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QUEST MEANS BUSINESS
Shake Up in Greece; Socialist Francois Hollande Wins French Presidency; Future Cities: Dhaka's Plan to Fix Traffic Congestion; Interview with Warren Buffett
Aired May 7, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: France and Greece both say no. The electorate gets their say on austerity.
Greece fails to form a new government.
And Warren Buffet tonight. He won't be investing in Facebook.
I'm Richard Quest. I mean business.
Good evening. The voters have spoken, and the message to the eurozone's leaders is clear. The austerity-first approach favored by politicians is too harsh and must be changed. Tonight, we are live in both Paris and Athens, where the political landscapes just got shaken in a big way.
Hala, we'll be with you in a moment in Paris. I need to go to Athens first to our correspondent Matthew Chance. New Democracy has failed, having been invited to form a government as the single largest party in the election. And now, tell me what happens and whether Syriza stands any chance, the new or the left-wing government, stands any chance of forming a government.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Richard, it's thrown the whole situation into some chaos because there were quite considerable hopes that this party, which of course backed the austerity plan, it's one of the parties that instituted them, would be able to form some kind of coalition, even though it didn't get a majority itself, it was hoped it could carry on along that path.
But Antonis Samaras, the leader of the party, appeared on state television within the last hour saying that it's spoken to all of the political parties that have gained seats in the parliament as a result of this election, and none of them had given a yes to joining a coalition with him.
He said he tried, but he failed, and handed the mandate, as it's called here, to try and form a coalition, to the next-largest party in the election, which is the coalition of the radical left, which emerged, essentially, from nowhere to become the second party in the elections.
The big difference, of course, is that that party, unlike New Democracy, is fundamentally opposed to the austerity measures. And so, if it can form a coalition -- and that's a big if at this stage -- it will be a coalition that is forged on the basis of opposition to austerity measures, which obviously has huge implications not just in Greece, but for the eurozone as well.
QUEST: Matthew, two questions in one. We're getting into the weeds of the Greek electoral system here, but bear with me, if you will. Firstly, is there a feeling that there is a feasible possibility of Syriza forming a government?
And secondly, is it at all feasible that they could go into minority government if they get enough? They may not get a total majority, but they could still say we're going to give it a go to see how far we get?
CHANCE: Well, I -- my understanding is that they have to demonstrate that they have a majority by the 17th of May. If they can't do that, the country goes back to elections. That's my understanding of the situation.
But looking at the figures that they've got to work with, and I've got a copy of some of the seats here that the various parties have got, just doing a quick calculation, it's not going to be possible for Syriza, the coalition of the radical left, to forge a coalition purely with leftist parties, parties that share its anti-austerity point of view.
It's going to have to bring on the New Democracy, which is right of center, of course, if it is going to be successful to have a majority coalition government. If it attempts a minority government, I can't see, quite frankly, in this volatile political environment, that it's going to last any longer than a few weeks or a few months. So, I don't think that's something that might happen.
QUEST: Matthew Chance is in Greece and we will be with Matthew all week. It's obviously a warm night in Greece, and I don't just mean the temperature, politically, as well. Matthew Chance, who is in Greece.
There is change at the core of Europe as well -- as well as the periphery. France elected its first Socialist president in 17 years. You know it is Francois Hollande. Hala Gorani just finished doing the international desk live from Paris, stays on to do double duty to talk to us this evening.
Hala, we know that this was a protest vote about Sarkozy and about what they've seen over the last four or five years. But do the French people really want what they have elected and have woken up this morning to find?
HALA GORANI, CNN INTERNATIONAL CORRESPONDENT: You say it's a protest vote against Nicolas Sarkozy. I think it's also a protest vote against what they feel is a terribly harsh economic situation. France's unemployment rate is above 10 percent still.
What Francois Hollande will bring to this country is going to be something slightly different, of course, from Nicolas Sarkozy if he follows through on his campaign promises, and that is to renegotiate the fiscal compact with Germany. Francois Hollande won with a small but a decisive majority. So, French people are expecting this to happen.
But look at this. Before you ask me to follow up, you saw the CAC 40 today, one and two thirds of a percent higher. You saw the euro dollar that dipped below 1.30 that ended up over 1.30 at the close of trade in Europe. This is not an investment reaction by traders that signifies in any way that there's panic regarding the election of Francois Hollande, and it's very different from Greece.
QUEST: So how, then, Hala, since you've chosen to grasp the third rail in this, how, then, is Hollande going to renegotiate a fiscal compact with Germany when Angela Merkel says it's non-negotiable? Explain that, if you can.
GORANI: Well, that is the big question, because you can say you're for growth and for austerity. You can say you're going to balance your budget but at the same time create jobs. But the two things economically, of course, are pulling in different directions.
On the one hand, you need to cut spending, on the other, you need to increase spending. So the question isn't what is the method. The question is, what is the source of that money? Is it going to come from euro bonds, which Germany opposes. Is it going to come from the European Central Bank?
All these instruments that Germany is against, Francois Hollande is going to try to get some of his way. What analysts are saying is, look, this isn't going to be a complete reworking of the agreement between France and Germany and other eurozone members. It's going to be completed. That's what the socialists are saying with other agreements.
That's going to be the big question is, how are thy going to come together to come to a conclusion? Because they have to, Richard. They have to. This is the engine of the eurozone. They cannot disagree for long.
QUEST: OK. Hala Gorani's in Paris tonight. We'll talk more about this, and I know we'll be doing math on the fiscal compact.
Austerity's no longer inevitable, was what Hollande told his viewers last night in the victory speech. If he's true to his manifesto, there will be a major shakeup in France and, of course, in the rest of Europe.
As we were just saying with Hala, we were getting deeply into it straightaway, but he has promised to renegotiate the fiscal compact. This is the backbone, if you like, of the new European fiscal monetary union, whatever you like.
This pledge, he wants a greater focus on growth, and he says one thing is standing in the way, and it is this, of course. Angela Merkel. She says the pact is non-negotiable. So, they're calling it Frangela, as opposed to Merkozy as before.
As long as Angela Merkel says no, and as you'll hear in a second, she is saying it pretty clearly, one wonders how far the whole deal of renegotiation can go.
QUEST: It may not be -- we may have a little go at hearing dear old Angela Merkel in just a second, or young Angela Merkel in a second.
The other problem with Hollande is seen by some as the tax and spend approach. He says he's going to put in $20 billion or $26 billion euros over the next few years into the French economy, which will involve more investments, more jobs, and more growth. And he's going to pay for it not so much in deficit, but with higher taxes on corporations and the rich.
The headline-grabbing, eye-watering number is 75 percent top rate of tax. Also, inheritance tax will be changed -- will apply to millionaires, those over a million euros. The most controversial part of the manifesto is this. So, take the totality of what he is proposing to do and the fact he is now elected.
Thierry Breton is the chairman and chief executive of the French technology company Atos. He was also France's finance minister after Jacques Chirac. Mr. Breton joins me, now, from Paris.
When you look at the policies of Francois Hollande and you remember he is now elected, can he get these polices through, and should he?
THIERRY BRETON, CHAIRMAN AND CEO, ATOS: Let's read the question. First, if we see the market reaction, we can say that today, the market believe that he will be able to do it. In fact, if we look at the spread of the data, France, no movement at all. Flat. No reaction. If we look at the CAC 40, plus 1.65 percent.
So, it means that the market today, today, believe that he will stick to his commitment. And I just remind you, what are these commitments? He said, like Nicolas Sarkozy, that by 20 -- 12, at the end of 12, he will reduce the deficit at minus 4.4 percent. He said that next year, in 13, he will reduce it by minus 3 percent.
And of course, the market believe it. The question is, how will he do it? And now, the opening move will be in July when we will have the election. Being elected will have to be very careful, because this is when the prime minister will say what do we do?
QUEST: Right. In this environment, though, he has to balance this problem of the fiscal compact. Angela Merkel has said quite clearly today that she will -- there's no -- to be no renegotiation. He says he wants to renegotiate. You can see immediately, Mr. Breton, between the two positions there is plenty of blue water, and it's going to be difficult to see how he keeps that promise.
BRETON: Richard, I believe that this will be fixed more easily than everybody thinks. First, France and Germany will have to work hand-by- hand. And guess what? They will do it. Hollande said during the campaign that, in short, that it was necessary to add some growth strategy. But he will not renegotiate the treaty. This is impossible, and he knows it.
What Angela Merkel will probably say is that she will agree that for the south countries from Europe -- Italy, Spain, Greece of course --
BRETON: -- France. They will accept to have an addendum to the treaty to say that we need to have -- and by the way, we need to have -- a gross policy.
QUEST: OK --
BRETON: The IMF policy --
QUEST: When --
BRETON: -- of Mrs. Lagarde is going too strong, too hard for Europe. We need to take care of the people, and we probably need to ease a little bit, to ease a little bit the constraint for the population.
QUEST: OK. So, let's talk about this Greece -- this growth versus austerity. Whether it's Christine Lagarde, and I would, perhaps, also add in there Chancellor Merkel, austerity is no longer the watchword.
What growth policies? Because I'm getting weary, Mr. Breton, of hearing everyone say more growth without saying exactly which growth policies do you want to see.
BRETON: Remember, an economy grows in time. Today, we -- and believe me, I am the one who reduces the debt of my country, and I will stick always to this policy. We need to reduce the debt. We need to reach a balanced budget. That's really my belief. My only point is to say that to do this in two or three years is much too difficult.
By the way, what the markets are wanting is to be certain that we will be able to do it. They don't request a specific timing. What I believe today is that to commit to a balance budget by 17 is too early. Remember, the Germans said in 10 that they will come back with a balanced budget in 16.
BRETON: Six years. We need also at least six years. And again, what is important is to give a date and to stick to this date. What I believe is that if we ease a little bit, let's say that we will not be at balance by 16, but by 18.
In between, we will have room to add more measures to make things a little bit more socially acceptable. This is how and only how we will be able to put some measures to make things acceptable by our people.
BRETON: But again --
QUEST: Final question --
BRETON: -- we will have to stick to the commitment.
QUEST: OK. Final question. Can we say that the austerity thrust down the throat of Europe has failed as a policy?
BRETON: No, I don't think so. It was extremely important that we all took a commitment. So, this was important. It's done. Now, the question is, how? And again, the how is, of course, like always in political life and economic life, more important.
People think that that Hollande will probably do it more easily than Sarkozy. What they have decided here in France, now, he has to demonstrate that he can do it. But believe me, it will be a not-easy game.
QUEST: Mr. Breton, wonderful to have you on QUEST MEANS BUSINESS tonight. Thank you for putting that into perspective. The former finance minister of France joining us live.
More QUEST MEANS BUSINESS in a moment as Greece starts piecing together a new government. The voters don't want austerity, the European Commission, well, they seem to want it.
QUEST: Francois Hollande will be thrown right into the thick of things. May is going to be a pivotal month for the future of the eurozone. He will barely know where the photo copier is before he's having to do something.
May the 14th, one week from now, there is a euro group meeting, and he will be, obviously, having to attend that. This will be the first chance to look at the whites of the eyes and see exactly what he means and how he's going to do things.
Then, on the 15th, there's an ECOFIN, European Finance Ministers. So, euro group is eurozone, and then ECOFIN for the whole lot of them.
Don't -- hasn't even got time to get that over and done with before there is May the 16th, when he is going to be or most likely he will be inaugurated, Wednesday May the 16th.
Now, as -- once he's in position, things really start to speed up. On May the 18th, the first big test of his international stage and strategy, the G8 meeting in the United States at Camp David with President Obama.
Still more dates within the month that he's going to have to -- we're going to have to keep an eye on. All this relates to Hollande and what Hollande's going to do, but by the time we get to May the 31st, it is Ireland and the vote on the fiscal compact.
Later in the year, we have the Netherlands elections coming along. So, as you can see, right the way through the month, there is an enormous number of dates where this could all get tricky. And Christine Lagarde says growth and austerity are not mutually exclusive. Jim Boulden is with me, now. Jim?
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Yes. Is there a way to get growth and keep austerity on?
QUEST: Is there? Is there? Is there?
BOULDEN: I can't think of a way.
QUEST: Well, there must be, because everybody says there is.
BOULDEN: Well, they have some wiggle room in France because, of course, the budget deficit isn't nearly as bad as, say, the UK. But why all these dates matter is that any one of these meetings, if it looks to the markets that Europe wavers at all, to give him some sort of good PR after his election, the markets might get quite worried. But as of now, they're very muted about all this.
QUEST: We'll have a look at the markets in just a second -- and factor in why they didn't react as badly as some had feared.
BOULDEN: First of all, we knew Hollande would probably win, so that isn't a surprise. When you look at Greece, it was always going to be an issue about how Greece forms another government. It's going to be a messy time to form a new government. But again, I think the markets were aware of that. And in some ways, the markets have moved beyond Greece anyway.
QUEST: All right, look at the markets, and we can --
QUEST: -- we can factor in exactly why.
BOULDEN: Did you look --
QUEST: They were very bad to start with --
QUEST: -- at the beginning of the day.
BOULDEN: But this is why I asked for these, because people were looking at, obviously, Athens General being very bad, because the banks there did very badly. However, as the afternoon kicked in, Spain, Italy continued to do very well, and Paris rebounded, and you can see they finished higher than 1.5 percent.
Who knows what'll happen tomorrow or the next day, but the bond markets were very calm. The euro fell a little bit and then stabilized around 1.30. So, the markets didn't react, that's the bottom line. If they get worried again --
QUEST: I don't agree.
BOULDEN: -- about Greece.
QUEST: I think you're putting -- I think that's a favorable view.
BOULDEN: Oh, yes. No. I'm saying that people were worried all weekend the markets would have a very bad reaction. We saw that in Asia.
QUEST: Six percent down on the Athens market!
BOULDEN: Very small market and a lot of banks there we -- who obviously are going to have a hard time getting paid if -- if -- Greece doesn't get its next tranche of money in June.
QUEST: Of the two elections we had today -- over the weekend, and let's put to one side the German regional elections, if we may. Of the two major elections we had, France and Greece, which was the most important?
BOULDEN: France by far. Mr. Hollande has got to be seen to be in the camp of Europe with Mrs. Merkel shaping European policy for the years to come.
QUEST: And what do you make of the fact that Citi, in their document today, said the likelihood of Greece leaving is now between 50 and 75 percent?
BOULDEN: In the next 12 to 24 months, not this week, next week, or the week after.
QUEST: Jim, thank you very much.
Time now for our Currency Conundrum. In 2008, a loaf of bread cost how many Zimbabwean dollars? Who writes these? One trillion, two billion, ten million? That's the Currency Conundrum.
As for today's numbers, the euro has managed to recover, as Jim was saying. It made gains almost three quarters of one percent against the dollar, now back at 1.30. Those are the rates, this --
QUEST: -- is the break.
QUEST: Tonight's Future Cities and the first in our series of reports from the capital of Bangladesh in Dhaka, a city where the commute to work is a growing challenge, cars and buses competing with rickshaws as travelers face a daily struggle on the roads, often in temperatures of more than 100 degrees Fahrenheit. Tonight, Leone Lakhani reports on efforts to keep Dhaka's traffic moving.
LEONE LAKHANI, CNN INTERNATIONAL CORRESPONDENT (voice-over): Welcome to Dhaka, Bangladesh. This heaving mass of humanity, 15 million people and counting, all trying to get around.
LAKHANI (on camera): Dhaka's transport story is one of congestion, chaos, and calamity. The city here is choked with people, pollution, and traffic. And at the center of it all, it was described as the traffic clock, the dandor (ph).
S M SALEHUDDIN, DHAKA TRANSPORT COORDINATION BOARD: Dandor means traffic conditions. It is a part of our life, just learning to navigate.
LAKHANI (voice-over): Dr. Salehuddin has spent years trying to get to grips with the complexities of Dhaka's transport system.
SALEHUDDIN: Today, we have a real crisis point. I drive my car myself, and the reality is, it's very difficult, because you have a lot of different modes of transport, and the average speed, you can hardly reach to 7 to 10 kilometers per hour.
LAKHANI: Cars are not king on Dhaka's roads. Buses, bicycles, rickshaws, and pedestrians all compete for road space in a city which at last count has only 57 traffic signals.
SALEHUDDIN: Dhaka was actually -- a lot very unplanned there. We have only 78 percent road space in comparison to other cities, we have 25 to 30 percent of the area.
LAKHANI: The flow of traffic is painfully slow, dictated by the pace of pedal power and Dhaka's many human taxis.
LAKHANI (on camera): One of the main modes of transport in this mega city is the rickshaw. There are an estimated 400,000 of them on Dhaka's roads, and this is where Dhaka police lay them to rest, here at the rickshaw cemetery.
LAKHANI (voice-over): For urban planner Salma Shafi, rickshaws are a major part of the problem.
LAKHANI (on camera): How many rickshaws are there in Dhaka? Hard to estimate?
SALMA SHAFI, CENTRE FOR URBAN STUDIES: Four hundred, five hundred thousand?
LAKHANI: It's hard to -- rickshaws are not the answer, then, necessarily.
SHAFI: No, rickshaws should be allowed only within areas for interior movement, because it's a very slow-moving vehicle compared to the other fast vehicles and cause a lot of accidents.
LAKHANI (voice-over): With the dubious accolade of being the rickshaw capital of the world, it's hard to see how these busy roads will ever give way to calmer reality.
Salma Shafi estimates that 60 percent of journeys in Dhaka are made by the urban poor on foot. Bangladesh is one of the world's poorest countries.
SHAFI: We need public transport very badly. We need commuter service or trains, rapid bus, and a lot of pedestrian walkways along the roads, because the poor people, the big number, most by foot.
LAKHANI (on camera): Like any city, Dhaka has its dreams and its vision for the future. There are many plans on paper, including a new metro, that would dramatically change the way people move around the city.
LAKHANI (voice-over): The strategic transport plan, announced in 2004, is a mammoth document which promises a lot. Billions of dollars worth of projects, which could alter the city completely.
An efficient bus rapid transit system to whisk people to work. Flyovers that bypass the congestion down below. A new metro almost approved. A large infrastructure project paid for by public-private partnership.
SAFI: Trying to make them actual, our mass transit rail is expensive, and then, how many people can afford it? So, you have to think about the common people and cheap mass transit -- transport system.
LAKHANI: One 20-kilometer metro line alone costs $2.7 billion, and Dhaka has plans for three. These flyovers, scheduled to be finished by the end of 2013, are the most convincing visual evidence that overhauling Dhaka's chronic traffic congestion is possible.
SAFI: For somebody like me who loves Dhaka, we have to make Dhaka liveable. There are people, we will all fight and work for Dhaka until we have the strength -- as long as we have the strength.
LAKHANI: The question is whether every dream will be realized, whether Dhaka can ever catch up with the demands of an exploding population. It's back-breaking work, shaping this developing metropolis into a city fit for the future.
QUEST: Hello, I'm Richard Quest, more QUEST MEANS BUSINESS in a moment. This is CNN, and on this network, the news always comes first. And tonight it is mainly, of course, about elections.
The risk of political deadlock rising in Greece after Sunday's parliamentary elections. About an hour ago, the leader of the new Democracy Party, Antonis Samaras, announced he has not been able to form a coalition government. The mandate now passes to the far left party that finished second.
In France, the president-elect Francois Hollande has agreed to visit Berlin shortly after taking office and be sworn in by May the 16th. Mr. Hollande says he wants to renegotiate the Eurozone austerity pact. That's a move the German chancellor opposes.
Election won and now Vladimir Putin is back in the Kremlin in the president's office. He took the oath during a lavish but brief inauguration. Outside the Kremlin, there was a large show of force as police arrested more than 100 anti-Putin protesters.
Other news and the U.N. secretary-general is blasting Syrian leaders for holding a parliamentary election when the violence has yet to stop. State media reports that there have been no problems and that voter turnout is high. Opposition groups say the elections are sham, meant to boost the legitimacy of the regime. The polls will close in half an hour.
It's been a violent 24 hours in Afghanistan. NATO officials say they are looking into reports civilians were killed in a coalition airstrike in Badkyz province in the northwest. And a Western source says attackers killed three U.S. soldiers south of a base in Ghazni province in the east.
QUEST: Greece has been urged to honor its bailout deal after voters made a very clear stand against austerity. The majority of Greeks voted for anti-austerity parties after years of painful cost-cutting. Now the leading new Democracy Party has failed to piece together its coalition and so the mandate moves to the left wing parties to see if they can do so.
Joining me now is Petros Doukas, Greece's former deputy finance minister.
Sir, the -- it's clear a new democracy couldn't form, at least in the first instance. Can the Syriza Party, do you think they will fare any better, and if they don't, ultimately are you back at the polls?
PETROS DOUKAS, FORMER GREEK DEPUTY FINANCE MINISTER: You're watching, Richard, democracy at work at its birthplace. And in mysterious ways. I very much doubt that Syriza, the radical left party who is given the mandate now to form a government, will be able to form a government. I think, in the end, we will go for new elections within the next four weeks.
It's going to be very difficult as things stand now to have a viable government being formed. The numbers don't add up unless the new Democracy conservative party, which is the largest party in Parliament, also is part of such government. That doesn't seem to be the scenario today.
QUEST: Even if there are new elections, elects a new democracy (inaudible) do manage to form some form of coalition, your parties have to accept that the voters have gone against austerity. Now I know you're stuck with the agreements and the bailouts and the measures. So how do you square that circle to recognize what the voters have said but still keep your international obligations?
DOUKAS: Absolutely. First of all, we say no return to the drachma. We are sticking with the euro. Second, we're saying we will honor all of our commitments. The signature of the Greek parliament and the Greek political leaders stand and is valid. What we have signed is honored.
The third is there are some items that we could sit down and talk about. But not unilaterally. We have to sit down with our friends and try to figure out a solution that is amicable and will alleviate a bit of the pain that has resulted. And yet there is election results. People feel --
QUEST: (Inaudible) --
DOUKAS: -- with their backs on the wall and they will behave very strangely. And we need to fix that.
QUEST: If you do what you've just said, you are ignoring what the voters have just said, surely. They have said no to more austerity. If you continue with those policies and hope that Chancellor Merkel, Mr. Barossa, Mr. Draghi will let you tinker at the sides, surely you're basically thumbing your nose at the electorate.
DOUKAS: There are not that many choices there. What is the other choice? The other choice is unilateral abandonment of the memorandum and the agreements. That means no new money coming into Greece. Greece still runs deficits. It needs foreign financing to get things moving. There is one big risk, however, as you suggest, that a timepoint European leaders may say, OK, we'll try to teach them a lesson. We'll give enough money to pay principal and interest.
But we won't give enough money to pay for pharmaceuticals, welfare, salaries and pensions. And that is indeed a very big risk. And I think it's very important and very critical that the radical left Syriza party participates in the government, because what has happened so far, and very successfully, some parties stay out of the government and they just kick and scream and that the parties that are in the government are just not performing.
Now it's time for all them to bite the bullet. Nobody stays out. They come in and they try to talk sense, let's put it that way, to our European partners and see if we can come up with some amicable solution. Indeed, there's no way to continue just cutting pensions. We cannot have so many people homeless. We cannot have so many foreclosures as we have --
DOUKAS: But I think if Europe really wants to solve the problem, they need to come to some understanding of our needs.
QUEST: You're talking about, I think it was Eisenhower, who said about being, better to be inside the tent dueling (ph) it out rather than outside the tent, doing -- and I think it was -- I'm sure a viewer will write and correct me if I've got that one wrong.
Finally, let's just say that you do go back to the polls in four to six weeks. Is Greece not inexorably moving to a vote that really is in euro or out euro? And it doesn't matter which we cut this cake. Ultimately, that's what the final decision's going to be.
DOUKAS: Yes. Over 70 percent of the people are very, very strongly pro-euro and pro-Europe. They don't even want to entertain the idea. But some leftist parties have had it easy. They can stay out of the government and just sit there and criticize. What I have proposed to our guys at the new Democracy conservative party is that in no way participate in any government that the radical left Syriza is not a full member of.
Mr. Tsipras, the head of the radical left party, said yesterday that Ms. Merkel needs to understand the Greek problem and the problem of the Greek people. I fully agree, we should take him to task that he also personally tries to convince her. There's no reason for him to stay out and just criticize those who are trying for a better future from the inside and taking the hard measures. We need to reform.
I think we all understand that Greece cannot be the Greece of three years ago, which borrowed heavily and spent heavily. We need to change our systems. We cannot always blame somebody else. But we need to have our allies understand that pressure is sometimes overbearing, and we need to ease it a little bit.
I know we cannot work out miracles, and the left will soon discover that they cannot work our miracles. But at least there will be more practical about it rather than kick and scream from the outside.
QUEST: Just make sure that there's a camera (inaudible) try with Ms. Merkel as they try to convince her. It'll make good photography, and I suspect (inaudible).
DOUKAS: I would very much like to see that. But we should be able to be led away without trying.
QUEST: All right. We thank you for joining us. And we know you are still waiting for the results of your own election, so thank you very much for joining us. Obviously in a list system used in Greece, Petros Doukas, he's still waiting to know whether he had actually been reelected to Parliament. It's a very busy day. Elections all over the place.
And also on markets, inside for the moment, Warren Buffett reveals why he won't invest in Facebook. And yet he says, when it comes to America and Europe, he's backing America. In a moment.
QUEST: Time for the answer to today's "Currency Conundrum," how much did a loaf of bread cost in Zimbabwe in dollars in 2008? The answer was A, inflation and hyperinflation, a loaf of bread cost 1 trillion Zimbabwean dollars. In 2008 the currency was discarded in favor of the dollar.
President Vladimir Putin says the next few years will define Russia for decades to come. The president took up the post on Monday for the third time. It was a lavish and brief ceremony. Outside, police arrested more than 100 protesters, angry over the return to the Kremlin. The election in March was clouded by allegations of vote rigging.
Well, the rumor he was inaugurated, austerity was the last thing on anyone's mind. Two thousand guests, 5,000 bottles of sparkling wine and lunch, nearly $1 million. And then there's the venue, those halls in the Kremlin, which I got a chance to visit last year. Let me put it this way: Putin is not the only thing in Russia that's seeking to restore past glory.
(BEGIN VIDEO CLIP)
QUEST: From the outside this view has barely changed in more than 150 years. Look on the inside, it's a different story.
QUEST: The ceremonial halls of the great Kremlin Palace where the czars were crowned and today's presidents inaugurated. During the period in between, Soviet functionality took over.
TATIANA KAMENEVA, RESTORATION ARCHITECTURE (from captions): There was nothing here. It was where the Supreme Council of the Soviets met.
QUEST: So all this -- I mean, were the chandeliers here?
KAMENEVA (from captions): None of it was here, none of it. It was only on photographs, sketches and in the archives.
QUEST: Tatiana Kameneva was the chief architecture on a grand restoration project where work began in 1994 under the order of the then- president Boris Yeltsin.
Over four years Kameneva and her team painstakingly rebuilt these pillars, remolded all the gold carvings, restored the two-headed eagle, Russia's imperial emblem.
This wall is one of the biggest changes in the restoration. It was taken down by the Soviets to make one long room. It was restored after the collapse.
QUEST: In total, 19 kilograms of gold leaf went into this room.
KAMENEVA (from captions): As a restoration architecture, I have always been convinced that you need to preserve authenticity. All of our history, even from the time of the grand princes, is linked to this place.
QUEST: By the turn of the century, the Kremlin halls have been returned to their former czarist glory.
(END VIDEO CLIP)
QUEST: More rain and strong storms across parts of Europe. (Inaudible) Jennifer Delgado (inaudible) World Weather Center. What's going on?
JENNIFER DELGADO, AMS METEOROLOGIST: Hey, there, actually, Richard, we're talking about tornadoes popping up through northern parts of Italy. And we're starting to see the threat for severe storms as we go later into the day.
But just to give you an idea, some of the storm reports, anywhere you're seeing in yellow, that indicates some pretty large hail that happened in Slovenia as well into Austria. But there's also some rain out there, moving into parts of eastern England, as you can see for yourself. It's really sweeping into the southwest, affecting Ireland down towards areas, also including France.
And that means the weather is going to stay cloudy as well as rainy as we go through today, as well as looks like a good part of tomorrow. But the real action today is going to be anywhere you're seeing in gold. We're going to see the possibility of some storms, produce some large hail as well as strong winds, and that includes the Balkan Peninsula.
And then spreading up to Ukraine as well as into Moscow. I know you just showed that video there, coming out of Russia, and it looks like the weather is going to be a bit tricky across that region. High temperatures today generally in the teens as well as in the 20s, Bucharest 18 for you and 16 in Paris and 16 for Tuesday's high in London.
But I leave you with some super video. Now, Richard, I don't know if you woke up early on Sunday. If you didn't, well, here's your chance to see the supermoon rising, this coming out of New Zealand, a very beautiful time-lapse from one of our iReporters. And then let's go to the other video, this one coming out of Iceland.
You can see behind all the snow as well as the mountains there, you can see the supermoon on the horizon. That was the best time of the year. Of course, the supermoon, Richard, of course, is when the moon is closest to the Earth. It happens once a year. I thought that was pretty cool.
You know, I checked it out --
QUEST: And I missed it.
DELGADO: Yes, you know what, I checked it out. I had a supermoon launching party. It was so lame, I have to tell you. It didn't seem much bigger.
QUEST: I won't ask whether it was the supermoon or the party that was lame. Jennifer (inaudible) for that. And I'll have Warren Buffett after the break.
QUEST: The billionaire Warren Buffett says Europe's economic problems are not going to fade away quickly. And he has more faith in the U.S. economy. Poppy Harlow asked him who he'd pick for U.S. president.
(BEGIN VIDEO CLIP)
WARREN BUFFETT, CEO, BERKSHIRE HATHAWAY INC.: I think Barack Obama. He's my choice.
I think the American economy is going to do well in the future, though. I mean, it's -- for 200 years, our system has worked. And we haven't lost the secret sauce. We go off the tracks occasionally. Capitalism overshoots. We have bubbles, all that sort of thing. But in the end, you know, we keep finding ways to unleash more human potential.
POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: But just this week, Mitt Romney came out and blasted the president, saying look what you're doing for job creation, simply isn't enough. Is he right? Or is the president doing everything that can possibly be done?
BUFFETT: He's doing sensible things and, you know, that's going to be the election. They're going to be blasting each other over a lot of things.
HARLOW: So if Mitt Romney were to become president, I know he's not your choice, he's going to push for lighter regulation on businesses. He's going to push for repealing what he calls ObamaCare. Would that be fundamentally better for American business, large and small? Could it be?
BUFFETT: I think it would -- I think it -- well, it would depend -- I mean, there -- obviously there are some regulations that don't make sense, but there's other places where more regulation is needed. So I don't think there's a way to make a blanket statement on that.
HARLOW: We've got to talk about Europe. Obviously with the key elections and what happens in Europe, specifically in France, specifically in Greece, and really the U.S. and its recovery hangs in the balance, and I don't think people pay enough attention, necessarily, to what's happening over there. What is your assessment of the situation in Europe? How concerned should we be here in the United States?
BUFFETT: Well, they have huge problems that have yet to be resolved. But Europe isn't going to go away. I mean, Europe will be producing more goods per capita 10 or 20 years from now. But they have huge problems to be resolved. They took on a common currency and they did not have common fiscal policies. They didn't have a common culture.
And when you have the common currency and they have the bonds of some country, major countries yielding close to 6 percent and others below 2 percent, you know that -- you know that you got a big, big problem.
HARLOW: So pay a lot of attention to Europe?
BUFFETT: Oh, sure. On the other hand, it doesn't make me bearish about the United States.
HARLOW: No matter what happens?
BUFFETT: Well, I think it -- obviously the greater the ease with which the Europeans solve their problems, the better off it is for us. But we are not -- we are not dependent -- our economy is not dependent on them coming up with a wonderful solution soon.
HARLOW: Talk about super PACs. What -- a man who has quite a lot of money, you could act like, say, Sheldon Adelson, and you could put a lot of money behind one candidate. At the same time, you clearly disagree with the Citizens United decision.
You disagree with super PACs. What kind of influence do you think, Warren, super PACs are making in this election? And, frankly, our political system? Do you think it's damaging?
BUFFETT: I think they're terrible for us. I mean, I think that they lead toward a plutocracy because you get huge amounts of money. And huge amounts of money don't appear in politics without consequences. And super PACs, by their nature, are probably going to focus on dubious arguments and negative advertising. And I won't contribute to one.
HARLOW: You won't -- but you do you think that they're going to drive this system?
BUFFETT: I think they can be an important factor in this election, sure.
HARLOW: All right. Final one for the last one, Facebook. Is Facebook a company that Berkshire or you personally will put your money into?
BUFFETT: Well, we never buy a new offering. I can't recall in my life buying a new offering. The idea that something coming out will say on a Monday that's being offered with significant commissions, all kinds of publicity and everything, the seller electing the time to sell is going to be the best single investment that I can make in the world among thousands of choices? That's mathematically impossible. So we are not a buyer of new issues.
HARLOW: But even if this time you said, look, even at Google and Apple now, you wouldn't be a buyer, but you wouldn't short them, either.
BUFFETT: I wouldn't short them, either. No, I wouldn't short -- I would not short Facebook. I would not short Google. I would not short Apple. They're fantastic companies. But in terms of what they'll be worth five or 10 years from now, I just don't know.
HARLOW: All right. Warren, thanks.
BUFFETT: Thank you.
HARLOW: Are you on Facebook?
(END VIDEO CLIP)
QUEST: Today traders had their first chance to react to the weekend elections and of course Europe, with the exception of the Greece, the markets took to elements in their stride. Look at the numbers and you will see -- and this is a message we leave you with tonight.
In a day when the French electorate voted for change, the Greece electorate voted for change, there was great uncertainty. The major markets finished higher, at least France and Germany did. Athens was sharply down, London was closed for holiday weekend.
That's the way it looks tonight. There is great uncertainty in the financial world, because that's QUEST MEANS BUSINESS. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable. The news is next.
QUEST: The first attempts to form a coalition government after Greece's parliamentary elections has failed. A short time ago, the new Democracy Party announced he has not been able to reach a deal with other parties. The mandate now passes to the far left party that finished second.
In France, Francois Hollande, the new president-elect, has agreed to visit Berlin shortly after taking office. He's due to take the oath before May the 16th in order to give (inaudible) prime minister. Hollande said he wanted to renegotiate the Eurozone austerity pact, which is opposed by the German chancellor.
The final polls are closing in Syria's parliamentary election. The U.N. secretary-general is blasting Syrian leaders for holding an election when the violence has yet to stop. State media has reported that there have been no problems and that voter turnout is high.
In Afghanistan a day of 24 violence. NATO officials say they are looking into reports civilians were killed in a coalition airstrike in Badkyz province in the northwest. And a Western source says attackers killed three U.S. soldiers south of a base in Ghazni province in the east.
The news headlines here on CNN. Now to New York, "AMANPOUR" is live.