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QUEST MEANS BUSINESS

G20 Summit Embroiled In Greek Drama; ECB Cuts Rates to 1.25 Percent; Interview with Philip Jennings; Greece Confidence Crisis; How Does Frankfurt Co-Exist with London?

Aired November 3, 2011 - 15:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


MAX FOSTER, CNN ANCHOR: A U-turn on the Greek referendum. And now the opposition wants snap elections.

I'm Max Foster in London.

BECKY ANDERSON, CNN ANCHOR: And I'm Becky Anderson in Cannes, where President Sarkozy says the euro will not be allowed to fail.

This is QUEST MEANS BUSINESS.

Tonight, in Cannes, the crisis in the Eurozone is front and center. The nation that invented democracy, drama, and crisis, well, it is bringing all three to this summit. And it is not even present.

FOSTER: The Greek prime minister appears to be backing away from the idea of a referendum, without abandoning it, though. He said everything depends on the vote of confidence in the Greek parliament, due on Friday.

(BEGIN VIDEO CLIP)

GEORGE PAPANDREOU, PRIME MINISTER OF GREECE (through translator): The vote of confidence is the guarantee-is the guarantee-how we move ahead in the next few steps, according to the decisions that we have made. And how we are going to negotiate with the parties of the opposition, if they want to cooperate.

(END VIDEO CLIP)

FOSTER: Well, adding to the sense of high drama the ECB is making a shock cut in interest rates.

With all that going on the G20 summit, itself, looks like a sideshow.

ANDERSON: Mmm, well, Jim Boulden is in Athens and he joins me now, live.

Jim, it has been a very long and extremely confusing day, with very mixed messages coming out of the Greek parliament building. What do you understand to have happened today? What is underlined at this point?

JIM BOULDEN, CNN BUSINESS CORRESPONDENT: We are watching this whole political debate, this whole-this future of who runs this country, playing out live on television, playing out at the parliament building behind me.

A few hours ago the prime minister, Papandreou, did come out and say he was calling for the opposition party to come together in an idea of national unity. And they would push through the austerity measures together and get Greece back to growth. Then we waited for the opposition leader, Mr. Samaras, to come out. And we thought he might say something very positive, instead he had a very impassioned speech and he said he was rejecting Mr. Papandreou's ideas of national unity. And he wanted Mr. Papandreou to resign. Let's hear some of what Mr. Samaras had to say.

(BEGIN VIDEO CLIP)

ANTONIS SAMARAS, GREEK OPPOSITION LEADER (through translator): We are asking you to resign in order to give the power to Greek people, to give the power to the new prime minister, to negotiate new measures.

(END VIDEO CLIP)

BOULDEN: Now, Becky, we were not expecting to hear anything more from Mr. Papandreou tonight, but we are being told now it is very likely he will go again in front of the cameras. This drama is far from over. Earlier we heard from the finance minister, Mr. Venizelos. He made it very clear the thought the referendum was over, because he thought national unity was a possibility. Let' hear how he characterized it in parliament earlier today.

(BEGIN VIDEO CLIP)

EVANGELOS VENIZELOS, FINANCE MINISTER, GREECE (through translator): As the prime minister said, the government and the country is clarifying that we are not going ahead with a referendum. We also have to show that it is clear, there is a window of consensus that even late, or even under some time, actually gets us to the point that they would vote for the decisions of 26 of October.

(END VIDEO CLIP)

BOULDEN: Now this vote of confidence is not expected for another 24 hours, in the parliament building behind me, Becky, but if Mr. Papandreou does speak again tonight, it could all change. And it continues to change, hour-by-hour. That is not what the markets want to hear. And I know that is not what the leaders there at the G20 want to hear.

ANDERSON: Yes, absolutely, very fluid in Greece tonight. Jim, thank you for that.

FOSTER: Becky, in this Greek drama, George Papandreou is fighting, of course, for his political life. And there are several key players waiting in the wings, as well, ready to take over, if the prime minister should fall at this stage.

Evangelos Venizelos is the Greek finance minister. He is also the deputy prime minister. He told lawmakers tonight, there won't be a referendum. He says the Greek position with the Euro area shouldn't be in doubt and it should not be decided on by a referendum. So that is his view. Antonis Samaras, well, he is the leader of the Greek opposition party, New Democracy. He held talks with Papandreou earlier, on Thursday.

Now, as Jim said, calling for him to resign. Ironically, it was Papandreou's-he was Papandreou's roommate, would you believe, at Amherst College, over in the United States. This man, Lucas Papandemos (ph), well, he is-uh, ah, well, a small group of lawmakers have put him forward as a successor. He is a highly respected man in Greece. He was vice president of the ECB in from 2002 to 2010. And was Greece's central banker when they entered the euro. So he does know about all of this crisis, and how it affects Greece.

Now, Kevin Featherstone is the head of European Institute at the London School of Economics. And he joins me now.

Obviously, you haven't been able to speak to anyone in the government today, because they are rather busy, let's say. Tell me how you sum up what has happened over the last 24 hours. This dramatic change?

KEVIN FEATHERSTONE, EUROPEAN INSTITUTE, LONDON SCHOOL OF ECONOMICS: Yes, we've gone from a situation where we were expecting a referendum. And you could see that in terms of domestic politics, the referendum was designed to split the opposition. It was designed to ensure that the main opposition party took a clear stance on last week's Euro deal. In that sense, from the prime minister's point of view it was potentially a neat political trick.

The problem was that in Athens the political world thought that the prime minister was being crazy because he was putting in doubts, with the referendum, Greece's position in the Euro. And then what we have seen, this morning, from Greece is members of his own party, the governing party, calling for the prime minister to go. Implying that they would vote-would not vote for him in the vote of confidence tomorrow.

FOSTER: He's only got a one-seat majority now, right?

FEATHERSTONE: It is a two-seat majority. And unless you have heard in the last few minutes-

FOSTER: No, no, no.

(LAUGHTER)

Sorry, I got my sums wrong.

FEATHERSTONE: OK. A two-seat majority.

FOSTER: So how does he stand going into the confidence vote if things don't change from here.

FEATHERSTONE: Very problematic, this afternoon, in parliament after the prime minister spoke, one of his own ministers, Anon Depoulou (ph), the education minister, was heard to stand up from the back and say that this was not the way forward. There should be some government of national unity. And we have just heard in your clip, the economics minister, Evangelos Venizelos, saying that there would not be a referendum. Even at this stage, we are unclear, is there going to be a referendum or not. If the vote of confidence-

FOSTER: It has been a U-turn? What is your understanding of the referendum?

FEATHERSTONE: Well, I-it is as clear as mud in the sense that the prime minister is suggesting that there could still be a referendum. But it is not at all clear that his party would actually back that.

FOSTER: It is very unlikely, right? At this point?

FEATHERSTONE: It is very unlikely.

FOSTER: And in terms of the three men that we were talking about, lining up to take his job. I mean, do you really want that-does anyone want that job right now?

FEATHERSTONE: Yes, that is right. Congratulations, you have become prime minister of Greece.

FOSTER: It is at the worst possible time, isn't it?

FEATHERSTONE: Yes, and of the three people that you have mentioned, if I could just say something very briefly. They would each have problems in terms of getting to the position of being prime minister. Venizelos was appointed because he is the of a particular faction in the governing party. His ability to claim support across the governing party is problematic. And Antonis Samaras is at the moment quite popular in the opinion polls, but he is in the opposition and he can't become prime minister unless the governing party implodes. And then the third candidate that you have mentioned, Lucas Papademos (ph), the former vice president of the European Central Bank; highly respected figure, as you said, but this is-

FOSTER: But not as a politician?

FEATHERSTONE: Not as a politician. It is not immediately obvious that a central banker would be best facing down the demonstrations and protestors in the center of Athens.

FOSTER: Kevin Featherstone, thank you very much, indeed, for joining us.

FEATHERSTONE: You're welcome.

FOSTER: Now stocks are rising off all of this news, in the U.S., tonight. Traders taking heart from the ECB's decision, particularly, to cut rates by a quarter of a percent. So you can see the Dow is up, pretty healthily. Up more than 1.5 percent at this point, over the 12,000 mark. So, psychologically important moment, really, came today.

Shares in Europe ended the day higher. Traders went shopping in Athens, even as the country faced a deep political crisis. Shares also gained ground in London, Paris, and Frankfurt. The rate cut in the Eurozone is clearly welcome and traders also seem to be betting the crisis in the Eurozone will turn out all right, it seems.

ANDERSON: Yes, but these are short-term bets, aren't they? You and I know that, Max. So watch these markets. Anything can happen Friday, and probably will.

Greece could not have picked a more pivotal time for this crisis. The world's most powerful nations are watching together, here in Cannes. And they have not been afraid to speak their minds. We will bring you all the action from the first day, the first official day of the G20 summit. That up next. Stay with us.

(COMMERCIAL BREAK)

ANDERSON: All right. Welcome back. You are watching QUEST MEANS BUSINESS here on CNN. I'm Becky Anderson in Cannes, following the first day of the G20 summit and what a dramatic day for Europe.

Right now French President Nicolas Sarkozy hosting a working dinner to round off what has been the first official day of this summit. It takes something serious to overshadow an event of this size, but all the discussion at that dinner will be dominated by Greece.

Talks began with a working lunch, attended by Mr. Sarkozy, U.S. President Obama, and German Chancellor Angela Merkel. Mr. Obama said fixing Europe was at the top of the agenda.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The most important aspect of our task over the next two is to resolve the financial crisis here in Europe. President Sarkozy has shown extraordinary leadership on this issue. I agree with him that the EU has made some important steps toward a comprehensive solution. And that would not have happened with out Nicolas leadership.

(END VIDEO CLIP)

ANDERSON: All right. Well, Mr. Sarkozy, later to attend the stage for the traditional class photo. The French president, who is the official host of the summit, of course said that the Eurozone must be protected at all costs.

(BEGIN VIDEO CLIP)

NICOLAS SARKOZY, PRESIDENT OF FRANCE (through translator): The euro is the beating heart of Europe. And Europe is at the heart of French policy. We cannot allow the euro to break up, that would be the break up of Europe. This is how the problem must be addressed and no other way. Euro is the heart of Europe. The euro explodes so does Europe.

(END VIDEO CLIP)

ANDERSON: Yep, well, President Sarkozy is absolutely determined that the euro won't be broken up. He needs to reinforce that message, because of course, we all know that the markets are speculative and they will back against the euro-bet against the euro, if indeed they see a chink of light.

Joining me now is Peter Spiegel, who is the "Financial Times" bureau chief in Brussels.

Always interesting to be at these meetings. We couldn't, though, have made this one up, could we?

PETER SPIEGEL, BRUSSELS BUREAU CHIEF, "FINANCIAL TIMES": No, I mean, it really has been a meeting that, actually, has been problematic for Sarkozy. Because he really had an agenda here he wanted to press. And this Greek thing has hit him. He is angry. I mean, all the European leaders I talked to, since coming here, I mean, steam coming out of their ears.

They are so angry that Papandreou has basically pulled the rug from under their feet. I mean, they had a deal two weeks ago. And they really thought that this was-that they had finally gotten their act together. And for him to turn around and call this referendum that really put the markets back at, you know, nipping at their heels. Very angry. I think today may have calmed some of those nerves. But I have to tell you, as you said in the lead up, I think the market is going to look very hard at the coming days on whether this is real.

ANDERSON: Sure, and the day isn't finished yet. Because we are expecting the prime minister of Greece, Papandreou, once again to speak to parliament. There have been calls over the last hour and a half, post his speech, this afternoon, which was a very baffling speech. It has got to be said. There have been calls for him to stand down, by the opposition. And for snap elections to be held.

Listen, he said earlier on today, snap elections in Greece would be catastrophic. A referendum is a good idea, but the best idea is consensus politics at this point. And he is right, isn't he?

SPIEGEL: I mean, that is clearly what European leaders are pushing from him. Surprising that at this point, if Papandreou were to go, I'm not sure there would be any tears shed in this town, or in Brussels, or any European capital. They are so angry at this point. But what they are really pushing now is-Samaras, in particular, the opposition leader, he has taken the political hay at going after this deal, and try to gin up popular opposition to it.

And they are angry. They are furious about that. They really do want national unity. They think perhaps a technocratic government, with Papandreou out of the way, where the opposition joins in and gets the decisions done, so they can restore confidence in the Eurozone and Greece. That is what they really want. They are really angry right now.

ANDERSON: I wonder whether the October 27 deal will ever restore confidence in Europe? I put this to you. Those who were there, who signed off on that deal, I would suspect have got little real understanding of the details of that deal. Whether the details are lacking or not-the real intricacies, the financial engineering, that went into a deal like that. They needed to sign off on something. They go something.

What I got from President Obama, here, was, listen, we don't need any more short-term fixes. We need long-term aims at this point. Do you think the October 27 deal gives us that?

SPIEGEL: Well, I think, he made just a couple of very different (ph) points. Obama's comments today were so telling. I mean, he sort of said, we appreciate the progress you made thus far, but we have got to work on the details. And I think you are right. I don't think they didn't understand the details. There were no details. I mean, that was a bit of a fig leaf.

And I think the markets on day one responded positively, and then next day they fell. The one thing that is overshadowed by this Papandreou drama is the markets weren't convinced from the beginning. Even before this happened, they weren't convinced. And that is the real problem.

At this point the politics have become so horrible in every single country. Merkel's popularity is down, Sarkozy's popularity is down, the Dutch government is falling, the Finnish government it is happening. Every single country, all of these managers are so unpopular that to get anything serious, with real details, where you get German and the big economic powers really backing these smaller countries, is almost impossible right now. And whether the politics gets any better, I don't think that is going to happen.

ANDERSON: Tomorrow is another day. We'll talk then.

SPIEGEL: It is.

ANDERSON: Thank you very much indeed for joining us, Peter Spiegel, joining there. The "FT" correspondent.

Out of Brussels for you this evening, well, politicians are going to tell us how serious the situation is of course. Movements on the bond markets, though, are setting off alarm bells, too, of course this evening, Max.

FOSTER: Yes, we are going to take a look at that, Becky. Because the figures are pretty incredible when you look at them, particularly in relation to Italy, we are focusing right now. Yields on Italian 10-year bonds, have shot up a full percentage point just in the past month. Look at it, 6.18 percent. That is because investors are less and less confident that the country can make good on its debt. So they are making the cost of borrowing money much more expensive for Italy. You can see, compared to Spain or France, where they stand currently.

Right now there is a 6.25 percent rate on Italian debt, roughly. That is tough enough as it is. But markets all agree, it is 7 points, 7 percentage, 7 percent is actually unsustainable. It doesn't-it is getting pretty close. And Italy is on its way there. You can see its costs are much higher than other countries like France or even Spain. And remember we saw a similar story with Greece last year.

Look at Greece, though, compared with these three. This is a pretty extraordinary statistic. The interest rate Greece has to pay on its debts is more than 26 percent, so it is dwarfing those others. Italy, not there yet. It was this kind of pressure from the bond markets that pushed Greece into a bailout. And it could push Italy the same way. Some are saying, Silvio Berlusconi, had to spend the morning explaining why he hadn't done all his homework. He met with other European leaders to discuss his failure to push through all the reforms needed to fix Italy's deficit. Meanwhile, his list of allies at home is getting smaller and smaller.

Let's go to Mathew Chance in CNN Rome.

You can never write off Berlusconi, can you? He has faced endless challenges over his career. What is it looking like this time?

MATTHEW CHANCE, CNN INTERNATIONAL CORRESPONDENT: Well, he has called another confidence vote for next week to-for the parliament to vote on the sort of austerity measures that he has already agreed with the cabinet. And he's taking to G20 in Cannes to discuss with his European counterparts. That will be the 52nd confidence vote that Silvio Berlusconi has been submitted to since he came to power back in 2008. And so, obviously, the odds are on his side.

In the sense that, you know, he has survived so many in the past. His coalition has been very adept at self-survival. It comes together, it seems, when it comes to confidence votes. But then he's too weak to pass the kind of important, difficult, painful austerity measures that the country needs to get back on the right economic track.

Now, whether it will be different this time is the big question. Because there have been lost of, you know, kind of extraordinary statements issued by his political allies by the country's president, essentially, calling for Berlusconi to either get the austerity measures implemented or to step aside and allow somebody else who is more capable of doing that. He has shown no sign of stepping aside, yet. But we will see how this confidence vote goes, potentially, next week. To see whether he can survive it in the parliament; if he can't, then Italy is looking for a new period of uncertainty as well.

FOSTER: Matthew, thank you very much indeed.

Almost an unprecedented period of European politics, isn't it right now?

Well, lower interest rates just might as a slight relief to Italy's economy. Next we'll look at why the ECB's new president has announced the Eurozone's first rate cut in almost two and a half years.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MARIO DRAGHI, PRESIDENT, EUROPEAN CENTRAL BANK: The ongoing tensions in financial markets are likely to dampen the pace of economic growth in the Euro area in the second half of this year, and beyond.

The economic outlook continues to be subject to particularly high uncertainty, and intensified, downside risks. Some of these risks have been materializing, which makes a significant downward revision to forecasts and projections for average real GDP growth in 2012, very likely.

(END VIDEO CLIP)

FOSTER: Just days into his new job, ECB President Mario Draghi has announced the ECB's first rate cut in nearly two and a half years. The quarter point cut, to 1.25 percent, is a measure to stimulate an economy that Draghi warns could slip into a mild recession by the end of this year. If you see the last rate cut, here, made 2009.

Now, that one brought the central bank's key lending rate to an historic low of just 1 percent. It was held there, at that level, for one year and 11 months. People got pretty used to it there.

Now, Valentijn Van Nieuwenhuijzen, is chief economist and head of strategy at ING Investment Management. He told me earlier that the markets didn't see today's rate cut coming.

(BEGIN VIDEO CLIP)

VALENTIJN VAN NIEUWENHUIJZEN, CHIEF ECONOMIST, ING INVESTMENT MANAGEMENT: It was absolutely a big surprise. As you can see the chance of the leadership in the ECB was suggested to me really something of importance. Where everybody was basically expecting Mario Draghi to basically behave the same as Trichet had done in the past. And I think markets were supported by the fact that maybe there is some more innovative thinking going on at the ECB, with the new governor.

FOSTER: And what did you interpret from his comments? Do you see him as more dovish? What do you think he is going to be like as the Central Bank governor?

VAN NIEUWENHUIJZEN: Well, there was clearly an indication that he tended to use tools to guide the future of inflation, to assess the future of inflation, which is a bit more similar to what the Fed tends to do. However, in the end, he clearly sticks to the ECB playbook, and refer to the fact that he is just steering towards stability and inflation. And that he is not looking into expounding the bond issue (ph) programs. So, overall, it was an ECB type of message, but it has the flavor of Fed-type of approach towards inflation targeting.

FOSTER: Further rate cuts likely? Which wouldn't be great for the euro?

VAN NIEUWENHUIJZEN: I think further rate cuts are likely. We expect another rate cut at the next meeting. Thereafter, probably not the ECB is still very much a central bank. It does not like to cut rates below 1 percent. And I think in the end it will come to markets, if they see a real change in the assessment of a lender of last resort provision by the ECB, then really the markets will change, become more positive, but by cutting rates that is clearly quite unlikely at this stage.

FOSTER: The head of the OECD recently told me that he wants the central banks to start lowering rates as a part of a global effort to really help with this recession that seems to be setting in. Is the ECB getting involved in some fiscal, political work here?

VAN NIEUWENHUIJZEN: Well, I actually do not think so. It is clearly a signal that now international institutions are pushing for more easing. But you have to realize here that central banks are pushing on a string (ph). The growth outlook is really only going to change materially if there is also a coordinated action to support growth from a fiscal policy stance.

And we are not seeing that, at all. And the fact that some central banks are now cutting, again, a little bit, or providing some additional liquidity is not going to change the outlook materially. We need a stronger growth program and a stronger fiscal policy approach.

(END VIDEOTAPE)

FOSTER: Well, George Papandreou says the voices of unity need to get louder in Greece. So could any voice drown out signs like these, or scenes like these? We'll ask that question for you in just a moment.

(COMMERCIAL BREAK)

FOSTER: Welcome back.

I'm Max Foster.

QUEST MEANS BUSINESS continues in just a moment.

We're going to check the headlines for you this hour, beginning with the very latest from Greece.

Back to square one -- Greece's opposition leader has rejected the prime minister's olive branch. George Papandreou said if the ruling and opposition parties could get on the same page, there would be no need for the controversial referendum on the European bailout deal. Antonis Samaras responded by repeating demands for the prime minister's resignation.

Reports of more violence in Syria a day after the government in Damascus pledged to end its crackdown on anti-regime protests and demonstrators. Opposition groups say Syrian troops have killed at least 18 people in the city of Homs. This video is said to be from Homs, but CNN can't independently confirm it.

Three Pakistani cricketers have been sent off to jail today. Salman Butt, Mohammad Asif and Mohammed Amir were convicted of plotting to cheat and to take bribes in a match against England last summer. Butt was sentenced to 13 months while Asif got a year. Amir pleaded guilty and got just six months.

Are you with QUEST MEANS BUSINESS.

We are continuing to following -- to follow the situation in Athens for you on a dramatic day for the Greek government.

BECKY ANDERSON, HOST, "CONNECT THE WORLD": That's right.

Meanwhile here in Cannes, 2,000 kilometers away, the leaders of the world's most powerful nations are watching.

I'm Becky Anderson live at the G20 summit as Europe's debt crisis comes to a head. Now, resolving that crisis is the top priority of the leaders here in Cannes. That is the opinion, at least, of the U.S. president, Barack Obama. He joined the summit host, Nicolas Sarkozy, at the front of the traditional class photo a couple of hours ago, the French president warning reporters, quote, "If the euro explodes, so does Europe."

Well, Greece would be the epicenter of any such explosion. And today, we came close to the brink. Prime Minister George Papandreou seems to have lived to fight another day in Greece's parliament just. He also seems to be thinking twice about a referendum on Europe's debt deal. His finance minister said that controversial vote would now not be taking place. We didn't hear that ourselves from Papandreou, though. He did, though, tell parliament that: "We are witnessing an important milestone in Greek history."

(BEGIN VIDEO CLIP)

GEORGE PAPANDREOU, GREEK PRIME MINISTER (through translator): I hope that this day will prove a very important day, when the voices for unity and consensus get wider, a very important day for our country. The more Greeks that turn around and say that Greece is more important, aren't we, then the more rosy our future will be.

(END VIDEO CLIP)

ANDERSON: Well, unity is not a word that sums up the mood of the Greek people right now. Strikes and protests have been a daily fixture on the streets of Athens, workers tired and angry and feeling exploited by a crisis they don't feel that they are responsible for.

Well, Philip Jennings is the secretary-general of the UNI Global Union International Group for Workers Rights, joining me here live in Cannes.

You've had time with some of the world's top leaders over the past 24 hours. The agenda here, when set, was all about action on sustainable growth and jobs creation.

We've seen none of that, have we?

PHILIP JENNINGS, GENERAL SECRETARY, UNI GLOBAL UNION: It's been our job to keep their eyes on what this global economic game is all about. That's about people, about having people in work and making sure that they get decent work.

We've had to try to change the rules of the game whilst we've been here to get the jobs issue back on the agenda.

Why is this?

We have 200 million people unemployed now. This is a world record. We need to create 18 million jobs next year, just to go back to the pre- recession days.

On the current economic forecasts, we're going to be nowhere near that. In one year's time, there's a risk there will be 250 million people out of work. This is -- this is a recipe for political and social and economic disaster.

That's why we've been going around the rooms, talking to Obama and all the other leaders, jobs on the agenda.

ANDERSON: Philip, are they listening?

JENNINGS: Yes, they will be listening. We had the ministers of labor with us three weeks ago. We've managed to get unanimity amongst the G20 that jobs has to be a priority.

We are hopeful that during the course of the night, we're going to get some good statements coming out on jobs, on social protection, on rights -- workers rights, union rights.

These guys, I think, the men and women leading this G20 are going to say things about the right to organize, about the right to negotiate...

ANDERSON: Well...

JENNINGS: -- to stop some of the lunacy that we're seeing in (INAUDIBLE).

ANDERSON: Well, I hope you're right, because what I see in this European debt deal and this crisis that has not only engulfed Europe, but it's certainly taken center stage here in Cannes, is the pumping of money into a financial system in order to keep that steadyish (ph) in the short- term. None of the money that has been promised or ponied up for this European debt deal is going back into infrastructure, going into jobs or into anything that I see...

JENNINGS: Becky, you're right.

Becky,

ANDERSON: -- as growth productive.

JENNINGS: Becky, you're right. And this is where they're getting it wrong. And that's why we're beginning to realize -- they're beginning to realize that they have to take on the deficit hawks, that they have to take on the austerity hawks, because they are beginning to understand that when you take money out of the worker's pocket, when you -- when that person is not in employment, the deficit becomes worse. You will never overcome your deficit problems with the levels of unemployment that we're seeing.

That's why we've got to change the rules of the debate here, change the rules of the game. We've won a seat at the table. We never had this before, Becky. We are now recognized as a union movement. We signed an agreement with the business community here today, the first time ever when we talked about the concerns of the real economy.

We have to bring these people back to the reality of what's facing people today, that people are fed up. It's not just the Greek people, it's the American people, it's the British people. They want to see a message of hope coming from here.

We also want to see a -- a -- what's also been lost, the tragedies, as well, that bankers are getting away with it again.

Who's talking about the banking community?

Who's talking about financial greed?

Who's talking about corporate responsibility?

ANDERSON: All right...

JENNINGS: That's one of the things...

ANDERSON: -- if I waved a magic...

JENNINGS: -- that could help here.

ANDERSON: -- wand tonight and said to you, the floor is yours, you know, that the narrative is yours, what would be your one message of hope tonight?

What's your solution here?

JENNINGS: The solution is we are here to make G20 join with the labor movement to make a breakthrough. It's time to change the rules of the game.

You have fallen foul of the deficit hawks and the austerity hawks. You have a chance to put people to work. You have the means. You have the means. There's enough money around to do this.

The business community is sitting on trillions of dollars. It's not the workers who are on strike, the business community is on strike.

A message of hope -- put people in work and ensure, you say to every young person that as a leader, that you can look to anyone under the age of 25 who isn't in work that in a year's time, they're going to have a job.

ANDERSON: Philip, thank you for that.

JENNINGS: Thank you.

ANDERSON: I wish you the very best of luck.

JENNINGS: Thank you.

ANDERSON: I hope those who are making decisions were listening to that tonight, because Philip Jennings makes an awful lot of sense.

I'm Becky Anderson here.

Next, a crossroads for a leadership defined by crisis -- as George Papandreou tries to rally support ahead of Friday's vote of confidence, we want to take a look at the the decisions that brought him to the crisis point.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BILL GATES, CO-CHAIR, THE BILL AND MELINDA GATES FOUNDATION: Well, I mean pleased that the needs of the -- the poorest were kept on the agenda despite all the short-term pressures that these leaders are under. And I would say that there are at least 10 of the leaders who spoke out, that they think that's very important. President Sarkozy is the one who put it on the agenda. President Obama spoke out in favor of the discussion. And so I do think we'll see more countries coming in, even countries like China and Brazil, that were aid recipients, are now turning around and contributing not only resources, but their innovative capacity to help out with these challenges.

(END VIDEO CLIP)

ANDERSON: Well, as G20 leaders discuss fixing the world's most advanced economies, Bill Gates, co-chairman of the Bill and Melinda Gates Foundation, is here in Cannes to remind them to follow through on their promises to help those living in poverty.

FOSTER: You know, Becky, the last 24 hours have seen Greece's prime minister grilled by European leaders in Cannes and by the Greek opposition in Athens. The next 24 hours looks to see a confidence vote that could end his leadership.

From the very start, George Papandreou has been faced with enormous economic challenges.

CNN's Felicia Taylor looks at how they culminated into the crisis that he's now facing.

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FELICIA TAYLOR, CNN CORRESPONDENT (voice-over): Raised with Greek politics in his blood, Papandreou is the son and grandson of two former prime ministers. He won the office himself in late 2009, full of promises to overhaul the failing Greek economy.

(BEGIN VIDEO CLIP FROM 2009)

GEORGE PAPANDREOU, GREEK PRIME MINISTER: We have the strong will to take tough, indeed, unprecedented, measures to react swiftly to the difficult circumstances.

(END VIDEO CLIP)

TAYLOR: But the government's finances remained dire, with a budget deficit of nearly 13 percent, which is about four times more than the Eurozone's limit and public debt of more than $400 billion.

But as recently as January of last year, Papandreou told our Richard Quest that Greece did not need a helping hand from the Eurozone.

(BEGIN VIDEO CLIP FROM 2010)

PAPANDREOU: We don't need help a lot and we are not looking for a bailout.

(END VIDEO CLIP)

TAYLOR: Within months, Greece appealed to the EU and the IMF for a bailout for the first time, involving a three year package, marking the first rescue of a Eurozone member.

(BEGIN VIDEO CLIP)

PAPANDREOU: What we have asked for is to the support enacted and, in fact, to have the necessary time and political support to implement our program and whatever necessary measures we need to.

(END VIDEO CLIP)

TAYLOR: A second rescue package is agreed upon by the middle of last summer. Greece promises to adopt even more austerity measures, such as cutting pensions by 20 percent. And this sends more than 100,000 people into the streets.

Despite the protests, Papandreou approves a stricter set of austerity measures on October 21st.

(BEGIN VIDEO CLIP)

PAPANDREOU: We have promised to -- to cut our deficit by 5.5 percent. That's a huge cut. I don't know how many countries do that.

(END VIDEO CLIP)

TAYLOR: With tensions rising and tempers brimming, a solution appears to be reached at the stimulus in Brussels, as the EU leaders agree on a bailout package.

And then, without warning, on October 31st, Papandreou calls for a referendum on the bailout. That's a high stakes game of politics that may even test the skills of the seasoned George Papandreou.

Felicia Taylor, CNN, London.

(END VIDEO TAPE)

FOSTER: What a week. And it's not over yet.

That is QUEST MEANS BUSINESS, though.

I'm Max Foster in London.

ANDERSON: And I'm Becky Anderson in Cannes here at the G20 summit. One day left to go.

What will we get from that?

Well, we'll see tomorrow.

"MARKETPLACE EUROPE" is next here on CNN.

It's a very good evening from France.

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RICHARD QUEST, HOST, "QUEST MEANS BUSINESS": Hello and welcome to MARKETPLACE EUROPE.

I'm Richard Quest.

This week in Frankfurt, where we're looking at the increasing role Germany's financial capital is playing in world markets and asking, how does Frankfurt coexist with its larger competitor, London?

JULIET MANN, CNN CORRESPONDENT: I'm Juliet Mann in London, where I talk to the man who's responsible for selling this city as the best place to do business, Chris Cummings, CEO of Citi UK.

QUEST: And in Frankfurt, we'll hear from the former president of the European Central Bank, based in the city.

And we hear from Ubertes Verte (ph), in charge of promoting the city as a financial center.

Times, they are a changing. Ever since the Eurozone was plunged into crisis, Germany has emerged as the powerhouse and backbone of the European economy. And standing on her shoulders, the European Central Bank, based in Frankfurt.

The ECB is the arbiter of monetary policy, the guardian of the Eurozone's currency, the euro.

I spoke to the ECB's former president, Jean-Claude Trichet.

(BEGIN VIDEOTAPE)

QUEST: The city of Frankfurt, the -- the German chancellor says she hopes you have enjoyed being in Frankfurt. The mere presence of the ECB has -- has certainly raised the awareness and the importance of this city.

How do you regard it?

JEAN-CLAUDE TRICHET, FORMER ECB PRESIDENT: Well, I have to say that I spent eight years here...

(INTERRUPTED BY LIVE NEWS EVENT)

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