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QUEST MEANS BUSINESS
Germany Approves Greek Bailout; Dissenting Views on Bailout; Greek Minister Discusses Bailout; Nokia's Game Changer; Greece Influencing European Markets; HSBC Earnings Up; Prudential Considers Move From London; Gulf Coast Oil Spill Trial Delayed; Future Cities: Feng Shui Plays Key Role in Hong Kong Life; New World Bank Report on China; Interview with Bill Ford; 84th Annual Oscars; Interview with Paul Dergarabedian
Aired February 27, 2012 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, HOST: They backed the bailout, but there's no more fuel for Europe's firewall.
Gasp for the camera. Nokia's CEO shows us a most surprising SmartPhone.
And the black and white, silent French film which struck Oscar gold in 2012.
I'm Max Foster. This is QUEST MEANS BUSINESS.
Hello to you. No guarantees and no other option. Germany has approved Greece's second bailout. Even Angela Merkel says she can't be sure it'll work, though. The chancellor says the risks of failure are too big to even comprehend.
(BEGIN VIDEO CLIP)
ANGELA MERKEL, CHANCELLOR OF GERMANY (through translator): The federal government sees no need for a debate on increasing the capacities of the ESFS and the ESM. The conditions for refinancing for Italy and Spain have visibly improved, thanks to their reform efforts there.
With Greece's voluntary debt conversion, we are breaking new ground. If we are successful, it will further decrease the risk of infection for other euro countries.
(END VIDEO CLIP)
FOSTER: At the same time, she says that now is not the right time to talk about putting more money into Europe's rescue fund, the ESM.
Now, this has not been an easy ride for Angela Merkel, 15 members of her own party voted against the bailout today, and I spoke to one of them earlier, Klaus-Peter Willsch. He's from the Christian Democratic Union. I asked him if the chancellor was choosing the wrong place to put her money.
KLAUS-PETER, CHRISTIAN DEMOCRATIC UNION (via telephone): This is -- while this has nothing to do with a lack of solidarity or something, the whole EU project is a project of solidarity, and with all this cohesion funds and social funds and all that stuff that's been given out there, this is the way we organized the whole European Union.
But when you look at the currency union, this is something different, and there is -- as long as you have differences for policies in your countries, no other way than preserving countries form excess debt when you let them take the responsibility for their own budget and for their own deficit.
FOSTER: I know you're not suggesting that Greece should be thrown out of the euro, but you do want Greece to decide to leave on its own. So, what can Germany offer? What can Europe offer as an incentive, do you think?
WILLSCH: Yes, well I think first of all it would be for Greece's sake if they would go out because I think -- I definitely think they need to have autonomous currency policy. They have to devalue -- they have to go to their own currency, devalued in order to get some competitiveness.
They cannot succeed with such a strong currency like the euro is. So, I think we could give them all technical aid and all that in order to handle that. We would, of course, have to take care for our banking system and all that.
But I think it's a better way to cope with the problems because then we just had to -- look if there is an infection, if there is influence on the banking system and would maybe have to recapitalize there, if the this would hit systemic banks, those who are needed for the system.
What we are now doing is to get whole countries out of the market financing. We lower the interest rates and I think in the long run, this does not work, because the only means against excess deficit spending is to make the money expensive. So, high interest rates are the only means to fighting off this.
FOSTER: Joining me now is the Greek Minister of Culture and Tourism, Pavlos Yeroulanos. Thank you very much for joining us.
PAVLOS YEROULANOS, GREEK MINISTER OF CULTURE AND TOURISM: Sure.
FOSTER: An MP there suggesting that Greece should be given an incentive to leave the euro. What do you think of that?
YEROULANOS: Well, especially after the vote today, this kind of language should be completely out of the dictionary. What we need to do is to keep one story straight and keep on that track throughout this process.
It's going to be a long, drawn-out process, and the last thing we need is politicians speaking on one hand to the market from one side of their mouth, and from the other side of the mouth to speak to their electorate.
We need to get one story and keep to that story, whether we are in Germany or in Greece or whatever, in order to keep the eurozone intact.
FOSTER: Was there great relief to the Greek government, the vote in Berlin today?
YEROULANOS: Well, it's a step in the right direction. I don't think we should be talking about relief, here. The number one thing we need to focus on is to create growth and jobs.
Growth and jobs is what's going to get Greece out of the crisis, not bailout packages, and the bailout packages definitely contribute to stability and create an environment in which we can attract investment. But unless we do that, then no bailout package is enough to get Greece out.
FOSTER: You have to achieve so much in such a short space of time, don't you? And many people look at it saying it's not doable to have that amount of restructuring in such a short space time. Many Greek people, as well, that are opposed to it.
Do you have sympathy for some Germans, for example, who don't feel -- that feel that perhaps the money should be spent elsewhere, perhaps at home?
YEROULANOS: I think there's a lot of sympathy that should be spread around here, but the reality is that there's work that needs to be done, and it needs to be done with a particular strategy.
We have a strategy. We need to keep the eurozone intact. We need to get the Greek economy back on its own feet, back on its own capacity to grow. And this is work that cannot be done only by one side of the equation, it needs to be done by all of us together.
I think what's most important right now in Europe is to make sure that instead of throwing stones at each other, we actually work with each other in order to produce the change that needs to take place.
But at the end of the day, we should be focused on getting a stronger euro, getting a stronger eurozone, a more intertwined economy so that we don't see things like that happen again.
FOSTER: Do you think it can survive long-term when it's been proven that it's struggling right now with the current system. Perhaps it is too big. Perhaps it should be split in two, for example.
YEROULANOS: Well, people who speak like that about the European Union and the eurozone forget that the reason why we got to this union in the first place is exactly because we wanted a peaceful Europe, a Europe that can work with each other as opposed to against each other.
The experiences we've had have been devastating, so this is only part of a process of unifying our communities and our economies for the sake of peace and growth.
Now, we're going to have difficulties in the process, and we're going to have these sort of back and forth as we go along, but we should stay focused on -- keep our eyes on the horizon, make sure that this euro, European project works out and that we all contribute to its success.
FOSTER: What about Greeks watching, thinking, "Why don't we just cut our losses here, leave the euro, deal with some short-term pain, and then rebuild our economy on a national level?"
YEROULANOS: Actually, the pain of leaving the euro will be much more long-term than the action changes we need to do in the short term.
I know that everybody's focused on debt reduction and salary cutting and so forth, but there's a lot of structural changes that are taking place right now in Greece which are absolutely vital for the growth of the economy, and these are things that we should do, whether in the zone or out of it.
So, I think the changes can be painful, but they're absolutely necessary right now, and although it's tempting for some to think that leaving the eurozone would allow us to depreciate our currency and make the economy more conductive in that way, I think that is a solution that will in the long-term have a much larger cost, especially for the Greek middle class.
FOSTER: And what will be crucial for your country, of course, is tourism. It's a huge industry for you, and you need attract people to come to Greece. How are you doing, there? People being put off from coming to Greece? And what sort of incentives are you offering them?
YEROULANOS: Actually, last year we had the record year in arrivals and a record year in income from tourism, and that is very encouraging. We want to continue this kind of growth, and in order to do it, we're working on two tracks.
First of all, we're stabilizing the markets that we had in the past, and we're opening new markets. One of the reasons why I'm in England is to get people to think positively about coming to Greece next summer. But apart from --
FOSTER: William Hague hasn't helped you there, has he?
YEROULANOS: No, the statements by Mr. Hague were, I think, in the wrong direction.
FOSTER: Just to clarify, he's been suggesting that Brits should register with the embassy there in case there's some violence, right?
YEROULANOS: Well, this, as far as the British government is concerned, is standard practice for them. It's the way that they see protecting their citizens in the best manner.
But for Greeks, there isn't -- these kinds of statements don't make any -- have no benefits, especially if you consider that what you see on your monitors happening in Athens is only in a very small part of one city.
So, I think the statement might have been necessary for his purposes, but certainly not vital for people who come to Greece and see a completely different picture of a country that's absolutely peaceful and a lovely place to visit.
But going back to your previous question, you said how are we growing the tourism sector? We are opening new markets. We have fantastic growth from Russia, Turkey. We've had -- we're making bids for China and India.
These markets, we feel, will grow the Greek economy, the Greek tourism sector, at least, in the next ten years. And we see a lot of interest for investment in order to support these kinds of -- this kind of growth.
Now, in order to bring this investment in Greece, which is absolutely vital right now, we need to create a stable environment. And this package is a step in the right direction. We need to build on this package, create a stable environment, get investment back in Greece, get jobs, create more jobs, and make sure that this is the way we turn the Greek economy around.
FOSTER: Minister, thank you very much, indeed --
YEROULANOS: Thank you.
FOSTER: -- for joining us on the program.
Next, Nokia unveils its latest phone.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Wait for it. Features a large, high resolution, 41 mega-pixel sensor.
(END VIDEO CLIP)
FOSTER: Forty-one, unbelievable. And the audience gasps for the camera at the Mobile World Congress. More in a moment.
FOSTER: Digital devotees are gathered in Barcelona for a glimpse of the latest gadgets at the Mobile World Congress. Nokia kicked the conference off, unveiling a new camera phone with a massive 41 mega-pixel capacity. Unbelievable.
CEO Stephen Elop told Jim Boulden it's part of a plan to catch up with Google, Apple, and Samsung in the SmartPhone race.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: So, not often do you hear people gasping at the Mobile World Congress when somebody makes an announcement, but I heard there were gasps this morning.
STEPHEN ELOP, CEO, NOKIA: There were gasps for a number of reasons, actually.
ELOP: The first is because we're accelerating the clock speed of Nokia, and when people see our fourth new Lumia SmartPhone device on the Windows phone platform, they see our fifth, sixth, and seventh Asha product and, yes, when we introduced the Nokia 808 with a 41 mega-pixel camera --
BOULDEN: Right. Say that again, 41?
ELOP: Forty-one mega-pixel camera. But you know, the 41 is impressive. What's even more impressive is the technology that allows you to work with an image that size.
So, for example, this device -- and just before we came on, we took your picture with it.
ELOP: And what you're actually able to do is, if you -- is zoom in. We can zoom right in, for example, and get a high-resolution image of your left eye, as an example.
BOULDEN: Not just my eyes, not just my face, but my left eye.
BOULDEN: And it shows that consumers will be able to take great pictures, but work with those pictures and still upload them to Facebook or do whatever they like to do with those images.
BOULDEN: Let's talk about how that phone fits into that strategy. Obviously, Nokia through massive transformation, you're partway through this massive change.
BOULDEN: Is this the killer one? Is this the one that puts Nokia back in front?
ELOP: I think it is -- emblematic of the type of differentiation that we intend to introduce. We believe that one of the primary purposes of a SmartPhone is to help people capture and relive their lives.
Take the picture, make the recording, keep track of their lives, organize all of that information, and that's something we're focused on as one of our key differentiators across all of our products. So, by introducing it here, we've said, wow, there's the new high bar for this type of experience, and you should expect to see that on other devices and across other platforms with time.
BOULDEN: That's the Symbian OS. Are we going to see that on the microphone Nokia OS?
ELOP: Yes. So, we haven't said specifically what or when, but we have said this will live on other platforms.
ELOP: So, that's a reasonable thing to expect.
BOULDEN: But you won't tell me it's going to be on the Windows.
ELOP: I won't say precisely.
BOULDEN: No. But this is the future of Nokia. This is the OS that's the future. Will Symbian disappear?
ELOP: So, over time, we'll sell less and less Symbian. But we have said we'll support it through 2016. But for our SmartPhone line, Windows Phone and the Lumia line is our future.
BOULDEN: Where would you say you are on the road to recovery at Nokia? Where are you on the massive transformation?
ELOP: We're right in the heart of transition, right in the middle of it, where you're transitioning and restructuring and making all of these big changes, and yet at the same time, you stand up at Mobile World Congress and say, "Look at what we're delivering, look at the new products."
You can see all of the activity behind us. This is the strongest presence we've had at Mobile World Congress in years. The booth is jammed. Nokia is coming back strong with some great product. But we still have a lot of work to do, and we respect that.
FOSTER: We'll see how the market takes to it. Now, uncertainty with Greece is still influencing Europe's stock markets. Bankia mining shares amongst the worst performers. Credit Agricole down 3.5 percent, Commerzbank down 2.8 percent. All the main markets, as you can see, down, but less than 1 percent.
HSBC is reporting pre-tax profits of almost $22 billion for the 2011, up 15 percent on 2010. Investors weren't too impressed, though. HSB's share -- HSBC's shares fell 3.7 percent in London despite record profits of its commercial banking center.
(BEGIN VIDEO CLIP)
RALPH SILVA, DIRECTOR, SILVA RESEARCH NETWORK: They actually broke some records in terms of profitability and, yet, the markets still wanted more.
But the difference between HSBC and the other British banks is pretty simple: diversification. They have far more products than anyone else, and they are more diversified on a global perspective.
They operate in 80 countries, haven 90 million customers and, of course, have a completely diversified portfolio that, regardless of what happens, they can make money in some part of the world, and it really has to be the model for the future of banking.
(END VIDEO CLIP)
FOSTER: UK insurer Prudential today warned that it might relocate due to new European rules. It said a review was underway ahead of measures due in 2014 that require Europe's insurers to hold more capital. Prudential has had its headquarters in the UK since it was founded 164 years ago.
The legal fight over the Gulf Coast oil spill has been pushed back a week. BP and other companies involved in the spill two years ago have been given more time to reach a settlement with local residents. Nina Dos Santos has more.
NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT: The explosion that destroyed BP's Deepwater Horizon rig nearly two years ago killed 11 people. The oil spill left beaches in five states polluted and also devastated tourism and fishing along the US Gulf Coast.
Now, BP set up a special $20 billion fund to compensate people who'd lost out. It says that it's dealt with 570,000 claims so far at a cost of $6 billion.
Now, around 116,000 claims are going down the legal route. BP is currently in talks with lawyers representing these claimants, and we're talking about all sorts of people, like fishermen, clean-up workers, as well as hotel owners and property companies.
And consider this. The case has already generated something like 72 million pages of legal documents. It could take until 2014 to conclude with lawyers bills alone running into the billions of dollars.
Nina Dos Santos, CNN, London.
FOSTER: Now, an ancient art in a modern capital. Richard investigates how feng shui -- I say that wrong every time, so I'll get blamed again -- is shaping Hong Kong as he follows the flow of chi, that's energy, through the city net.
FOSTER: Hong Kong is a modern city built on the ancient philosophy of feng shui. It plays a part in everything from architecture to the types of deals it launches. Now, the city has even been forced to compensate those whose chi, or energy flow, has been affected by public construction.
Richard finds out firsthand the importance of yin and yang in this global financial capital.
RICHARD QUEST, CNN INTERNATIONAL (voice-over): This is the other side of Hong Kong, a side many don't see. More tranquil, more harmonious. Where the grass is certainly greener. There are mountain peaks and sweeping views of the surrounding sea. And it all helps to balance the yin and the yang.
It's also important to the city's feng shui, an ancient art that studies the flow of chi, or energy, thought to bring people health and prosperity. Now, some Westerners might scoff at this concept. Here, it permeates nearly every aspect of day-to-day life.
QUEST (on camera): Why have you decided that we should go up to the peak? What are we going to see there?
ALBERT CHEUNG, FENG SHUI MASTER: About 150 years ago, Hong Kong was only a small fishing village, right? How come 150 years later, we've become one of the major world financial centers? So that has a lot to do with the feng shui of Hong Kong.
QUEST: Does it really?
CHEUNG: Yes. The feng shui is actually a science, the study about the nature of the energy that influence an area or a place. So, if the energy that comes around your area is good, it's going to bring about what we call wealth and health.
QUEST (voice-over): They cynics may say not likely. The region's biggest banks certainly pay attention. In fact, controversy erupted when the Bank of China's new headquarters was erected in the late 1980s.
Its design was sharply criticized. The building was said to resemble a knife or screwdriver, digging into the heart of the city. It was believed that the building's jagged edges funneled negative energy towards surrounding buildings, such as the competitor, HSBC.
Meanwhile, over at HSBC, lions guard the entrances and the wealth.
CHEUNG: If you have looked at the mountains here, you can actually see the vegetation, the trees are very green. You probably feel that this is a nice spot, right?
QUEST: Albert reminds me mountains are home to dragons, with bridges representing the dragon's back. And why did this luxury property leave a gaping hole in part of the building, keeping in mind the extraordinary value of this land? It's so energy can flow through, or as some put it, so the dragon can get to the sea.
The list goes on. Even Disneyland reportedly adjusted its pathways and entrance here, hoping to bring more prosperity.
QUEST (on camera): Those people who say it's nonsense, what do you say? Putting it bluntly. What do you say?
CHEUNG: It's not nonsense. I would only say to him that things that you don't believe doesn't mean it doesn't exist. Because that thing, feng shui, has been with us for more than 3,000 to 5,000 years. If that is totally nonsense, it wouldn't survive.
QUEST: Why do you think people today are starting to believe and follow more of these philosophies and grabbing onto these theories of thousands of years old?
CHEUNG: We probably now are worried that the world economy is suffering, a lot of downturn. And so people are facing more and more challenges in the life. They probably like to look for some other help so as to grab hold of what kind of situation that they will be facing in the future.
QUEST (voice-over): Predicting the future, that is big business here, as well. We're just into the Year of the Dragon.
QUEST (on camera): This is the time when you get your fortune told, see what lies ahead. Perhaps very relevant in these uncertain financial days.
TOMMY CHUNG, FORTUNE TELLER: OK, you give me two hands. Right here, OK. Your skin is very smooth. That means you are sentimental. When you make a decision, no one can change your mind. Also, you like to travel from place to place, OK?
QUEST: All right.
CHUNG: And you see -- you see with the lights?
QUEST: So, I like to travel?
CHUNG: Yes, you like to travel from place to place, OK? And also, you see, this lifeline --
CHUNG: This is the beginning of the emotion. This the end. You see from the end, you see, now this is very clear, 51, 53, it's about 7 years, excellent good.
CHUNG: Yes. Not only. I'm not sending you back, OK?
QUEST: So, the next two years are going to be good?
CHUNG: Yes, OK. At least see over 55. This 5 year, excellent good. OK?
QUEST: OK. It's going to be a good time?
QUEST: He hasn't told me which stocks to invest in in the stock market.
QUEST (voice-over): How appropriate. Ancient philosophy and fortune telling in a modern financial city. I wonder, do these fortune tellers see that Hong Kong remains a Future City?
Richard Quest, CNN, Hong Kong.
FOSTER: Eighteen years in the future, Hong Kong could be part of the world's biggest economy. It all depends on what Beijing does next. Up next, the World Bank warns China it needs to change.
FOSTER: Welcome back, I'm Max Foster. These are the main news headlines for you this hour.
Witnesses in Idlib, Syria say security forces shelled civilian areas at random today. Activists say 125 people have been killed across Syria just this Monday.
The bloodshed moved the EU to pass new sanctions against the Syrian government. The Syrian regime, meanwhile, claims the voters overwhelming approved changes to the constitution.
Lawmakers in Germany have voted to accept the latest bailout package to keep Greece from defaulting on its debts. But many lawmakers are getting an earful from German taxpayers who are tired of footing the bill for Greece's overspending.
The Taliban have claimed responsibility for a suicide bombing on Monday at a military airfield in Eastern Afghanistan. Nine people were killed and 12 others were wounded. It is the latest incident sparked by the burnings of Korans at a U.S. airbase last week.
The state-run TV network in Russia says an assassination plot against Prime Minister Vladimir Putin was recently thwarting in Utwain -- Ukraine - - and that those behind it were arrested several weeks ago. Details of the plot were announced less than a week before Russia's presidential election, which Mr. Putin is expected to win.
British singer, Charlotte Church, and her parents will get nearly a million dollars from the publisher of "News of the World" for phone hacking. The settlement is, by far, the largest of its kind since the scandal broke. Their attorney says the payout was bigger because both Church and her parents were targeted starting when she was a teenager.
Rescue vessels are on their way to a Costa Cruise Lines ship drifting near the Seychelles. The Allegra lost its propulsion after a fire in the engine room. That fire has been extinguished and authorities say everyone on board is in good health.
A sister ship, the Costa Concordia, ran aground off the Italian coast last month, killing 21 people.
The World Bank has some tough words for China's leaders -- free up your economy or you'll hit a brick wall. The World Bank and a Chinese think tank just released a report called "China 2030." It recommends an overhaul of how China does business if it wants to become the largest economy.
The first priority is to become a true market economy. Next, it has to speed up the pace of innovation. That includes going green. It has to expand services such as health, education and access to jobs.
The report calls for China to modernize its fiscal system with better public funding of local government projects. And it says China should foster relations with globar -- global trading partners and not allow growth to primarily come from government.
So the overall theme of the report is the government needs to take a step back.
But in a country that like doesn't like uncertainty, it's not clear if China's leaders are prepared to let the private sector take the helm.
Stan Grant has that story from China.
STAN GRANT, CNN CORRESPONDENT: This 400 page report really comes down to this -- China is now at a turning point. That's how the World Bank sees it. And, really, this is about economic reality meeting political will.
Let's look at the ame -- the economic situation here.
China, of course, has enjoyed breakneck growth for the past 20 years now. It is, according to this report, if everything stays on track, going to become the biggest economy in the world by 2030. But that brings with it a lot of challenges and a lot of risks.
It's not going to get there on the back of double digit growth. Growth could slow to around 5 to 6 percent. It's going to have a more educated, more wealthy population and a more demanding population.
In essence, what the World Bank is looking for from China is more freedom. It wants the government to back off, take its hands off the wheel, allow private companies to operate where public companies, at the moment, have a monopoly. It wants people to be able to leave -- move more freely around the country, to be able to chase the jobs where they are.
One of the things that it's talking about here is eating into that gap between the rich and the poor. This is not just an economic problem. It really goes to the social stability of the country, as well.
And to do that, China is going to have to provide more social security, more opportunities for the -- the poorer population to be able to travel to where the work is, to be able to work for private companies at a higher rate of pay.
The other thing it's looking for here is to diversify the growth models. Up until now, China has been able to rely on investments and exports. It now needs to move to a consumption model. It needs to be able to get people to spend more. For that, people need to feel more secure.
All of this a big challenge for Xi Jinping, who's likely to become president next year, to take over the leadership of the country.
Is he going to have the political will to step back, take the hands off the wheel, put more trust in private companies and more trust in the people?
That's the challenge ahead.
(END VIDEO TAPE)
FOSTER: Well, China joined up with other G20 countries in knocking back the EU's request for more help from the IMF over the weekend.
Eswar Prasad says there's little chance of the Chinese people supporting a rescue plan for European Union. He was the head of the IMF's Chinese division and he told me this is a dangerous stand-off between Europe and the Fund.
ESWAR PRASAD, PROFESSOR OF TRADE POLICY, CORNELL UNIVERSITY: It was developing into a rather untimely game of chicken between Europe and the rest of the world, in this case, represented by the IMF, because if the IMF plays hard ball and if the Europeans don't take the necessary steps, it could lead to a worsening of market confidence. And that could, essentially, make the problems much worse and, in fact, bring forward the problems in Europe.
So there is a real concern that if the IMF doesn't step in in a timely fashion, it could make things a lot worse.
But I think there is a far bigger risk, that if the IMF steps in too early, that could create room for Europe not doing what it needs to do. And I think that is one concern that Christine Lagarde, the managing director of the IMF, has been very forthright about and which many other countries, including the emerging markets and countries like the U.S., Canada and Japan, are concerned about, that if the IMF steps in too early, it could take the pressure off Europe to do what it needs to do.
So it's going to be a very difficult balancing act on both sides.
FOSTER: I know that you're in China at the moment. And there is this sense that whatever happens in the Western economies, China will still be able to hold up the world economy.
What's been your assessment of things there whilst you've been there?
PRASAD: If there was to be a significant external shot coming from Europe, my sense is that the Chinese would respond very aggressively with monetary policy, and especially with fiscal policy. They have a leadership transition coming up here in the next 12 to 18 months. And stability is really the watchword here. Stability both in terms of making sure that growth doesn't slow down too much and not undertaking any major policy reforms, which carry risks.
So I think that China can be counted on, over the next 12 to 18 months, to provide a good boost to world growth.
FOSTER: And we shouldn't forget the investments that China has in Europe, anyway, because it's going to lose a lot of direct money just from losing investments in Europe, if the economy gets any worse.
But would China step in and save the European economy if the IMF was recently, if it's only to protect its own investments?
PRASAD: China certainly has a strong interest in making sure that things go well in Europe. In addition to the money it has invested in European bonds, the European Union remains the largest single export market for China, accounting for a little over 20 percent of China's exports.
However, it would not play well domestically within China if China stepped in directly to help Europe, because, after all, there is a sense, rightly so, that Europe is a very rich continent and that China is a large country, but the level of per capita income here is substantially lower than in Europe.
So the notion of the hard-earned resources of the Chinese people being used to protect the Europeans from their own profligacy would not go down well at all.
I think it's far more likely that if China does want to help Europe, it would be through the IMF.
(END VIDEO TAPE)
FOSTER: Well, next, the car which takes orders so you can get on with driving it. Ford's new family car listens to what you say and talks to your phone. We'll be talking about it in a moment.
FOSTER: Ford has launched its latest car at a tech, rather than a motor, show. The B-Max features sync, a voice recognition system that links audio, phone and GPS so drivers can tell their car to do almost anything apart from actually drive it. It's linked together through mobile apps, of course.
Jim caught up with executive chairman Bill Ford at Mobile World Congress in Barcelona.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Of course, here at the Mobile World Congress in Barcelona, no surprise, you've got hardware makers, you've got operating system, you've got app developers.
But this year, also, Ford Motor Car has come to the Mobile World Congress to sound out one of its new cars and its new technology to connect the automobile to your life.
What is Ford doing at what most people think of as a mobile phone conference?
BILL FORD, CHAIRMAN, FORD MOTOR COMPANY: Well, first of all, our -- our industries are really converging. I mean we're -- today we announced we're putting sync, which is our -- our program we have with Microsoft, on voice recognition and bringing all of your digital life into the car. We've announced we're bringing that to Europe.
BOULDEN: And the idea is a car like this to be connected, connected to your life, connected to your phone, connected to your house?
Is that what you're talking about?
FORD: Well, yes, I mean, in the short-term, yes. I mean it's, you know, a car like this, you can really seamlessly bring in, you know, your - - your smartphone into the vehicle and then anything that you would do, you know, on a tablet or a phone, you can now do from your car, but you do it hands on the wheel and voice-activated. So, you know, we don't want driver distraction.
BOULDEN: Well, that was going to be my question.
Aren't you just putting more things into the driver's mind instead of thinking about driving?
FORD: Well, actually, we're -- we're -- we're actually taking that away from them, because today, often drivers are looking down and we know that they're playing with their cell phone --
FORD: -- and, you know, texting and -- and we want them to stop all that.
FORD: We want them to be looking at the road and we want to have their, you know, their hands on the wheel.
And so what our technology is allowing them to do that, knowing that they want to also be connected.
BOULDEN: Now, give me an example in -- in the future. I've heard some wild things about my car knowing I didn't use my coffeepot in the morning --
BOULDEN: -- and that it will suggest how I get to a coffee -- coffee shop?
FORD: Sure. Well, I mean that, actually, that's the easy thing.
FORD: We -- we can do that for you right now. With -- with this new technology, you can ask your car to -- where are the coffee shops then take me to it. A little bit longer, though, we -- we introduced a concept vehicle here called the Evos, which uses cloud computing. And once you have that, it's almost limitless. I mean that car, the Evos, it can turn off your -- your lights in your car. It can -- it knows your calendar. But it can also check your health. It can do a blood sugar reading, a blood pressure reading. I mean it's really -- it's quite remarkable, you know, how much you can do once you connect to the cloud.
BOULDEN: So tell me how my car of the future, my Ford of the future, will know my calendar and know if have a -- a meeting canceled and then I can drive the long way to work.
FORD: Yes, I mean it -- it will do all of that because -- because it will be connected to the cloud. And, you know, all the -- all the data that you have in your daily life will be available to you in your car.
BOULDEN: Of course, not everybody is comfortable with the idea of -- of this information in the cloud.
BOULDEN: And that's -- security is still a very big issue.
FORD: Of course. And that's one of the issues that we're going to have to work out as we go along. And that's why we're actually here to talk to the mobile providers --
FORD: -- because they're already facing many of those security issues. And -- and you're right, I mean, I think for -- you know, for now, what we're -- what we're working with is option. You know, you're -- you can opt in --
FORD: -- with how much you're comfortable with.
FORD: Because, you know, let me give you a real world example. Your car will know where you are at any moment.
FORD: And that's great for -- for safety reasons --
FORD: -- particularly as you start to get into vehicle to vehicle communication and vehicle to infrastructure communication. But the down side of that, potentially, is, you know, somebody knows where you are at every second.
FORD: And so those the kind of issues that we're going to have to work through as we develop all these technologies.
(END VIDEO TAPE)
FOSTER: There you are.
We'll bring you updates from Mobile World Congress in Barcelona all this week for you all sorts of being -- things being unveiled there.
Now, one film studio, two Oscar sweeping films, meanwhile. Next, we'll look at why the Weinstein Company is so good at sniffing out success.
FOSTER: The red carpet has been rolled away for another year and a new batch of Oscars has been handed out.
From Los Angeles, CNN's Kareen Wynter has the highlights of the 84th Academy Awards.
(BEGIN VIDEO CLIP COURTESY AMPAS/ABC)
BILLY CRYSTAL, COMEDIAN: You didn't think I wasn't going to do this, did you?
(END VIDEO CLIP)
KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT (voice-over): Of course not. This year's Oscars marked the return of Billy Crystal. "SHOW BIZ TONIGHT" can tell you the nine time host launched the show with a star- studded film montage featuring a visit from Tom Cruise, a smooch from George Clooney and a little help from Justin Bieber.
(BEGIN VIDEO CLIP COURTESY AMPAS/ABC)
JUSTIN BIEBER, ACTOR: I'm going to get you the 18 to 24 demographic.
(END VIDEO CLIP)
WYNTER: And after Billy's song and dance, it was time to hand out the statues.
UNIDENTIFIED MALE: "The Artist".
WYNTER: The night's big winner was "The Artist." The silent film earned five Oscars, including the coveted best picture.
(BEGIN VIDEO CLIP COURTESY AMPAS/ABC)
UNIDENTIFIED FEMALE: Christopher Plummer.
WYNTER: Supporting acting nods went to "The Beginners'" Christopher Plummer and "The Help's" Octavia Spencer. Queue the waterworks.
(BEGIN VIDEO CLIP COURTESY AMPAS/ABC)
OCTAVIA SPENCER, ACTRESS: Thank you, Academy, for putting me with the hottest guy in the room.
(END VIDEO CLIP)
WYNTER: Some would say the hottest guys in the room were up for best actor.
(BEGIN VIDEO CLIP COURTESY AMPAS/ABC)
UNIDENTIFIED FEMALE: Jean Dujardin.
(END VIDEO CLIP)
WYNTER: Which eventually went to French star, Jean Dujardin.
UNIDENTIFIED MALE: Meryl Streep, "The Iron Lady".
WYNTER: Meryl Streep proved she is still one of Hollywood's iron ladies, earning honors for best actress.
(BEGIN VIDEO CLIP COURTESY AMPAS/ABC)
MERYL STREEP, ACTRESS: And I could hear half of America going oh, no.
(END VIDEO CLIP)
WYNTER: But in the middle of all the accolades, "SHOW BIZ TONIGHT" can tell you half of America may have been thinking, where's Sacha Baron Cohen?
The controversial actor went rogue on the red carpet while in full character as "The Dictator." But aside from a pre-taped interview, Cohen was nowhere to be seen during the show.
But Crystal was. And he reminded audiences why this remains Hollywood's biggest night.
(BEGIN VIDEO CLIP COURTESY AMPAS/ABC)
CRYSTAL: The movies have always been there for us.
(END VIDEO CLIP)
WYNTER: Kareen Wynter, CNN, Hollywood.
(END VIDEO TAPE)
FOSTER: Well, both of the night's big winners, "The Apprentice" and "The Iron Lady," were distrivute -- distributed by the Weinstein Company.
Co-chairman Harvey Weinstein says that picking up a silent black and white film like "The Artist" was a major gamble, as well as a major triumph.
HARVEY WEINSTEIN, CHAIRMAN, THE WEINSTEIN GROUP: Here is a movie, black and white, silent film. You know, when I first told everybody I had bought this film, it was right after we had won for "King's Speech".
And who the hell, in 2 -- who, in 2012, I mean would think that a movie like that could work?
Certainly, you know, it wasn't the common wisdom. And here the -- here it is, it's reached the pinnacle of American success and won five Oscars.
(END VIDEO CLIP)
FOSTER: Well, Weinstein Company was also behind last year's big Oscar success, which was "The King's Speech".
Paul Dergarabedian is president of Hollywood.com's box office division.
And he told me that as well as being able to sniff out good films, Harvey also has got the business skills to profit from them.
PAUL DERGARABEDIAN, BOX OFFICE DIVISION PRESIDENT, HOLLYWOOD.COM: He knows how to nurture relationships both with the -- the filmmakers and, you know, those who are the taste makers. He -- you know, he really hit the talk show circuit in support of the artists. He does this every year. People almost know -- I mean think about this, he -- people know who he is. And that's pretty amazing, because a lot of people wouldn't even be able to recognize a lot of big mainstream directors by sight.
But I think the more Harvey is out there, the more people are going to recognize hey, that's that guy. He's like a Cecil B. DeMille or a Daryl Zanuck or a Jack Warner. He's somebody who's synonymous with movies and the production of movies and distribution of films and also being a great showman, as well, and really having great taste. It's a great combination.
FOSTER: Struggling financially for a while when he set up this new business, as you would. You know, it's a very big investment. You have to wait a while, don't you, for the payback.
But do you imagine him setting up yet another Hollywood studio up there with the big names, the ones with the big money?
Is he going to come back again to that level?
DERGARABEDIAN: I don't know. I think he's right there in his sweet spot right now, with a -- with a company like the Weinstein Company. And I don't know that he would want to go bigger, because the kinds of films that he gravitates toward are the more esoteric, more challenging films. I think Harvey Weinstein, his taste is what Oscar loves. But he also is not an elitist. He really, I think, knows what audiences like. "The Artist" is such an accessible film, it -- you know, when you go see it, it's just, in the marketing of it, trying to convince people that a silent black and white movie is something they do want to see. That's a tougher challenge.
But I'm sure Harvey will rise to it, because, look, you've got to capitalize on a best picture win like this. And if anyone can do it, it's Harvey Weinstein.
(END VIDEO TAPE)
FOSTER: Yes, he's pretty bad, isn't he?
Now, we're going to check in on the weather for you, starting in Europe with Jennifer, who's at the Weather Center -- hi, Jennifer.
JENNIFER DELGADO, ATS METEOROLOGIST: Hi there, Max.
We are starting off right now with me standing right in front of you. And we're going to focus on parts of Europe.
We're starting off right now with some snow out there, as well as a little bit of that wintry mix you can see coming down through parts of Germany as well as into the Czech Republic. Some very light rain, just exiting off parts of England. But that's not where the real action is going to be today.
It's really going to be down toward the southern parts of Europe, affecting parts of, say, Macedonia, as well as spreading over toward Turkey.
And this area of low pressure is just really starting to get into gear. It's to be bringing some heavy snowfall. We're talking, in some locations, we're really going to be digging out. We're talking 12 to 25 centimeters of snowfall for areas including Istanbul as well as into Ankara, as we go through today, as well as tomorrow. And really, it's going to start to wind down as we move through Wednesday.
So that is really kind of a bad situation, because parts of Turkey, they've also been dealing with incredible amounts of snow, as well as the cold temperatures.
Our temperatures for your Tuesday not looking so bad at all. Minus two for a high in Kiev, three in Bucharest, five in Istanbul, eight in Athens.
And then over toward the west, we're talking 10 for Glasgow, 13 for London and in Madrid, a comfortable 20 degrees.
And we have this ridge of high pressure over toward the west. So that's really going to keep conditions fairly quiet for this Monday, as well as into Tuesday now.
But we do have some travel delays out there. And this is going to be for Tuesday. And this is going to be for some snow moving in through parts of Scandinavia. For Copenhagen, we're talking delays 30 to 45 minutes.
Then for Sofia, some snow around the morning, with a 60 to 90 minute delay. And then for author, some strong winds around in the evening as well as into the overnight hours. So make sure you're checking ahead, of course. Those delays are also going to include parts of Turkey.
Now, we're also watching an area, you can see, just to the north of Madagascar. This has a high chance for a tropical development. It's bringing some very heavy rainfall from Madagascar, moving through the Mozambique Channel. And the problem is over the last, say, well, month or six weeks, this whole area has really been hit with an increased amount of moisture, as well as tropical cyclone activity. So we are going to be watching this, but they really do need a break from the heavier rainfall.
And another area that needs a break from the rainfall, we're talking about in Florida, Daytona Beach. Of course, the Daytona 500 is a very big deal here in the U.S., especially in the South, Max.
And the race is going to get underway in a couple of hours. We're talking 1700 GMT. And it looks like the track should be dry, as long as the rain comes to an end. And it looks like it has since I looked at the radar just a little while ago.
So good news for all those race fans. They're -- they're an unusual bunch.
FOSTER: Normally the dry -- yes, yes, yes. Normally the dryness lasts.
Thank you, Jennifer --
DELGADO: You're welcome.
FOSTER: -- very much, indeed.
We're going to get some thoughts now from some of the world's most influential voices, the world's social media voices, that is.
Economist Nouriel Roubini has been Tweeting about the situation in Syria. He says: "With economic problems adding to the hardship of ordinary Syrians, those loyal to the regime may switch sides."
Media mogul, Rupert Murdoch, is concerned about the political battle in Australia. He Tweets: "Oz Labor tearing themselves to pieces, ugly sight. Tony Abbott should just lie low and watch." He's the other party, of course.
And Dan Alpert, the managing partner of investment bank, Westwood, is focused on Greece. He Tweets: "Greece if psi works out, will prove the ultimate test of the confidence, fairy and pixie dust will be no match for punishing austerity."
For some Top Tweets and links to great stories, you can also follow me, Max Foster, at CNN.
We'll be back in a moment with a stock market recap for you.
FOSTER: Now, lingering concerns over Greece helped send stocks here in Europe lower this Monday. Banking and mining shares amongst the worst performers. You can see that the main markets were all down not more than 1 percent, though.
Credit Agricole down 3.5 percent.
Commerce Bank down 2.8 percent.
HSBC down 3.72 percent, despite posting a 15 percent jump in pre-tax, full year earnings.
Spain has well and truly missed its 2011 budget deficit target. The shortfall came at 8.5 percent of GDP, .5 percent higher than the estimate given by new prime minister, Mariano Rajoy, in December, and well above the 6 percent target set by the EU.
And 2012 might not be any better. Spain needs to cut roughly $3.5 billion to reach this year's goal of 4.4 percent of GDP. It's hoping the European Commission may still soften that target.
The U.S. markets, let's have a look at them this Monday. Currently up .17 percent. But crucially, up above 13000. So the moment that many investors have been waiting for. For it to happen this week happened -- for -- it happened last week, rather. It happened this week.
But will it stay?
We'll follow that for you as we head toward the close.
Billionaire investor, Warren Buffet, has told shareholders in Berkshire Hathaway that a successor has been chosen to take over from him at the company. Quite an ask (ph). That's when he steps down, of course. But he stopped short of naming the heir apparent and he made it clear he was talking about the long-term rather than the short-term, as ever. He said he and his 88 -year-old vice chairman, Charlie Munger -- Buffett is 81 -- are both in excellent health and love what they do.
Berkshire Hathaway reported a 21 percent fall in net income in 2011, to $10.3 billion. Even though its profit was down, Buffett's company is still sitting on more than $37 billion in cash. And Buffett made it clear he's looking to spend some of that, saying he's on the prowl.
That's QUEST MEANS BUSINESS.
Thank you so much for watching.
The news continues, though, here on CNN.