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Dutch Government Collapses, Spain Reenters Recession, World Markets React; Bahrain Grand Prix Threatens Reputation of F1

Aired April 23, 2012 - 16:00   ET


MAX FOSTER HOST: Tonight on Connect the World, economic tremors: global stocks slide as political upheaval in Europe sends investors scrambling for the exit.

ANNOUNCER: Live from CNN London, this is Connect the World.

FOSTER: The Dutch government collapses, Spain is back in recession, and France is on track for a political shakeup. Tonight, backlash against austerity is changing Europe's political and economic landscape.

Also tonight, a CNN exclusive, evidence U.S. troops have fired into Pakistani territory, putting more pressure on an already tense relationship.

And (inaudible) certainly is lucky to be alive: a narrow escape for a U.S. drag racer, but not for the TV camera.

Well, if you thought the EuroZone crisis was as thing of the past, think again. With fresh fears over the future of three of Europe's major economies, markets on both sides of the Atlantic ended the day in the red.

In New York, the Dow closed down around 100 points just moments ago, but across Europe, concerns sparked heavy sell-offs with Germany's DAX index falling more than 3 percent. The cause, a sea of political and economic change sweeping across the continent. Tonight, Atika Schubert is monitoring the Netherlands for us, where the collapse of the government has plunged the country into uncertainty. We'll cross live to Hala Gorani in France to find out why the results of yesterday's elections have sent shivers through investors. And Al Goodman is in Spain. Already battling high unemployment and the rising cost of borrowing and now also back in recession.

First, though, to Atika on Europe's rapidly changing political landscape. The curse of austerity strikes a new country.

ATIKA SCHUBERT, CNN INTERNATIONAL CORRESPONDENT: Yes. This seems to be another victim of the economic crisis that has become a political crisis. Basically, the Dutch government faces a budget deficit of about 4.7 percent and that is over the 3 percent limit. So they were really struggling to come up with some sort of solution with their coalition government. It just didn't work.

Geert Wilders is the far right party leader withdrew his support of the coalition. Everything collapsed. And now the prime minister has resigned.

So no it does make it tough.

FOSTER: This is The Netherlands, a secure, sound economy, right in the heart of Europe, particularly shocking. It's not a Greece.

SCHUBERT: No, no, this is particularly shocking. It is a country with a AAA rating, one of the few left in Europe. And that, already, is on the brink, that rating. And the fact is The Netherlands is one of the very champions of this new austerity measures, saying no, no, no, no matter how tough it is, you have to keep it within budget. And here they are suddenly the victim of the very thing they were preaching against. So it particularly tough on The Netherlands.

So this is why, in a sense, it's a crisis of their own making. They sort of talked themselves out, it's going to be even harder now, because they're going to be trying to balance this budget as elections are being set up. And those won't happen until at least September.

FOSTER: Atika, thank you very much indeed. Well, as The Netherlands prepare to head to the polls, France is gearing up for a political showdown. 10 presidential candidates have been whittled down until just two.

Well, the frontrunner Francois Hollande believes it's growth, not austerity that will help get his country back on track. Hala, he's not exactly a fan of the world of finance either. So he's made a big enemy there.

HALA GORANI, CNN INTERNATIONAL CORRRESPONDENT: Although the differences between the two candidates Francois Hollande, as you said correctly is the frontrunner, and Nicolas Sarkozy, the incumbent, are not fundamental differences, there are differences -- differences in how to approach the debt crisis on the surface. One of those is cutting spending. Nicolas Sarkozy would be in favor of more austerity and Francois Hollande would be in favor of allowing some room for government spending in order not to completely choke off growth.

As far as the stock market reaction today, it's difficult to tell if an isolation that has to do with the political situation in Europe, if the collapse of the Dutch government, the uncertainty perhaps of a Francois Hollande -- potential Francois Hollande presidency -- or if it's because once again today we had disappointing economic indicators for the region.

You know, investors -- as you know full well, Max, they look at these indicators. And when there's any kind of uncertainty, any kind of worry going forward, if an indicator such as the manufacturing index across the EuroZone region, for instance, is disappointing, that will be enough to plunge share prices down.

And in fact, we saw indexes Frankfurt as well as in Zurich go down, not just in France and in parts of the region where there is political uncertainty.

So I think really it's an overall regional malaise that we saw today, Max.

FOSTER: Hala, is the relationship with Germany as well. If you just purely look at the economics. You have these two big powerhouses working together. Sarkozy was at the heart of that. If Hollande gets in, what does that mean for the relationship of Germany and that very powerful bloc keeping things together?

GORANI: Well, those two leaders, Anegla Merkel and Francois Hollande -- if indeed he is elected -- that's certainly not something that we're sure of. There's still two weeks until the second round. But an Hollande presidency would mean rebuilding a personal relationship.

That said, the relationship between the countries has been one of stability, of more or less cooperation for the last several decades. They make it work, the French and the Germans, when they have to. There might be disagreements on exactly, you know, precisely what measures to put in place to tackle this EuroZone debt crisis that is truly threatening the EuroZone and the common currency.

But in the end, they're going to have to come to an agreement, because the situation is grave. The unemployment rate in this region is very high in France as well. And many people here say that what has motivated their vote is the fact that they don't have really any hope for the economic future of their children in the way they had economic hope for themselves when they are younger. So these leaders are going to have to get to work, whoever gets elected on May 6, Max.

FOSTER: OK, Hala Gorani in Paris. Thank you very much indeed.

Well, as parts of Northern Europe balk at the prospect of austerity, Spain is discovering that while balancing its budgets it tough, returning to the -- returning the country to growth is even tougher.

Al Goodman joins me now from the Capital Madrid tonight. And a country back in the grip of recession. I mean, not unexpected, Al, but it's a powerful symbol of what's going on in Europe right now for a very large economy.

AL GOODMAN, CNN CORRESPONDENT: It is, indeed, Max. Now, the conservative government, which has been in power just a little over three months promised they were going to turn this economy around, clean thing up, the mess they said that was left by the previous Socialist government. Obviously they haven't done that yet. They have approved, or announced billions of dollars in austerity cuts, try to get that budget deficit down in line with Brussels, but they haven't figured out the magic formula to get growth.

And here we have the latest sign of that. Spain going back into recession. The second recession in just a little over three years. The last one back in 2009. There was a drop of 3.7 percent in growth, negative growth 3.7 percent. Now we have two consecutive quarters where the growth has declined by just tenths of a percent. But basically, consumer demand is down.

Why? Well, there's 23 percent unemployment. 5 million Spaniards out of work. There have been budget cuts. There have been salaries frozen and cut. People are timid about going to buy anything. They are saving if they can -- Max.

FOSTER: Al Goodman, Hala Gorani and Atika Schubert, thank you all very much indeed for joining us tonight.

Well, as the EuroZone's leaders attempt to deal with the fallout from the economic crisis, Iceland is attempting to bring its leaders to account. Former Prime Minister Geir Haarde was today fond guilty of negligence for failing to inform his ministers about the events which lead up to the collapse of the country's banking system in 2008. But he was cleared of three other charges and will face no punishment.

Speaking to CNN, Haarde said he had been a scapegoat.


GEIR HAARDE, FRM. ICLANDIC PRIME MINISTER: I have just followed the traditions that all my predecessors as leaders of the Icelandic cabinet have practiced throughout the decades. And, you know, maybe I'm just taking a hit from all of them.


FOSTER: Well, earlier I spoke to Stephen Pope. He's a man experienced in the world of finance, stretches across three decades. I asked him which of today's developments he found most alarming.


STEPHEN POPE, CEO, SPOTLIGHT IDEAS: Spain is a story we're quite familiar with right now. I would suggest that going forward, France, purely because of its size, is going to be a major problem. It has unemployment higher than Italy. In terms of its current account balance relative to the economy, that is worse than Italy. And it's certainly nearer the distressed Latin countries than you would say is for the European average. So generally speaking, France is a big problem.

FOSTER: But is it a problem because of the election result? Because austerity cuts will be less likely with those economic problems around?

POPE: Yes. I think that the takeaway from the first round of election was that no leading candidate addressed the issues facing France. And wonderful spending plans. How are you going to pay for it?

Now we're getting to the sharp end of the deal where it's the head to head, Sarkozy and Hollande. And again we're going to see a polarization of (inaudible) trying to garner the votes from the national front, try to occupy the center and yet still no reason address the problem and that we worry that if Hollande becomes the president he's going to say I want to promote growth. The only way that's going to happen is if there is somehow an agreement to have these euro bonds, these collective debt instruments within the EuroZone which we know the Germans are vehemently opposed to.

FOSTER: So there's a breakdown between the French and German relationship. Sarkozy was obviously very close -- is very close to Merkel. So your concern that if you lose that link, and that's what's coming out of the election, then that's damaging for Europe's economy.

POPE: If it is Francois Hollande who becomes the president, he's going to be rather disinclined to work fully with Angela Merkel give that while she said she would go and campaign for Nicolas Sarkozy and also even critical of this Franco-German pact saying that it was Germany who were the drivers and France was acting as the passenger. So think he really is concerned that France was a tag along partner at the top end of the EuroZone table. He wants France to assert its own strength, but unfortunately that comes through liberal spending and fiscal indiscipline.

FOSTER: And we talk about The Netherlands briefly, because what we've got there is a situation where there's been a backlash against austerity effectively. And Netherlands is very close in many ways to Germany. So we're seeing a small version of Germany playing out here?

POPE: Absolutely. Because The Netherlands has always been regarded as close to Germany in terms of its fiscal discipline. Holland has a long history of being a nation of bankers and managing the books very well. But suddenly, you have a very small economy that doesn't have many competitive edges out in the wide world, it's finding it hard to impose austerity and make these draconian fiscal deficit measures, cannot agree. You had one of the coalition partners walk out over the weekend, leaving the prime minister with no option other than to resign. And so now we have a small economy, a part of the inner core, which will lose its AAA status, become just another AA sovereign borrower. We know the world is full of those at the moment.

And so I think you're going to find that this is like another layer of the onion being peeled away. And people are going to start worrying what's going to happen to the core, what's happening to the fiscal drive that's been dominating the EuroZone since the last two years.

FOSTER: Is there a feeling that if it can happen in The Netherlands, it can happen in Germany?

POPE: Well, you see there is an election next year in Germany. We know that the SPD opposition are rather more inclined to support the concept of Euro bonds, because they're all for the bigger expansion and the welfare program for the workers, but I think what you'll find is that it is going to almost throw a spanner in the works. Some of the Germany PMI numbers have not been that impressive of late.

FOSTER: So manufacturing numbers?

POPE: That's right. And I think you could easily see that if German's heavyweight companies who have been selling a lot to China, if the China story turns sour and their sales aren't looking so good, suddenly Germany itself would begin to question the imposition of such tough austerity. And this will feed back to things we discussed many times before that at the core the principles underlying the EuroZone are becoming unraveled.


FOSTER: Stephen Pope.

Our top story tonight, markets have fallen on both sides of the Atlantic as the backlash against austerity promise yet more political upheaval across Europe.

But in France, the story isn't over yet. Coming up, how a far right candidate knocked out of the election could still play a leading role in its outcome.

Your watching Connect the World live from London. Still to come, two nations on the brink of Civil War. Bonds fall on South Sudan as tensions rise with neighboring Sudan. We'll bring you the latest.

I've never experienced anything so gruesome, killer Anders Breivik describes his actions and disputes claims of insanity.

And in sport, arrested and deported: we asked the British journalist kicked out of Bahrain if Formula 1's reputation is now damaged.

All that and much more when Connect the World continues.


FOSTER: You're watching CNN. This is Connect the World with me, Max Foster. Welcome back to you.

Now the European Union is rewarding a former international pariah for sweeping political reforms. Today, they've suspended most of its sanctions against Myanmar. Paula Hancocks is following the story tonight from Yangon.


PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Another international vote of confidence for the changes happening here in Myanmar. The European Union has suspended most of its sanctions, which is seen here as a reward for the reforms carried out by this new civilian government. But the fact that it's not a complete lifting of sanctions, just a suspension at this point, is also an incentive for the government to continue to open up.

Now that was a move that was praised by the National League for Democracy, Suu Kyi's party. I spoke to officials who said they were pleased it was just a suspension as they believe there are still fundamental issues that need to be solved in this country before this transition to Democracy can actually be considered a success. And that is something that UK foreign minister agrees with.

WILLIAM HAGUE, BRITISH FOREIGN SECRETARY: Progress is being made in Burma, but we remain very concerned about conflict and human rights abuses in some ethnic areas of Burma particularly in (inaudible). There are still political prisoners. There is a dispute today about swearing in of opposition members to the parliament.

So I think all this illustrates why it would be right to suspend, not to lift entirely, the sanctions.

HANCOCKS: But we can now say that there is a political stalemate. Just three weeks after that euphoric and historic election victory by Suu Kyi and her party, now the NLD is still insisting that there has to be a change in the wording of the swearing in oath. They say they will not say they will protect the constitution.

At this point, it's very unclear when or even if that change will happen.

Now some supporters of Aung San Suu Kyi have been speaking to on the streets of Yangon say they are very disappointed that she did not have her historic debut in parliament this Monday. And they're also concerned about what will happen. They don't believe this country can make the changes it needs to unless Aung San Suu Kyi is physically in the parliament.

Paula Hancocks, CNN, Yangon, Myanmar.


FOSTER: Well, here's a look now at some of the stories connecting our world tonight.

Sudan and its newly independent southern neighbor are inching ever closer to all out war. Witnesses in South Sudan say Sudanese war planes attacked two towns on Monday hitting an open air market. Officials in the south say two children killed. Sudan denies the air attack. It's also rejecting international calls to renegotiate with South Sudan over control of an oil rich border region.

New concerns today about the relations between Egypt and Israel after Egypt canceled their biggest bilateral trade agreement. Two state run energy companies say they'll no longer supply Israel with natural gas. They accuse Israel of not meeting its financial obligations. But late today an Egyptian official suggested the contracts, or the contact could be renegotiated. Israel's prime minister is downplaying the political significance of the dispute, but some believe it's not just about business.


ITZHAK LEVANON, FORMER ISRAELI AMBASSADOR TO EGYPT: In fact it is commercial, but in our relationship between Egypt and Israel, everything is politics. When an Israeli doesn't get a visa, this is political. When you stop the gas, it's political. Everything that we do between Israel and Egypt has a political aspect. So in this regard, yes, it is a commercial dispute, but with a lot of political aspects that we have take into account.


FOSTER: Self-confessed killer Anders Breivik has offered a limited apology to some victims of his rampage in Norway. At his trial, he apologized to the non-political victims of his bomb outside a government building in Oslo. Breivik did not apologize for killing 69 people at a youth camp later that day as he considered them political activists.

City officials confirm the police chief in the Trayvon murder -- Trayvon Martin murder case in the U.S. will resign. Sanford, Florida chief Bill Lee caused an uproar when his officers did not initially arrest George Zimmerman. Zimmerman shot and killed the unarmed teenager in February. He's now pleaded not guilty to second degree murder and is free on bail. Lee had stepped down temporarily at the weekend after city officials criticized his handling of the incident.

We're going to take you to a short break now, but when we come back. We'll follow one decision to race in Bahrain hurt the sport in the long- term. We'll discuss next.


FOSTER: You're watching Connect the World live from London. Welcome back. I'm Max Foster.

Now the Formula 1 season is shaping up as one of the most exciting in recent memory, on the track at least, but this past weekend's events in Bahrain has many wondering about the sport's image off the track of course. Don Riddell joins us from CNN Center with a closer look at this.

Well, we've had four different winners this far this season. So at least on the track, it's been interesting.

DON RIDDELL, CNN SPORTS CORRESPONDENT: Well, it's been absolutely brilliant on the track, Max. Thanks very much.

Yeah, last season Sebastian Vettel just ran away with it, didn't he? I mean, we knew after a few races what the outcome of the season was going to be. This year, it just couldn't be any different. We've had four different drivers and four different teams taking the checkered flag. That hasn't happened since 1983. There are only 12 teams in Formula 1. Already 6 of them have actually featured on the podium. So just an incredible start to the F1 season.

But that is an image that the sport really did not want. That looks like the smoke from the protesters in Bahrain. You can see it billowing over the track. And while this was yet another incredible race with Vettel winning in Bahrain to return to the top of the driver's standings. It really didn't get very much coverage, didn't it?

The news media all around the world focused on the situation in Bahrain and the debate reigned and continued right throughout the weekend should F1 even have been there?

Well, earlier I've spoken to one of the journalists that were covering the race. Channel 4, ITN's Jonathan Miller, who wasn't accredited to be in Bahrain. He was actually detained by the police and he's now been released and has returned to Britain.

This is his verdict on how F1's image has been affected by the events in the last few days.


JONATHAN MILLER, ITN: The F1 leadership are -- have interesting things to consider. You know, really called their judgment into question as to whether it was appropriate to run that race, particularly this year, in Bahrain, when it was clear that things went over, that they weren't settled. And for all Bernie Ecclestone, the ring master of -- of the Formula 1's determination that it was quiet and peaceful in Bahrain. It is not.

And you know I think F1's reputation in the eyes of the broader world will probably have been damaged. The message that the protesters very clearly gave to the cameras, my own cameras included these amazing posters that were being held up by, you know, women, children as they marched down the streets under -- and clouds of tear gas, said do not race over our blood. And essentially that is what F1 did.


FOSTER: Do not race over our blood is powerful words, isn't it Don?

But another story that we've been following is the death of this London marathon runner, absolute tragedy. But actually an amazing story of positivity has come out of that today.

RIDDELL: Yeah. I mean, real tragedy. This was a 30-year-old runner, Claire Squires, who died within a mile of the end of the finish line at the London Marathon on Sunday. Now, she, like many of the field in the London marathon, and I was one of these a few years ago, they do this to raise money for charity. And she had picked a Samaritans as her chosen charity. She was only hoping to raise 500 pounds, which is what, $750. But I guess we're looking at the power of modern communications and some incredible public sympathy.

You can see there from her donation page that more than 14,000 people have now donated to her cause. And she has raised posthumously it is -- has to be tragically said -- she has raised over 160,000 pounds. That number has just been growing and growing all day as more and more people have been hearing of Claire's story.

She has been a fundraiser in the past. Her mom works for the Samaritans. The family are, of course, devastated today. But, you know, that is turning out to be her tribute.

FOSTER: Unbelievable. And the drag racing crash in the U.S. No injuries, but pretty remarkable when you look at the pictures.

RIDDELL: Yeah. Well, these pictures just speak for themselves. This is from Kansas speedway. The driver is Lizzy Musi who loses control quick spectacularly. And the rest just speaks for itself.

Camera absolutely perfectly placed. I don't believe there was anyone manning at that camera. Cameras that are that close to these kind of circuits usually are just locked off, as we say in the business Max. Things like this can happen.

Car destroyed, camera destroyed, but incredible pictures.

FOSTER: Unbelievable.

Don, thank you very much. Indeed, stay tuned for World Sport with Don in about an hour.

Still to come on Connect the World. The French presidential runoff could hinge on supporters of a candidate who didn't make it past the first round. We'll see how far right politician Marine Le Pen is emerging as king maker.

Wrestling with more than each other, the Afghan and NATO troops treading a fine line on a tense border.

And from Mumbai to Copenhagen and back, we take a look at Indian super chef Sanjeev Kapoor's fusion journey.


FOSTER: A warm welcome to our viewers across Europe and around the world. I'm Max Foster and these are the latest world headlines from CNN.

Markets have fallen on both sides of the Atlantic following the collapse of the Dutch government after it failed to agree on cuts to the budget. Investors were also spooked by the results of yesterday's French election, which saw Socialist candidate, Francois Hollande, come out on top as the race heads into a second round.

A Sudanese air strike has demolished a market in South Sudan. There's growing concern that Sudan and its southern neighbor are on the brink of all-out war over oil reserves. South Sudan broke away from Sudan and became its own nation less than a year ago.

The European Union is suspending most of its sanctions on Myanmar, praising its dramatic political reforms. Landmark elections recently swept opposition leader Aung San Suu Kyi into parliament, but she hasn't taken her seat yet because of a dispute over the lawmakers' oath.

Officials say the US police chief at the center of the Trayvon Martin case will resign. Sanford Florida's chief, Bill Lee, had stood down temporarily after a no-confidence vote. He's been criticized after police didn't immediately arrest George Zimmerman, the man who killed Martin.

The presidential election in France is down to a two-man race, but tonight, much of the talk is about a woman who could heavily influence the outcome. Far-right politician Marine Le Pen is emerging as a kingmaker of sorts after her surprise showing in the first round of voting. CNN's Hala Gorani joins us again from Paris with more. Hala?

HALA GORANI, CNN INTERNATIONAL CORRESPONDENT: Well, yes, when the results came out yesterday, the initial exit poll results giving Marine Le Pen 20 percent, people were quite surprised.

In the end, when the final results were announced by the Ministry of Interior here, she was closer to 18 percent, but still, the highest score ever by the National Front.

You were talking about Marine Le Pen. She's 43 years old, she's a bold, blonde woman who touts anti-immigration as one of her major issues, and she's been able to attract French voters who say they don't like the current system, who say they don't trust Europe, and they don't think immigration should be allowed to flow freely in and out of this part of the world in Europe.

And Jim Bittermann took a look at why her role is going to be important in French politics and how she also has her eyes set on another political electoral race a little bit further down the line.


JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Marine Le Pen arrived at her party headquarters the day after the first round of the French elections with a broad smile on her face and bright hopes.

She finished a surprisingly strong third in the race for the presidency and now sees a good chance for her party in June's parliamentary elections.

MARINE LE PEN, NATIONAL FRONT CANDIDATE (through translator): Well, we'll have an executive council, and then we're going to discuss all this and we'll prepare for the legislative elections.


BITTERMANN: What also has raised her spirits is the way her party captured 18 percent of the vote, a result higher than her father ever scored, and he was the founder of the party.

It puts her now in an enviable position where she may be courted for her support by Nicolas Sarkozy, the incumbent president, who will need some if not all of the votes she captured if he is to win another term.

But Le Pen has no love for Sarkozy, despite a photoshopped picture of the couple now making the rounds of the internet. In fact, Le Pen is refusing to endorse Sarkozy for now, saying that she'll explain who she'll vote for on the National Front's Joan of Arc Holiday, May 1st.

It seems likely that she'll tell her voters to abstain rather than vote for Sarkozy. The party spokesman explained why.

LUDOVIC DE DANNE, SPOKESMAN FOR MARINE LE PEN: Abstention should be taken into consideration for the second round. We will see the results and the figures. The voters do not belong to us. We do not say that they belong to us. They are wise people, I hope, because they vote for us, actually, more and more, so, we'll see what happens in the future.

BITTERMANN: At least one thing in the future, the legislative elections in June. The National Front is counting on obtaining a party group in the French National Assembly, and for that reason as well, Le Pen does not wish to be seen supporting Sarkozy. She said after the vote, she'd like to see Sarkozy's Center Right party implode.


GORANI: All right. Well, the question is going to be for Marine Le Pen is what kind of impact is she going to have on this two-man race. Right now, however, Francois Hollande is ahead in the first poll conducted after round one, about 54 to 46. So, both men are going to have to slug it out in order to -- in order to register a victory on May 6th for the second round, Max.

FOSTER: When they ask Le Pen's supporters to abstain, that's very difficult to do if you're a voter and you care about an election, so if they are going to vote, who are they going to vote for, do you think, Hala?

GORANI: Well, when they do vote, because their candidate, of course, didn't make it to the run-off, they tend to vote for the right-wing candidate, in this case, Nicolas Sarkozy.

But many Le Pen voters will abstain. Half, perhaps 70 percent of Le Pen voters will vote for nobody at all in round two, and that's one of Nicolas Sarkozy's biggest problems. It's that people who voted for other candidates on the right are less likely to vote for him than people who voted for other candidates on the left are likely to vote for Francois Hollande, his Socialist challenger.

So, there you have an arithmetic and strategic headache for Nicolas Sarkozy as he heads into round two.

FOSTER: High politics, indeed. Hala, thank you again.

Now, one of France's most acclaimed stars appears to be disillusioned with French politicians and the election. Juliette Binoche has in the past described herself as a socialist and was particularly critical of Nicolas Sarkozy at the 2007 election. But this time, the Academy Award-winning actress told Becky she didn't feel inspired to support any of the candidates.


JULIETTE BINOCHE, FRENCH ACTRESS: I think they are running for power. And I understand we all have that in our being, but you've got to get over that. There's a -- that's why when I -- I'm sorry, but when I listen to Obama, I feel there's more of a person there. I believe in the person. He has a vision that is beyond himself.


FOSTER: Well, you can catch Becky's full interview with Juliette Binoche later in the week on CONNECT THE WORLD as she responds to criticism about her controversial new film, "Elles."

Up next, tensions heat up on the Afghan/Pakistan border. We have an exclusive report on the NATO troops who are coming under increasingly unfriendly fire.


FOSTER: Now, for an exclusive report from Afghanistan, the border with Pakistan, there. The area's been a flashpoint of violence with accusations of insurgents being allowed to cross the border and even NATO troops being fired on from Pakistan. CNN's Nick Paton Walsh joins me, now, from Kabul. What have you found out, Nick?

NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT: A deeply complex area about which ISAF rarely ever want to talk about, the occasions when they return fire into Pakistan because of the dicey relationship between America and Pakistan.

But at FOB Tillman, an outpost on the Afghan/Pakistani border, we learned that ISAF has returned fire into Pakistan four times since June, something, though, they rarely wanted to talk about.


WALSH (voice-over): Forward Operating Base Tillman is at the heart of the most complex part of America's war on the Afghanistan/Pakistan border. On the other side of the border, insurgents seek shelter. Across it, the Pakistani and American military eye each other, often with suspicion.

There's sensitivity about our visit and unusually, a press officer is sent to watch over us. Twenty-four Pakistani soldiers were accidentally killed by US forces in November on this border, so it's tense even up in these silent heights. Nobody wants to talk about insurgents crossing over here.

UNIDENTIFIED MALE: I can neither confirm nor deny that. You'll have to talk to my commander, the PAO staff's on crew.

WALSH (on camera): Here, you can see just how close they are to Pakistan's border, on the other side of which is said to be a sanctuary for the feared Haqqani insurgent network. Incidents on this border tend to flare into massive diplomatic scandals, so you can see why everybody here is so acutely sensitive about what they'll see.


UNIDENTIFIED MALE: That is not right! That is not right!


WALSH (voice-over): We visit the Afghan unit and interrupt a friendly wrestling match. The Americans tell us the Afghans are reliable partners in this fight. One of them exhausts this American into a tie.

The Afghans tell us the nearby Pakistani army not only let the Taliban cross the border to attack them, but make a strong accusation the Pakistanis also fire upon them, most recently on April the 14th.

MASOUD KARIMI, AFGHAN ARMY COMMANDER (through translator): The Pakistani checkpoints are only three kilometers from here, and when we go patrolling towards the border, we come under fire both from the Pakistani military and the Taliban.

Last week, when we went near the border, we were attacked with an anti-aircraft gun and mortars by the Pakistani army from their checkpoints. We are not only attacked from the Pakistani side, but we are also attacked by the Pakistan army.

We just saw them with our own eyes, but the Pakistani shoulders were firing at us, and on the same day we report it to the Americans. But the Americans told us that it was from the other side of the border, and they didn't have permission to conduct operations there.

WALSH: The Afghans pinpoint that checkpoint is on the border and show us video about various clashes.

NATO confirms Afghan soldiers hear we're in a cross-border clash that day, but it's not just the Afghans. The Americans here are also targeted by shells fired from inside Pakistan, the US commander admits to us.

WALSH (on camera): So, how many times since you've been here have you returned fire against targets located on the Pakistani side of the border.

CHARLES SEITZ, CAPTAIN, US ARMY: I have no idea. I don't keep -- I don't remember those numbers.

WALSH: I want to find that hard to believe, to be honest. Because that must be a serious issue for you here, when you have to return fire to a neighboring country.

SEITZ: It is, but like I said, because I'm not the approval authority for it, I don't keep that number.

WALSH: But you act from this base.


WALSH: Right.

SEITZ: I don't remember -- I don't know the number.


SEITZ: And that's what you're asking, is the number --

WALSH: But it has happened during the time which you've been here.


WALSH: OK. If I said to you that they were between -- you had over five times have fired into Pakistan in response to being fired up, from inside Pakistan, would that be accurate, or does that sound like a low number to you.

SEITZ: No, that sounds accurate.

WALSH (voice-over): NATO confirmed Outpost Tillman has fired into Pakistan four times since June. A US official said they tried to contact Pakistani officials first, although a Pakistani military spokesman said that doesn't always happen.

It's clearly a sensitive topic, and we're asked to leave our embed early. As we board an American helicopter, a Pakistani soldier gets off. Neither NATO nor the Pakistan military could explain what he was doing there.

The United States is slowly leaving this area, leaving its complexities to the Afghans and their clear belief the Pakistani army targets them, leaving enmity and mistrust and an insurgent sanctuary behind.


FOSTER: What was that Pakistani soldier doing there?

WALSH: We still don't know. ISAF won't explain his presence, and the Pakistani military go even further to say that their soldiers shouldn't be in that kind of military American space. It's probable that he was there in some sort of liaison capacity.

He must have been there with knowledge of the Americans, getting off one of their helicopters with what seemed like a translator behind him.

Perhaps this is some sort of move that neither side want to openly acknowledge to try and improve communication in this buried, confusing area, where we have these four different elements: the Taliban, the US military, Pakistani military, and Afghan military, often getting confused up with each other and resulting in these particular exchanges.

And you can imagine, also, given the strength of anti-American sentiment inside Pakistan and often the strength of anti-Pakistan sentiment inside America after they apparently seemed to have allowed bin Laden to live somehow inside Pakistan for a decade, that both sides wouldn't really want to acknowledge this.

But it really gives you an idea of the complexity here and recriminations across that border. This really is something nobody wants to talk about simply because it's such a raw part of this dicey relationship between America and Pakistan, Max.

FOSTER: Yes, a relationship that seems to be breaking down even further, which is a worrying indication.

WALSH: Well, this whole situation at the border's not something which is regularly aired in public. It's something people don't want to talk about, as you saw in that piece.

And we hear regular indications from US officials that their relationship with Pakistan is improving and likewise out of Pakistan since the clash we mentioned in November in which 24 soldiers were killed in that long-standing sense of suspicion since the bin Laden raid.

But really, things like this do have the tendency in the months and years ahead to flare out of control. Once the United States pull back from that area, which is happening slowly already, they're going to leave Afghans behind who fundamentally view that many times the Pakistani military is their adversary.

And without the US there to kind of play some buffer with its technology, power, and diplomacy, there are many concerns, perhaps, that this could spiral out of control somehow, Max.

FOSTER: OK, Nick, thank you very much, indeed, for joining us with that.

You're watching CONNECT THE WORLD. When we come back, culinary king Sanjeev Kapoor swaps his spicy Indian kitchen for a more subtle Scandinavian one in this week's Fusion Journey.


FOSTER: Now, in tonight's Fusion Journey, we follow one of the world's biggest TV chefs, Sanjeev Kapoor, as he travels from India to Denmark in search of inspiration. He's spending time with the owner of Norma, the Danish restaurant twice voted best restaurant in the world.



SANJEEV KAPOOR, CHEF, "KHANA KHAZANA" TV SHOW HOST: I'm chef Sanjeev Kapoor from India, and I've been cooking for over 25 years, now.

Welcome to Sanjeev Kapoor's kitchen!

I first thought that I would become an architect. The motivation at that time was to do something which nobody in our family, nobody in our neighborhood, none of our friends should be into.

So, being a chef at the time sounded really different and maybe bizarre, also. So, that caught my attention, and I became a chef.

In India, we have the opportunity that we have so many different ingredients, which I think can be used. Which, I think, different seasons, different flowers. Different hubs, different leaves, different ingredients.

In India, we love to work with our hands so that you can feel the ingredients, you can really taste them while you are cooking, and that, I would say, is typically Indian.

I think Indian cuisine is fairly bold, because what we have is unique blends that we have of spices and herbs. In one dish, we can have 15 to 20 different contrasting spices and herbs, and yet, we come up with one dish.

It's something which you cannot ignore. You have one spoonful of anything Indian, and you are bound to love it.

For my journey, I'm going to the Danish capital, Copenhagen, and the heart of Nordic cuisine. What is challenging is, then, from Indian perspective, taste is paramount, and our savory dishes are more salty, our hot dishes are more hot, our sweet dishes are more sweet, our sour things are more sour.

So, the subtlety that Nordic cuisine has is something which is lacking today in India, so I don't know how I'll be able to fit that into our food, here. I'm sure that once I go there, once I spend time there, that's something which I'll be able to change my thinking, and I hope I'll get some answers.

So, my expectation is a lot, and I know that after that, once I come back, I'll have so much to work on. I'm really excited.



FOSTER: Well, on Wednesday, we'll see how Sanjeev Kapoor's adapting to those subtle flavors of Denmark as he fuses Indian spice and Danish simplicity. We'll be sure -- we're sure to be in for a mouthwatering surprise.

For more on the Indian super chef, you can take a look at our website, Sanjeev writes about his experience in Copenhagen and gives details on the contrasting cuisines.

Now, what did you make of tonight's stories? The team at CONNECT THE WORLD wants to hear from you. Have your say at, and you can tweet us @CNNconnect, and that's where you'll find us on Twitter.

Finally, in tonight's Parting Shots, a remarkable story of a football that washed up on the other side of the ocean to be reunited with its owner. David Baxter, seen here with his wife, found the ball in Alaska and noticed the Japanese characters written on it.

His wife was able to translate the name of a school in an area hit by the tsunami last year in Japan. With that information, they were able to track down its owner, incredibly, a grateful 16-year-old.


MISAKI MURAKAMI, LOST SOCCER BALL IN TSUNAMI (through translator): I didn't even imagine that my soccer ball would reach Alaska, thousands of kilometers away from Japan. It is my treasure.

I was to transfer to another school after third grade, and my homeroom teacher and classmates gave the ball to me. It has been hard to find my own belongings after the earthquake, but I'm very happy that my soccer ball has been found and is coming back to me.


FOSTER: Just imagine. I'm Max Foster. That was CONNECT THE WORLD, thank you for watching. The world headlines are up next after a short break.