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QUEST MEANS BUSINESS

Sarkozy Treaty Talks; Draghi Integration Call; Reform Revolt; interview with Crown Prince Alois of Liechtenstein; In from the Cold; Interview with Justin Knight; Use it or Lose it: Paid Vacation; Europe Discusses Options For Saving Euro

Aired December 1, 2011 - 14:00:00   ET

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


RICHARD QUEST, HOST: Rewrite the rules -- France's president calls for a rethink on Europe.

Occupy Wall Street officially -- tonight, an exclusive look inside the movement's new headquarters.

And present without leave -- why some people take their vacation days in the office.

I'm Richard Quest.

A busy program ahead, because I mean business.

Good evening.

Nine days left in the countdown to next week's crucial EU Summit and across Europe, leaders are uttering new truths that a few months ago they would not dared to have spoken of publicly. today, the president of the ECB, Mario Draghi, hinted for the first time the ECB might be prepared to step up its role. His U.K. counterpart, Sir Mervyn King at the Bank of England, reiterated he is planning for the worst -- a collapse of Eurozone.

And we have just heard from President Sarkozy, who wants to rethink how Europe is organized. And that includes the borders.

Not surprisingly, the comments we are hearing and the tensions and stresses, has taken the wind out of the traders' sale following yesterday's blast of hot air.

On Wall Street, the Dow Jones is down just 5.6 points. Incidentally, when you and I were together yesterday, I did question and wonder whether the Dow would make 12000. Well it did and it seems to be holding it. But it's still got two hours to go.

As for Europe, a reversal of fortune again. This morning's S&P warned another recession could hit the continent. Contagion is beginning to hit France and Germany. That much we know.

So these numbers, whilst the losses seem small, except in Zurich, of course, do have to be seen in the totality of what took place. The FTSE is down just a .25 of 1 percent.

Nicolas Sarkozy says France and Germany will work together on a new treaty for Europe. His speech was broadcast live. And the French president said we couldn't afford to question the Eurozone's survival, France and Germany must unite their destiny and see it through.

(BEGIN VIDEO CLIP)

NICOLAS SARKOZY, FRENCH PRESIDENT (through translator): The heart of the European economy, there must be a zone of stability and confidence which is the engine of European competitiveness. I will do everything and nothing less to keep France and Germany united together, wrapped in the fabric of stability and confidence so that this can safeguard Europe.

(END VIDEO CLIP)

QUEST: When we need good common sense on what's happening in Paris, we turn now to Christian Malard, who joins us tonight.

Well, sir, keep France and Germany united.

What role is Sar -- what message, what role is Sarkozy playing?

CHRISTIAN MALARD, TV3 JOURNALIST: Well, it's clear that Sarkozy was telling the French tonight that the marriage between Germany and France are doomed to be married and no case of divorce. It's clear that Europe -- and Sarkozy said it's a necessity and that France and Germany is the pole of stability that Europe must be built upon.

It's clear that it was a problem between the two, everything would be collapsing.

So this is why Sarkozy wanted to show he's occupying the ground, because he's delivering the speech tonight. Tonight morning will be Angela Merkel speaking in front of the Bundestag. And Monday again, this, too, this couple is going to meet again in Paris to make some new proposals to reshape, to rebuild Europe. I don't know how we can say, but definitely until the summit next week in Brussels you will hear about the two of them.

QUEST: Do they have -- does Sarkozy have any credibility on this issue?

Remember, it was only two months ago, Christian, that they -- he stood next to Merkel and said we agree and then we had the ECOFIN. We had the Euro Summit. It all collapsed. And bingo, we know what happened.

MALARD: You put the finger on it, Richard. In France, the public opinion and the Socialist opponent of Sarkozy, Francois Hollande, are fearing that Sarkozy will have to accept a kind of German diktat. And the French would not like Germany to be leading Europe on their own and impose their own kind of economic dictatorship, should I say.

So this the big fearing.

So Sarkozy today, as we could see, concerning the role of the ECB -- and we might step -- his role -- step up his role, but as he alluded to it, he was very careful, because, you know, it is a big bone of contention he has with Angela Merkel...

QUEST: Right.

MALARD: -- on the role which should be played or not by the ECB.

So right now he's trying to cool down the game.

QUEST: Olli Rehn talks about 10 days to save the euro, up to November -- sorry, to the December the 9th summit.

Christian, as seen from Paris, do you think these politicians are boxing themselves in?

They are setting themselves up for what could be a failure on the 9th?

And that could have terrible consequences.

MALARD: Yes, sure. It's clear tonight, Sarkozy wanted to make sure, he we also telling French public opinion, but other public opinions, that Europe might be swept away if there is a problem with the euro, if the euro was doomed to disappear for certain reasons.

So he wanted to put the people in front of their responsibilities, not only the French, the Germans and the other countries of the Eurozone. It's clear we are at a crucial crossroads. Everybody is aware of it.

And tonight, we had a sense of dramatization by Sarkozy before the next meeting with Merkel next Monday, at the Elysee Palace, and definitely before this crucial summit, which is going to take place at the end of next week in Brussels.

So we will see what's kept in store. But no, things are good or better. I mean we will see what's going to happen.

QUEST: Christian Malard, we appreciate you giving us time tonight from the French capital in Paris.

Everybody wants -- well, at least some people want the ECB to do more, whether it's with Eurobonds or, indeed, by bailing out governments or taking more of a fiscal role.

The new head of the ECB, Mario Draghi, has hinted that he might take more aggressive tactics, but only if Europe puts its house in order first. The president says the risks to the zone are increasing. Before the central bank steps in, the first piece of the puzzle is more integration.

(BEGIN VIDEO CLIP)

MARIO DRAGHI, ECB PRESIDENT: A new fiscal compact will be the most important signal from Euro Area governments for embarking on part of comprehensive, deep -- a comprehensive deepening of economic integration. It would also present a clear trajectory for the future evolution of the Euro Area, thus framing expectations.

(END VIDEO CLIP)

QUEST: That's Mario Draghi.

So far, it's talk and little action.

Today, here's a bit of history for you, the Lisbon Treaty came into force precisely two years ago today. The catchphrase them was taking Europe into the 21st century.

Now, as they're talking about reopening the treaties and renegotiating relationships between countries, we could be back to square one.

If you join me at the super screen, we find Jim Boulden over here -- good evening, Jim.

JIM BOULDEN, CNN CORRESPONDENT: This Lisbon Treaty, of course, one of the pieces of the puzzle that you have to look at in order to talk about fiscal union, tighter integration.

Let's look at some of the scenarios. Let's look at some of the pieces to the puzzle.

First of all, of course, what we heard from Mr. Sarkozy and with -- what we hear from Merkel and what we're going to hear for the next couple of days, until we get to that big meeting next Friday -- the idea of a stability pact -- how can Europe discuss with each other, hammer out a dear -- deal to have tighter fiscal union.

What does that mean?

That means getting the budgets together. That means having oversight in some of the budgets and very tough measures to countries that don't meet the targets -- penalties. That's what they want to see. That's part of this puzzle of fiscal union.

What else is part of the puzzle?

Well, of course, we talk about the European Central Bank. Mr. Draghi has said it. He's hinted to it. He's talking more about it. The only way to get to having the European Central Bank have a bigger role, he's called it sequencing. We have to get steps. One step would be fiscal union. Then we could see the European Central Bank become the bank of last resort.

Could it be the ECB would then start to buy more bonds?

Would it then be able to loan money to governments directly?

We might get there. We might not.

Now, what is this here?

Why do we have James Bond?

Well, we're talking Eurobonds. Some people say it won't happen. Many others say it will happen. What could it be, if you have fiscal union, you have a single bond. If you have one bond, all the debt from all the countries committing and you create this Eurobond.

The worry, of course, in Germany, is that they would lose their AAA rating.

However, if you have a single fiscal union, it seems likely you would also have a single bond.

But to do all of that, as Richard talked about earlier, the Lisbon Treaty -- two years old today.

Could they, next Friday, the European leaders, come together and change the way they operate without opening the fiscal, the Lisbon Treaty?

Because if they open the Lisbon Treaty, Richard, that could take a long time for those agreements.

QUEST: All right, Jim. But countries outside the Eurozone are now also warning what might happen and preparing for the worst.

The governor of the Bank of England, Sir Mervyn King, was asked today if there are plans to handle a backup of the Zone. He admitted Britain's government is preparing for all kinds of scenarios.

(BEGIN VIDEO CLIP)

MERVYN KING, GOVERNOR, BANK OF ENGLAND: The government, together with the FSA and the Bank of England, are making contingency plans against a wide range of contingencies. But I'm not going to go into detail as to what those are. But we are certainly making contingency plans.

(END VIDEO CLIP)

QUEST: What did you make of that?

BOULDEN: Well, he didn't say what I think the people there who asked him the questions was. They wanted him to say yes, we are definitely thinking about what will happen...

QUEST: He said it...

BOULDEN: -- if there's a breakup...

QUEST: -- as close, as near.

BOULDEN: But he didn't say the words that we have heard from other people, did he?

Of course they're going to look at that contingency. But to be fair, he said we look at a lot of contingencies. I think what he's saying is it would be crazy if we didn't think about them.

QUEST: He -- you're being charitable here. He also said extraordinarily serious...

BOULDEN: Yes.

QUEST: -- situation, Jim.

BOULDEN: Central bank governors around the world are telling the politicians what they need to hear. They're saying that you have to figure it out. You have to do it. You have to be the ones to make the tough decisions and then we can step in and help you, after you make the tough decisions.

But we know the politicians haven't been doing that.

QUEST: All right, Jim.

BOULDEN: Yes.

QUEST: Good to see you.

Many thanks, indeed.

Tens of thousands of protesters go back to the street. They are in Greece. It's the first general strike for the new government. We're in Athens next. The demonstrators said they've nothing left to lose.

QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: Tonight, a general strike aimed at a new government took place in Greece. The demonstrators' message is the same -- the most vulnerable people are paying for austerity. Tens of thousands of peaceful but passionate protesters are holding a 24 hour nationwide walkout, all in the same week that European leaders approved the next injection, the sixth, of money, nearly $11 billion, to keep Greece from going bust.

CNN's Elinda Labropoulou is among the strikers in the center of Athens.

(BEGIN VIDEOTAPE)

ELINDA LABROPOULOU, CNN CORRESPONDENT: Greece's public and private sector unions have joined forces in what is the first general strike under Greece's new interim government, a government primarily formed to ensure that Greece sticks to the necessary requirements of its lenders to prevent the country from defaulting on its debt.

To the thousands marching across Greece, this recent change of government has made little difference. The general strike comes only days for the debate for the 2012 is to begin in parliament. And although it does show significant improvement, that will see the budget deficit cut to about half and the primary surplus, for the first time, it is accompanied by severe austerity in a country where new taxes will empty taxpayers' pockets by billions of euros.

Protestors are saying that the measures are suffocating the economy and they're asking their government and its lenders to do more to promote growth.

Elinda Labropoulou, CNN, Athens, Greece.

(END VIDEO TAPE)

QUEST: And a warning tonight from one of Europe's smallest countries -- change is also on the agenda and it will be painful for banks and for the country's citizens.

The hereditary prince of Liechtenstein has said his country, as it cleans up its image as a financial center, we'll have to make major changes. And that could also costs of living for its citizens.

I spoke to the prince a few days ago in the capital, Valduz.

(BEGIN VIDEOTAPE)

CROWN PRINCE ALOIS, LICHTENSTEIN: The manufacturing side can go on more or less as they did in the past. The financial sector side, there we will have major changes in the next four or five years. We've started already to have them.

QUEST: Major changes?

CROWN PRINCE ALOIS: Certain companies. And you have others, particularly in the trough (ph) sector that we didn't give up because they won't be as easy, as interesting to be in business anymore.

(END VIDEO TAPE)

QUEST: The hereditary prince of Liechtenstein.

And you can hear the full interview in 25 minutes on "MARKETPLACE EUROPE," when we visit Valduz in Liechtenstein on CNN.

In a moment, Occupy Wall Street coming in from the cold. The movement's got an office and we've got access, exclusive, in a moment.

QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: Tonight, on Wall Street -- the protesters have a new place to stay in Manhattan. They have abandoned Zuccotti Park for an office that's about a million miles from Wall Street itself. Volunteers say it's just a space that keeps out the rain.

They began camping out in New York's Financial District in mid- September. Their call is for economic fair play and it sparked a global following.

The authorities got busy. These pictures from two weeks ago show police trying to keep Occupy protesters from reentering the site.

The movement has been plagued by clashes with police along with court- ordered evictions.

CNNMoney's Poppy Harlow gained exclusive access to the movement's new digs in New York's financial district.

(BEGIN VIDEOTAPE)

POPPY HARLOW, CNN BUSINESS CORRESPONDENT: Zuccotti Park is nearly all cleared out. But Occupy has moved to places that you probably wouldn't expect, including an office right off of Wall Street.

You walk in, you get a name tag like this.

Is this Occupy headquarters?

MEGAN HAYES, OCCUPIER: Not at all. This is one of our offices. Because we don't have Zuccotti Park...

HARLOW: Yes?

HAYES: -- we are spreading out our resources so we can have people join us.

Working groups can continue to work and continue to plan.

HARLOW: All right. Show us around.

HAYES: This is some of our working space. As you can see, lots of Occupiers working here. We have some offices, our info hub to help people who were staying in the park who are now homeless.

HARLOW: You've got a copy machine, fax.

HAYES: As every office needs, we have our copy machine.

HARLOW: Look, rent in Manhattan isn't cheap. How -- how are you guys paying for this?

HAYES: We are not. It's donations. Our office furniture was donated. Our -- our food is still donated. Our water is donated.

HARLOW: So this really stands out to me. We walked in here.

HAYES: Um-hmm.

HARLOW: What print media is saying about the movement today. So they're posting all this up that we, the media, are putting out there. You're keeping an eye on us.

HAYES: Of course.

HARLOW: Is it a more professional movement now?

You've gotten an office.

Is it different now?

HAYWOOD CAREY, OCCUPIER: No, I don't think so. One of the things that we're trying to reconcile here is that were trying to show the world a different way of doing things. And though we may be -- we may be in an office space, we want to stay true to exactly who we are.

HARLOW: So there's no boss on this office floor?

CAREY: Absolutely not.

HARLOW: Who did...

CAREY: We are a -- we are a movement without leadership. People will oftentimes say, well, a bunch of anarchists can't run anything. They'll just do whatever they want.

Nothing could be further from the truth in Occupy Wall Street. We have layer upon layer upon layer upon layer of structure, regulations, guidelines. The difference is, is that we as a people came up with those.

HARLOW: Here, right next to the New York Stock Exchange, in the Trump Building, is another public meeting area for Occupy Wall Street, where a lot of them have gone since Zuccotti Park got evicted.

CAREY: It's a little bit ironic, this is actually the lobby of a bank. But that actually makes it so much more important to us.

HARLOW: Is this space as important as your office is that we were in earlier?

CAREY: This space is much more important than the office be...

HARLOW: Why?

CAREY: Because what you're seeing right here is decision-making. I can't tell you what we're going to look like in a year, but what I can say is what you see around here is what's going to determine what we look like.

(END VIDEO TAPE)

QUEST: It's a fascinating exercise in grassroots democracy.

Poppy Harlow is now live from CNN New York.

What do you make of it -- Poppy?

I mean we know the goals are amorphous and we know that there's no one single objective of this.

But has it got legs and does it have steam?

HARLOW: So in my opinion, from what I've seen covering this over the last two months, it does have legs. It does have steam. And, Richard, it is more organized, at least Occupy in New York, than it was before.

I was shocked when we saw that office, how many people were working diligently there. There were meetings going on on all sorts of topics. There were making phone calls, asking to find shelter for those people that were in Zuccotti that needed a place to stay.

It was much more organized than I expected. So I don't know it has legs -- Richard.

QUEST: Which brings me to the question that so far no one has managed to answer to my satisfaction, which is what do they want and will they know it when they've got it?

HARLOW: I wish I could answer that for you. I cannot answer that for you. I asked every single person.

Every time I go down there I ask them, what is your main goal? I've heard everything from take all the money out of politics to supporters of Obama's jobs campaign to I don't know, but we need better than -- than - - than we have right now.

There is no clear goal. That is why they have been criticized across the board. But what they will tell you and what they've told me, Richard, is the media can go ahead and criticize us for not having one singular goal, that doesn't matter, we're fundamentally changing the system to a non-hierarchical system that is not run by corporations. That is -- I suppose you could say that is one of their goals. But no clear mission -- that's been the criticism, until they have that clear mission, where can this go from here?

QUEST: Poppy Harlow with excellent access in that office building.

Poppy, many thanks.

In a moment, a step in the right direction. It's Europe's debt crisis. Bond yields are falling across the bloc and you know that it's that time of the year -- use it or lose it. Time is running out to take your holiday vacation allowance.

Why would we not take it?

(COMMERCIAL BREAK)

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

More QUEST MEANS BUSINESS in a moment.

This is CNN.

And on this network, the news always comes first.

European Union foreign ministers have approved a host of new sanctions against Iran and more may be on the way. The penalties come two days after Iranian students stormed the British embassy compound in Tehran. They targeted 180 Iranian companies and individuals, mainly because of Iran's nuclear program. The U.S. says it would support restrictions on Iran's central bank and oil exports.

Egyptians will have to wait a little longer for round one results of parliamentary elections. The military rulers now say they won't be ready until Friday or Saturday. Two Islamist parties are already claiming victory.

U.S. and Iraqi troops were honored for their sacrifices and contributions in Baghdad today. The Iraqi prime minister and the U.S. vice president spoke at the ceremony. It's the first in a series of events expected to mark the U.S. military's withdrawal, to be completed by the end of this year.

When is a bond sale a success?

We you actually sell the bonds, even if it means at higher rates. Spain's bond sale has been an auction of an expensive success. Today, it sold the full $3.7 billion worth of bonds that it was hoping to. But the down side is the yields were higher than at a similar sale last month.

And in France's case, the bond auction $4 billion debt auction was also a sellout. The yields, as you can now see -- so Spain is at 5.74. Italy is now under 7 percent, 6 and nearly -- 6 and change, 6 and more than change. The U.K. at 2.26 and Germany at 2.18. So Germany is now, once again, the anchor bond of the Union.

If you take a look at Germany's bond yield, look at this, Germany's one year bond yield is 0.01 percent -- practically 0. And on Wednesday, it even dipped negative for the first time ever.

What does a negotiate bond rate mean?

It shows that investors are scrambling for a safe bet. And that means they're actually willing to pay. Instead of getting interest back, they are paying to lend money to Germany.

Justin Knight is head of European rate strategy at UBS and he joins me now.

You don't see negative rates very often in bonds.

JUSTIN KNIGHT, HEAD OF EUROPEAN RATES STRATEGY, UBS: You don't. You see it in times of crisis, of course. So on the short end of these yield curves, the very short dated bonds in Germany have had negative yields, you know, in the sort of one, two, three month part of the curve several times. And of course in 2008 in the U.S. Treasury bill market, yields were negative as well. This is all about capital preservation for investors.

QUEST: Right. What do you -- I mean, I understand capital preservation. So they'd rather put it in a bond and lose money than leave it in equities and lose lots of money.

KNIGHT: Potentially yes, or perhaps leave it in other government bond markets in Europe where they might lose even more. And of course with worries about the euro itself and whether that exists as a currency amongst some people in the market, then of course what you want to own is not euros, but German government debt for some people.

QUEST: Do you -- we were in this 10 days to save the euro of Olly Wens' (ph) 10 days. What credence and credibility to you give them to be able to do this in the next 10 days?

KNIGHT: I think they've already started down a path which will end to the solution.

QUEST: Which is what?

KNIGHT: The solution is common debt issuance, that is fiscal union, it is -- there are many paths to the solution, but from a markets perspective what you need to do is get buyers back into the peripheral markets of Italy and Spain. And you can do that one of two ways. It's one, you have an artificial public sector buy at the ECB which a lot of people are calling for. We don't think that's going to happen, or at least not buy itself.

Or you enhance the credit. And the involves a system of cross guarantees, issuing debt together where it is jointly or severally guaranteed by the member states.

QUEST: That is a fine solution. But Merkel doesn't like it. The Bundesbank doesn't like it for one simple reason, because unless you get the fiscal union side. Unless you get the treaty changes, unless you get good housekeeping, everybody loses their AAA.

KNIGHT: That's right. But I think what we're looking at now when Mrs. Merkel says no to euro bonds, it is interesting that she's not just saying no, no way, never as used to in the past, she's saying not now. And you often hear out of German Finance Ministry officials that it's all about sequencing. It's the wrong order.

QUEST: That's what (inaudible) said today. It's all about the sequence of events.

KNIGHT: Exactly.

So, you need to get the conditionality in first before you do euro bonds. And that's the way they want to look at it.

QUEST: Were you as shocked as many people were when you heard Mervin King (ph), he talked about the extremely serious and grave crisis. Banks need to be prepared. And they're all putting in place a contingency plan?

KNIGHT: I must say I did only hear that quite a bit after you said that. I thought it was perhaps honest. But it would be surprising that it they wouldn't be putting in a contingency plan. There are conversations going off on -- in what financial institutions around the world and sort of what if, even if you're applying a very low probability to a euro break-up, obviously that would be a disastrous outcome, so...

QUEST: OK. But there is a difference, isn't there -- I'm just going to ask about this from an actual post online. There is a difference, isn't there, between EuroZone breakup and euro collapse. The euro as a currency ain't going anywhere. Or do you disagree?

KNIGHT: Well, no, I kind of agree. I mean, it depends very much on what happened. I mean, in 1992 when Stirling left the RN (ph) what I think caused it in those last few weeks. And I was in a bank that was seeing a lot of foreign exchange (inaudible) at the time was not so much the hedge fund activity. George Soros very famously made a lot of money off of this, but the corporate hedging of Stirling cash flows.

If we get to this point where enough people believe there's an existential moment for the euro then you have corporate both domestic and international in the euro area hedging their income streams selling euros to buy the (inaudible) cost of base.

So I can see that happening. That kind of event would cause a very, very sharp fall in the euro itself.

What probability I'd put on that? I don't know. But I think you're right there are various different forms of euro breakup. You could end up with a euro that is owned only by the core countries. You know, in which case that would be a strong currency, yeah.

QUEST: Many thanks indeed. We'll talk more about this again in the days ahead.

Now today many of you would have opened on the first door on your advent calendars. As you know here on Quest Means Business we're on day two of our own euro countdown. It isn't til Christmas, it's to a deadline, that December 9 that was set by the European commissioner for economic affairs.

(BEGIN VIDEO CLIP)

OLLI REHN, EUROPEAN COMMISSIONER FOR ECONOMIC AFFAIRS: We are now entering the critical period of 10 days to complete and conclude the crisis which all the European Union.

(END VIDEO CLIP)

QUEST: So, 10 days to serve the euro and the European Union. Ollie Rehn's words, not ours. So we have our advent calendar. There is day two. There is day two with the chocolate all ready. But we have another way of looking at things and it is this, our very own 10 days to save the EuroZone.

Now a reminder of what happened, of course. November 30 that was where we had a liquidity boost from the central banks. But now let's look for today's December 1. Two events took place today.

Well, you haven't paid the money for the taling (ph), the first fiscal union. We've got Sarkozy saying he agrees with Merkel. And Merkel is due to speak about her policy for next week's European summit. So this two, they are getting closer together. And they say they agree on everything.

The second big event in our 10 days today on December 1 -- there we are. When you pay your money you get your choice. Fiscal compact. Mario Draghi saying it's the sequencing of events that's important.

So two events today on its day 9 of our 10 days to save the euro.

When we come back in just a moment, there are two people types in this world: those who use it and those who lose it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I don't work in an office anymore. When I did work in an office I lost it.

UNIDENTIFIED MALE: Actually, I haven't used it in two years.

UNIDENTIFIED FEMALE: I use it.

(END VIDEO CLIP)

QUEST: After the break, what hasn't he used or lost in two years? You'll be surprised at the results.

(COMMERCIAL BREAK)

QUEST: Now some news I need to bring you. The al Qaeda leader Ayman al Zawahiri says that the group has been responsible for the kidnapping of a U.S. citizen in Pakistan. He's 70 years old. And he's a development expert. Warren Weinstein was abducted in August from his home in Lahore. In August.

Weinstein is a former USAID worker. Has them when details become available we will of course bring them to you. But that kidnapping had taken place back in August.

The year moves on. It is December 1. And so we flip the calendar to the last month. 2011 is truly drawing to a close.

You haven't got long to use up your vacation time. An Expedia survey conducted across 20 countries shows that on average most of us get 24 days of paid holiday each year. And not all of it is used. On average, we will not use 4 days will go to waste. Four whole days.

The amount of time you get off there is depending on where you live. For instance, Germany and Brazil get a generous 30 days a year on average. The U.S. gets half of that. And if you live in South Korea, it's a paltry 10 days.

So we wanted to know if you make the most of what you get. We went to the streets of New York. And the question became use it or lose it and how much is left?

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I have 14 days that I have not used out of 21 days for my vacation, because it's been very busy.

UNIDENTIFIED MALE: I like what I do. I want to keep moving up through the company I'm at. So if I take a lot of vacation days I can't be in there consistently and doing what I'm doing to make myself better at my job.

UNIDENTIFIED MALE: My sister-in-law is a lawyer. And unless she gets four weeks of holiday a year, she's told pretty much, or she gets the idea that she takes more than about two weeks that's pretty much frowned on. And she can't -- you know, she can't bill her hours if she takes all four weeks.

(END VIDEO CLIP)

QUEST: Send me your views @RichardQuest is where you can do it. Do you take all of your annual vacation?

The president of Expedia Worldwide, Scott Durchslag, is a man who knows his holidays. He told me when it comes to vacations Asia and the U.S. draw the short straw.

(BEGIN VIDEOTAPE)

SCOTT DURCHSLAG, EXPEDIA PRESIDENT: It's about twice as much vacation time in Europe as in the U.S. And the Europeans tend to take every one of those days while the U.S. tends to leave a couple on the table. And if you're in Asia you really get a raw deal, because you get about 7 days of vacation and you don't tend to take all of it. And even when you do go, you tend to stay connected for most of it.

QUEST: For you, what was the outstanding point of the report?

DURCHSLAG: I think it was that there's a, you know, a cultural divide here where Americans kind of live to work and Europeans work to live. And you know I think our observation is that the ideal is to be able to get a good work/life balance to maximize productivity, because in these difficult economic times creativity, innovation, productivity they all go together. And there's a certain value to having that break to being able to rejuvenate.

QUEST: The losing it is the what I'm getting to the end of this year with -- I may want to tell you how many days still left on the table under the use or lose system. It always seems very unfair you can't carry the lot over.

DURCHSLAG: Yeah. I mean, I think there's another way to look at it, though, Richard which is that if they didn't require you to use it you wouldn't. You'd hoard it. You're a vacation hoarder I can tell. And the problem with that is, you know, there's a value to making employees take it, because that's -- that's where you get the productivity benefits in terms of people rejuvenating it.

And so it's a two-edged sword right?

QUEST: We'll come back to the survey in just one second. I do want to ask you on why you're economic grounds, EuroZone in deep trouble, U.S. is still very sluggish, are you seeing in the numbers and the sort of things people are booking this malaise of the economy being reflected?

DURCHSLAG: No, we're not seeing it in the numbers. People are still traveling. But the way they're traveling is different. So they are seeking value in new and different ways. And as a result we're looking at trying to deliver choices that make that possible. So we're offering different types of sales, different types of daily deals or flash sales to be able to take advantage of people looking for that value or changing their booking behaviors.

And in particular this time of year is the single best week of the entire year to book travel for the next year, because it's that period of time between Thanksgiving and Christmas when the models, basically give the best deals. And we hope people will take advantage of that window to use that vacation rather than lose it.

(END VIDEOTAPE)

QUEST: I wouldn't like to tell you, as I say, how many vacation days I am about to lose -- put it this way, I could go away now and not come back until the New Year and I'd be OK.

@RichardQuest, let me know how many days you've got use or lose.

And that is Quest Means Business for tonight. I'm Richard Quest in London. Where you're up to in the hours ahead, I hope it's profitable. Marketplace Europe, that's next.

QUEST: And welcome to Marketplace Europe. I'm Richard Quest this week reporting from the tiny European country Lichtenstein. Barely a 160 square kilometers, it's just about the size of Brussels. But what a punch this place packs. Famous for its banks and its secrecy laws, Lichtenstein has made great changes in recent years.

And shortly, we'll be going to Vaduz Castle to talk to his serene heinous Prince Alois about the reforms he's introduce and his plans to shift the economy, make it more diverse. We'll also, of course, be looking at the industry that does exist in Lichtenstein.

This is the center of Lichtenstein, the place where the traditional parliament was located. It is from here that all distances are measured throughout the country. It's the perfect spot to begin our look at the Lichtenstein economy.

We start, of course, with financial services, arguably the most famous and controversy part of the business here. Take a walk down main street and you have to look carefully, but they are there, just about everywhere, the bank.

And what better way to see the 17 banks of little Lichtenstein than on this little train.

World of Lichtenstein banks, this one is the princely bank, LGT, owned by the royal family.

These institutions were forced to become more transparent under pressure from the G20. Since 2008, Lichtenstein signed 20 tax agreements with countries including Germany, the UK, and the United States. The banks may be able to compete, as for the hundreds of trust companies which specialize in managing the private affairs of the wealthy, they may have a much bleaker future.

This is the courtyard at Vaduz Castle, the home of the heir apparent, the Serene Highness Prince Alois. With so many reforms taking place in the banking sector, His Highness warns that for the economy here there will be major changes ahead.

One thing I know, if I use the phrase tax haven, you will immediately tell me no Mr. Quest we're not a tax haven, correct?

PRINCE ALOIS VON LICHTENSTEIN, LICHTENSTEIN: Correct. I will say today we are rather a safe haven than a tax haven. In the past, Lichtenstein was known as a tax haven due to very restricted information exchange on tax methods. However that has changed in the last three years. We changed our policy on that. And we still have strong bank -- banking secrecy, but on not tax methods any more.

QUEST: You had to be forced by the OECD, the Germans, the EU, you had to be dragooned into changing those rules.

VON LICHTENSTEIN: Well, our philosophy was similar like Switzerland like other countries that all have strong banking secrecy on tax methods, a different one. And there was obviously a force by the outside to change this policy, however, we saw that already coming and as a result of that development were one of the first ones to complete the change of policy.

QUEST: Now can you compete with the other offshore banking sectors?

VON LICHTENSTEIN: The other sort of offshore place is they're also moving. I think everyone has to change, particularly on tax methods, but also in other areas.

QUEST: You don't see any potential threat to the concept of Lichtenstein as a small country nestled between basically Switzerland and two EU members?

VON LICHTENSEIN: The manufacturing side can go on more or less is (inaudible) to us. The financial sector side than we will have major changes in the next four or five years, they've started already to happen.

QUEST: Major changes?

VON LICHTENSTEIN: Certain companies, and you have others, particularly in the trust sector, that we give up, because for them it won't be as easy, as interesting engaged in this anymore.

QUEST: So what is the challenge to increase industrial production, or industrial business here?

VON LICHTENSTEIN: The challenge is to continue to offer them interesting and interactive business environment. I think for that, we need to offer -- to open a little bit more the amount of top people we allow to come to Lichtenstein. The key thing is to get them to Lichtenstein. And in the past we were successful. I'm sure in the future we are as well.

QUEST: His Serene Highness, the heir apparent Prince Alois.

After this break, we'll take a look at the industry that is in Lichtenstein through the eyes of the engineering group Hilti, the country's largest employer.

(COMMERCIAL BREAK)

QUEST: Welcome back to Marketplace Europe in Lichtenstein.

We've already heard from His Serene Highness Prince Alois about his vision for this country being more than chocolate box beauty and the business of banking. For a real economy there needs to be industry too.

And there is. Take a look down there, just by the river on the border with Switzerland, little industry of Lichtenstein.

A free economy with low taxation has meant Lichtenstein's finances staid on track. While many of Europe's economies ran out of steam, this one continued to power ahead. It's largely due to its liberal tax laws, which have enticed companies from all over the world to set up shop here.

The asphalt plant is one of the few really big factories here. For the most part, industry is made up of small companies, machine tool plants, and workshops. Even so, when taken together, industry still makes up 36 percent of the country's economy.

Bo Risberg is the chief executive of Hilti.

BO RISBERG, CEO, HILTI: So we've been here since 1941, 70 years now. So we were founded here.

QUEST: The company supplies technology to the construction industry and has over 20,000 employees worldwide. As the largest private employer in Lichtenstein Bo Risberg has a vested interest in the policy of opening up the country.

RISBERG: The industrial side is as you say it's in mechanical technologies, it's in dental technologies, it's also food and other words in high tech. It's mainly those areas where you have a large degree of innovation basically that's where we can overcome some of the cost advantage we have in this part of the world to be very innovative.

QUEST: What needs to happen here, do you think, to promote greater industrial activity, or greater industrial investment? What would you like to see them do here?

RISBERG: I think the main thing is here to keep the innovation power in this part of the world, which means on the one hand it means to have access to great educated people from the University. Also a good cooperation with the universities, (inaudible) with the universities. We still have too few engineers in Europe. And -- but those engineers we have are very innovative. And we have to have focus on certain issues where we can provide them and become global leaders.

QUEST: Historically Lichtenstein has had to reinvent itself many times over the years. Now it's proposing to bolster its manufacturing and innovation sector at a time which is probably the most difficult in Europe's history.

The industry of Lichtenstein. Time to leave the tiny country, cross the covered wooden bridge and head back into Switzerland.

And that's Marketplace Europe for this week. I'm Richard Quest. Keep me informed with what's happening in your business Quest@cnn.com otherwise whatever market you're in, I hope it's profitable. I'll see you next week.

END