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CONNECT THE WORLD

U.S. President Prepares to Deliver State of the Union Address; Arab League Looks to UN to Up Pressure on Syria; "Hugo" Leads Oscar Charge; Parting Shots of Solar Radiation Storm

Aired January 24, 2012 - 16:00   ET

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


BECKY ANDERSON, HOST, CONNECT YOUR WORLD: The U.S. president prepares to officially kick off the 2012 election season with his State of the Union address. Tonight we ask: can Obama convince voters to give him a second term?

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ANDERSON: Hi, from London, I'm Becky Anderson. Also tonight, the latest on a beleaguered Arab League mission as the death toll in Syria (inaudible) higher. Then the special one may be on his way out. Why Jose Mourinho may walk away from Real Madrid to the end of the season.

First up tonight, Barack Obama getting ready to face millions of Americans to make his case for a second term in the White House. The U.S. president is putting the finishing touches on his annual State of the Union address. Now it's his best chance in months to convince his audience this big (inaudible) policies that are working, and that he can deliver even better results over the next four years.

Now his speech is expected to focus on the economy, contrasting his efforts to help the middle class with Republican plans that he says would benefit the rich. Well, there is a lot riding on this speech tonight. It's the president's last State of the Union before the November election. CNN's White House correspondent, Dan Lothian, joins me now.

So, Dan is he ready?

DAN LOTHIAN, CNN REPORTER: Well, you know, the president was pretty much behind closed doors much of the day, working on that speech. But a short time ago, cameras, a small group of reporters and cameras were ushered to an area just outside the Oval Office to capture the president taking a walk along the colonnade.

And the president was asked whether or not the speech was done. He said that there were still some tweaks that were being made to the speech. He was also asked about whether he liked it, and he gave some positive responses to how he felt about his position with that address.

But, certainly, there is a lot of criticism about the State of the Union address coming from Republicans up on Capitol Hill, who see this as more of the same, according to some of them.

They're concerned that the president is essentially putting so much of the focus and blame on wealthy Americans, and that is what the president will be pushing tonight, this theme that middle class Americans need a lot of help, that the country should be set up, the economy should be set up in a way that middle class Americans can also benefit.

ANDERSON: Dan, (inaudible) is watching tonight, this is effectively the beginning of the election season. We've seen these primaries and these caucuses for the Republicans. But our viewers will note President Obama, as the President of the United States of America, so what should they be watching out for tonight?

LOTHIAN: Well, I think, you know, one of the things that we always like to watch for is the kind of response that the president gets. And, I mean, already we've heard from Republicans that much of what the president will propose, that will require congressional approval, is dead on arrival.

So will there be this kind of, you know, sitting on their hands, the close-up shots will be so telling of the kind of reaction that the president will get from his proposals.

But another thing you want to be watching is what happens after the speech, and the president will be hitting the road for the next three days, visiting five different states. But again, even that is controversial, because Republicans are saying, take a look at where the president's going. He's going to Colorado. He's going to Michigan, Nevada, Arizona, Iowa.

These are states that are potential battleground states, that could be critical to the president's reelection campaign. And so Republicans are saying, look, while the president is saying he's talking about policies that will help the nation, what he's really doing is trying to win himself a second term.

ANDERSON: And why not? So right. So, Dan, thank you for that. Dan Lothian on the story out of Washington for you this evening. CNN, of course, will have live coverage of President Obama's State of the Union address. You can see that right here, beginning 8:00 pm Eastern. That is 9:00 Wednesday morning in Hong Kong, 1:00 am here in London.

About just less than five hours from now, well, President Obama won't waste any time trying to build the momentum from that speech.

He kicks off a three-day tour, as Dan suggested, the next morning, making a policy sales pitch, for what it's worth, to five states that could be pivotal in the fall election. Republicans fighting for the chance to challenge President Obama didn't need to hear his speech before condemning it.

The two leading candidates, Mitt Romney and Newt Gingrich are stumping through Florida today in sight of the next crucial Republican primary. Now both are portraying President Obama as a big government tax-and-spend liberal who (inaudible) economic policies rely on social welfare.

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FORMER REP. NEWT GINGRICH, R-GA., PRESIDENTIAL CANDIDATE: I think it's fair to say that I'm in favor of jobs and paychecks. So I would to run a campaign this fall in which we have a job-and-paycheck candidate versus a dependency-and-food-stamp candidate.

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GINGRICH: In fact, as President Obama has been the best food stamp president in American history.

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FORMER GOV. MITT ROMNEY, R-MASS., PRESIDENTIAL CANDIDATE: Today President Obama has amassed an actual record of debt, decline and disappointment. This president's agenda made these troubled times last longer.

He and his allies made it harder for the economy to recover. Instead of solving the housing crisis and getting Americans back to work, President Obama has been building a European-style welfare state.

(END VIDEO CLIP)

ANDERSON: Well, for a time, of course, Romney was the Republican to beat. But a new national poll shows Gingrich has closed the gap, and the two are now statistically tied. Now Gallup said the Republicans across the United States shows 29 percent support Romney, 28 percent Gingrich. Now that poll was taken before Mitt Romney satisfied demands that he release his tax returns. He did do that today.

He, after the issue became a thorn on the campaign trail, the returns then show the former venture capitalist and his wife made $42.7 million over the past two years. Effective tax rate was just under 14 -- one-four percent. Normally that level of income would require a 35 percent tax rate.

But Romney's income was almost entirely from capital gains and dividends from investments which are taxed at a lower rate. The question now, of course, is will this help or hurt Romney's with voters as he campaigns in Florida and beyond?

Let's bring in one of our senior political analysts in Washington, Ronald Brownstein, who's the editorial director of the National Journal of Regular Faith (ph) on CNN. Let's do Romney first. Just how much all these -- this tax debacle damage him, do you think?

RONALD BROWNSTEIN, "THE NATIONAL JOURNAL": I think it's hurt him more as a general election matter than as a primary matter, but it does reinforce what has already been, Becky, an important divide in this Republican race.

Romney has run best right from the beginning, better among more upscale, college educated managerial Republicans. The more blue collar populace part of the party, lower income working class Republicans have always been resistant to him, and I think this probably adds another barrier between him and those voters, both the size of the income and the fact that he is benefiting from such a low tax rate.

ANDERSON: Well, certainly the headline doesn't look particularly good. Gingrich, of course, has come into this process relatively late. Romney certainly the frontrunner until a couple of weeks ago. It does certainly feel as though Newt Gingrich has got the momentum now. Do you think, at this point, he can sustain that?

BROWNSTEIN: Well, I think Romney is still the overall favorite, but you're right. I mean, what had been working for Romney through the early stages of this race was very simple. It was a strategy of divide and conquer. In that, he was unifying the center of the party behind him more than any single rival was unifying the Right of the party against him.

The Right has always been suspicious of him, but it was fragmenting between Newt Gingrich, Rick Santorum, Rick Perry, Michele Bachmann earlier, Herman Cain. What we saw in South Carolina was the beginning of that changing.

If you look at the groups that are kind of the center of what I could call the populace wing of the Republican Party, evangelical Christians, strong supporters of the Tea Parties, those who consider themselves very conservative voters without a college education, and lower middle income voters, all of those voters, Newt Gingrich won at least 40 percent of them in South Carolina, more than anybody had won in the earlier states.

So the risk for Romney is that the Right consolidates behind one alternative to him. Now Gingrich has also some financial and organizational challenges, but he now has a constituency and a coalition that is beginning to see him as their champion.

ANDERSON: Ronald, then what sort of effect will this Republican race have on Obama tonight as he prepares himself for this State of the Union address? And what can we expect to hear from him?

BROWNSTEIN: Well, I think Obama walks into the chamber tonight in a stronger position, frankly, than he was in a few weeks ago. I mean, he's had a number of things kind of move slightly in his direction. He's not in a commanding position, say, like Ronald Reagan in 1984, but we've had better economic news.

We had 200,000 jobs in the last report. We've had an increase in the percentage of people who say they expect the economy to improve over the next year. And I think dramatically, Becky, over the last month we have seen a decline in the favorability polling for both Mitt Romney and Newt Gingrich as they have become better known.

I mean, part of the challenge the Republicans have is that there is a demand from their base for a very vitriolic condemnation of the president. They are feeling obviously very alienated from the direction that he's set. But that kind of clangs in the ears of a lot of swing voters.

What I think you'll see from the president tonight is an attempt to reassert the lines of argument that he laid down in Kansas, in his Osawatomie, Kansas, speech, going to a place that Theodore Roosevelt did in 1910, about economic fairness and an economy that works for everybody is the only way that we're going to kind of get out of this ditch.

Now, obviously, a subtext of that, if they get Mitt Romney, is that he is someone who is living a very different life than you are and is benefiting from some of the complexities of the tax code that I think the president will probably talk about.

ANDERSON: Fascinating. All right. Well, we await that speech. Ronald Brownstein, one of our senior political analysts in Washington, from (inaudible). We thank you very much indeed for joining us, our top story tonight, just hours to go until U.S. president Barack Obama sets out why he is the man to lead America for the next four years.

See that here on CNN. You're watching CONNECT THE WORLD live from London. To come this hour, the Arab League's monitoring mission in Syria was see (inaudible) observers (inaudible). (Inaudible) tell you why up next.

(Inaudible) new video shows one couple's terrifying experience as they attempt to escape from the sinking Costa Concordia. And in a snowy ski resort in Switzerland, business leaders are getting ready still with the economic big chill (inaudible) blizzard of bad news is just blown in. That ahead. Up next.

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ANDERSON: You're watching CONNECT THE WORLD here on CNN. I'm Becky Anderson for you. The world's news leader, welcome back. Syria has agreed to allow the Arab League's monitoring mission to continue for another month. Some observers are heading home.

The six-nation Gulf Cooperation Council says it's pulling out its representatives after becoming frustrated with Syria's lack of commitment to stopping the violence. This on a day the opposition activists say more than 60 people were killed. Syria's foreign minister has blamed the uprising on a conspiracy, one which he claims some Arab states are now backing.

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WALID MOALLEM, SYRIAN FOREIGN MINISTER (through translator): The Syrian leadership stance is as strong and decisive towards what is directed against Syria internally and externally. There is no country in the world that has the world blocking it and using Arab Hellenists (ph) to fulfill this conspiracy.

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ANDERSON: Well, CNN's Nic Robertson has just returned from Syria, and I'll be getting his take on the intent to end this bloodshed about 15 minutes from now. Do stay with us for that look over now at some of the other stories connecting our world tonight.

And at least nine people dead and more than 70 wounded after five bombs struck Baghdad. The bloodshed has raised fears that Iraq security forces are unable to keep the peace now that American forces have left. Violence in Iraq has killed almost 200 people since the start of the year.

For the first time in decades, Egyptians will wake up in a country that's no longer under a total state of emergency. Egypt's military rulers say emergency law will be partially lifted on Wednesday, but they reserve the right to use it in cases of what they call, quote, "thuggery." The announcement was made a day before the anniversary of the uprising that brought down former president Hosni Mubarak.

Australia says it will follow the E.U.'s lead and cut off oil in ports from Iran. Speaking after a meeting in their counterpart, London, the Australian foreign secretary, Kevin Rudd, said that his country was deeply concerned over the Islamic Republic's nuclear (ph) ambitions.

Britain's foreign secretary said the two countries would now work together to try to force Iran to change course.

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WILLIAM HAGUE, BRITISH FOREIGN SECRETARY: Yesterday the European Union agreed to a phased ban on the import of Iranian oil, an action against Iran's central bank.

This is a significant increase, a major increase in the peaceful, legitimate pressure on the Iranian government to return to negotiations over its nuclear program. Until it does so, the pressure will only increase and Britain and Australia share the same sense of resolve about that.

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KEVIN RUDD, AUSTRALIAN FOREIGN MINISTER: As far as E.U. sanctions against Iran are concerned, those concerning oil and other measures, I would confirm today that the government of Australia formally and fully supports the range of these sanctions which have been announced in Brussels. We believe this is the right course of action.

We believe that for the simple reason that the Iranian nuclear weapons program is fundamentally destabilizing, not just for the wider Middle East and the Gulf states, but also for the wider world.

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ANDERSON: Well, rescuers searching the wreck of the Costa Concordia have found another body, bringing the number of dead to at least 16. Meanwhile, new video emerged of one honeymooning couple's desperate attempt to escape the sinking ship.

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UNIDENTIFIED MALE: (Inaudible).

UNIDENTIFIED MALE: (Inaudible).

UNIDENTIFIED FEMALE: (Inaudible).

DAVID SABA, COSTA CONCORDIA SURVIVOR: It was done (ph) very violently.

DENISE SABA, COSTA CONCORDIA SURVIVOR: It was like a freefall onto the water.

DAVID SABA: And we were -- we thought we were going to roll over and get in to the water upside down.

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ANDERSON: Well, more than 4,000 people were forced to evacuate the cruise liner after it struck a rock near the Italian island of Giglio on January the 13th. (Inaudible) in the U.S. state of Alabama after a deadly storm tore through there.

At least two people were killed when a tornado hit Monday. More than 200 homes were destroyed and an elementary school was so severely damaged that it will have to be torn down. (Inaudible) the same area was hit by a tornado outbreak last year that killed nearly 250 people across the whole state.

Well, sports is up next on CONNECT THE WORLD. Could the coach known as "The Special One" be on his way out at Real Madrid? Alex Thomas gives us the lowdown on that. Up next. And the nominees are in, but some fans are outraged. The Oscar (inaudible) many were hoping to see and why it was shut out.

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ANDERSON: This is CONNECT THE WORLD at 22 minutes past 9:00 in London. I'm Becky Anderson. Welcome back.

Now trouble brewing between one of the biggest brands in world football, Real Madrid and their manager, Jose Mourinho, apparently Real are currently five points clear of that bitter rival (inaudible) Barcelona in the Spanish league. That's a fact.

But it's being reported that Mourinho will quit as coach at the end of the season following a training ground spat between him and some of his senior players. (Inaudible) world sports Alex Thomas for more on this.

(Inaudible) try and sort this out for us. Is he worn out with Real Madrid? Are they worn out with him?

ALEX THOMAS, CNN REPORTER: The trouble for Jose Mourinho -- and he's only been there for a season and a half -- let's face it -- but has a history of moving on from club to club, and being incredibly successful wherever he is, hence the fact they're calling himself a special one when he first got to Chelsea. Hasn't been accursed (ph); he's rather lived up to the boast.

But Real Madrid is more than just a football club in Spain. It is a massively historic institution with huge connections politically, some of the highest echelons of Spanish society. Mourinho likes to go into a club and be the man in charge, call all the shots, and it's not quite happened for him in Madrid, although they are top of Spain's league. But against bitter rivals Barcelona, they've come up second best. And --

ANDERSON: It's -- sorry. If he were to go -- I'm putting you on the spot here -- what do you think he'd do?

THOMAS: Well, he's made no secret of the fact he wants to go back to England, certainly, and there are clubs that aren't big enough to take Mourinho. But Pedro Pinzon (ph) has written a blog here at CNN.com/worldsport. He's made the bold prediction he could go to Manchester City if Manchini (ph) doesn't take the title to Northwest England.

But the training spat was interesting. I won't -- we don't have time to go into all the details, but needless to say this reports Sergio Ramos (ph) and Ica Casias (ph), the goal keeper, basically called him out and had a bit of a verbal suing (ph) and throwing on the training ground the night after losing to Barcelona in the first leg of their Spanish (inaudible).

Hopefully we'll have time, just actually ahead for Mourinho, he was speaking to the head of the second leg of that Spanish (inaudible), obviously dismissed all the reports and say, hey, just look at the success on the pitch this season.

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JOSE MOURINHO, REAL MADRIC COACH (through translator): When we arrived here, the club had the tradition of being eliminated from the cup by inferior division teams. We won the cup, and we're in the quarter finals, playing against the Spanish champions and the European champions.

When we arrived here, Real Madrid were not even top seeds in the Champions League, and at this moment, we have a Champions League record of six games and six victories. We're top seeds but the points we have will remain so for a few more years. And we are leaders in La Legue (ph). I don't think we have so many problems, and I don't think we are doing things as badly as it seems.

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THOMAS: This is actually one of the things that one of the players said to him, was (inaudible) "You were never a top player, Jose. You wouldn't understand." Of course, whenever that challenge is laid down, he just has to point to his record as a coach, which is second to none.

ANDERSON: He wasn't a great player, but he has been a great coach.

THOMAS: Yes.

ANDERSON: (Inaudible) or Chelsea possibly.

THOMAS: A return to Chelsea was the biggest shock, but he does love England. He wants to come back.

ANDERSON: Australian Open, there's been a -- what? Some news out of there, I know.

THOMAS: Yes, well, I mean Caroline Wozniacki has lost again. This is the woman that's finished world number one the last two seasons running, but has yet to win a grand slam. And she's getting awful stick (ph) for it, a bit sexist I think, because look at her men's goal looped on all the world number one, and he's never won a major title, either.

But she's crashed out of the quarter finals. She (inaudible) no mean player, Kim Clijsters, the Belgian, defending champion at the Australian Open, but because Caroline didn't reach the semis, it means she'll lose her world number one ranking now. But says, don't worry, I'll get it back towards the end of the season. That was the big shock, her losing to Clijsters.

Elsewhere, it's all gone to the seeds, especially in the men's singles, where no surprise that Federer and Nadal through to the semis again. They'll place each other. That'll be mouth-watering. But so are the quarter finals in both the men's and women's singles. We can look forward to overnight our time here in the U.K., Becky.

ANDERSON: A big weekend for tennis. Keep your eyes on your screens. World sports in an hour's time with Alex tonight. Don't miss that here on CNN. All right. Still to come on CONNECT THE WORLD, thank you, Alex.

As six countries pull out of the Arab League monitoring mission in Syria, I'm going to ask Nic Robertson, who's just returned from the country, why the world seems powerless to stop the violence. (Inaudible) ahead at this hour. (Inaudible) may be looking (inaudible). (Inaudible) but the economic (inaudible) just not a pretty picture.

The IMF flashes it global growth forecast. More on that coming up. And (inaudible) new best friend, (Inaudible) nasty (inaudible) in the pound (ph) has become top dog in Tinseltown. Uggie is with us live later this hour.

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ANDERSON: And it's just before half past 9:00 in London. Welcome back. You're watching CONNECT THE WORLD here from London. I'm Becky Anderson. (Inaudible) world news headlines at this point.

And Syria has agreed to allow the Arab League (inaudible) to remain in the country for another month. It comes on a day that opposition activists say at least 50 people were killed by security forces there.

At least nine people were killed and 72 wounded in bombings in Baghdad on Tuesday. The attacks targeted mainly Shiite neighborhoods, including two bombings in Sadr City. Nearly 200 people have died in attacks in Iraq since the beginning of the year.

Crews have discovered a 16th body in the wreckage of the Costa Concordia cruise ship. The victim was found on bridge three of the ship. Italian authorities say 16 people are still missing.

And US president Barack Obama will make -- or soon make his case for a second term in office. He delivers his annual State of the Union address in just a few hours from now. It's expected to highlight plans to revive the economy and reduce income inequality.

Those are your headlines this hour.

As the killing continues in Syria, some observers are on their way home even as Damascus agrees to extend the mission. Now, a -- key block of Gulf Arab nations are saying that they will withdraw their representatives over Syria's lack of commitment to ending the bloodshed.

With its mission faltering, then, and its plan to stop the violence in tatters, the Arab League is now looking to the UN to ratchet up the pressure by passing its own resolution.

Speaking earlier today, the Syrian foreign minister said it was all part of an Arab plot to, quote, "internationalize the situation."

(BEGIN VIDEO CLIP)

WALID MOALLEM, SYRIAN FOREIGN MINISTER (through translator): This is an acknowledgment by them that these decisions -- the decision of the Arab League is not actually qualified to play this role, and so they wanted to go to the UN Security Council.

(END VIDEO CLIP)

ANDERSON: All right. The foreign minister, there, also highlighting a little later the strength of Syria's relationship with Russia, a country which has so far led the opposition to taking any action at the Security Council.

Let's take you to Syria and to the capital there, Damascus, where Arwa Damon joins us on the phone. Arwa, you've heard what the Syrian foreign minister has said today. You've heard the talk from the GCC members who are suggesting, simply, that they're not prepared to back this Arab League mission any further. What are you hearing on the ground at this point?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT (via telephone): Well, activists have also been highly critical of the Arab League mission itself. This morning, we headed out to a central Damascus neighborhood because we had been told that a funeral was going to be taking place.

But before the activists could even get that underway, the entire area was swarmed by security forces. We ended up in the home of one of the activists who managed to get away and basically ushered us in.

And we watched that press conference that the foreign minister gave, with them, and they were also expressing their disappointment, their despair, their disgust in what he was saying, because they feel as if the Syrian government is living an entirely alternate reality.

But the activists don't believe that the Arab League is going to have the solution, either. You heard from the foreign minister there just how incensed Syrian government is when it comes to the Arab League initiative itself.

You were talking about Russia, which is very critical, because many people have been telling us in many various conversations that they believe Russia is key in shifting the dynamics here should it choose to do so.

Should Syria lose Russia's backing at the United Nations, that would possibly deal the government a blow that could alter the dynamics on the ground here. The Syrian government gained a lot of its strength knowing that it has Russia, at least up until now, as an ally, and that is why many say that the government continues to act as if it is still in a position of power, Becky.

ANDERSON: Fascinating. All right, Arwa, for the time being, we thank you for that. Arwa Damon is in Damascus.

Nic Robertson joins me, now, in the studio, recently back from a trip to Syria. Nic, you just heard what Arwa has said, and you heard the foreign minister alluding to Syria's relationship, there, with Russia. Just how important a role does Russia play at this point?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Russia really is essentially the gun to Bashar al-Assad's head at the moment. He -- Russia -- the Russians were the ones who told him to accept the Arab League monitoring mission back in December, to accept the proposal that he should pull back his forces from the streets.

And we're beginning to hear from Russian officials that there is discomfort with the way Assad is leading the country, might be leading it towards civil war.

ANDERSON: How do you know that?

ROBERTSON: There have been some public statements by Russian officials, and we're also hearing from Russian diplomats, the ambassador to the United Nations talking about whatever solution comes about in Syria, it needs to be a cease fire from both sides.

The Russians are not going to support something that gives the Arab League and perhaps the West, the United States, the Europeans, some extra foothold in Syria.

So, what I've been hearing behind the scenes is questions being asked by Russian diplomats that sort of say, OK, if we get Assad side to stop shooting, who is going to get the opposition to stop shooting? So, it does seem that they are thinking about how to stop the fighting and what next.

But this is an important country for them, business ties, seaport on the Mediterranean for their navy.

ANDERSON: You make a very good point. So, how does all this play out into what is going to be a pretty significant period as the Arab League's plan is taken to the UN and put before the Security Council at this point?

ROBERTSON: And the UN's sort of resolution that would be proposed around that, will the language in it satisfy the Russians? The early indications are that what the UN will say is broadly speaking, let's support the Arab League's initiative to stop the violence, pull back the troops, but support its political path, the UN saying it has to be a sort of a Syrian-led solution.

ANDERSON: Given your experience on the ground, and you were in Syria for quite some time. It's certainly by no means your first trip. But you got some really good access, the likes of which other journalists weren't getting when you were on the ground on this last trip.

So, you spoke to a lot of people. What is your sense of the possible success of a plan that is picked by the Russians that says cease fire on both sides?

ROBERTSON: The opposition is fractured. There are many different elements to it. We're already seeing sort of in fighting within the opposition.

There are elements like the Salafists, the sort of radical extremists, that have honed their terror tactics, if you will, in Iraq, crossing the border, going into Syria. You have the Free Syrian Army that sprung up to protect these demonstrations. And you -- so, you have different groups vying for power.

And as far as we see politically on the surface, no country calls the shots over the opposition, so how do you get them to put their weapons down?

I would venture that you can probably persuade some of them, if they see some real guarantees from Assad, but the trust here is eroded almost completely, and where there -- and the will on the street from the grassroots anti-government protesters, will they accept political compromise from the leaders? Who are their leaders? Do they trust their leaders?

It's such a nascent uprising, if you will, that there are many disconnects in it and people exploiting those disconnects.

ANDERSON: Nine and a half, ten months in the making, but as you suggest quite rightly tonight, a nascent uprising all the same. For the time being, Nic, we thank you very much, indeed, for joining us. Nic Robertson, our Senior International Correspondent joining us on the show tonight.

Well, snow falling on the eve of the World Economic Forum in Davos, and so, too, is the global economic outlook. Europe could be about to pull the rest of the world into a new recession. That is a dire warning from the IMF. Going to discuss that up next.

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ANDERSON: The world's economy is, quote, "deeply into the danger zone." Stark words from the International Monetary Fund earlier today. The IMF now predicting 3.3 percent global growth in 2012. That is down from 4 percent.

The IMF's research director said what begins in Europe could have dire consequences for the rest of the world.

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OLIVIER BLANCHARD, ECONOMIC COUNSELOR, IMF: The world recovery, which was weak in the first place, is in danger of stalling. The epicenter of the danger is Europe, but the rest of the world is increasingly affected.

There's an even greater danger, namely that the European crisis intensifies. In this case, the world could be plunged into another recession. This was the bad news. Let me turn to the good news.

With the right set of measures, the worst can definitely be avoided, and the recovery can be put back on track.

(END VIDEO CLIP)

ANDERSON: Well, apparently, there is some good news out there, but European stock traders didn't see it, markets closing lower today, both in Europe and in the US.

Slow progress over dealing with Greece's mountain of debt not helping. Disagreements remain over the interest rates private investors will be paid on new bonds that they will get from Greece.

Standard and Poor's says the deal on the table in the end will likely be classes as a default and Greece's credit rating, they say, will be downgraded accordingly.

Joining me now from the winter wonderland of Davos in Switzerland is my colleague Richard Quest, revving up for the annual World Economic Forum. As they arrive on the ground, there's some pretty dire news out there. No doubt, Richard, Europe's going to be front and center this week.

How will the IMF's line that Europe could pull the rest of the world into a recession, how's that going to play out, do you think, amongst the great and the good on the hill?

RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: It won't be any surprise to them. They've heard similar from the OECD, from the World Bank. They've heard it time and again. They had IMF managing director Christine Lagarde saying "1930s depression" could be on the cards. So, they know full well the situation facing them.

What they are irritated, to use Klaus Schwab's words, what they are irritated about is the inability of policy makers, of leaders, to actually get it done. And by that, what they mean, deal with Greece, put a firewall around Italy and Spain, and start to sort out the longer-term problems of a fiscal compact for Europe.

ANDERSON: How do you work out what's going on in Greece, though? I mean, you're going to -- I've got to suggest, you're going to have 2,500 great and the good of the business world, politicians, and CEOs at the top of that mountain. Greece has got to be a bone of contention for people. What's your sense, at this point, of what we might hear this week?

QUEST: From here, we will probably hear a lot of talk about the mistakes that have been made, the errors that were taken, the decisions that should have been implemented. Ultimately, though, Greece is going to play out, pardon the phrase, back in Athens.

And even -- look. It doesn't matter, Becky. The warning we got today was as clear as the snow on the chose trees. It doesn't matter what deal, how it's structured, how they call it, it's a default, and S&P are going to call it a default. There could be credit default swaps that will come into play. But Greece's just about manageable. It is still Italy, it is still Spain.

And really, what's annoying some of the people here, particularly from, say, Africa, from Asia, from ASEAN countries, they want to come here, and they want to talk about big issues of growth, development, dealing with poverty. And every year for the last three at least, it's been sclerotic Europe that's kept the agenda going.

ANDERSON: And you can understand their annoyance, given it costs something like $35,000 per person to stay on that mountain for, what is it, three and a half days? I know you're not paying yourself. These people are paying, and it's significant for them.

Just remind us -- just remind us what we can expect from the Davos World Economic Forum meeting over the next three days.

QUEST: Be delighted to, once I've got over the shock of you asking me for that sort of money. The big thing in the next 24 hours, and I suspect you and I will talk about it tomorrow night, Angela Merkel. The German chancellor will be here, she will give the opening address. She's going to have to say something about the role that Germany sees for itself and the next stage forward in the crisis.

If she comes here and wooly talks about how the development of this, that, and the other, it won't wash. Now, I'm expecting a strong speech tomorrow from Mrs. Merkel that will set out where she believes the crisis is going and, crucially, the enhanced role that some people believe Germany will now play.

ANDERSON: Well, let's rate her tomorrow night when we speak, because I imagine we will be speaking, so I'm looking forward to your rating, and I shall have provided one earlier for this show, and we'll be discussing that accordingly. Mr. Quest, at the top of the hill in Davos, we thank you very much, indeed, for joining us.

Do stay with us this week for our Davos coverage. It's going to be a fascinating time with the great and the good, as I say, do meet to discuss where we go next as far as these world economies -- or this world economy is concerned.

You're watching CONNECT THE WORLD here on CNN. When we come back, howling for an Oscar. Meet the pint-sized star taking the lead in Hollywood. Uggie is going to join us. He's up next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ASA BUTTERFIELD AS HUGO CABRET, "HUGO": What does he do?

JUDE LAW AS HUGO'S FATHER, "HUGO": He's a wind-up figure, like a music box. This is the most complicated one I've ever seen. By far. See, this one --

(END VIDEO CLIP)

ANDERSON: Could it be the best film by far and make Academy Award history? The Martin Scorsese epic "Hugo" is leading the Oscar charge after receiving 11 nominations -- on Tuesday. Among them, Best Picture.

And if the fantasy flick wins, it will be the first time a 3D movie has been awarded the coveted gong.

(BEGIN VIDEO CLIP)

BUTTERFIELD AS HUGO: Can we fix him?

LAW AS HUGO'S FATHER: Of course we can.

(END VIDEO CLIP)

ANDERSON: We're going to have to wait until next month to find out, but "Hugo" face some competition this year. CNN's correspondent Kareen Wynter was in Los Angeles for the nominations and has more on this year's front runners.

(BEGIN VIDEOTAPE)

KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT: It was a big morning in Hollywood as the nominations for the 84th annual Academy Awards were announced, and Martin Scorsese's film "Hugo," it actually pulled in the most nominations, 11 including "Best Picture."

And right behind it, that film that everyone's fallen in love with, that silent film, a love letter to Hollywood, "The Artist" pulled in 10 nominations.

Some other best picture categories -- contenders, rather, included "The Help," "The Descendents," as well as Brad Pitt's "Moneyball."

And speaking of Brad Pitt, well, he's going to be going head to head once again with his buddy George Clooney, George Clooney starring in "The Descendents." Just won a big Golden Globe win for his lead actor role in that category, so they'll be duking it out.

And many people believe this is George Clooney's race to win. He's no stranger to the Academy Awards, he won an Oscar in 2005 for his role in "Syriana," so we'll see who takes home the Academy Award.

As for the leading ladies, speaking of close race, it'll be a close race between Glenn Close as well as Michelle Williams. Michelle Williams just won for her portrayal in the film "My Week With Marilyn," she starred as Marilyn Monroe. She'll be going up against Glenn Close in "Albert Nobbs."

But we can't forget about Meryl Streep and "The Iron Lady." She's been getting so much critical acclaim for her portrayal as the former British prime minister Margaret Thatcher in that film. She's really one of the greatest living actresses of our time.

She -- this is her 17th nomination, she's won two Academy Awards before for "Sophie's Choice" as well as "Kramer vs. Kramer." She's going to be a tough one to beat and, again, a clear favorite heading into the Academy Awards which, by the way, air February 26th. It'll be hosted by none other than Billy Crystal.

In Los Angeles, I'm Kareen Wynter.

(END VIDEOTAPE)

ANDERSON: I've got to say, I can't wait. There was one glaring omission from the nominations list, though, at least that's the opinion of fans of the pint-sized star known simply as Uggie. He's about to join me on the show. First, though, let's take a look at how he is created -- and why he has created so much fuss.

(BEGIN VIDEOTAPE)

ANDERSON (voice-over): Hollywood's most glamorous were there, looking their finest. But it was another star on the red carpet that was turning heads at the recent Golden Globes.

WYNTER: Uggie, I love the bow tie. How long did it take you to get ready?

(DOG BARKS)

WYNTER: Wow, that long.

(DOG BARKS)

ANDERSON: Uggie, who was rescued from the pound as a pup, is a Tinsel Town newcomer with all the tricks. He knows how to skate, and he knows how to act.

His performance in the silent movie "The Artist" has already fetched him one gong, the Palm Dog Award at the Cannes Film Festival.

It's also won him a legion of fans and prompted an Oscar campaign on Facebook and on Twitter. Uggie is the star that everyone wants to be seen with, and he appears to be lapping it up.

(END VIDEOTAPE)

ANDERSON: The Oscar campaign for Best Animal in a Film may have failed this year, but Uggie is still in the running for two gongs at the Golden Collar Awards next month. Time to meet Hollywood's new best friend, he's in our New York studio with his owner and trainer, Omar von Muller.

And before we start, I know that Uggie, Omar, is partial to a kiss and a cuddle from a woman, so from the CTW team here and all the girls on the team, can you just give him a little kiss and let him know that we're pushing for him in these --

OMAR VON MULLER, UGGIE'S OWNER/TRAINER: Oh, yes.

ANDERSON: -- in these awards?

VON MULLER: Give some kisses. That's my buddy right here.

(LAUGHTER)

ANDERSON: Sweet. Omar, does he deserve an Oscar, do you think?

VON MULLER: Say it again?

ANDERSON: Does he deserve an Oscar?

VON MULLER: Yes.

(LAUGHTER)

ANDERSON: Is it time that the Academy recognized him?

VON MULLER: I can't hear you. Say it again?

ANDERSON: Is it time the Academy recognized him and other animals, do you think?

VON MULLER: Well, I think animals should be recognized in the Academy. I don't know exactly if this is going to be Oscars like humans, but they should get some type of award. It takes a lot of work to get them where they are.

ANDERSON: How does Uggie -- and you can ask Uggie, because I don't think he's got an ear piece in, so I don't think he can hear me. How does he cope with the rough and tumble of show biz?

VON MULLER: How is he doing?

ANDERSON: How does he cope with the rough and tumble of the show biz world?

VON MULLER: Oh, how does he cope. You know what? He's doing fine. Me and my wife are a little bit overwhelmed because there's a lot of cameras and all kinds of things that we've been doing. But he's been doing fine. He's -- he's a star. He was born a star.

ANDERSON: Let's -- we've got some pictures of him performing some of his tricks on top of the Empire State Building today. You do, of course, train other dogs. What makes Uggie special as we watch -- oh, sweet! As we watch him performing here.

VON MULLER: Well, Uggie is -- he's my best friend. We do perform, we do a lot of tricks, we do that for fun. So, when we -- when he's behind camera, it's something that is just natural for him, because we've been doing it for a long time.

ANDERSON: How is he coping with all of this attention?

VON MULLER: Run that -- say that again?

ANDERSON: How is he coping with all of this attention?

VON MULLER: He loves it. He loves it. He loves people, he loves attention, he loves the flashes, the cameras, and the more attention he gets, the more he likes it.

ANDERSON: We've got a Jack Russel at home, so this is a joy and a delight for me and my dad, who I'm sure is watching. How many other Hollywood studios, Omar, have been knocking on his kennel door at this point?

VON MULLER: Actually, we've been getting tons of calls. We've been getting a lot of calls, a lot of -- for a lot of different things. He's -- he's almost ten years old, so he's pretty much getting ready to be retired. I don't think I will put him through long hours like for the movie "The Artist" anymore.

For little roles and little things like that, maybe, but he's getting kind of old. He's -- I think we're going to let him just relax at home.

ANDERSON: What can you get him to do for us tonight?

VON MULLER: I'm sorry?

ANDERSON: What can you get him to do for us tonight? I know he's -- there's no skateboard in the house.

VON MULLER: It's kind of hard to make him skateboard up here, but OK. Uggie, come here. Up, up! Up, up! Ready? Ready? I'm going to give him a kiss.

(LAUGHTER)

ANDERSON: Oh! What a sweetheart.

VON MULLER: Are you ready?

ANDERSON: We've -- we wish him the best in all of the awards that he's up for -- aw!

VON MULLER: OK.

ANDERSON: Give him a kiss! Sweet!

VON MULLER: Right here.

ANDERSON: Omar --

VON MULLER: We love that. Yes?

ANDERSON: Always a pleasure. Thank you so much.

VON MULLER: Thank you. OK.

ANDERSON: Oh! Speaking of the Oscar Best Picture, check out our best picture in our Parting Shots tonight. This is the largest solar radiation storm since 2005. It's known as a solar flare caused by a massive explosion on the sun's surface. It sends a bombardment of charged particles towards the Earth.

Now, the biggest issues is radiation, mostly a concern for satellites and power grids, but the threat this time does appear to be low. Although judging by that picture, it doesn't look low, does it? Looks very, very scary.

I'm Becky Anderson, that was CONNECT THE WORLD. Thank you for watching. The world news headlines, as ever at this point, are up next. From the team here at CONNECT THE WORLD, it's a very good evening. "BackStory" up after those headlines. We're going to take a very short break. Back after this.

(BEGIN VIDEO CLIP)

VON MULLER: Skate. Up, up! Good!

UNIDENTIFIED MALE: Can we do it again?

VON MULLER: Yes. OK. We'll start on the other side?

UNIDENTIFIED MALE: Right here, I'm right behind you.

VON MULLER: Up, up! Up, up! More! Up! Up, up! Go, go, go, go, go!

UNIDENTIFIED MALE: Can we get one from there, please?

VON MULLER: Sure. Ready, Ug?

UNIDENTIFIED MALE: All right, folks, this is the last one we're going to do, thanks.

VON MULLER: Up! Up, up!

(END VIDEO CLIP)

END