always.
When we come back, the Profitable Moment will be amongst us. And we'll be talking about Egypt and the environment (INAUDIBLE).
QUEST: Tonight's Profitable Moment.
The new finance minister in Egypt warned that the damage to the Egyptian economy from the unrest will be expensive. And he should know. Samir Radwan is a highly respected economist in development issues. He spent decades at the ILO, the International Labour Organization.
Now, of course, you'll be saying to me, the issues at stake in Egypt are much deeper and greater than merely the price of money. And you would be right.
But as the new minister recognizes, it's foolish not to recognize whatever damage is done will have to be repaired at some point. And that, too, will hurt the people.
Perhaps the most encouraging thing about the comments tonight is the recognition of the serious situation -- the acceptance that something must be done to improve the Egyptian people's lot. But now, of course, he is no longer standing on the sideline. He is one of the people who actually has to go out and do it. I wonder how comfortable it seems to be from that position rather from before.
And that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I do hope it's profitable.
"PIERS MORGAN" is ahead after the news headlines.