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World Leaders Battle to Keep the Eurozone Afloat; Interview with Stavros Lambrinidis; Syrian Officials Agree to Arab League Peace Plan; Confrontation in Cannes; Italian Prime Minster`s Cabinet in Emergency Session; Young Italians Can`t Find Work; US Keeping Eye on Europe; How Euro First Introduced; Assange Loses Extradition Appeal; Russian Arms Dealer Viktor Bout Found Guilty; French Magazine`s Offices Attacked Before Controversial Cartoon to Run; Chelsea Supporters Accused of Adding to Racial Row; Royal Couple Pack Aid Packages for UNICEF; Awaiting Joint Statement from Sarkozy and Merkel in Cannes

Aired November 2, 2011 - 17:00:00   ET


BECKY ANDERSON, CNN INTERNATIONAL HOST: Tonight on CONNECT THE WORLD, with the Eurozone thrown into turmoil, Greece`s foreign minister tells me that there is no need to panic.


STAVROS LAMBRINIDIS, GREEK FOREIGN MINISTER: I can give you only one answer, and this is very sincere. The Greeks, in my view, will not vote no.


ANDERSON: Well, as the Greek prime minister gets criticized for his debt deal referendum, we`ll hear from our correspondents across the globe as world leaders battle to keep the Eurozone afloat.

Live from Cannes in France at the G20 summit, I`m Becky Anderson.

MONITA RAJPAL, CNN INTERNATIONAL HOST: And live from London, I`m Monita Rajpal.

Also tonight, as Syria agrees to a peace plan aimed at ending the deadly crackdown, an opposition member tells me the regime is just playing for time.

And why Chelsea`s fans could be in hot water over the John Terry race row.

ANDERSON: First up, though, tonight, with the stakes so high, there is not a second to waste. Crisis talking are taking place right now, on the eve of the G20 summit. All other topics are taking a back seat to what is a debt debacle that`s threatening to push the global economy back into recession.

Listen up. European leaders are demanding answers from Greek Prime Minister George Papandreou, calling him in for a special meeting. They are frustrated and furious that his surprise call for a referendum on a Eurozone debt plan could torpedo months of complex negotiations.

Well, Mr. Papandreou is meeting now with French President Nicolas Sarkozy and German Chancellor Angela Merkel.

Well, earlier, President Sarkozy was the host of this G-20 meeting and a working dinner with Chinese President Hu Jintao. He`s been trying to convince China to throw the Eurozone a financial lifeline.

Well, as you would imagine, CNN has correspondents across the continent and beyond.

Jim Boulden is in the Greek capital, Athens.

Our senior international correspondent, Matthew Chance, is in the Italian capital of Rome for you this evening.

And Frederik Pleitgen will be joining me from Berlin in Germany.

Stateside, we`ve got CNNMoney`s Poppy Harlow.

And we also have Ali Velshi here with me in Cannes. He`s at the conference center, covering the meeting now underway with the Creek -- Greek prime minister -- Ali, what do we know at this point?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, they haven`t come out of the meeting. Obviously, we`re not allowed in the meeting. Boy, we would love to see what`s going on. It`s very strange, because the world has watched these protests in Greece, in Athens, over the last year. Clearly, the Greek populace not very happy with what`s been imposed upon them, even though some people think this deal was designed to save Greece. Clearly a difference of opinion.

So what we`re seeing now is the idea that -- that Papandreou, the Greek prime minister, will put this deal to the Greek people. This was never part of the discussion. So the -- the Eurozone leaders came to this deal last week with the understanding that it will pass, that the Greek parliament will approve it and it will go through.

Now, this -- this wrench has been thrown into the works and we don`t know what the outcome is going to be.

Now, major world markets today responded positively on the hope that something would work out. But you and I know, Becky, that there have been diplomatic words exchanged and they -- you know, they -- they talk about frustrated and shocked. So Angela Merkel of Germany, Nicolas Sarkozy of France, in a meeting with Papandreou of -- of Greece, trying to convince him that this is not the way to go.

The International Monetary Fund has said the next installment of money that is to go to Greece will not go to them until there`s a decision on this referendum.

We don`t know when the referendum will be. It could be as early as mid-December. It could be as late as January. But basically, all of this mending that Europe has tried to do, as you say, for months, is on hold right now until the outcome of the meetings that are just underway right now in this building where I am in Cannes -- Becky.

ANDERSON: Yes, Ali, this meeting was supposed to be about clarity, about coherent coordination, about policies to promote sustained growth and job creation, much needed around the world --

VELSHI: Right.

ANDERSON: And yet, we are mired once again in this European crisis.

You allude to the International Monetary Fund. And the $8 billion question tonight, which is simply this -- if -- if the Greeks --


ANDERSON: -- aren`t given that next tranche of money, because, indeed, the Europeans are frustrated with them about this referendum, they can`t pay their bills at the end of the month. That would be a --

VELSHI: Correct.

ANDERSON: -- disorderly default, for all intents and purposes, and possibly the end of the Greeks in the euro. I mean this is --


ANDERSON: -- this is really important stuff, isn`t it?

VELSHI: Yes. Very serious. But the Greeks, many Greeks are -- are saying, the austerity that`s been imposed upon them as a condition of getting this money is already so harsh, that it`s costing their economy, so why should they bear a greater burden for the benefit of the rest of -- of Europe -- or the rest of the world?

But the reality is, you know what disorderly defaults mean. They affect everybody in the world, because our banking systems are all interlinked. So a disorderly default in Greece could mean that -- could -- could mean an inability to get mortgages, auto loans, business loans around the world. And that is what is worrying investors around the world.

Now, as you said, you spoke to the Greek finance minister, who said don`t panic about this, we`ll come to some arrangement. But right now, the world is sort of that teetering on that balance. It`s very easy to fall into panic when things like this happen, when we hit roadblocks like this - - Becky.

ANDERSON: OK. Keep your ear to the floor. I know you`re not in that meeting. Oh, to be a fly on the wall --


ANDERSON: -- in the next couple of hours.


ANDERSON: Ali Velshi is at the conference there, as the unofficial launch of the G20 meeting is underway.

We`re going to get you live to Athens -- thank you, Ali -- live to Athens in just a moment.

But first, though, have a listen to what the Greek finance minister did tell me earlier today in an exclusive interview.

I asked Stavros Lambrinidis whether he believes the Greeks will approve the control referendum, whether they`ll vote yes or not and what happens if they don`t.


LAMBRINIDIS: I expect and I believe that the Greeks, for the reason I told you before, will vote yes. I think everyone is getting a little tired of doubting the wisdom of the Greek people or their commitment to Europe. And the referendum will take place the moment that the details of the loan agreement are finalized. I hope very, very soon, to be honest.

ANDERSON: When is that, January, December, next week?


LAMBRINIDIS: It`s -- it`s up to us. There -- there are discussions right now on a number of elements of the details of the loan agreement --

ANDERSON: All right --

LAMBRINIDIS: -- and they can happen very soon if everyone moves fast and with determination.

ANDERSON: OK. Let me -- the last question to you, sir.

Does Greece have a Plan B if, indeed, the Greeks vote no and, for example, are you printing drachmas now anywhere in the world if, indeed, you were to pull out of the euro, for example?

LAMBRINIDIS: I can give you only one answer and this is very sincere. The Greeks, in my view, will not vote no. I do not speculate on anything else. And -- and our commitment has been proven up to now to apply tough measures, to -- to take the pain, to change the country. And this is a commitment that I think will be demonstrated, as well --


LAMBRINIDIS: -- in this referendum.

ANDERSON: Sir, what do you say to those watching this show now who will be thinking that this decision is jeopardizing the entire future of the Eurozone?

For those who think this is a reckless gamble on the part of the Greek authorities, what do you say?

LAMBRINIDIS: I say that we have been discussing in Europe, for the past year and a half, the future of the Eurozone. And -- and entirely irrespective of the referendum that was just announced, that future has been placed in doubt by markets, or some in the markets, for a long while.

In fact, although Greece is at the center of the storm, it is well known that Greece is not the center of the problem of the debt crisis in Europe today. We are changing everything that we must and we have the obligation to our partners to do.

But everyone realizes that there are attacks on other European countries and on their debts, that there`s a questioning of the capacity of Europe to defend itself. We -- we`ve watched this movie, as I said at the beginning, many times. And Europe and Greece are dedicated to safeguarding a very strong currency and a very strong union.


ANDERSON: Fascinating.

Well, that`s an exclusive interview with me earlier on today.

The exact wording of that Greek referendum is still unclear, but new reports tonight suggest that I will cover only the debt deal and not the broader question of Eurozone membership.

Well, let`s get more from Jim Boulden, live tonight in Athens.

I mean talk about spanners, this is an enormous spanner in the works of this G20 meeting.

How is all of this playing out on the streets of Athens -- Jim.

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: I think -- I think what`s so interesting, Becky, of course, is that Greece is not even a member of the G20. And Mr. Papandreou should actually be here, at the parliament, behind me, dealing with this confidence debate that`s going on because he has actually called for a confidence vote in his government. That vote will take place Friday night.

The debate has already begun tonight, Wednesday night. It will go out throughout Thursday and Friday.

He`s going to have to get back from Cannes to deal with that after he gets his dressing down there where you are.

He`s also going to be hearing from people on the streets of Athens, which we did, listening to some people here who are absolutely perplexed, very confused about why he`s decided to put this referendum to the Greek public.

Listen to some of this.


UNIDENTIFIED MALE: Confused. Totally confused.


UNIDENTIFIED MALE: We tried together to discuss, to talk about what happened with Papandreou?

We cannot -- we cannot answer you. We cannot answer you.

UNIDENTIFIED MALE: I think it`s another way to commit suicide for my country, for the European citizens, for the euro -- for Europe as a whole.

UNIDENTIFIED FEMALE: I think we don`t have a choice. We have to follow what Europe says.


BOULDEN: Now, look, Becky, of course, people here are not happy at all with the austerity. This -- this economy is in recession. But they thought last week`s agreement was an agreement. They thought, well, we`re going to have to go through this, it`s going to be tough, we`re not very -- a very popular government. But the decision has been made. The haircut was agreed to. The next loan, the next tranche was coming and then we`d have to see when this economy could grow again.

Now, it`s in turmoil and all of it is up in the air again. And people here are frustrated. Yes, they`re going to get a chance to vote, they think, on this whole issue, whether you call it just about the next tranche or whether it`s about the whole European project.

But they don`t necessarily want that vote. And I think that`s what`s really interesting.

ANDERSON: Fascinating.

Well, I`ve got to say -- and, Jim, thank you for that -- one of the French lawmakers I heard today called the decision by the Greek prime minister to announce this referendum on Monday totally irresponsible. That`s the reaction from one French lawmaker.

The architects of the Eurozone debt deal have got an awful lot riding on these meetings here in Cannes, including German Chancellor Angela Merkel.

Let`s get now to Frederik Pleitgen, who`s in Berlin for us this evening.

And what are you hearing from Merkel`s people tonight -- Fred?

FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: Well, one of the things, Becky, that they`re not going to like hearing is exactly what the foreign minister of Greece just told you a couple of months ago, that at this point in time, there doesn`t really seem to be any timetable set yet for when that referendum is supposed to take place, because one of the things that the German government is telling Greece, is they`re saying if you`re going to do this referendum, you need to do it very fast.

One of the things we keep hearing here out of political Berlin is they want clarity as fast as possible, because a lot of the things that need to move forward at this point in time are not moving forward.

One prime example is the Association of German Banks came out today and said, listen, if we are going to get these Greek debt write-downs on the way. They require a lot of very complicated bond swaps that take a lot of preparation.

They say at this point, none of that is moving forward because no one knows whether or not Greece actually wants to go through with it and do all of this.

So the Germans are saying, time is of the essence, this thing has to move forward as fast as possible. They want clarity as fast as possible. And certainly both Angela Merkel and Nicholas Sarkozy have been absolutely uequivable -- unequivocal in the past couple of days, in the past two days, saying they expect all the things that were agreed upon at that Brussels summit a week ago to be implemented exactly the way they were agreed upon - - Becky.

ANDERSON: Fred, thank you for that.

I can tell you, tonight here in Cannes, there is no clarity, no coordination and no clear coherent way forward. What a frightening situation at the unofficial launch of the G20 summit.

I`m Becky Anderson with a special edition of CONNECT THE WORLD live in Cannes.

Just ahead, young, gifted and out of work -- they`ve got degrees, but no jobs. Why the Eurozone debt crisis is an employment nightmare, especially if you are under 25. That coming up.

Do stay with us.


ANDERSON: If you are just joining us, a very warm welcome.

I`m Becky Anderson at the G20 summit in Cannes in France.

You`re watching a special edition of CONNECT THE WORLD.

Well, the lost generation -- that is how some people are describing the young of Europe. Many are under 25, armed with shiny new degrees, and the way things stand now, have no hope of launching a career any time soon. It`s really desperate.

We`ve got some numbers for you. And this is how European youth unemployment stacks up. I couldn`t believe it when I saw these numbers.

A staggering 44 percent of people under the age of 25 are out of work in Spain. In Italy, it`s 28 percent. France was slightly better, coming in at 21. That`s still a fifth of the population.

So out of work, out of pocket and just out of college -- the young and unemployed of Europe say that nobody is listening to them.

Well, that is why CNN`s Diana Magnay is on the road this week, traveling to the heart of the Eurozone.

She`s been talking to young people at town hall style meetings organized through social media.

Tell us what`s happening to you. Go to our Web page, iReport.

Let`s catch up with Diana in Italy.

She held this town hall earlier today out in Milan.

Have a look at this.



FEDERICO LIMOUTA: Not really. Maybe in a few years, there will be a different kind of euro for, you know, the economy is changing so Italy is not so strong in these days. And in a few years, maybe we will get the lira back.

MAGNAY: Would that be OK for you, to get the lira back?

Does the euro matter to you?

UNIDENTIFIED MALE: No, because -- well, everyone has the idea of the future as a cosmopolitan universe. So it will be the best way to have just one money in the world. But if we go back to the past, it`s not so OK for us.

MAGNAY: Do you feel the same?

UNIDENTIFIED FEMALE: No. I think Europe and Europa is the only future we have in Italy, because we are not in a condition and we cannot hope to go on without Europe. I think this.

MAGNAY: How worried are you about your job prospects?

LAURA ABSONIA: We have a serious problem to find a job in the future. So sometimes this problem, I don`t know what to do.

UNIDENTIFIED MALE: And I don`t know (INAUDIBLE), but it`s for an enormous problem.

MAGNAY: Would you leave?

Are any of you thinking of leaving?

And, if so, where would you go?

UNIDENTIFIED FEMALE: I think studying philosophy maybe in Germany or maybe Spain, other countries, not Italy.

LIMOUTA: There is no money in the -- in Italy. There is no opportunity or just a little opportunity. It`s a -- it`s difficult.

MAGNAY: Who do you feel is to blame for the problems that Italy has right now?

UNIDENTIFIED FEMALE: First of all, the government and the image we have in other countries all over the world. And this is the main problem. But also the -- the way the government -- the government uses money, how are taxes, because they don`t put them in culture and in jobs. And they just use -- use them to take banks` problems and personal problems.


ANDERSON: Don`t rely on us. Tell us your own stories. I really want as many of you as possible to catch up with Diana as she makes her way around Europe -- iReport. This is really all about you guys out there. Do get in touch.

Diana joining me now from Milan.

Fascinating stuff, Di.

Are you hearing the same story again and again?

MAGNAY: Well, no, a very different here in Milan than the one I heard in Munich yesterday. And that obviously is a result of a group of young people in the strongest economy in Europe who are looking to try and see how to resolve the problems in other countries, compared to the situation in here, in Italy, where you have students who (INAUDIBLE) is the problem and who don`t see a future for themselves in that country.

So very different suspected jobs here. Of course, a huge concern. Youth unemployment 28 percent, where the Eurozone average is at 20 percent. Youth unemployment in Munich, where I was, was under 10 percent.

Well, at the same time, still, this sort of kind of lack of understanding, which all of us share as to what to actually do about this crisis.

But I think another important contrast between Germany and Italy is that the students that I spoke to there did feel that Angela Merkel, for one, was doing her best on the European front to try and resolve the crisis, whereas you did get a very real sense from the students here that they had very little say in their own government`s leadership -- Becky.

ANDERSON: Yes, keep up the good work, Di.

Continue to keep up with where Di is, as she moves around Europe this week. If you are close, get in touch with her and get down to one of these town halls that she`s holding. It`s all across social media, so do log on.

You`re watching a special edition of CONNECT THE WORLD.

I`m Becky Anderson live in Cannes in France.

I`ll be back later in the show with more from the G20.

For now, though, let`s cross to my colleague, Monita Rajpal, at CNN London -- Monita.

RAJPAL: Yes, Becky, coming up after the break, a breakthrough in Cairo. Syrian officials agree to Arab proposals for peace.

But will it really change anything on the ground?

We`ll look at that, right after this.



Welcome back.

Syrian officials have said yes to an Arab League peace plan aimed at putting an end to the government`s violent crackdown on dissent. It calls for an immediate end to the bloodletting and the opening of talks between the embattled leadership in Damascus and opposition groups.

Well, CNN`s Ben Wedeman is in Cairo, where the Arab League is headquartered.

He`s joining us now live -- and I guess, Ben, a lot of people are asking how sincere is this agreement?

BEN WEDEMAN, CNN CORRESPONDENT: Well, really, the proof is going to be in the pudding.

Will the Syrian government be willing or able to implement its commitment?

It`s talking about releasing prisoners, pulling troops off the street, opening a dialogue with the opposition and also allowing in Arab League monitors as well as the international Arab press into Syria and all around Syria to see what the situation is on the ground.

In the past, Bashar al-Assad`s regime did promise to pull the troops off the street, to release prisoners, but, really, it didn`t live up to those commitments.

So certainly the opposition is saying that they think this is in -- in Arabic they say, "ink on paper," simply empty words.

And certainly on the question, for instance, Monita, of this meeting, this proposed meeting between the government and the opposition, Damascus wants the -- the talks with the opposition to take place in Damascus itself. And, of course, there are many members of the Syrian opposition who are loathe to return to Syria out of fear that they`ll actually be harmed, executed or imprisoned.

So there`s such a gap of mistrust between the opposition and the government, it`s hard to see, at this point, after, according to the U.N., more to have, after 3,000 Syrians have been killed, that they`re going to be able to come together and somehow work this out peacefully -- Monita.

RAJPAL: Yes, a lot of questions there.

Ben Wedeman, thank you very much.

Ben Wedeman there in Cairo.

And one of the main questions now being asked, can a deal brokered in Cairo put an end to the bloodshed in Syria?

Earlier, I spoke on the phone to Ausama Monajed, a prominent member of the Syrian opposition.

And he told me the regime in Damascus is just trying to buy time.


AUSAMA MONAJED, SYRIAN OPPOSITION MEMBER: We officially are going to present a -- a requesting to the Arab League and also to the United Nations secretary-general, requesting officially the humanitarian intervention and the civilian protections for demonstrators. And we`re considering (INAUDIBLE) in that regard.

We do not think that the regime is genuine. We do not think that the regime can really stop all these atrocities that they have committed, because there is so much blood on their hands now. This is only a trick and a trap from the Assads to just buy more time to figure out a way out of this.

Unfortunately, there is (INAUDIBLE) coming down.


RAJPAL: Just ahead on this special edition of CONNECT THE WORLD, we`ll bring you the top headlines this hour.

Plus, Becky will have more from the G20 gathering in France.

ANDERSON: That`s right.

Here in Cannes, Europe`s bailout fund was meant to be a life ring to keep more European states from slipping into the debt crisis. With that now in jumped, alarm bells are ringing, especially when it comes to Italy.

That and much more ahead on this special edition of CONNECT THE WORLD live from the G20 summit.

Do stay with us.


RAJPAL: You`re watching CNN, the world`s news leader. This is CONNECT THE WORLD. We want to get a check of the headlines this hour.

Crisis talks in Cannes. On the eve of the G20 summit, the leaders of France and Germany are grilling the Greek prime minister on his sudden decision to put an EU debt rescue plan to a popular referendum at home.

Syria has agreed to an Arab League peace plan aimed at ending the government`s bloody crackdown on protesters. The initiative calls for an immediate halt to the violence. It also allows Arab League observers and journalists to enter Syria to document what`s happening.

The controversial founder of WikiLeaks, Julian Assange, is deciding his next move after a British court refused to block his extradition to Sweden. Authorities there want to question him about allegations of sexual misconduct, which he adamantly denies.

The mayor of Paris says he will help the satirical magazine that came under attack. The offices of French publication "Charlie Hebdo" were burned early Wednesday. The magazine was set to hit newsstands with an issue that seemed to make light of Islamic law.

Chelsea football club has condemned its fans who made chants against a QPR player Anton Ferdinand in a Champions League game last night. The chants were connected to claims Chelsea captain John Terry racially abused Ferdinand during a recent match.

Those are the headlines this hour. You are watching CONNECT THE WORLD.

We are bringing you special coverage on the future of Europe. We`re live at the G20 gathering in the south of France. Let`s return, now, to Becky Anderson, live in Cannes.

BECKY ANDERSON, HOST: Yes, it`s all happening here tonight. Confrontation in Cannes. The emergency meetings have captured the world`s attention.

Greek prime minister George Papandreou is face-to-face with two people who are not very happy with him this evening, German chancellor Angela Merkel and the host, here, of the G20 meeting, French president Nicolas Sarkozy. They are trying to get the Greek rescue plan back on track.

Europe and the markets, well, they thought the dark days for debt- stricken Athens and the euro zone were fading if not actually over.

Well then, the bombshell. Mr. Papandreou threw the recently-minted rescue deal into disarray Monday by calling for a surprise public vote on the plan.

A reignited euro zone debt crisis could kick the global economy back into recession. It`s a top issue for the G20 summit, which officially starts here on Thursday. On Friday, the Papandreou government faces a confidence vote.

Well, Greece`s prime minister isn`t the only one feeling the heat at the moment. Tonight, Italy`s leader Silvio Berlusconi is struggling to fight off contagion from the euro zone debt crisis. His cabinet is meeting in emergency session in Rome as we speak.

We go live, now, to our Senior International Correspondent Matthew Chance, who is in the Italian capital this evening. Things are very, very tough for Berlusconi at this point, aren`t they?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the political pressure on him, Becky, has really been mounting since Greek -- Greece announced that decision to stage a referendum.

The markets have been spooked, and they`ve been concerned about the debt-ridden countries, like Italy, which has $2.6 trillion worth of public debt, and about their stability.

So, there`s been an emergency cabinet meeting this evening here in Rome with top officials here in Italy trying to hammer out some kind of deal so they can push through some emergency austerity measures on the eve of the G20 summit so Silvio Berlusconi, the prime minister under pressure, can travel to that summit showing with some concrete measures that he has an enthusiastic commitment to pushing through the deeply unpopular austerity measures in this country.

I`ve heard within the past few minutes that the cabinet meeting has broken up. We`ve gotten no detail at this point, though, on what`s been agreed or, indeed, if anything has been agreed.

But what we do know is that what`s been under discussion is a government decree, a decree to amend the budget, not so much to decrease the amount of public expenditure that Italy makes, which is considerable, but what`s been under discussion according to people close to the talks is the possibility of raising taxes in Italy, a country which is already very heavily taxed, indeed.

So, they`re likely to be very unpopular measures, indeed, if indeed those measures have been agreed. We hope to bring you more detail very shortly, Becky.

ANDERSON: Yes. Yes, let me just repeat that for our viewers, because you and I are just hearing it in our ears. It`s being reported that the cabinet has agreed to anti-crisis measures, whatever those are, at the moment.

Matthew, we don`t know what those details are, and I know you`ll hit the ground after this to try and find out.

What we do know is what Diana Magnay has been learning through her social media town hall today. Twenty-one percent unemployment for the youth in Italy.

And what she was hearing time and time again from those she met in Milan is that Italy just isn`t working for these guys. For these under-25- year-olds, they just can`t find any work. Is that reflected with what you`re hearing on the streets of Rome tonight?

CHANCE: Yes, absolutely. It`s one of the huge problems confronting Italy, the youth unemployment is a major issue here. It`s something that Silvio Berlusconi has promised to tackle. Stimulus measures aimed at getting Italy`s young back into employment.

It`s also trying to look at ways of getting the country`s women into employment as well. It`s got one of the lowest rates of female employment in the European Union, as well as slashing pensions and tackling the massive public expenditure that so characterized Italy over the past several years.

Hopefully, that`s what`s being discussed tonight in this cabinet meeting, but again, it`s not altogether clear at this stage, Becky, what`s been agreed.

ANDERSON: Yes. All right, Matthew, thank you for that. Matthew Chance, your Senior International Correspondent out of Rome for you this evening.

Let`s go Stateside, shall we? Because this is a global issue, and it needs a global solution. Ben Bernanke says the US is keeping its eye on Europe.

Poppy Harlow is in New York for us tonight, and Poppy, a few hours ago the Fed Reserve chairman told reporters that Europe`s debt crisis poses big downside risks to the US economy. What`s he going to do about it?

POPPY HARLOW, CNN BUSINESS CORRESPONDENT: Absolutely, that`s the key question, what is the Federal Reserve going to do? You often do not get many details from the Fed until they actually announce a program, Becky.

What he did say to try to assure investors around the world, it certainly helped prop up US markets today, is that the Fed has more tools that they can implement. But what was key here is the focus on confidence and the impact that the Europe situation is having on American confidence.

And what Bernanke went on to say is, he said we cannot disassociate ourselves from Europe, and that is an unfortunate fact. Just as Europe could not disassociate itself from the United States in our collapse in 2008, we cannot now disassociate ourselves from Europe.

What Bernanke said is, this has been a huge drag on consumer confidence in this country, which is the lowest it has been, really, since the Great Depression. So, a massive, massive weight on consumer confidence, that`s what`s playing out.

He did -- and I found this very interesting, because he chooses his words very carefully, and today in his press conference, Bernanke told reporters that as much as he and Timothy Geithner, the US Treasury Secretary, can advise European policymakers, that is the extent of the power they have.

They have no power over the decisions made in Europe. They can simply sit by and advise them. He said, Becky, "Sometimes they take our advice, sometimes they do not." Obviously, the Federal Reserve, here, monitoring the situation in Europe and as the G20 kicks off very, very closely.

But he said clearly the impact is significant on US markets, it`s significant on confidence, and it is going to continue to drag on the recovery of the United States and our growth, the Fed lowering our growth estimates for the full year in large part because of this situation in Europe. Becky?

ANDERSON: Yes. Lest we forget, we live in a global world where what happens in one place will affect much of the rest of the world.

And I`ve just seen the White House press pool arrive here at this hotel, which means Mr. Obama is in town. He`s going to want some answers at this G20 summit when it kicks off officially tomorrow morning.

Of course, when it was created, the euro was never supposed to be in this kind of jeopardy. Max Foster, now, looks back at how things were when the common currency was first introduced.


MAX FOSTER, CNN INTERNATIONAL CORRESPONDENT (voice-over): It was heralded as a tool that would change the status quo of the global economy, a challenger to the dominance of the US dollar and the Japanese yen.

UNIDENTIFIED MALE: The majority of the EU`s politicians agree that a single currency, to be called the euro, will benefit trade, guard against inflation, and eliminate exchange rate risks.

FOSTER: But in the face of monetary unity, there was division, with protests stretching from Spain to Germany.

JIM BITTERMANN, CNN SENIOR EUROPEAN CORRESPONDENT: Across Europe, according to one survey, consumers are more negative than positive about the coming of the euro. Many worry that businesses will take advantage of odd exchange rates to round off prices upwards.

UNIDENTIFIED FEMALE: Will the euro be a benefit or a loss for everybody?

UNIDENTIFIED FEMALE: It`s a big step towards union, and union most of the time means peace.

UNIDENTIFIED MALE (through translator): Countries that are economically worse off, we`ll end up paying for. And then, before you know it, there`ll be another war.

FOSTER: European leaders were on the hard sell, painting the euro as economic and even social savior.

WOLFGANG ISCHINGER, DEPUTY FOREIGN MINISTER, GERMANY: In the long run, such a project will, in fact, contribute to the kinds of things that our citizens are looking for. Security, the absence of crime, the absence of drugs, prosperity, jobs, trade, investments.

FOSTER: But those assurances back in 1998 assumed euro members would play by the rules.

YVES-THIBAULT DE SILGUY, EUROPEAN UNION COMMISSION: The credibility of the euro will be strong because emeritus of the commission is rigorous economic and we take no risk with the strict application of the treaty.

BILL DELANEY, CNN CORRESPONDENT: Most of the 11 countries scheduled to circulate euros still don`t appear sufficiently prepared to meet the strict economic criteria supposed to give the new currency credibility.

FOSTER: Still, the currency was launched.

BITTERMANN: With his visit carefully timed to hit main French newscasts, Strauss-Kahn pushed a button and brought a new and hopefully solid currency into existence on live TV.

DOMINIQUE STRAUSS-KHAN, FINANCE MINISTER, FRANCE: It`s a kind of symbol. It`s the first euro ever done.

FOSTER: On January the 1st, 1999, the euro became the official tender for financial markets.

UNIDENTIFIED MALE: Little excitement, just satisfaction at a strong start for the euro.

JIM RODGERS, FINANCIAL COMMENTATOR: The euro is the single most important thing happening in the world in the next five years. It`s more important than any war, any election. Because if the euro works, the euro is going to replace the US dollar as the world`s reserve currency.

FOSTER: It was another three years before cash machines began feeding out the crisp new notes.


FOSTER: A new year. A new financial era. Welcomed in --



FOSTER: -- around the world.

ROMANO PRODI, PRESIDENT, EUROPEAN COMMISSION: The euro is the beginning of a strong European Union. We shall be the best in the world, the best in the world.


ANDERSON: Will we be seeing those crisp euros disappear and these old currencies coming back to play? ATMs, perhaps, spewing those out in the weeks or months to come. Who knows at this point?

I`ll be back with some final thoughts from Cannes in about ten minutes time. Now, let`s get back to Monita Rajpal in London for you. Mon?

RAJPAL: Thanks, Beck. Still to come, the offices of a French magazine are destroyed on the day it was due to publish a highly controversial cartoon. You`re watching CONNECT THE WORLD.


RAJPAL: Hello, I`m Monita Rajpal in London. You are watching CONNECT THE WORLD. Here`s a look at some of the other stories making headlines tonight.

The founder of WikiLeaks, Julian Assange, has lost his appeal against extradition to Sweden. An appeals court ruling in the UK now puts Mr. Assange one step closer to being sent to Sweden to face rape allegations. He now has two weeks to consider whether he wants to appeal to the Supreme Court. Here`s what he had to say.


JULIAN ASSANGE, FOUNDER, WIKILEAKS: I have not been charged with any crime in any country. Despite this, the European arrest warrant is so restrictive that it prevents UK courts from considering the facts of a case as judges have made clear at each stage.

We will be considering our next step in the days ahead. The full judgment will be available on No doubt there will be many attempts made to try and spin these proceedings as they occurred today.


RAJPAL: The man known as the Merchant of Death has been convicted of conspiring to kill Americans, among other crimes. Now, Russian arms dealer Viktor Bout could face life in prison. Federal jurors in New York took two days to reach the guilty verdict. Sentencing will take place in February. The charges stemmed from a 2008 sting operation by US agents in Thailand.

The offices of France`s famous satirical magazine "Charlie Hebdo" have been destroyed by fire. The building was apparently attacked just hours before a controversial issue of the magazine was set to hit stores -- to hit store shelves.


RAJPAL (voice-over): The offices of a French satirical magazine destroyed by fire. Police won`t yet say it was arson, but the blaze came as the latest issue hit the stands with a cartoon character of the Muslim prophet Mohammed on the cover.

STEPHANE CHARBONNIE, EDITOR, "CHARLIE HEBDO" (through translator): It`s an indescribable mess. Everything has melted. The keyboards, the computers, everything is dead. Ashes cover all of our belongings.

RAJPAL: The editor says he found a Molotov cocktail among the ruins of the offices of the magazine "Charlie Hebdo." This week`s issue has the character of Mohammed saying "100 lashes if you don`t die of laughter." But the cartoonist says it was not meant to offend.

RENALD LUZIER, CARTOONIST: People say OK, that`s not fun. OK, we can`t make everyone happy, and we know that. They say, OK, let`s move the line further. Let`s move the line further. But it was not completely -- it`s not the point to make provocation.

RAJPAL: But the French satirists probably shouldn`t have been surprised. This isn`t the first time cartoons of Islam`s founder has sparked violence.

Newspapers in Denmark and Norway prompted furious demonstrations by Muslims around the world about five years ago when they ran Mohammed cartoons.

At least two cartoonists have been attacked. Lars Vilks got death threats after drawing Mohammed with the body of a dog.

A man tried to break into Kurt Wstergaard`s house after he drew Mohammed with a turban shaped like a bomb.

But some Muslims feel under threat themselves in France. The country banned full-face Islamic veils like the burqa this year, and several Muslim women have already been arrested. Hind Ahmas was arrested for wearing a burqa. She says she feels threatened.

HIND AHMAS, CAMPAIGNER (through translator): They`re going to feel like they have the right to inflict anything upon us, and that`s what really frightens me.

RAJPAL: For his part, cartoonist Renald Luzier insists he isn`t frightened.

LUZIER: One thing that is sure that next -- next week, there`ll be another "Charlie Hebdo."

RAJPAL: And just as sure with France`s Muslim population growing fast, tensions are not going away anytime soon.


RAJPAL: Also making headlines tonight, Chelsea supporters are now accused of fanning the flames of a racism row that`s already engulfed captain John Terry and caught the attention of the UK`s Metropolitan Police.

The football club has been forced to condemn the behavior of its own fans after they made chants against QPR player Anton Ferdinand during a Champions League match Tuesday night. CNN`s Don Riddell has more.


DON RIDDELL, CNN SPORTS CORRESPONDENT: John Terry is now the subject of not one, but two investigations into alleged racial abuse. The Chelsea in England captain is one of the highest-profile footballers in the country, but he`s now engulfed in a storm of negative publicity.

The central defender is accused of racial abusing the Queens Park Rangers player Anton Ferdinand during a recent Premier League match. Terry vehemently denies the accusations. Ferdinand says he feels very strongly about the matter.

Meanwhile, Chelsea have been forced to condemn their own supporters following the chants that were heard during last night`s Champions League match against Genk in Belgium. The Chelsea fans who were clearly supportive of John Terry were chanting "Anton Ferdinand, you know what you are." Afterwards, a Chelsea spokesman described the chants as "wholly inappropriate."

The football association were already investigating this matter. Now, it is a police investigation, and the FA say that they`ll make no further comment until the police have concluded their own investigation.

But the English FA have a big decision to make in the coming days. They`re due to be playing two friendly games against Spain and Sweden, and in different circumstances, you would`ve expected John Terry to be playing, and as captain.

But given the sensitive nature of this case, now, perhaps they`ll pass on John Terry on this occasion. We`ll find out when the England manager Fabio Capello names his squad over the weekend.

Don Riddell, CNN, London.


RAJPAL: The Duke and Duchess of Cambridge are giving UNICEF a helping hand. The British royal couple were visiting the charity warehouses in Copenhagen where they packed dozens of aid packages destined for East Africa. Their aim, to draw attention to the food crisis in Africa affecting an estimated 13 million people.

Coming up, the latest on our top story of the day. International pressure on Greece is growing as German and French leaders meet on the eve of the G20 summit. Becky Anderson is there.

ANDERSON: That`s right, Monita, and we are now awaiting a crucial statement from the host of the G20 meeting, here, President Nicolas Sarkozy, an his German counterpart Angela Merkel.

They`ve been in crisis talks with the Greek prime minister Papandreou, who was hauled in front of -- even though he`s not a member of the G20 -- hauled in front of the two of them, today. Brought here to Cannes to explain just what is going on with his referendum on the European debt deal announced on Monday.

Keep your eyes on CNN. We`ll be back with more on that after this.


ANDERSON: It`s just before 11:00 here in Cannes in the south of France, famously a mecca for movie moguls, now morphed into the main stage for monetary policymakers. It must be like living in hill for those who are at the summit center just a couple of miles away from me here in Cannes in the south of France.

We are awaiting a statement from the host of this G20 meeting, Nicolas Sarkozy, and his German counterpart, Angela Merkel. They have been in crisis talks with the Greek prime minster, trying to work out what to do next in this euro zone crisis.

This was a meeting with such high stakes. The idea was to get some clarity, some coordination, some real coherency to the global economic issues as they stand at the moment, and that being some action on getting some sustained growth going forward for the global economy and some action on jobs.

What this has effectively become is a crisis meeting about how to deal with the next stage in the euro zone debacle. As I say, awaiting this statement. We`ll bring that to you as soon as we get it here in Cannes in the south of France.

This is the unofficial opening of the G20 meeting. Most leaders now here for the real kickoff, which is Thursday morning here in France. We`ll be here for you for that as we move through the next 48 hours. A crucial time for all of us, you, me, policymakers to markets.

Thanks for watching. Monita will be back with the world news headlines next, followed by "BackStory." I`m Becky Anderson from Cannes. A very good evening.