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QUEST MEANS BUSINESS
European Markets Tumble on Fears of Greek Exit from Eurozone; Greek Government Deadlock; Greece's Future Debated in Brussels; Francois Hollande Inauguration Tuesday; Hollande and Europe's Future; Luxembourg Prime Minister Denies Greek Exit Talks; Europe's New Direction; Uncertainty Over Greece Drives Down Euro; Future Cities: Dhaka Finds Answer to Rubbish Problem
Aired May 14, 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: Tonight, fears of an exit and fears of exposure all cause stock markets to fall.
In Greece, there's an extra push to form a coalition government.
And the exit of executives. Bosses pay the price at Yahoo and JPMorgan.
I'm Richard Quest, tonight live from Paris where, yes, I mean business.
Good evening to you. Tonight, this is one program I guarantee you need to stay with us for for your financial health and well-being.
Winning the election last week this time, President Francois declared that Europe is watching us. Now, of course, the talk has shifted from austerity to growth. So, we are in Paris on the even of Hollande's ascendancy to the presidency of the Republic of France.
Also tonight on this program, we are live in Athens, where political leaders are making their last-ditch efforts to break the deadlock and somehow form themselves into a government for Greece. It has reignited many fears that the euro and the eurozone could be under serious pressures. We'll also be in Brussels, where we talk to finance ministers who are holding their own meeting.
We begin with the markets and a serious and major sell-off across Europe. For investors, the unthinkable has happened. These stocks have fallen on fears that Greece will leave the eurozone. The big three markets all down nearly 2 percent, Paris off more than 2 percent.
Banking stocks took a hit. Barclays down 6.4 percent, Lloyd's and Credit Agricole both down 5.5 percent. The Athens composite down nearly 5 percent, its lowest point in 20 years. Spanish bond yields, their highest level in 2012 so far.
So, what was behind all of this? We need to start our coverage tonight in Greece, where there is an extra push to try and form a coalition government. Now, unfortunately, it seems as if those talks have come to an end, because nobody really wanted to do a deal. If new elections are held, the question is: what happens for the left, particularly the Syriza Party, whether it garners further support.
Our correspondent Matthew Chance joins us tonight in Athens. The latest position, Matthew, does not bode well and poll -- the next poll probably in June, is that right?
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I think it's just a little early to say that now, because even though the talks that were being held between the president of Greece and the main political parties, those last-ditch efforts to forge a coalition, over the course of the past few minutes, those talks have broken up.
But what's emerged out of them is a new proposal that's being made by the president of Greece for a technocratic government to be put in place with some kind of support from the political parties in that parliament behind me.
They've delayed further talks until tomorrow, kicked the can a bit further down the road to make a decision about whether to go to an election or not. This new technocratic government proposal may have some traction.
But at the same time, it's kind of deeply flawed as well, because many of the left-leaning parties in this country, who were elected on a platform of opposing the austerity measures have already said just minutes after that proposal was made public is that if that technocratic government is going to push forward Greece down the road of austerity, then they won't support it.
And so, we're back at square one, and the next option, of course, constitutionally in this country, will be fresh elections to try and get a more decisive decision from the Greek elections.
At the moment, though, again, the decision has been offset until tomorrow, where there will be more meetings between those political leaders to see if something can come out of this.
QUEST: A difficult question that I need a quick answer to, Matthew. How aware are they now and how much is it playing into the mix that finance ministers in Europe and others are now openly saying if Greece goes, so be it?
CHANCE: Well, I think the Greek people and Greek politicians are increasingly aware of this. All of the other issues that fog the waters here have been cleared away, because now a decision about whether Greece stays in the euro or whether it crashes out of it. And that's what the Greek politicians and the Greek people, if it goes to elections, will have to decide on.
QUEST: All right, Matthew Chance, joining me from Athens with that side of the story.
European finance ministers, as I alluded to Matthew there, are now openly discussing -- beg your pardon -- Greece's exit from the eurozone. They're gathered for a eurozone meeting tonight and eurozone group, and an Ecofin later in the week.
Austria's finance minister says, "While Greece could not leave the eurozone, leaving the eurozone altogether was now a possibility." Her Irish counterpart, however, said it was important to keep Europe together.
France's new --
(BEGIN VIDEO CLIP)
MICHAEL NOONAN, IRISH FINANCE MINISTER: I would like Greece to stay in the euro. I think it's very important that the euro stays -- the eurozone stays intact and that the very many countries that want to join the euro and stabilize -- will have the stabilization necessary to allow them to join.
(END VIDEO CLIP)
QUEST: France's new government takes power on Tuesday, when Francois Hollande becomes the first Socialist president in 17 years. The city is abuzz, as you might imagine, with what is going to happen next.
The Hollande era will officially begin when he is inaugurated in Paris, though he will not be staying in France for long. Immediately after the ceremony, Mr. Hollande will fly to Germany to meet Chancellor Angela Merkel.
She's in special need of allies. Her party suffered a big defeat in region elections this week. The Christian Democratic Union, the CDU, soundly beaten in Germany's most populous state, North Rhine West failure. However, Mrs. Merkel is still not compromising on Europe's fiscal compact and said talks will not just be focusing on growth.
Joining me now to discuss this is Philippe Waechter, the head of economic research at Natixis Asset Management. When he takes office tomorrow, what's his priority, Francois Hollande?
PHILIPPE WAECHTER, HEAD OF ECONOMIC RESEARCH: Well, I think his priority is growth. You want to really change the minds of all European authorities. For the moment, authorities say you have to be -- you have to make fiscal consolidation to gain growth. And he's saying no, it's the country. You have to gain growth first to have fiscal balances.
QUEST: So, that's the message he's going to take to Berlin. It's a bit odd, isn't it? Almost as soon as he takes office, he gets on a plane and goes to pay his homage to Angela Merkel.
WAECHTER: Well, he has to discuss with her, because as you said, European situation is a mess today, with Greece, with Spain, with Italy, and so we have to change our minds in Europe. And that's what he wants to do, and that's why he's going directly to discuss with Merkel.
QUEST: What price will he accept, do you think, from Merkel and from the eurozone? Because he's clearly not going to get a shift -- complete shift from austerity to growth. He's not going to get a renegotiation of the fiscal compact. So, what does he get instead?
WAECHTER: No, it's a negotiation. Merkel will start with the fiscal pact, he will start with a broad compact, and they will have to meet each other in the middle, and that's what he expects.
QUEST: Let's just listen to what Chancellor Merkel had to say today, and to put it into perspective, the chancellor making it clear that, obviously, there has to be an accommodation, but she's not shifting that far. Here, listen to Chancellor Merkel.
(BEGIN VIDEO CLIP)
ANGELA MERKEL, CHANCELLOR OF GERMANY (through translator): Tomorrow, the newly-elected French president will visit, then there will be an informal meeting of the conservative government leaders in the EU, where we will discuss all these questions.
And afterwards, I will approach the opposition parties and we will discuss each other's expectations. Nobody is against growth, but the question is, what it means for budgets.
(END VIDEO CLIP)
QUEST: Now, that is the interesting part. She is now facing electoral problems of her own. Hollande comes with a renewed mandate, a strong mandate. How serious is this situation?
WAECHTER: Well, the point -- when you look at Germany, they've been having bad figures, unemployment. Last week, we have unemployment figures on the -- in April. That means that, OK, there is electoral problem for Merkel, but I think that the main issue is what will happen on the economic side.
And when you are in Germany, you have a lot of trade with Spain, with France, with UK. And if all these countries are in a recession, Germany will become very weak.
QUEST: So, we end up with Greece. Let's just put Greece finally into this mess. We've got Greece, we've got Hollande austerity, we've got Merkel in -- possibly in trouble, and we've got the markets down 2 to 3 percent. Do you think we are looking now, tonight, this week, at another serious downward leg?
WAECHTER: Well, it's possible, yes. Because we don't know exactly what will happen in Athens, and there was discussion today, they will discuss tomorrow, too. We don't know exactly what will be said between Merkel and Hollande, and all this is very important for Europe and for the euro area.
That's what we expect for this week. We expect some good news on that, but we don't know -- at this moment, we don't expect it.
QUEST: Too much uncertainty.
WAECHTER: Too much uncertainty, for sure.
QUEST: Thank you very much.
WAECHTER: Thank you.
QUEST: The one thing we can be certain of, tomorrow, the inauguration takes place here, he goes up there, and then he goes to Berlin. Philippe, many thanks, indeed, for joining us.
In just a moment, the reality -- a reality check for France's new president. Luxembourg's finance minister tells us why Francois Hollande is being unrealistic if he thinks he can renegotiate the fiscal compact, in a moment.
QUEST: A magnificent spring evening quarter past eight in the French capital, the Eiffel Tower looking glorious against the blue sky. This is the first really decent sort of weather they've had. Later in the program, we'll get an update on what the weather will be like tomorrow when Francois Hollande has his inauguration.
After the ceremony at the Elysee Palace, he will go to the Arc de Triumph, where he will pay his respects at the tomb of the unknown soldier up at the Arch de Triumph before flying onto Berlin to meet Chancellor Merkel.
Now, let's -- the other major event, of course, happened with the Ecofin meeting, which is taking place in Brussels, and the eurozone group also meeting.
Luxembourg's finance minister is denying that there is a plan to get rid of Greece or, indeed, a Greece exit. Before the talks started tonight, Luc Frieden told Nina Dos Santos, it's in everyone's interest for Greece to stay within the eurozone. But here is the real warning: he said it doesn't help matters for loose talk about leaving.
LUC FRIEDEN, LUXEMBOURG FINANCE MINISTER: It must be very clear for the Greek people and for the Greek political parties that whoever forms this new government in the next few days or weeks, that it's not a unilateral financial assistance.
It's a financial assistance, which Greece needs, linked with conditions to put them back on the path which in the future will allow them to be again a fully sovereign country.
NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT: The markets are still pricing in a 75 percent chance of a Greek euro exit if you take, for instance, reports published by CitiGroup in the last week or so. That must be something that ministers like you have to consider the ramifications of. Are you planning for it? Just in case?
FRIEDEN: We -- we are not right now planning or discussing an exit of Greece. That would not be fair vis-a-vis Greece. Elections are something normal in democracy.
I do realize that these circumstances are extremely difficult for Greece, but I think we must clearly convey to the Greek people through their political parties and directly, that for them, leaving the eurozone also has a very high price.
For us, the priority is to keep them in the eurozone, not at any price, but at the conditions that have already been agreed upon.
DOS SANTOS: We've got a key meeting going on on Tuesday between Francois Hollande, the president-elect of France, and Angela Merkel of Germany.
Being from Luxembourg, you're in a unique position. You're almost, geographically speaking, between a rock and a hard place. Metaphorically speaking, as well. Do you think that this'll be the first time that we may see a softening by Angela Merkel vis-a-vis austerity?
FRIEDEN: Well, we indeed understand very well the positions of France and of Germany being located between the two countries. And I don't think that you can say on the one hand there is austerity measures and on the other hand there are growth measures. I do think that the two go hand-in- hand, and that is something that is often forgotten.
DOS SANTOS: France has not said that it's going to plan on keeping the deficit. In fact, Francois Hollande has said that he wants to eradicate the deficit by 2017. So, he's already said that. What he has said, though, is that he wants to open up this -- this new fiscal pact to include growth. What are the realistic chances of that actually happening?
FRIEDEN: With all due respect for my excellent French friends, I must say that it's unrealistic to renegotiate the fiscal compact. This is, in fact, on the one hand, common sense, what is the content of that fiscal pact. And on the other hand, it is the result of very long negotiations.
QUEST: Now, the economic reforms of austerity are working, so says Sweden's finance minister and the country's prime minister, too. I met with them both before Anders Borg headed off to Brussels. They told me the victory of Francois Hollande in France, it was part of this wider focus that was already under discussion, a focus that was moving from austerity to growth.
ANDERS BORG, SWEDISH FINANCE MINISTER: The fiscal measures are starting to come into effect in Europe. We are seeing next euro deficit in the eurozone of below 3 percent. So, it is also quite natural that, to some extent, the debate is shifting towards what can do to get -- to invest ourselves out of the crisis.
QUEST: I'll put it bluntly, if I may. Have you got a stimulus package in your back pocket that you're ready to introduce?
BORG: We are always cautious, but we do have strong public finances, and there are some investments in future opportunities that we need to do. Obviously, we'll have to do that in thorough manner in the body process in the autumn.
But we will be one of the economies in Europe that would spend more money and be able to do tax cuts without jeopardizing public finances.
QUEST: So, Prime Minister, when Christine Lagarde says there are countries that can do more, she's talking about you.
FREDRIK REINFELDT, PRIME MINISTER OF SWEDEN: Yes, but it should be sustainable. Don't look at it as a package to solve a short-term demand problems. It's more structurally right incentives for work, for the kind of investments that will grow our economy stronger.
QUEST: We need to talk Greece. How concerned are you? And are we now at the point, Prime Minister -- where it's time to make a really fundamental decision on what to do about Greece?
REINFELDT: It's clear that the Greek people are asking for getting away from austerity measures, getting away from a lot of their problems. It's very hard to see that way, though. The pathway for that.
QUEST: But you have to come up with a response to the Greek situation, don't you?
BORG: Well, if they don't fulfill the programs, if they don't deliver onto the forms that have they have promised, I can't see an alternative for shutting down the payments for them.
Obviously, the payment, the debt service, should be fulfilled, because we don't want them to become a European problem. But you cannot deliver money to a country that isn't -- that is failing on their program.
QUEST: We're coming to the point where Greece has to decided whether it wants to stay in the euro or not.
BORG: Yes. We are at the point when they have to decide, are they going to deliver, fulfill their obligations, and stay in the eurozone, or will they have a political majority saying, "We don't want to be part of this, and we don't want to deliver." Well, I think we're very close to that point.
QUEST: We've seen this extremist -- or at least very right-wing or left-wing parties, the growth of them, now, in Greece, we've seen the pirates in Germany. Even in your own country, you have had parties --
QUEST: -- more to the edge of the political spectrum.
REINFELDT: Well, that's the risk we face, because their austerity measures, things such as not clearly outspoken from political leaders, that we have problems, that we have a solution, have created a feeling that it's -- it's somewhere -- it's not understandable. People do not see their own growth. They don't feel that they are to blame for the situation, and therefore, you get these reactions.
QUEST: And in that regard, these extremists are going to take advantage of that situation.
REINFELDT: Absolutely, but they can never, never manage to do anything right, and they will never take any responsibility for anything. So, they're never the solution. They might voice their complaints, but they can never solve the problems.
QUEST: Sweden cleaned up a banking crisis that was every bit as serious and drastic for this country. As Spain decides what to do with the banks, Bank Euro, or whatever one. What would your advice be?
BORG: Well, I think they have to be tough. They need to put money on the table and put that in the cap in terms of common stock into the banks. That would safeguard the taxpayers. It would put the banks back in a credible situation.
I would strongly argue not to waste a huge amount of public money on buying bad assets at the high prices, that was be detrimental for public finances and it will not restore credibility.
QUEST: How close are we, Minister, to another serious down leg in this crisis?
BORG: Well, I do tend to be more of an optimist than a pessimist. There are clear risks to this scenario. Greece is a main obstacle. But there are also a lot of structural reforms, now, in Europe, and the rest of the world -- the rest of the world -- is actually starting to grow.
QUEST: That's the Swedish prime minister and finance minister. And now, today's Currency Conundrum, which has a French flavor. Before the euro was created, policymakers considered calling it the "ecu." Why was the name rejected? The pronunciation? It was already the name of a currency? The initials were confusing? We'll have the answer later in the program.
Now, the rates. Uncertainty about Greece hits the euro. It's down more than two fifths against the dollar. There, also, is the sterling rate. In other words, those are the rates to the break.
QUEST: Tonight's Future City is rubbish. No, not the piece or the subject. It's the subject we're talking about. The government's taking advantage of rubbish. Every day, Dhaka's 15 million residents produce 5,000 tons of waste. It's an extraordinary amount.
So, an urban planning duo has come up with a plan to recycle a huge amount of it. It's been so successful, the Bangladeshi government is replicating it in another 14 cities. When we talk rubbish, as we say where I come from, where there's muck, there's brass. It's tonight's Future Cities.
LEONE LAKHANI, CNN INTERNATIONAL CORRESPONDENT (voice-over): In a bustling mega city like Dhaka, there are many markets like this.
MAQSOOD SINHA, FOUNDER, WASTE CONCERN: Every day in that market, 60 to 70 tons of waste are generated, every day. And what was happening is that it was a bottom for the market. Because of high-density of population in the cities, they are creating huge amounts of waste in a small area, and cities are not -- they don't have enough resources to cope with the situation.
LAKHANI (on camera): Dhaka's 15 million residents produce up to 5,000 tons of waste every day, and if that goes uncollected, the waste could clog up the drains, the streets, the rivers.
K M NURUL HUDA, MD BANGLEDESH MUNICIPAL DEVELOPMENT FUND: Probably the waste in Dhaka is a problem. First of all, it is a problem for Dhaka City because of our poor management system.
It is a duty and responsibility of Dhaka City cooperation to take the waste every day in the night. But because of some limitations, they cannot do it. Sometimes they leave it for days, and after that, it is taken away.
LAKHANI (voice-over): around 70 percent of waste in Dhaka City is organic. Here at Garden Bazaar Market, it's almost 90 percent. For Maqsood Sinha and Iftekhar Enayetullah, that presents a business opportunity.
IFTEKHAR ENAYETULLAH, FOUNDER, WASTE CONCERN: We have founded Waste Concern with the motto, with the slogan that waste is the source. In this plan, we collect waste, free of cost for the city.
LAKHANI: Waster Concern is Bangladesh's first organic waste recycling company. It's been up and running since 1995, gradually growing. It collects organic waste from markets and homes and turns it into compost, fertilizers for farming.
LAKHANI (on camera): Space is at a premium in densely-populated Bangladesh, and landfills like this one are packed full. Now, Dhaka's city master plan doesn't have provisions for more even thought he United Nations says Dhaka will be the second-largest city in the world by 2030.
SINHA: Bangladesh is a poor country. Right now, our per capita income is $800 US, and we don't have too much resources. So, we need to look at whatever resources are available and use it in a positive way.
LAKHANI (voice-over): The waste is collected across the city and brought to this processing plant on the outskirts of Dhaka.
SINHA: Right now, you are in the middle of around 25,000 tons mostly in this mound. We collect the waste from the market, bring it to this plant, where we process it through a technological aerobic composting.
LAKHANI: The rubbish is sorted and then laid out to dry and decompose for weeks at a time before being sifted and broken down into the final product.
LAKHANI (on camera): Waste Concern say their project stops more than 100 tons of rubbish a day from being dumped into a landfill.
LAKHANI (voice-over): They say their business model has been very successful. Now, there are 56 sites like this operation all across Bangladesh.
ENAYETULLAH: Beyond Bangladesh, we have -- we are building plants in Cambodia, in Shri Lanka and Vietnam similar to this kind of project, and we are expecting that all these plants will be operational by early next year.
LAKHANI: As Dhaka grows and changes, so does the waste that needs to be processes.
SINHA: Recently, we are finding that because of consumers that are using different kinds of waste, like electronic waste, computers, cell phones, and also they're using packaging materials, plastics. Different things are coming up in the waste.
LAKHANI: Waste Concern are in talks with the government to expand their services to cope with the different types of waste. They believe the best tool is education.
SINHA: We want to show the people, teach them how they can make their waste into a resource. This is our ultimate goal.
LAKHANI: When big cities build their future, they count on people like Maqsood and Iftekhar, people who can see the light in the gloom and find opportunity where you least expect it.
UNIDENTIFIED FEMALE: -- their business model has been very successful. Now there are 56 sites like this operational across Bangladesh.
IFTEKHAR ENAYETULLAH, FOUNDER, WASTE CONCERN: Beyond Bangladesh we have -- we are building plants in Cambodia, in Sri Lanka and Vietnam similar to this kind of projects and we are expecting that all these plants should be operational by early next year.
UNIDENTIFIED FEMALE: As Sri Lanka (ph) grows and changes, so does the waste that needs to be processed.
MAQSOOD SINHA, FOUNDER, WASTE CONCERN: Recently that we are finding that (inaudible) we are using (inaudible) with like electronic lifts, computers, cell phones, and also there is in packaging materials, plastic and paper things are coming up with the waste.
UNIDENTIFIED FEMALE: Waste Concern are in talks with the government to (inaudible) their services to cope with the different types of waste. They believe that that's, too, education.
SINHA: We want to show the people, teach them how they can make their waste into resources. This is our (inaudible).
UNIDENTIFIED FEMALE: When big cities build their future, they count on people like Maqsood and Iftekhar, people who can see the light in the gloom and find opportunity where you least expect it.
RICHARD QUEST, CNN HOST: Hello, I'm Richard Quest, live in Paris. More QUEST MEANS BUSINESS in a moment. This is CNN, and on this network, the news always comes first, the news right into us here.
Ron Paul says he is ending his active campaign to be the Republican candidate in the U.S. presidential election. That's the sort of formal way of saying they're giving up without actually losing all the money. The Texas congressman is the last remaining challenger to Mitt Romney and is a distant, well, very distant second. Paul says he will still try to win delegates at upcoming state conventions.
Other news today, in Greece the latest talks to form a new unity government have finished without agreement. The leader of PASOK, Evangelos Venizelos says the president will now try to form a new technocrat government. New elections will be held if no agreement's reached by Thursday.
Days after revealing that America's richest bank lost $2 billion in risky investments, JPMorgan has had its first executive casualty. Ina Drew is retiring as the chief investment officer. She made $15 million last year and was one of the highest ranking women on Wall Street.
Supporters of the Palestinian prisoners who have been protecting in Gaza are now celebrating. Prisoners on a hunger strike have signed a deal with Israel to end their fast. Up to 2,000 Palestinians have been on strike for a month to demand better conditions. A handful of prisoners have been fasting for longer.
Live pictures for you, party time in Manchester, a victory parade is underway for a Club Man City a day after they won the English Premier League. Their first top-flight title in 44 years, about half an hour, the manager, Roberto Mancini told the crowd the win was an incredible moment, and there's the procession going through the city.
QUEST: Francois Hollande tomorrow will be sworn in as the new president of France. And not surprisingly, many in the business community are concerned about some of the policies that he's put forward, not just those on personal tax, but also on a rise in corporate taxation as well. He once described the world of finance as his advisory. He said, "I don't like the rich."
Maurice Levy is the chief executive of Publicis, the French advertising giant. He famously said he'd be happy to pay more taxes. You've got your wish here.
MAURICE LEVY, CEO, PUBLICIS: Absolutely. Not to the extent I wanted, much more than I could have expected. But clearly I considered in August that we should all contribute more. But at the same time, the issue was also to control the spending and to reduce the debt burden.
QUEST: Do you think Hollande will be able to get the more extreme part -- and I know they're not very extreme, but (inaudible), he wants to improve the (inaudible), increase the number of teachers, improve welfare payments, increase taxes, move from austerity to growth. Can he do it?
LEVY: I don't believe he will do it everything. And not at once. I think that there is what we call in French le possible de verite (ph), which is what are the real thing. And that when confronted with the real thing, he will have to adapt.
QUEST: But corporate France must be worried. When you're with your chief execs, the -- fellow chief execs, the idea of an increase in corporation tax, the idea of some of the rolling back of the reforms?
LEVY: We are used, in France, to have such a situation. We went through that at the time of Francois Mitterrand. We had (inaudible) at the time of (inaudible) response and we have always been able to sit down and to have a constructive discussion. There is a change. We are democrats. We accept the change, obviously. And we will do our utmost to make sure that corporation will create jobs and we'll help --
QUEST: And will --
LEVY: -- lightening the burden.
QUEST: I suppose what I'm really asking, can you see chief execs like yourself starting to do whatever you can to move money, to reduce the tax burden, move jobs, all those sort of things?
LEVY: We will do our best to run our business in order to deliver the best result for our shareholders and all our stakeholders. And at the same time, we will comply with the local politics. And if there are new policies, which are decided by the government, we will do our best to make these policy working with our own strategies.
QUEST: We need to talk about what's happening in Europe at the moment. We seem to have taken a rather nasty turn. Again, Greece and how worried are you with what is now happening?
LEVY: I'm very worried because when you see the situation in Greece, we are in a deadlock. And we will probably have to go back to new elections, and we will probably have to carry a larger burden of the debt crisis in Greece and take more losses.
This is not very encouraging nowadays, where we have all a lot of problems of our own. In Italy, they have their own problem. In Spain, also, and we have all our issues. So to take more of the Greek burden will be very difficult for us.
QUEST: Many thanks indeed for joining us.
LEVY: Thank you.
QUEST: You get a bell. You can take me -- you can buy me dinner while you've still got some money left.
QUEST: Before the taxman takes it all.
LEVY: It will be a great pleasure, eat in one of our good French restaurants.
QUEST: I do need to, before we go any further, just allow the viewer to enjoy this delicious spectacle. The wonderful French sunlight in France, but just look at what's making the picture, so you can see us tonight.
Natasha (ph) and Matt (ph).
QUEST: Helping to make sure that we have a fine piece of television to come your way this evening.
Let's carry on and talk about Francois Hollande plans to spend $26 billion creating new jobs. We were talking about that a moment ago. They are sorely needed in places like Dreux, just an hour's drive west from here. And employment is much higher than the national average. The situation is desperate, particularly for the young. Jim Bittermann now reports from the town and the city of Dreux.
(BEGIN VIDEO CLIP)
JIM BITTERMANN, CNN CORRESPONDENT (voice-over) You don't have to travel far from Paris to see the kind of challenges France's new president is facing. Sixty miles west of the capital, the once royal city of Dreux has been witness to them all. Just like many other parts of France, Dreux was booming just a few decades ago.
The country's growth after World War II was hitting 6 percent and beyond. But then came the bust. Industrial goods could be made more cheaply elsewhere. Corporations were outsourced. In just one decade, from 1990 to 2000, Dreux lost 5,000 jobs. The unemployment rate rose to where it is now, about 12 percent, well above the national 10 percent average.
So when it came time to vote for president this year, 62 percent of Dreux residents voted for the socialist, Francois Hollande. And it's not hard to find out why.
KAREN WELBRECHT (through translator): What's really important to me today is that we don't arrive at the same point as Greece. What makes me frightened is especially unemployment and the situation with young people.
TUFIK CHABOUNE, SALESMAN (through translator): Above all, employment. It's the most important. After that, it's standard of living and bringing people together.
BITTERMANN (voice-over): But if Hollande has his work cut out for him in places like Dreux, few think he can really change things very quickly.
ULRICH HEGE, PROFESSOR OF FINANCE: You can't throw money at this problem, right, because it would be about the budget problems that you have. So you have challenges, for example, that in provincial towns like Dreux, you have a large part of the population that depend on redistribution income, that depend on Social Security, that depend on unemployment.
BITTERMANN (voice-over): Long before the elections, Dreux was tapping into support funds from the national government, trying to move the city away from its industrial employment base to a more service oriented economy with a panoply of schemes designed to promote future growth. But frequently, they require substantial front-end investment for benefits that will be very slow in providing economic return.
Dreux's mayor does not believe the new president will be able to come up with ideas that'll be able to change things any faster than the current programs.
GERARD HAMEL, DREUX MAYOR (through translator): I don't know what the new government will bring, but unfortunately I don't see extraordinary measures that will very quickly get us out of the situation that we are in.
I don't see measures that will attract business.
BITTERMANN: The election of a new president, especially one who's come into office promising change has raised expectations just about everywhere in France, but the question is, have they been raised too high? Can anything very quickly change the kind of problems you see on the street level? Jim Bittermann, CNN, Dreux.
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QUEST: Coming up after the break, from little things, big things will grow. Yahoo! loses a chief executive and we need to answer the question, does it really matter if you pad your C.V.?
QUEST: The answer to our "Currency Conundrum," why was the ecu rejected as the name for the E.U.'s single currency? Well, it was really all three that you can see. Germany protected the word "ecu" sounded too much like "kuh" or "cow". The ecu had been a French 18th century currency and the ECU was the abbreviation of the European Currency Unit.
So Yahoo! is replacing its chief executive for the third time in as many years. Scott Thompson has quit just 10 days after admitting that he padded his CV, curriculum vitae, your resume, with a degree in computer sciences.
"The Wall Street Journal" is reporting Mr. Thompson has been diagnosed with thyroid cancer and this in part had influenced his decision to step down. His resignation has defused a difficult situation with one of Yahoo's largest investors. Third Point, the New York hedge fund uncovered the error that launched the scandal. It will now get three of four board seats it has been seeking.
The senior Yahoo! executive Ross Levinson will replace Mr. Thompson. So it is indeed a fine line between embellishment of one's CV and outright lying. Corinne Mills knows the difference. She's the managing director at Personal Career Management. She joins me now.
Corinne, what did he do that was so awful, and surely we all do a little bit of padding of our CVS.
CORINNE MILLS, MANAGING DIRECTOR, PERSONAL CAREER MANAGEMENT: Well, you know, there's a difference between embellishment and factually lying, and this is what he's done. I think anything which is kind of numerical or quantitative, dates, numbers, figures, all of those things can be checked.
And we live in such a digitally connected world that somebody can always check up on you. So stupidity is probably his biggest error.
QUEST: You say that, I'm wondering then, what does one do? How do you embellish a CV or let me put it another way. To a lot of viewers who may have lost jobs recently, either redundancies or layoffs, and they don't want to have to admit that rather unpleasant fact on a CV. How do you do it? What's the trick?
MILLS: There's no stigma about being made redundant. Look, the reality is that there are lots of things that people might prefer to gloss over on their CV, but there's all kinds of ways you can downplay it and hide it. You don't have to lie about it.
So for instance, if there's a job that you hated, you know, or a collection of jobs or, you know, gaps between employment, you can just group them together or present them in a different way. That doesn't mean that you're lying. It's just that you're presenting it differently. That's fine.
QUEST: (Inaudible). All right. I can understand if I say I had a first-class degree and I only had a third-class degree, that is perhaps going too far. But you must -- come on, Corinne. You must allow us a little bit of sugar on the top, a little bit of embellishment of the facts. That's what a CV's all about.
MILLS: Look, you have to provide evidence. Any employer is going to hire you because you've got the relevant skills and experience for the job, but you've got back it up with evidence. Otherwise, you're not going to get on the short list.
QUEST: Do you think he should have resigned?
MILLS: Well, that's not to say. That's not for me to say. But I think, you know, with these things, if they really wanted him to stay, I'm sure that they could have found a way to have made him stay and that this would have been seen as an oversight or an error. The fact that he's been allowed to resign suggests perhaps he didn't have the power base behind him.
QUEST: All right. Many thanks indeed for joining us. We'll talk more about this and I know @richardquest, our Twitter address, we will have some thoughts on that.
When we come back in a moment, we will consider just how Greece might leave the euro and the Eurozone and indeed, what would happen to the rest of us? It's QUEST MEANS BUSINESS and we are live in Paris tonight. Good evening to you.
QUEST: Having had a fairly appalling couple of weeks, now they are involved -- there we are enjoying a wonderful day. That's the Louvre and the Place de la Concorde (inaudible). Good evening to you from Paris as we await inauguration tomorrow of Francois Hollande as their new president.
So the word of the day is "grexit," Greece exiting the euro. Austria's finance minister says Greece cannot leave the euro without leaving the European Union at the same time. It is a constitutional crossroads, and it could make it impossible for Greece to leave in an orderly fashion, let alone the ramifications of contagion for other countries.
Nina dos Santos now looks at exactly how a "grexit" might come about.
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NINA DOS SANTOS, CNN HOST: If you believe economists, the chances have never been greater that Greece could be heading for the Eurozone exit door. And one legal analyst has said, well, E.U. leaders may already be considering the possibility even if they're too scared to admit it.
CHARLES PROCTOR, PARTNER, EDWARDS WILDMAN PALMER: I think for many years talking about the possibility of a Eurozone withdrawal was simply a taboo. But I think the dam has burst, because there are so many people now talking about it. It's not a possibility that can be ignored any more.
DOS SANTOS: But wouldn't it be slightly incompetent of the E.U. leaders not to be considering legally how they would deal with the situation whereby Greece were to want to exit of its own volition?
PROCTOR: Well, it seems there's a certain amount of contingency work has been done. But it's been kept secret, you know, against the political backdrop that the Eurozone must hold together.
DOS SANTOS (voice-over): What's standing in their way is this, the E.U. treaty, more than 400 pages long and no easy euro escape route. Take for example Article 128.
PROCTOR: The provision states that the European Central Bank has the exclusive right to issue euro banknotes within the union. It's quite clear from Article 128 of the treaty that only European Central Bank and the national central banks within the euro system can issue banknotes that are legal tender.
So if Greece independently goes off and issue new banknotes, so just basically legal tender in Greece, then that will clearly be a breach of this provision of the treaty.
DOS SANTOS: And so what I suppose this means is that Greece has irrevocably surrendered its right to have a currency.
PROCTOR: Yes, they don't have the ability to create their own monetary system. They've transferred that to European institutions.
DOS SANTOS: There is one escape route inside this document, but the consequences for Greece make it look more like a trapdoor than an emergency exit.
DOS SANTOS (voice-over): This is Article 50. It doesn't mention a way out of the Eurozone, but it does offer a dramatic alternative.
PROCTOR: Article 50 says that any member state can decide to withdraw from the union in accordance with its own constitutional requirements.
Unfortunately, that only contemplates withdrawal from the E.U. as a whole and doesn't allow for separate withdrawal just from the single currency. I don't think it's going to be practical to do that in the time that's available, and against the backdrop of a financial crisis.
DOS SANTOS: Changing a treaty like this could take quite a bit of time, and that's something that Greece doesn't have these days, which is why treaty change through the back door might just have to do the trick.
PROCTOR: Any solution would have to take place effectively outside this document. Withdrawal from the Eurozone by Greece would be a breach of the treaty without any question. But these things happen.
DOS SANTOS (voice-over): And if it does, the whole thing may be up in the air once again -- Nina dos Santos, CNN, London.
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QUEST: We will consider all this in a "Profitable Moment" from Paris after the break.
QUEST: Tonight's "Profitable Moment," Europe is once again in turmoil as the crisis which started in Greece now threatens to explode across the Eurozone. If Greece does indeed leave, then the markets have been better prepared. That was the theory. But what we saw today proves anything but. The markets are nervous. They are worried. And they are simply waiting and watching.
Tomorrow here in Paris we will get a good indication of the future when Francois Hollande becomes the president of France and goes to Berlin to try and repair damage with Germany. And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable. I'll see you tomorrow.
QUEST: Ron Paul says he is ending his active campaign to be the Republican candidate in the U.S. presidential election. The Texas congressman is the last remaining challenger to Mitt Romney in the Republican race and is a distant second in the primaries. He says he will still try to win delegates at upcoming state conventions.
The latest talks to form a new unity government in Greece have ended without agreement. Now a solution has been floated, the leader of PASOK, Evangelos Venizelos, says the president will now try to form a new technocrat government. All elective parties will have to agree, otherwise elections will be called.
JPMorgan's chief investment officer Ina Drew has announced she's retiring days after the revelation her department lost $2 billion in risky investments.
As the E.U. slaps new sanctions on the Syrian regime, we're getting reports of gun battles in the city of Rastan. An opposition group says 23 government soldiers were killed there this Monday. Video posted online appears to show rebel fighters running through the streets.
You are up to date with the stories we are following for you here on CNN. Now, live, from New York, "AMANPOUR."