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QUEST MEANS BUSINESS
Italy on the Edge; Interview with Pavlos Yeroulanos; Turning Spain Around; New York's Casino; Royal Relocation
Aired November 7, 2011 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, CNN ANCHOR: Down, but not out. Berlusconi is still trying to hold his ground.
Bargaining hard, fiscal leaders in Greece fight over the top jobs in government.
I'm Max Foster. This is QUEST MEANS BUSINESS.
Hello to you.
Political chaos and economic turmoil as Italy's borrowing costs hit new records. The man taking the blame says, he's going nowhere; Silvio Berlusconi says rumors of his demise have been greatly exaggerated. But just as the walls seem to be closing in on the prime minister, his country's economy continues to be squeezed by the bond markets. Yields have actually hit record highs. They have been above the 6 percent mark now since last month's European crisis summit. And they have gone even higher since, even with the ECB pitching in to buy Italian bonds.
That is where the summit was. That is where the summit was, yields top 6 percent there. They are now well over the 6.5 mark, 6.66 percent for the 10-year bond yield; 7 percent is generally seen as unsustainable. Part of the reason behind the rate rise the markets lack of faith in the current political set up in Italy.
And if you need to know what the markets are hoping for, just take a look at how Italy's main stock index reacted to those rumors about Silvio Berlusconi. Well, the first report that the prime minister might be on his way out came around 10:30 a.m., as you can see around then. And then you can see what happens after that. Shot up, ending the day, up around 1.32 percent. But undoubtedly you can see from the timing here, that it was linked to that morning rumor.
Those incorrect reports sent other European markets up, too. Although those gains didn't actually last that long. You can see the main markets are down, not drastically, but this is the big talking point today. It is another day of political twists and turns in the Italian capital. It matters for Europe and the world. Senior International Correspondent Matthew Chance is live for us in Rome tonight.
Matthew, just explain for us where these rumors came from. Were they completely unfounded?
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, they came from a number of sources. One of them was an editor of a major daily newspaper here in Italy, who has apparently written and editorial, and giving interviews to various people. He has been very close to the prime minister over the past several years and so his opinion is seen as being particularly credible.
And you know, it may still not be-it may still be-it may still come to fruition, this idea that he's going to step down. It is really, even though it has been denied by Silvio Berlusconi, that he intends to resign, it really may be out of his hands at this point, because there is this crucial vote in the Italian parliament tomorrow; a test of his parliamentary majority when it comes to passing a budget reform from last year, a 2010 budget reform.
If he can't muster the numbers in the Italian parliament tomorrow, the pressure will really be on him, whether he wants to or not, to step down. Because I think the fact, Max, is you know Italy's economic problems which are centered around its enormous debt burden, $2.6 trillion. Those problems have been compounded by the fact that Silvio Berlusconi is seen, by the markets, as being incapable of passing the kind of austerity measures that the country needs to get its economy back on track.
So all of these concerns now, all of these fears about a default in Italy, they are all very much focused on Silvio Berlusconi's immediate future, Max.
FOSTER: Talk of vote of confidence in him, does that really depend on tomorrow's vote, though, on the finance bill?
CHANCE: Well, it does. I mean, tomorrow's finance bill vote, isn't strictly speaking, isn't a technically a vote of confidence but it is being seen as one. Because if the government can't even muster enough support to pass its own expenditure, from last year, that is, obviously, extremely negative for its future going forward when there are much more important bits of legislation, much more difficult bits of legislation that have to be put through. And so, if it is not an actual vote of confidence it is certainly being seen as one. The pressure on Silvio Berlusconi, if he can't muster the numbers tomorrow, will perhaps be unbearable for him. And he may have to step aside or got to the president and talk about what can happen in a future-for the future of the Italian government.
We are not there yet, though. Silvio Berlusconi is a master of horse trading. He said that he is very confident that he'll be able to get the numbers. He is currently engaged in negotiations with rebels to try and keep them in his ruling coalition. And so it is very much up in the air tomorrow about whether he is going to get by this vote. Or whether he is going to fall.
FOSTER: OK, Matthew, thank you very much indeed following that vote, of course, tomorrow. Time and time again we have heard that Mr. Berlusconi's days are numbered, as Matthew was suggesting. And time and time again, he has proved his critics wrong.
What's different this time? Is it different? Well, Lapo Pistelli is the head of foreign affairs for the rival Democratic Party. He joins us now, live from CNN New York.
Thank you so much for joining us.
LAPO PISTELLI, HEAD OF FOREIGN AFFAIRS, ITALIAN DEMOCRATIC PARTY: Good afternoon.
FOSTER: Are there any movements amongst the opposition parties to put together a no-confidence motion, which would lead to a vote?
PISTELLI: Yes, we are ready to do it, because Italy is facing political-is in a political stalemate, because on one hand, as your numbers have clearly shown, Italy is paying a very high price to the economic crisis. And we are adding a point of weakness, which is the inability of the government to deliver any credible and accountable reforms. But on the other hand, Silvio Berlusconi is not ready to give up. He's not ready to resign. Therefore we are here calculating, number by number, deputy by deputy, the number that are required to pass, or not, a confidence vote.
FOSTER: Yes, give us a sense of that, will you?
PISTELLI: We are ready to put this confidence vote this week.
FOSTER: If you could. Please put a number on it?
FOSTER: Just give a sense of the numbers, as you see them. You know, in terms of whether or not there will be a positive or negative vote in his confidence?
PISTELLI: No, there will be a very tight margin, but I guess we should have to take the example of Spain, of Greece. In Spain, Prime Minister Zapatero announced early elections, and the wave of financial speculation ended, suddenly. In Greece, the prime minister resigned, giving a sign of political discontinuity, and both coalition-both majority and the oppositions will be able to form a government to pass very drastic reforms. So, we can't go on any longer with our one, two, three, tiny margin confidence vote by the government.
FOSTER: OK. When will that vote likely be?
PISTELLI: We are not ready to do it. Sorry?
FOSTER: When will that vote likely be? When is the earliest a confidence vote might be in parliament?
PISTELLI: Today, Berlusconi changed it several times, his mind. He was ready to put the confidence vote tomorrow. Then he said, I don't do it. I won't do it. But I guess that the head of state has asked him to put a confidence vote on a letter that he wrote to the European Council, in order to propose a draft of measures, of economic measures, for the country. So it can be tomorrow. But it can be also at the end of this week, or next week. But the real question is what about the financial market reaction.
FOSTER: Yes, I want to ask you about that. Because if you look at the way the markets reacted today, when there were rumors that he would go, initially there was a positive reaction. But actually it didn't-it wasn't as positive as many said. Because once you look at the alternatives to Berlusconi's government, there is a lot of concern that there isn't a strong enough one to replace him, and him as leader. So, give us a sense of whether or not there will be a formidable prime minister in his place, to take you through this process?
PISTELLI: No, we have two alternatives. You have to know that under the Italian constitution the last stay (ph) is to the head of state. And the head of state has to try and form a new government, until he has to give up, where he finds that there are no alternatives in the parliament. But we have asked many times to have a high profile European personality, to run a government of national solidarity, between the majority and the opposition.
And many rumors say that the best name would be Mario Monti, the former European banker, member of the OECD board. If that is not the case, it is better to go for early elections, instead of this very long agony.
PISTELLI: It is going to be a Fort Alamo, where Berlusconi is not going to give up.
FOSTER: OK, Lapo Pistelli, of the Democratic Party. Thank you very much indeed for joining us on the program today.
Now from one prime minister under pressure, to another, Greek leader George Papandreou is on his way out. So could this be the man to replace him? We're live in Athens.
FOSTER: Greek leaders are meeting in Athens right now. They are deciding who will lead the new government and ultimately how the country will claw its way out of this economic mess. The prime minister, George Papandreou, offered his resignation with one condition. That Greece approves the controversial European bailout package, which the country so desperately needs to help repay its debts. CNN's Diana Magnay is following developments for us from Athens and we can talk to her now.
Diana, what are they discussing right now? And what is the likely outcome, do you think?
OK, we'll get back to Diana in just a moment. We are having technical problems there. But we can speak to Jan Randolph. He is the director of sovereign risk at IHS Global Insight.
Thank you so much for joining us. I mean the situation you've got in Greece is one thing, isn't it? Are you particularly focused on that right now? Or is it all about Italy?
JAN RANDOLPH, DIRECTOR OF SOVEREIGN RISK, IHS GLOBAL INSIGHT: Well, I think the bigger, more important question is now Italy. You know, Greece should be in a bailout, now implementing policies, but creating problems, again. It is all political and can a broad-based government implement. And that is the key test. We have got the same dilemma but for a much, much bigger, and much more important economy; seventh largest in the world, third largest in the Eurozone, Italy. With a leader who has effectively got no political capital left and is considered widely, increasingly widely as a liability.
FOSTER: But is there a good alternative there, for you? In this time of sort of dire economic straits, a political leader that is strong enough to replace him?
RANDOLPH: It is interesting because the southern Eurozone countries have a history, when it gets tough, the political parties usually abandon responsibility and hand the difficult decisions to some leader, some authoritative figure that has credibility, has wide respect, at technocrat. And it is these guys that actually push the country forward.
FOSTER: So that is a good prospect at this time, right now?
RANDOLPH: Well, it may be wishful thinking but that is the way we are thinking in terms of Italy and also Greece.
FOSTER: And in terms of Italy, I just want to talk about the bond yields, which we talk about this 7 percent figure that we are heading towards, as frightening for everyone. Is that a tipping point for Italy, as it was for Ireland, for example?
RANDOLPH: It is if it is sustained over a long period of time. It is difficult to actually work it out because it depends on the growth and where the budgetary position is. But we have got to be careful about drawing parallels with this so-called magic 7 percent, because that was the tipping point for Ireland, Greece.
FOSTER: Because they are smaller, less-
RANDOLPH: Because there was a bailout there, and they would create less problems by being pushed into a bailout.
RANDOLPH: There is no bailout for Italy. Italy has to reform. The question is to get the politics in place. I think, personally, that you know, the ECB deliberately withholding firepower to reduce those yields by buying Italian bonds. Simply to say, look, we are not going-we are not here as fair godmothers to save you. It would be wasting money. The only way we would come in to support you, if you actually implement reform. Then we will be behind you. Then that will be money better spent.
FOSTER: They haven't got the money, though, have they, Europe? So you are talking about the IMF or China?
RANDOLPH: Uh, the ECB has got the money. The problem is the Germans-
FOSTER: To bailout Italy?
RANDOLPH: The ECB, if it wanted to, is the only big bazooka Europe has. But the problem is we mustn't think of the ECB like a central bank for the United Kingdom or the Federal Reserve, which do quantitative easing. The Germans have deliberately kept the central bank away from government financing. They learnt the hard way, in their history, Weimer Republic, wiping out the savings, polarization of politics, destruction of Germany, Second World War. To keep the central bank well away from government, so governments are always responsible for taxation and spending, and respect financial balance in the medium term.
They want to instill that kind of mentally to the other Eurozone governments. But it's difficult, you know, Rome got used to that kind of policy.
FOSTER: And last word on Greece, obviously, their bond yields are through the roof and no one is going anywhere near that debt. But do you see that coming down now from the process that is unfolding?
RANDOLPH: I mean, those in the bailout, it doesn't really matter what happens to the yields outside the bailouts, because that is all (UNINTELLIGIBLE) market pricing. It will take 10 years before we see Greece fully back into the markets. They may not have the euro.
FOSTER: OK, Jan Randolph, thank you very much indeed.
Let's try again, back to Diana, now, who is in Athens.
Athens-Diana, there are some meetings taking place there, of course. Are we expecting a big outcome to these meetings? Is there going to be a replacement to Papandreou, you think.
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: Well, you've got to hope so. That is certainly what they are working towards, but we still have no name on who will be the new prime minister, and no, real idea, about the make up of that new government.
What we are getting a sense of, though, is that it won't necessarily be a unity government as such. It would appear as though the opposition conservative party is more keen not to be part of the government, or certainly a part of the cabinet, and perhaps their position will be that they will agree not to disagree any further with the policies of that new government. Certainly, one thing that Evangelos Venizelos, the finance minister, could take to his finance minister peers-his Eurozone peers, in Brussels this evening, where they are meeting right now-was a promise that this new government would be devoted, committed, to the terms of the 26th of October bailout agreement. Let's just listen to what he said.
(BEGIN VIDEO CLIP)
EVANGELOS VENIZELOS, FINANCE MINISTER, GREECE: After a difficult week, to hear now the new political situation, a new political frame in Greece, to hear the new government of national unity and of national responsibility, this is the proof of our commitment and or our national capacity to implement the program to reconstruct our country.
(END VIDEO CLIP)
MAGNAY: There is one name, Max, that is being widely discussed as a possible successor to George Papandreou, and that is Lucas Papademos, he a former vice president of the European Central Bank. He is a former bank of Greece governor, and most recently he has been a professor at Harvard, a specialist in economic affairs and informal advisor to George Papandreou on economic affairs.
And as such a sort of elderly statesman figure, perhaps a figure who supersedes really the fray of party politics, which is so important, really, for politicians in Europe. And also for the people in this country, who feel very disillusioned with the way the party politics has been sort of miring the country further into crisis.
And actually, Max, if you speak to the people on the street about these latest developments, about this promise of a new government, they say, well, this is all well and good let's hope that it does what it should. But we know that austerity is simply going to make our lives more difficult. And we are looking forward, really, to a chance to vote on a new government come February, to really voice our displeasure in the way that we see things going, Max.
FOSTER: Diana, thank you very much indeed.
Now, coming up next, an architect's bright idea to make a Tokyo landfill, a place of beauty.
FOSTER: It is a problem every big city faces, millions of people creating millions of tons of rubbish. On this month's "Future Cities" we head to Tokyo where they are turning trash into electricity and making dumping sites-green.
UNIDENTIFIED MALE (voice over): It is a city of roughly 13 million people, a metropolis along the sea, where land of course, is at a premium. And in a city like this one question few residents think about, what happens to never-ending amount of trash.
In Tokyo nearly 20 percent of it comes here, the Shin Koto Incinerator, located in Tokyo Bay. As many as 1,100 trucks roll in each day. They are weighed and then assigned one of 21 slots where they dump their morning haul. Workers oversee the operation from a central control room.
UNIDENTIFIED MALE (through translator): As you can see here, we can see everything from this console in this room. And also control the machines from here.
UNIDENTIFIED MALE: But the process is mostly computerized. Massive claws pluck and hoist the trash into the incinerator where it is burned at 1,000 degrees Celsius. That is 1,800 degrees Fahrenheit. Trash is burned 24 hours a day, every day of the year. And despite what one might think, outside, there is little smell.
AKIYOSHI TERAKADO, FACTORY CHIEF, SHIN KOTO INCINERATOR (through translator): We have managed to oppress almost entirely the emission of dioxin gas. We have also managed to score below the relative amounts of sulfur oxides and hydrochloric gas, and it is almost non existent.
UNIDENTIFIED MALE: Nitrogen oxide levels are about two-thirds of normal levels. And it is not just burning trash. There is another big benefit to this plant, particularly, after Japan's nuclear troubles. This facility is also partly a power plant.
TERAKADO (through translator): Right now, two of the three generators are operating. And as you can see on the board over there, we are producing 16,000 kilowatts of electricity now.
UNIDENTIFIED MALE: That is enough to power about 500 homes a day.
TERAKADO (through translator): Half of this electricity is used to operate this facility. And the remaining half is sold to power companies.
UNIDENTIFIED MALE: As for the leftovers? The ash is cooled and then taken to dumping sites on reclaimed land, which is exactly the story of this island itself. It was actually used as a dumping site until the late 1960s. And it is essentially that idea that touched off an idea from one of Japan's most renowned architects, award winner, Tadao Ando.
TADAO ANDO, ARCHITECT: I wondered if it was possible to turn this mountain of trash into a green forest, instead of just leaving it as a pile of trash.
ANDREW STEVENS, CNN CORRESPONDENT: This is Ando's vision, Umi Amori, or the Sea Forest. Nearly 100 hectares of trees built on an island of trash. Kuniyoshi Sekita is the head of Marine Park Projects, at the Tokyo Metropolitan government.
KUNIYOSHI SEKITA, HEAD OF MARINE PARK PROJECTS: Tokyo, is very close to the sea, but in the summer it becomes very hot because of the heat island phenomenon. By building this green space, we would like to create a milder environment.
And it is also Ando's vision to funnel cooler air off the water, into the city's center.
(through translator): Another plan is, well, you can have a good look here, is to build a wind passage starting at the sea forest and going into the heart of Tokyo.
STEVENS: And this is a community project driven by the people themselves. The idea is to have half a million people donate 1,000 yen, or about $13, to pay for the trees.
SEKITA: Unfortunately, this place alone will not be enough to make a big difference. We need to build more green spaces like this all around Tokyo in order for it to have a definitive effect.
STEVENS: It's not about thinking about Tokyo five years from now, but instead, what will this city look like in the next century or the one after that?
ANDO: The earth we live on today is the same size as it has always been, but the human population is growing fast. In order to preserve the same environment we have today, each of us needs to do what he can. That is why when they think about 100 or 200 years ahead.
STEVENS: And helping ensure Tokyo's place as a future city.
Andrew Stevens, CNN.
(END VIDEO TAPE)
FOSTER: Welcome back.
I'm Max Foster.
You're watching QUEST MEANS BUSINESS.
And these are the headlines this hour.
Political uncertainty has caused a spike in the Italian government's borrowing costs, with yields on its bonds getting dangerously close to the 7 percent mark. Meanwhile, Prime Minister Silvio Berlusconi used his Facebook page to deny reports that he's quitting. A crucial vote on budget reforms is expected on Tuesday.
In Los Angeles, the jury has reached a verdict in the trial of Conrad Murray, Michael Jackson's personal physician, on charges of involuntary manslaughter. It's expected to be read in around an hour-and-a-half, at 9:00 p.m. GMT We'll bring that to you live.
The jury had to decide whether Murray should be held criminally responsible for the lethal dose of Propofol in Jackson's system.
Syrian activists are calling on the international community to stop what they describe as a massacre in the flashpoint city of Homs. These pictures are seemed to be from Homs on Sunday. There's gunfire in the background and the camera operator says there's shelling.
The notorious revolutionary known as Carlos "the Jackal" is on trial in Paris. He's accused of four fatal bombings in the 1980s. These are pictures from one of those scenes. He's already serving a life sentence for the shooting deaths of three people in the 1970s.
Too big to fail and too big to bailout -- Italy is no longer just Europe's third largest economy. It is the continent's next disaster in waiting.
A little earlier, Nina dos Santos explained to me where it all went wrong.
(BEGIN VIDEO TAPE)
NINA DOS SANTOS, CNN CORRESPONDENT: -- is this country, the Eurozone's third largest economy, is also somewhere that we remember and know well because of its food.
FOSTER: Pizza, of course.
DOS SANTOS: Yes, pizza, indeed.
So if you want to make a recipe for disaster, first of all, as in Italy's case, you have to start out with a significant amount of borrowing here. We're talking about $2.5 trillion and counting, 120 percent of GDP. Of course, as Italy's financial situation gets more precarious, it's becoming more expensive to keep those borrowing -- Max.
FOSTER: Let's see what's on here, the four Business. The second one, budgets and cutting back on budgets, right?
DOS SANTOS: Yes, that's right. Italy has had to introduce a number of emergency budgets, austerity measures. The last one was worth about $60 billion.
But the concern is is it going to be able to implement them?
And the prime minister has been backed into many a corner by his fellow Eurozone heads of state and, also, even the IMF to say you must implement your emergency budget soon, before it gets dire.
FOSTER: The number three, the bonds. We've been talking about this, bond yields getting higher and higher.
But what does it actually mean and when does it become dangerous?
DOS SANTOS: Yes, the cutoff point for when it really becomes dangerous, economists generally say, Max, is about 7 percent, in terms of the yield. So the interest that you have to pay investors to get them to bet on you and lend you money, Italy's yield stands at 6.65 percent...
FOSTER: And going up every day.
DOS SANTOS: And going up every day. It already hit records. So this is really the concern, that we could see this country entering bailout territory. It's enormously important because the issues there rest on 200 billion euros every single year.
FOSTER: And we can't talk about Italian Bs without talking about Mr. Berlusconi, of course, your number four.
DOS SANTOS: And perhaps bunga-bunga.
DOS SANTOS: So perhaps we could add another...
FOSTER: It all comes together...
DOS SANTOS: -- another couple of places to that list.
FOSTER: We could.
DOS SANTOS: This is an interesting image. This is one of the images that came out of one of the many anti-Berlusconi protests over the last week in Italy.
FOSTER: Translate for us.
DOS SANTOS: What it is, it's an image, a rather flattering image of the prime minister of Italy, perhaps from his younger years, inside a toilet seat. And the word here, scaduto, actually means expired.
You wouldn't want to cope with anything that's gone off, would you?
(END VIDEO TAPE)
FOSTER: You start feeling sorry for him, don't you?
Well, on November the 20th, that's when Spain's general election will be held and a potential turning point in the country's handling of its debt crisis. The two prime ministerial candof -- candidates are due to push their -- their case in a televised debate shortly. The polls suggest the Conservative opposition leader will enjoy an easy run to government.
For whoever wins, there is real work ahead, of course, turning around the country's finances, reversing the high unemployment report and helping the five million Spaniards who are looking for work.
For more, let's bring in our Madrid bureau chief, Al Goodman.
So this is a huge TV special, isn't it, for Spain?
It doesn't happen very often.
AL GOODMAN, CNN CORRESPONDENT: It really doesn't, Max. And both of these candidates are very little known outside of Spain but quite familiar to the voters in Spain. They've been in and out of the halls of power for decades now between them.
Now, for the Conservative candidate, who's 16 points ahead in the latest government poll, he lost in 2004 and 2008. He thinks this is his time to take the helm at this huge crisis in the country. And basically, what he has to do is not make a misstep this night in the debate, which is due to start here very soon.
For the Socialist candidate, who was, until recently, the deputy prime minister under Prime Minister Zapatero, who has been so politically damaged that he cannot -- he is not running again for a third term, the Socialist candidate has tried to somehow cut the ground and -- and say that the Conservatives will -- will not get Spain out of the crisis, in fact, will make it worse.
That's basically going be his tune -- Max.
FOSTER: OK. We'll look forward to seeing that.
Al, thank you very much, indeed, for that.
Now, it's been a ray of hope for an otherwise gloomy economy. Tourists numbers in Greece were -- were up 10 percent this summer. But the European tour operator has upset hotel owners, though, talk of paying in drachmas. And we'll hear about that the and the response from the Greek tourism minister, next.
FOSTER: Europe's biggest tour operator has delivered shocked news to Greek hotel owners. Travel giant TUI is asking them to sign new contracts agreeing to pay their bills in drachma should Greece pull out of the Eurozone and revert to its former currency.
Now, Greece's culture and tourism minister, Pavlos Yeroulanos, told CNN's Ayesha Durgahee the travel company's move isn't helpful.
PAVLOS YEROULANOS, GREEK CULTURE & TOURISM MINISTER: What TUI is doing, I hope, is a mistake that they will take back. They're sending the completely wrong message. It's so important right now to calm everybody down and say this is the path we're going to follow, stay very stable on the course and -- and see this through. Because at the end, we're going to come out of this. All of us will come out stronger. All of us will have greater institutions in order to be able to -- to handle these difficulties and -- and -- and that is what we should be investing on.
The -- the decision of the European Union is to keep the Eurozone intact and that is the right decision. Any -- any other decision of a smaller Eurozone would only unfold a crisis that -- that no one wants to see.
AYESHA DURGAHEE, CNN CORRESPONDENT: Are you fearing for your job right now?
YEROULANOS: Well, when you're in politics, you cannot think that way. When you're in politics, your job can come and go anytime. The -- I think what they're -- what the new government needs to do is it needs to find the best people it can. We need to move very first and we need to move in a very firm direction.
DURGAHEE: And the tourism sector could be the economic savoir for Greece?
YEROULANOS: Absolutely. In 2011, we had a continuation of the growth in the new markets. Plus, the old markets are coming back. So 2011 has been a -- a year of records both in arrivals and in income. So the growth in arrivals has been around 10 percent and the growth in income has been around 13. It's -- it's been a phenomenal year and we want to keep that momentum going in 2012.
DURGAHEE: Is there a new strategy?
YEROULANOS: We are cooperating with the countries with -- that were traditionally our competitors. So we're working with Turkey. We're working with Israel. We're working with -- with Egypt. We've been working together in order to attract people from China or India or Latin America, people who are leaving their countries and want to have an experience of a lifetime by offering the pyramids together with the Acropolis or the Acropolis together with the (INAUDIBLE) Sofia or -- or Jerusalem, you have a cultural package.
We've been working on two tracks, two parallel tracks. One is what most people see, most news reports on, and that's the debt and the deficit. Everybody is paying attention on that while the real work that has been going on is the structural changes within the Greek economy, the way we are simply applying bureaucracy, the way that we are changing institutions in order to be a lot more responsive to our citizens' requirements. This is the kind of work that will lead Greece in the next 10 years, because that is what will bring growth.
(END VIDEO TAPE)
FOSTER: Well, apart from those financial storms, political storms in Europe, there are even real storms, according to Guillermo.
GUILLERMO ARDUINO, ATS METEOROLOGIST: Never-ending, unrelenting, ever living, staying in Southern Europe. Usually, we start talking about the storms in Northern Europe. Now, for days, we've been talking about France.
Remember the G-20 last week with all those storms there?
You -- you would see all those beautiful hairdos flying around, left, right, pew, pew, with the -- with the winds.
Well, it continues. And, actually, there are some bad stories, because the -- this unrelenting storm actually held, like that high pressure center is bringing some land slides and also some dangerous situations in Northern Italy.
Genoa in Central and Southern Italy, Naples, coastal towns and also even in Torino in the Piemonte region, all the way up, not only are coastal towns. This is pre-Alps region. It's pre-Alpine town. And this is the Po River. And we see so much rain because of the continuous, incessant storms that we have in the area that the rivers are very heavy. They are actually loaded with water.
So that's the concern. The problem is that this low is going to continue bringing the rain all over, anywhere from Barcelona all the way into the Italian and the French Riviera. Corsica, Sardinia, you see practically the entire peninsula here in Italy, not only are we seeing rain, but we're seeing winds, as well.
So these are the kind of observations that we've gotten from the area. Nice, 110 millimeters; Torino, 113; and Alcover in Spain, 100 kilometers per hour.
Is this a tropical storm?
Well, let's call it subtropical, maybe. And it has many characteristics that denote tropical features. But what we see and what matters is that it will continue. It will continue to bring winds. It will be miserable. It will continue to rain all over in the same areas.
Now, look at the north. Looking fine. Not so many problems. You see the storm. Again, we need to focus on this one. But as we go to the airports that we -- we usually cover, we see no problems at all. Lucky you.
Amsterdam looking fine.
Rome with some breezy conditions.
Barcelona with the rain, part of that low pressure center.
Elsewhere, all the way to the north, things are fine.
Vienna is in the alps -- in the Alpine region so we see sort of an indirect influence of that low percent.
Cold in the east. Warm in the North Sea.
What about that?
Twelve in London.
Thirteen in Paris.
Ten in Vienna.
So temperature-wise, it's not a problem when you, at the wind, Max, may feel a little bit colder, but 20 in Rome with winds, it's fine -- back to you.
FOSTER: OK, Guillermo.
Thank you very much, indeed.
ARDUINO: You're welcome.
FOSTER: We can tell you -- we've had some news into us. Greek state television is talking about a deal having been reached on a new prime minister in that country. We can't tell who it is yet, but Greek state TV saying there has been a major political movement in Greek politics.
And we're going to be bringing that to you as soon as we get it.
Now, the Big Apple's big gamble. It's popular with punters. We take a look inside New York's first ever casino.
FOSTER: France is planning huge cuts to try to balance the country's books in five year's time. The government wants to wipe out the deficit by 2016 and is starting with more than $9.5 billion of cuts in 2012.
Government spending is the main target. In total, almost $24 billion will be cut over the next five years. Some taxes are going up, too, including VAT. It will rise from 5.5 percent to 7 percent.
Prime Minister Francois Fillon unveiled the plan to parliament. He said it needed to be executed flawlessly if it was going to work. Although one thing we did note from his speech, not once did the word austerity pass his lips.
Now, Britain's prime minister says the G20 delivered a strong message to the Eurozone -- sort yourselves out and we'll help.
Speaking in parliament on Monday, David Cameron said Britain will not directly put any money into the European Financial Stability Facility, but does support the IMF.
(BEGIN VIDEO CLIP)
DAVID CAMERON, BRITAIN PRIME MINISTER: It is in our national interests that countries across the world that are in distress are supported in their efforts to recover. The collapse of our trading partners, within in the Eurozone or not, would have a serious impact on our economy. Businesses would not invest. British jobs would be lost. Families across Britain would be poorer.
Through the IMF, we can help other countries in a way that doesn't affect our own public finances.
But let me be clear, it is for the Eurozone and the ECB, the European Central Bank, to support the euro and global action cannot be a substitute for concrete action by the Eurozone.
(END VIDEO CLIP)
FOSTER: Cameron did say that Britain has agreed in principle to increase funding for the IMF.
Let's check on the -- actually, on Wall Street now, because it's been an interesting day there again -- Alison.
ALISON KOSIK, CNN CORRESPONDENT: Hi, Max.
We've -- we've been watching stocks, mostly in negative territory most of the day. Right now, you're looking at stocks in wait and see mode. The Dow is up 20. The NASDAQ and the S&P 500, they are mixed. At this point, Max, traders really don't know what to make of Europe anymore. There are so many rumors to filter out, including whether or not Italy's prime minister is stepping down.
Then, of course, he comes out and denies that.
Now, Greece is still a big concern, because its debt problems, they have not gone away. But Greece may be moving to the back burner for now. At this point, investors are continuing to watch the events unfold in Greece.
But now there is all that political drama happening in Italy. And Italy is a much bigger player than Greece. So until all of this is sorted out, Italy's government cannot move forward on fixing their economy. So analysts say things are likely to get worse in Europe before they get better.
And the market is resigning to the fact that events in Europe will continue to drag on the market for a while. So the bottom line with -- with the -- what you can expect from stocks, Max, expect more volatility.
FOSTER: OK, Alison.
Thank you very much, indeed, for that.
Now, you may think the Big Apple, where Alison is, has everything. But New York didn't have a casino, would you believe, until about a week ago.
CNN's Richard Roth reports.
UNIDENTIFIED MALE: We're open!
RICHARD ROTH, CNN CORRESPONDENT (voice-over): Start spreading the news. New York City's first ever casino is now open for gambling business.
The city that never sleeps has also been the city that you never could spin a slot machine.
UNIDENTIFIED FEMALE: I love the slots. I just love it here. And I'm so glad it came to New York.
ROTH: The Ginting Group, largest gambling operator in England and Southeast Asia, brought Resorts World Casino to New York.
MICHAEL SPELLER, PRESIDENT, RESORTS WORLD CASINO: This is a landmark decision for us to come into the United States.
ROTH: Thousands lined up in the cold on opening day.
UNIDENTIFIED FEMALE: But it's worth it. The first one in New York. Hey, if we have to wait two hours, we'll be here.
ROTH: It took much longer for this casino to start rolling. Political squabbles and scandal caused lengthy delays. The crowds feel the casino opened not a moment too soon.
UNIDENTIFIED FEMALE: We're happy.
ROTH: There is the random New York City reference, but once inside, gamblers could be anywhere. The casino is a long subway ride from Manhattan, but easy driving distance for millions of residents.
UNIDENTIFIED FEMALE: I hit it again! I'm so excited!
ROTH: The goal, though, is to bring another $500 million in taxes to the state by keeping customers and cash from going to Atlantic City, Vegas and other casino cities.
GORDON MEDENICA, DIRECTOR, NEW YORK STATE LOTTERY: We intend to keep some of the New York gaming dollars that are leaking out of state right here in New York.
ROTH: At the same time, casino backers hope out-of-towners landing at the nearby airport will be tempted, too.
DEAN MURRAY, NEW YORK STATE ASSEMBLYMAN: So when people do come from out of state or even out of the country, right next door at JFK, they land, they're looking for a place to have a good time.
ROTH: It's called a racino because it's next to Aqueduct Racetrack where bets have been taken since 1894. Gambling success isn't guaranteed in New York. OTB, the now shuttered off track horse betting operation, was a giant failure. More effective agreements between the company and state may mean success.
CHARLES BRESHER, NEW YORK CITIZENS BUDGET COMMISSION: They decided to put these racinos near racetracks because it's more acceptable to have gambling where gambling already was.
ROTH: One problem -- unlike Las Vegas, this place has only video machines for slots and other games. This woman is nice, but she's a cyber roulette dealer. State law, for now, prohibits human black jack and craps dealers.
UNIDENTIFIED MALE: He's an addict and I'm just a watcher.
ROTH: In a rough economy, gamblers will have to make sure that they don't lose money in a casino they so desperately waited for.
Richard Roth, CNN, New York.
FOSTER: There you are. It's been a long time coming.
We'll be right back after this break with an update on the markets for you.
FOSTER: Well, the duke and duchess of Cambridge are moving up the property ladder. Prince William and Catherine will soon be shifting into an opulent apartment that was once home to the queen's sister, Princess Margaret. The only catch is that it hasn't had a refit since the '60s.
I've been taking a look at who's paying the bill for these renovations.
FOSTER (voice-over): They already have an apartment at Kensington Palace. But next year, the duke and duchess of Cambridge are upgrading to a residence more fitting for a future king and queen. Apartment 1A was last used by the current queen's sister, Princess Margaret.
According to the palace's Web site, Apartment 1A is large enough to seat 40 people for lunch or 60 standing. It's described as a large suite of rooms, but no official pictures are being released.
The British newspapers have managed to dig out some images of it interior. The property is currently being used an an exhibition space, entertainment venue, offices and storage. But due to large amounts of asbestos and outdated plumbing and wiring, the space is uninhabitable.
The residence was last renovated in the 1960s by Princess Margaret and Lord Snowdon, shortly after their wedding. The duke and duchess of Cambridge will be updating it to their own style over the next year. Taxpayers will pay for the structural work. The royal family will cover decoration costs and furnishings.
Catherine is a hands-on creative, so will no doubt be heavily involved in any design work.
The more modest apartment they currently use at Kensington won't lie empty. Prince Harry will be taking that one on.
And all the staff who worked for the young royals will be relocated here. Kensington Palace replaces St. James Palaces as the official royal household of Prince Harry, William and Catherine. Both princes have now moved back into their childhood palace, the one they shared with their mother, Diana.
Max Foster, CNN, London.
(END VIDEO TAPE)
FOSTER: Let's take a look at how those European markets finished the day then. Each of the big three closed in the red. Those rumors about Silvio Berlusconi's future gave the markets a brief boost, but not enough to push the major indices much higher. But, of course, the Italian prime minister has flatly denied those rumors later on in the day.
BP's plan to sell its business in Argentina has fallen apart. The oil company has been selling off assets to help pay for the damage caused by last year's oil spill in the Gulf of Mexico. But now it has to hand back half the money it was going to get, a $3.5 billion deposit to the Bridas Corporation. Argentina's second largest oil producer says the $7 billion deal was canceled for legal reasons.
That is QUEST MEANS BUSINESS.
I'm Max Foster in London.
Thank you very much for watching.
The news continues here on CNN.