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QUEST MEANS BUSINESS
Europe on Edge Awaiting Greek Elections; Greek Markets Rally; Greek Students in London Positive About Future; Breaking News: US Changes Immigration Policy; Former Goldman Sachs Director Rajat Gupta Found Guilty of Insider Trading; Dollar Continues Slide
Aired June 15, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NINA DOS SANTOS, HOST: A crucial weekend for Greece. Parties make their final push for votes.
Guilty of insider trading. Former Goldman Sachs executive Rajat Gupta is convicted of making secrets.
And the prince of tales. Prince Charles watches London Fashion Week commence.
I'm Nina Dos Santos, and this is QUEST MEANS BUSINESS.
With two days to go until the Greek elections, Europe, as you'd imagine, is on edge. Sunday's vote could determine whether the country stays within the euro. As parties make their final pitch for support for the second time in six weeks, European central bankers and leaders around the world are bracing themselves for the possible fallout.
John Defterios is live in Athens, and he joins us now with the pulse on the scene. So, John, there's been a final push by some of these candidates. The polls have been banned for the last couple of weeks. Where do we stand?
JOHN DEFTERIOS, CNN INTERNATIONAL CORRESPONDENT: Well, as we speak right now, Antonis Samaras of New Democracy, Nina, has taken the stage. He was about an hour late taking the stage, as they were waiting for more of his supporters to come into Syntagma Square, or part of the square in Athens.
He's making a final push, trying to put some daylight between himself as the leader of the center right party and Alexis Tsipras of Syriza Party, representing the far left. In fact, Mr. Tsipras spent his last day of campaigning in Salonika in northern Greece and raised some eyebrows again in world markets by suggesting, let's vote no to a memorandum on bankruptcy.
Of course, the markets are worried if he took power, he would number one, try to throw away the austerity pact. Number two, he's trying to basically push back on the reforms, because it plays to his base right now, the union base, because the reforms would call for basic privatization across the state sector and mean more jobs, with unemployment already at 22.6 percent.
It's not clear at this stage that we'll have anybody getting a majority here. They're going to kind of push for a coalition. This is leaving some uncertainty, of course, in the markets as they go to the polls on Sunday.
DOS SANTOS: Yes, you were talking about that uncertainty in the markets. We've seen something of a rally, actually, for the Greek stock exchange in the last few hours of trading before these pivotal elections. What are people thinking, economically speaking, here, John?
DEFTERIOS: Well, it's quite interesting what's happened in the last 48 hours. We had a 10 percent rally on Thursday on rumors of a poll, a private poll, because as you suggested, the public polls have been closed already ahead of the elections, that Antonis Samaras is leading, from New Democracy, which would mean that Greece would stay in the euro, although he has suggested he'd like to water down the austerity.
We saw a rally today of another 1.85 percent, so a gain of almost 12 percent. And that's because we're starting to read about potential wiggle room in Brussels.
In fact, Charles Dallara, a man you're familiar with, Nina, the outgoing managing director of the Institute of International Finance, was suggesting that the pace of budgetary adjustment needs continuous examination, saying that this austerity for the Greeks and other European partners within the eurozone right now, is too difficult for people to dig out of. They don't see any light at the end of the tunnel.
The debt load here is 165 percent of GDP. Even after all the austerity, at the decade, we're looking at 120 percent of GDP. So this suggesting, maybe, to Brussels to drag this out, to stretch this out and give some hope to reforms going forward, austerity going forward, and this would favor New Democracy.
We stay in the euro. You've got to give us a little bit more budget - - budgetary leeway going forward, though.
DOS SANTOS: Yes, as you were just saying, talking of New Democracy, John, we're showing our viewers pictures as we speak of Antonis Samaras, the leader of New Democracy, addressing literally thousands of people, I must say, on the streets, there, waving flags.
This election really has got people getting to their feet and voting, hasn't it? But the rest of the world is watching what Greece decides, as well.
DEFTERIOS: Yes, that is for sure. But there's still about a third of the population undecided right now as we speak. And the audience here, the voters that have come out, it's a good rally, but the square is not filled.
So, they've go the lights turned on, they've got the flags up. It's blaring, of course, as you can hear in the background. But Syntagma Square is not filled.
And behind the scene right now, Nina, is quite severe austerity and worries about a cash crunch right now. We're getting discussions that tour operators, who only want to have bookings in cash, they don't trust the credit card, because they don't know if Greece is going to stay within the euro or go back to the drachma right now.
There's a shortage of pharmaceutical goods into the public hospitals, where the doctors are going to local pharmacies and buying the goods or asking the patients to come into the hospital with pharmaceutical goods. That shows you how desperate it is right now.
Even talks of the international companies that are operating in Greece, sweeping their accounts at night, because they don't want to have exposure to the Greek banking system.
So, behind the scenes, very tenuous situation. International investors watching very closely, and the Greeks basically burnt out on austerity, and that's why they're so undecided whether to stay in the euro or take a punt on a young leader who, believe it or not, would take them to Communism.
The country that fought Communism between 1947 and 49, it would be extraordinary if they took that path. But it shows the uncertainty on the ground here in Greece. Nina?
DOS SANTOS: It certainly does so. Therefore, as you were just saying, it's a pivotal vote for Greece. But also what John Defterios was saying there before does not necessarily mean it's a vote of confidence in the euro. Thanks ever so much for that, John, live on the scene in Athens.
Well, given what John was just saying before, you might think that many Greeks would be fairly pessimistic about the future. However, as Jim Boulden discovered, a group of 20-something masters students studying in London seem to see things quite differently.
JIM BOULDEN, CINN INTERNATIONAL CORRESPONDENT: What do you say to people who say, oh, the Greeks are not paying their taxes. They don't want to be in the euro, they don't want to go through the tough times.
KOSTANTINOS ANTONIOU, MASTERS STUDENT: We've been in the EU since 1981. Personally, I feel like a European citizen.
STAVROS KEKES, MASTERS STUDENT: It's true that there has been some excessive spending in Greece in the last three years. Many people say there has been a party which eventually would be over. So, what we're witnessing right now is the end of the celebration and the aftermath is coming up to the surface.
BOULDEN: Do any of you have an opinion that the Greece you're hearing about on the phone with your families and the Greece you're seeing in the media, that there is a difference? Do you think it's being unfairly portrayed?
KEKES: What I think is that the situation in Greece is maybe one of the toughest we have experienced in the last decade, but it's definitely not a situation which could bring the country to its knees, even though that's the image that's been portrayed so far.
So, I definitely think that it's something that can be actually solved, especially with the help of people like us who go abroad, gain experience in different countries like the UK, and eventually go back to Greece and offer their know-how and their experience to their own country.
MARIA BERETI, MASTERS STUDENT: We feel a part of this union, so we would like to be. So, we would like to remain, because it's not only the - -
DOS SANTOS: Let's just break away from our coverage on Greece for a moment, because we want to cross live to Washington, where the US president, Barack Obama, is about to announce a major change to US immigration policy.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: -- to make it more fair, more efficient, and more just, specifically for certain young people sometimes called "Dreamers."
Now, these are young people who study in our schools, they play in our neighborhoods, they're friends with our kids, they pledge allegiance to our flag. They are Americans in their heart, in their minds, in every single way but one: on paper.
They were brought to this country by their parents, sometimes even as infants, and often have no idea that they're undocumented until they apply for a job or a driver's license or a college scholarship.
Put yourself in their shoes. Imagine you've done everything right your entire life: studied hard, worked hard, maybe even graduated at the top of your class, only to suddenly face the threat of deportation to a country that you know nothing about, with a language that you may not even speak.
That's what gave rise to the Dream Act. It says that if your parents brought you here as a child, you've been here for five years, and you're willing to go to college or serve in our military, you can one day earn your citizenship.
And I've said time and time and time again to Congress that -- send me the Dream Act, put it on my desk, and I will sign it right away.
Now, both parties wrote this legislation, and a year and a half ago, Democrats passed the Dream Act in the House, but Republicans walked away from it. It got 55 votes in the Senate, but Republicans blocked it.
The bill hasn't really changed. The need hasn't changed. It's still the right thing to do. The only thing that has changed, apparently, was the politics.
Now, as I said in my speech on the economy yesterday, it makes no sense to expel talented young people who, for all intents and purposes are Americans. They've been raised as Americans, understand themselves to be part of this country.
To expel these young people, who want to staff our labs or start new businesses or defend our country, simply because of the actions of their parents, or because of the inaction of politicians.
In the absence of any immigration action from Congress to fix our broken immigration system, what we've tried to do is focus our immigration enforcement resources in the right places. So, we prioritized border security, putting more boots on the southern border than at any time in our history.
Today, there are fewer illegal crossings that at any time in the past 40 years. We focus and use discretion about whom to prosecute, focusing on criminals who endanger our communities, rather than students who are earning their education, and today, deportation of criminals is up 80 percent.
We've improved on that discretion carefully and thoughtfully. Well, today, we're improving it again.
Effective immediately, the Department of Homeland Security is taking steps to lift the shadow of deportation from these young people. Over the next few months, eligible individuals who do not present a risk to national security or public safety will be able to request temporary relief from deportation proceedings and apply for work authorization.
Now, let's be clear: this is not amnesty, this is not immunity. This is not a path to citizenship. It's not a permanent fix. This is a temporary, stop-gap measure that lets us focus our resources wisely while giving a degree of relief and hope to talented, driven, patriotic young people.
It is the right thing to do. Excuse me sir -- it's not time for questions, sir. Not while I'm speaking.
Precisely because this is temporary, Congress needs to act. There's still time for Congress to pass the Dream Act this year, because these kids deserve to plan their lives in more than two-year increments.
And we still need to pass comprehensive immigration reform that addresses our 21st century economic and security needs. Reform that gives our farmers and ranchers certainty about the workers that they'll have.
Reform that gives our science and technology sectors certainty that the young people who come here to earn their PhDs won't be forced to leave and start new businesses in other countries. Reform that continues to improve our border security and lives up to our heritage as a nation of laws and a nation of immigrants.
Just six years ago, the unlikely trio of John McCain, Ted Kennedy, and President Bush came together to champion this kind of reform. And I was proud to join 23 Republicans in voting for it. So, there's no reason that we can't come together and get this done.
And as long as I'm president, I will not give up on this issue, not only because it's the right thing to do for our economy, and CEOs agree with me, not just because it's the right thing to do for our security, but because it's the right thing to do period. And I believe that eventually, enough Republicans in Congress will come around to that view, as well.
And I believe that -- it's the right thing to do because I've been with groups of young people who work so hard and speak with so much heart about what's best in America. Even though I knew some of them must have lived under the fear of deportation.
I know some have come forward at great risk to themselves and their futures in hopes it would spur the rest of us to live up to our own most- cherished values.
I've seen the stories of Americans in schools and churches and communities across the country who stood up for them and rallied behind them and pushed us to give them a better path and freedom from fear, because we're a better nation than one that expels innocent young kids.
And the answer to your question, sir -- and the next time, I'd prefer you let me finish my statements before you ask that question -- is this is the right thing to do for the American people.
They -- I didn't ask for an argument, I'm answering your question. It is the right thing to do for the American people, and here's why. Here's the reason. Because these young people are going to make extraordinary contributions and are already making contributions to our society.
I've got a young person who was serving in our military, protecting us and our freedom. The notion that in some ways we would treat them as expendable makes no sense.
If there's a young person here who has grown up here and wants to contribute to this society, wants to maybe start a business that will create jobs for other folks who are looking for work, that's the right thing to do.
Giving certainties to our farmers and our ranchers. Making sure that in addition to border security, we're creating a comprehensive framework for legal immigration. These are all the right things to do.
We have always drawn strength from being a nation of immigrants as well as a nation of laws, and that's going to continue. And my hope is that Congress recognizes that and gets behind this act. All right? Thank you very much everybody.
UNIDENTIFIED MALE: -- specifically ruled this out, sir, last year.
UNIDENTIFIED MALE: What about American workers?
DOS SANTOS: OK, so there you have it. That's the US president, Barack Obama, there, announcing a major change to the US immigration policy.
As you just heard there, Barack Obama said that the United States will now stop deporting young people who came to the US as children of illegal immigrants. This is what he said, I quote: "It makes no sense to expel young people who want to contribute to the country simply because of the actions of their parents."
Now, these young people, according to this new policy change, will have to fulfill certain criteria to be able to adhere to these kind of criteria and fulfill them to stay.
So, under this new policy, we're talking about people who are younger than 30 years old who came to the United States with their parents, pose no security threat here, came to the US under the age of 16, I might add, and were successful students or served in the military.
And as such, they're going to be able to be getting a two-year deferral in accordance to what the US president Barack Obama just said.
Let me bring you some other quotes that he said. He said, quote, "This is not an amnesty. It's not an immunity." It isn't a guarantee of direct citizenship for the United States, and he knows that it is not a permanent fix. But for the moment -- and he repeated this at least three times -- "I believe it is the right thing to do."
He has been getting an awful lot of criticism from the Republican administration, which has criticized the Obama administration -- excuse me, the Republican side, which has criticized the Obama administration for perhaps targeting the Hispanic vote, here, and specifically targeting the Hispanic community.
Barack Obama, as you heard there, was questioned a number of times by a member of the audience, and he repeatedly rebutted that questioning, saying "I believe this is the right thing to do."
All of this change is part of an effort by the government to try and target specific resources of illegal immigrants who pose no real threat to the community, but basically are people who brought their children to the United States with them.
Those children went on to become successful students or successful people that contributed to the military, and that is why Barack Obama has announced this new measure.
Let's bring in Brianna Keilar, who has been listening into this speech and can join us now, live from Washington, to put a little bit of meat on the bones, here. So, Brianna, what did you make of it, and also what will it mean?
BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Well, what this is it's sort of a policy change. It's not an executive order. And President Obama actually said last year that he couldn't unilaterally change this. This is something that has been moving through Congress to no avail, really, for several years, trying to protect young illegal immigrants who - -
DOS SANTOS: OK, apologies for that. We apparently lost the signal, there, from Washington, but we'll try and get you more information on that after this short break.
DOS SANTOS: It's the biggest scalp yet in the fight against corruption on Wall Street. Rajat Gupta, former director of Goldman Sachs, has been found guilty of insider trading. Maggie Lake is following this story for us live in New York. So, Maggie, how much of a role did wiretaps have to play in this conviction?
MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: You know, Nina, this is interesting, because wiretaps have been critical in what has been a wide and very successful campaign by the US attorney's office in New York, Preet Bharara, in cracking down on insider trading.
It was critical in getting Raj Rajaratnam, a former hedge fund manager, who's sort of linked to this case, getting him convicted. In this case, for Gupta, it was not really. A lot of this evidence was circumstantial, which is why people are watching it so closely.
What you could say was more -- of a traditional insider trading case, where they would have phone records, showing a phone call was made, and then two minutes later, there was a trade made involving a stock and sort of link it that way. So, this was a little bit more traditional.
We of course have all those wiretaps where we heard Raj Rajaratnam talking to various people, talking about getting a tip from Goldman, but he never named Gupta specifically. There wasn't that sort of specific moment captured.
We did hear Gupta talking to him, but you didn't hear in the way you did with some of the other Rajaratnam things saying, "Aha! We're going behind their backs. I'm going to play them. I'm sort of cheating it" in the straightforward way.
So, it was circumstantial. But legal experts say that the prosecution put forth a very convincing case, a good case, it was very detailed. And in the end, they convinced the jury to find Gupta guilty.
And he is by far, Nina, it's worth pointing out, the biggest fish that has been netted so far. We are talking not just about a hedge fund manager, but somebody who is at the very top echelon of financial circles.
He was the managing director of global consulting firm McKinsey. He was on the board of Goldman Sachs, Procter and Gamble, heavily involved with the Bill and Melinda Gates Foundation, a philanthropist. He was at the highest levels of society in financial circles. So this is a very big win for prosecutors.
DOS SANTOS: Yes, the other interesting thing is that he didn't take the witness stand, did he? He didn't take the stand. Was that a mistake?
LAKE: That is something that's going to be debated. This is always the big question when it comes to these kind of testimonies about putting witnesses on the stand.
Lawyers tend to think that it's risky, that the chance for them to incriminate themselves, to come off, especially in white-collar cases, to come as privileged, as arrogant, the smartest guy in the room. It turns jurors off. That's sort of what legal analysts say. I've been told by many prosecutors that if you have to put your witness on the stand, your case is in trouble.
We understand that Gupta did want to testify in his own behalf, but in the end, followed the legal advice of his team and did not. It may have hurt them, but that's a really big question. It may have hurt them, but that's a really big question. It's a risky move.
As I said, the interesting thing, and maybe a clue to that, is when the jurors finished today, some of the jurors were crying. Gupta's daughters were sobbing. He was quite stoic. His wife was clearly upset. But some of the jurors left crying.
So, there was clearly some sympathy for this man, so maybe if he'd taken the stand, that would have swayed them. But again, a risky move, Nina.
And I do want to circle back to something, again, about this point about someone like Gupta, what it means for this sympathetic, respected person to be prosecuted in this way. Here's a quote from Preet Bharara, United States -- as I said -- attorney in Manhattan whose office is pursuing these cases.
In the press conference following this or addressing people following this, he said, almost two years ago, we said that insider trading is rampant, and today's conviction puts that claim into stark relief.
It's not a couple of cheats here and there, Nina. He's saying that this is endemic in the system. He's going to root these people out and he wants them to serve as an example. So again, this so far has gone up to the highest level in this, but he's not done yet.
DOS SANTOS: OK, Maggie Lake there in New York, following all the trials and tribulations of that Gupta case. Thanks ever so much for that.
Time now for a Currency Conundrum for you out there. Which country's currency can be used interchangeably with the Singapore currency? Is it A, the Brunei dollar? B, could it be the Malaysian ringgit? Or C, could it be the Thai baht? We'll have an answer to that question later on in this show.
Staying with the currency theme, though, the euro is slightly up against the US dollar in this session. Sterling is trading close to a two- week high, for its part, against the greenback. It's getting something of a boost from the new stimulus measures announced by the Bank of England. And the dollar is at a ten-day low, on the other hand, against the Japanese yen.
DOS SANTOS: Hello and welcome back, I'm Nina dos Santos, these are the main news headlines this hour.
Greece is preparing for a pivotal vote that could determine its place within the euro. Sunday's elections will be the country's second attempt to pick a new government after the first set of elections ended in a political stalemate. Opinion polls taken last month show a tight race between the Syriza and New Democracy parties.
There have been protests in Egypt after the country's military council formally dissolved parliament. On Thursday, the council's Supreme Court ruled articles that regulated parliamentary elections were invalid. It also cleared the way for a former prime minister under the Mubarak regime to run for president in the weekend elections.
A former Goldman Sachs executive is being convicted of insider trading. Roger Gupta was found guilty on four out of six charges against him for passing along confidential information to a hedge fund. He'll be sentenced in October.
And German authorities say that they may sue the so-called Forest Boy for social fraud. Police say a man who claimed that he'd been living in the woods for five years is actually a 20-year old from the Netherlands. They say that he'd spent months trying to establish his identity.
DOS SANTOS: Some Greek pharmacies are closed today as a sign of respect to a colleague murdered in an apparent holdup there. It's all part of a worrying spike in violence and crime in the country and as Matthew Chance now reports, there's some concerns that all this could get a whole lot worse if Sunday's election plunges Greece into further economic chaos.
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MATTHEW CHANCE, CNN CORRESPONDENT: Well, this is meant to be a very quiet, very secure neighborhood of the Greek capital. But as you can see, a makeshift memorial has been set out here with candles and flowers and messages for a local resident, a pharmacist. His name was Spyros Poukamisas, who was killed here not that long ago, just a few days ago.
One of the messages reads that Paradise is welcoming a most cultured person. Another one there written in Greek says that he was taken from us without reason and callously. Obviously, a lot of anger in this area and across the country about the wave of attacks that have taken place.
One of the reasons for that is that this killing took place just literally around the corner from another notorious gun crime, this time against two police officers who were shot here last year. You can see people are still lighting candles and laying flowers in memorial to them. There's even a couple of photographs of them.
But in neither case, in the killing of the police or of the pharmacist, has anyone been arrested or convicted or, of course, even charged.
Athanasios Mouhtis was a friend and colleague of the murdered pharmacist.
Athanasios, how concerned are you? How concerned are ordinary Greeks about the security situation in this country in the middle of this terrible economic crisis?
ATHANASIOS MOUHTIS, FRIEND OF VICTIM (through translator): We find ourselves in a very difficult situation. The fear and insecurity surrounding crime has turned out to be greater than the reduction of salaries and poverty. Crime is worse than the financial crisis.
CHANCE: (Inaudible), we're exploring the underbelly of the Greek capital and we've come to one of the areas in the center of the city, which is infamous for its prostitution.
So when you drive down the street, you can see the women lined up all along it, looking for customers. Of course, prostitution, drug dealing and robbery, to some extent, has always been a feature of Athens in a city this big.
But what's happened according to police since the start of the financial crisis is that the crime has spread out to other areas, and now ordinary Greek citizens living in areas they thought were safe are feeling the impact.
CHANCE (voice-over): Even official crime figures speak volumes. Armed robberies, they say, like this one in March, caught on security cameras, more than doubled last year. The Greek Ministry of Citizen Protection says murders have risen significantly, too, fueling a sense of public insecurity, which police are trying to play down.
ATHANASIOS G. KOKKALAKIS, PRESS SPOKESMAN, GREEK POLICE: It is not a nightmare yet. Of course we have problems. Of course we have some causes that increase the criminality. But we still got -- we made a security -- a secure community until now.
CHANCE (voice-over): For now, perhaps, many Greeks are alarmed at what more economic chaos in their country may bring -- Matthew Chance, CNN, Athens.
(END VIDEO CLIP)
DOS SANTOS: European Central Bank says that it's standing ready to pour fresh cash into the Eurozone's failed banking system. The ECB president, Mario Draghi, is poised to provide financial backup if those Greek elections create fresh financial turmoil. Well, he joins a growing chorus of global central bank chiefs who say they'll do what they can to keep the credit following.
(BEGIN VIDEO CLIP)
MARIO DRAGHI, PRESIDENT, ECB: I'll make one point. As you know, the ECB has the crucial role of providing liquidity to some bank counterparties in return for adequate collateral.
This is what we have done throughout the crisis, faithful to our mandate of maintaining price stability over the medium term. And this is what we will continue to do. The euro system will continue to supply liquidity to solvent banks where needed.
(END VIDEO CLIP)
DOS SANTOS: Mario Draghi's comments there follow an announcement in $150 billion in worth in terms of a credit boost to the ailing British economy, which as many of us now know, is in the midst of a double-dip recession. The British finance minister, George Osborne, says that that extra cash will help to improve confidence.
Well, that central bank action did wonders for banking stocks across the region. They led some of the major indices higher. And if we start out with London, where, of course, that extra cash was injected, as you can see there, the FTSE 100 finished up a fifth of 1 percent and ended up making up all of the gains of the week as a whole.
So it ended up finishing after five days in the green. The Athens composite, on the other hand, also had something of a strong day, despite flirting with negative territory earlier in the session. The benchmark index finished up almost 2 percent.
If we look at corporate news now, the French retailer Carrefour has now announced that it's going to be pulling out of Greece altogether, though. It said that it's selling its stake in its Greek operations, which will mean the company will have to write off more than $275 million.
And please stay tuned this Sunday when Richard Quest hosts our special coverage of those Greek elections. It all kicks off at 5:00 pm here in London time only on CNN.
Now fashion royalty meets royalty, full stop. After the break Prince Charles launches men's Fashion Week in London.
(BEGIN VIDEO CLIP)
DOS SANTOS (voice-over): Time now to give you the answer to today's "Currency Conundrum." Earlier on the show, we asked you which country's currency can be used interchangeably with Singapore's money. The answer is A, the Brunei dollar. Singapore and Brunei have actually had the agreement since (inaudible) 1967 (inaudible) set to boost trade relations.
(END VIDEO CLIP)
DOS SANTOS: Now Prince Charles is joining Britain's top fashion designers to launch London's first-ever male Fashion Week. We sent Isa Soares to take a look.
(BEGIN VIDEO CLIP)
ISA SOARES, CNN CORRESPONDENT (voice-over): Britain is renowned for its fine tailoring and cutting-edge designs. Not all is dapper and dandy though. Only recently, London slipped down in men's wear capital ranks to third place, behind Milan and Paris. The British Fashion Council is looking to change that with three days of men's fashion shows.
DYLAN JONES, EDITOR, GQ: Traditionally, men have shown -- the clothes designers have shown men's clothes in Paris and Milan. But why would you want to show clothes in the most boring city in Europe and the most bourgeois city in Europe? Wouldn't you rather come to the most culturally exciting city in Europe?
SOARES (voice-over): This is also a royal event, with Prince Charles as its well-heeled host.
CHARLES, PRINCE OF WALES: I seem to have lurched from being out of the best-dressed man to the worst-dressed man. I don't know why, but presumably it sells publications.
SOARES (voice-over): Men's fashion is nothing to be sniffed at. The international men's wear market was worth over $30 billion in 2011, with High Street seeing some of those profits.
PHILIP GREEN, ARCADIA GROUP: In our men's wear business, our top emphasis has been very, very good, very successful everywhere. We had a really good year, couple of years.
SOARES (voice-over): Retailers are flourishing, too. Asos says its men's wear sales were up 60 percent last year. my-wardrobe is also banking on this demand.
LUISA DE PAULA, BUYING DIRECTOR, MY-WARDROBE: (Inaudible) is much more a new concept for men. But I think it has enormous amount of potential.
SOARES (voice-over): Besides showcasing British talent, this men's wear collection is seen as a key to greater profit. According to a "Financial Times" report, Britain's creative sector is thought to be the world's largest relative to the size of the economy. More importantly, it's growing at twice the rate of the rest of the economy.
TOMMY HILFIGER, FASHION DESIGNER: I think men's fashion is dependent on probably workmanship and tailoring from all over the world, but I think the highest standard is here in Britain.
SOARES: With London already in the spotlight in 2012 for the Olympics, there's never been a better time for the fashion industry to broaden its horizon. And if London is to compete with the likes of Paris and Milan, it's time to separate the men from the boys. Isa Soares, CNN, London.
(END VIDEO CLIP)
DOS SANTOS: Well, the weather dictates a lot of what we wear here in Britain. Let's go over to Jenny Harrison for an update on what we can expect. Jenny?
JENNY HARRISON, CNN METEOROLOGIST: Yes, really think that I think, Nina, you get to wear some lovely outfits because of the rain and the showers and the cooler weather, you see. It's not all good when it's just summer fashion. But talking over the weather dictating, it did rather dictate what happened in the match still currently underway, of course, in eastern Ukraine.
That thunderstorm that came through the Donetsk (ph) Arena was inundated. It had to suspend play for 56 minutes. Now the thunderstorms continue to clear out. There's no real thunderstorm there anymore, and Kiev, of course, that match about to take place, will begin in a couple of minutes from now. So we have seen a little bit of cloud come through the area.
There is actually some thunderstorms in the forecast later on tonight. But it really should be mostly clear over the next few hours and also more showers and thunderstorms pushing, as you can see there, across into Poland. Temperatures maybe sort of 17 degree Celsius, quite brisk winds at about 25 kilometers an hour. But as I say, it should be a good start, anyway.
Now all these systems, of course, in eastern Europe have mostly originated out in the west. This is the next one. You can see that curl of rain, that really is impacting the U.K., some thunderstorms as well across into low countries, particularly heavy there.
But this system is going to bring the strong winds, very heavy amounts of rain as well. It'll work its way eastwards throughout the first part of the weekend, some very strong thunderstorms will then develop across central regions, Germany in particular.
And there's quite a few sort of areas scattered across Europe into Saturday morning where we will need to just be aware of the potential for some damage. So this is the system already coming through, very heavy rain across northern England, across into Wales, eastern areas of Ireland.
And when you compare whatever you're doing so far this month in June, with sort of the average, well, up into Scotland, for example, well below the average, and then further to the south, as you can see here, St. James' Park, 102 millimeters and 113 in Thorny Island, well over double the average. There's the system coming through, mostly fine across the Mediterranean.
The winds will leave quite quickly with that system coming in. And here are your temperatures this Saturday, very nice, 29 in Rome and 24 in Vienna. Nina, have a good weekend.
DOS SANTOS: You, too. Thanks ever so much, Jenny.
And to the rest of our viewers, have a great weekend, whatever you're doing. "MARKETPLACE AFRICA" is next.
ROBYN CURNOW, CNN HOST: You're watching MARKETPLACE AFRICA. I'm Robyn Curnow. Now later on in the show, we speak to Joyce Banda, southern Africa's first female president. And she tells us about her plans for avoiding financial disaster in Malawi.
JOYCE BANDA, PRESIDENT OF MALAWI: This is what we need to do in order for us to get out of this total dependence on aid. And Malawians are ready.
CURNOW: But first, Malawians, Congolese, Nigerians and Zimbabweans, all of those nationalities help to make up this community, a small suburb in Johannesburg called Yobol (ph). Small communities across Africa that all contribute to the local economy. Well, (inaudible) now takes us to Sierra Leone, where the Lebanese are helping to build the country from the bottom up.
SAMIR HASSANYEH, PRESIDENT OF SIERRA LEONE'S LEBANESE COMMUNITY: We were born in this country. Our ancestors came from the 1870s and my father was here. And we are a family of eight, four brothers, four sisters. All of us were born here.
UNIDENTIFIED MALE (voice-over): Here is Sierra Leone, and the country that Samir Hassanyeh's father emigrated from is Lebanon.
HASSANYEH: (Inaudible) is now become part and parcel of this country.
UNIDENTIFIED MALE (voice-over): The Lebanese community numbers less than 9,000 in a country of 5.5 million. But they are a vibrant and vital part of the economic development of Sierra Leone, which is beginning to emerge from the horrors of a civil war in Liberia, which spilled across its borders in the 1990s.
Its economy is heating up. GDP is expected to rise to 6 percent in 2012, from 5.6 percent in 2011. Just three years ago, it was a little over 3 percent. Construction, mining, oil exploration, almost every industry is surging and the Lebanese are active players in nearly all sectors.
HASSANYEH: (Inaudible) our home. (Inaudible) in the (inaudible) involved in shopkeeping, doctors, lawyers, engineers, this beautiful (inaudible) market (inaudible).
UNIDENTIFIED MALE (voice-over): This supermarket is just one of the businesses Samir represents as the president of the Lebanese community in Sierra Leone. The aisles are crammed with just about anything you can find on the shelves of America or Europe.
HASSANYEH: (Inaudible) has been here for about 15 years now. This is one of the best supermarkets (inaudible).
UNIDENTIFIED MALE (voice-over): But business wasn't always so easy. During the war, many were forced to close up shop. When they returned, they were faced with economic obstacles.
HASSANYEH: (Inaudible) we had lots of problem with banks. They would not establish (inaudible) credits. (Inaudible) was not accepted (inaudible). The currency was -- and still is not accepted. There was hardly any dollars (ph). You can find (inaudible).
UNIDENTIFIED MALE (voice-over): Those obstacles have vanished.
HASSANYEH: The president said that he's running the country as a business. You understand, there were many obstacles in setting up a business previous. That has been wiped out. (Inaudible) 48 hours (inaudible) business and no problems whatsoever.
The government that we have now in power is a government that's (inaudible) business community.
UNIDENTIFIED MALE (voice-over): Throughout their long history here, there was something missing, citizenship for Lebanese or any foreigner born on Sierra Leone soil.
HASSANYEH: This is a mar (ph), in the state, is a stain on Sierra Leone to depreciate -- differentiate by color. That's (inaudible) color of his skin, you have to be of Afro-Negro descent. You have to be (inaudible) become a citizen in this country. And I'm very happy that the president has changed his strategy (ph).
ALHAJI IBRAHIM BEN KARGBO, MINISTER OF INFORMATION AND COMMUNICATION: So our new policy is that we should give them naturalization. We have just concluded a first set of 50 of them.
UNIDENTIFIED MALE: Wow.
BEN KARGBO: So that they can be ready to be offer allegiance before the president himself.
UNIDENTIFIED MALE: It will be my honor and pleasure to become a Sierra Leone citizen.
UNIDENTIFIED MALE (voice-over): A citizen now, Samir says he has no intention of ever leaving.
HASSANYEH: Having been around the country, it's so beautiful. Go to the beaches, you hardly see like these beaches anywhere else. I like life here. Being (inaudible) I prefer living here than living in England or even in Lebanon. I go to Lebanon, I'm a complete stranger there. Here, I walk in the street; everybody knows me.
UNIDENTIFIED MALE (voice-over): Vladimir Dutep (ph), CNN, Freetown, Sierra Leone.
(END VIDEO CLIP)
CURNOW: Of course, communities can have an impact on economies, but a change of leader can make a fundamental difference to the direction of a country. After the break, we speak to Joyce Banda, the new Malawian president about how she plans to kickstart the economy.
CURNOW: She's ditched the presidential plane, downgraded her motorcade and has tried to rebuild relationships with foreign donors (ph).
Joyce Banda, Malawi's new president, only recently came to power after former president died. But in that short time, she has imposed strict austerity measures. Well, CNN's Athena Jones caught up with her in Washington, D.C., to talk about her plan to avoid financial collapse in Malawi.
(BEGIN VIDEO CLIP)
ATHENA JONES, CNN CORRESPONDENT: As southern Africa's first female president, you've introduced some fundamental changes already in your country. When it comes to what happened before you, relations with the IMF and with donors (ph) had really deteriorated significantly under the previous administration.
What was the cost to the economy of Malawi and to the people of Malawi over these last three years?
BANDA: The bad news is that it's tragic that our president -- the former president -- refused to devalue the kwacha for four years, because what that would have meant is that maybe the devalued kwacha by 10 percent a year, it would still have been 40 percent by now.
But the fact that we had to devalue by 40 percent at once means that Malawians are feeling the shock, the impact of that huge devaluation. And particularly rural people, the poor, the ones that are going to be most affected. That is why there is the austerity plans.
JONES: Talking about the austerity plan, the presidential plane has been sold. Am I right? The government's car fleet has been significantly downsized. What other plans are part of this effort to cut government spending?
BANDA: What we have said, what I have said to my team is that at a point such as this, with 40 percent adjustment in our currency, it means that Malawians are paying the price. While that is going on, they need to see us, the commitment on our part, particularly (inaudible). The political we ought to go through this with the people side by side.
JONES: This means there's some key moves that you've made, just in this short period of time. But when it comes to -- if I'm correct, over 30 percent, nearly 40 percent of your money comes from aid, comes from donors, and that's very, very important to the development of the country in Malawi. What about the future, though? What about getting to the point where you need less aid? What has to happen there?
BANDA: What I am saying every day to Malawians is that time has come for us to move from aid to trade. We have (inaudible) several sectors that we think we can focus on immediately in order for us to grow our economy.
So we have decided to develop our agriculture. We decided to develop our tourism sector. We have decided to develop our mining sector. So these are some of the things we are telling Malawians, to say this is what we need to do in order for us to get out of this total dependence on aid. And Malawians are ready.
JONES: I know that the IMF has just agreed to provide a loan of $157 million. Relations have been restored with some of your biggest donors, like the United Kingdom. How -- what are your plans for getting the economy out of this cycle of receiving aid and then eventually into more self-sufficiency? What is going to be involved there?
BANDA: What we decided to do was as soon as I was -- I was (inaudible) position was to go back on track with IMF, because that was fundamental because it was going to influence our decisions that were going to be made by all our partners that had withdrawn aid. I have been saying to all our donors that we have gone as far as we can.
When there was resistance in Malawi to stay on course on the IMF program, what Malawians were being told is that this resistance is as a result of our belief that if we devalue or if we stay on course, Malawians will suffer.
Now I came in, I told them to do this: I said, it's not true. It is when we go the other way, we pass this through before tide (ph), that everything shall be fine. Now what Malawians need to see is that while we are making these sacrifices, the international community is also moving in timely to support us.
JONES: We know that the African Union summit was scheduled to take place in Malawi. Now it's taking place in Ethiopia. And (inaudible) because you did not -- you decided that you did not want to allow Sudan's President Omar al-Bashir into the country. Do you think it would have been better to allow him to arrive and then to arrest him?
BANDA: I want you to know that I don't have any right. Malawi has no right to stop any president from coming to an African Union summit, because that is an African Union meeting. But in -- six months ago, we had (inaudible) summit in Malawi.
And the international community told us that we shouldn't invite President Bashir to come to Malawi. The president of Sudan came to Malawi and attended the meeting and we went from where we were, which was already bad enough, to zero. MCC (ph) --
JONES: In terms of donors, you mean?
BANDA: In terms of our donors (inaudible). I didn't say that he shouldn't come. But I may it very clear that we were not prepared to pay that price again. Now it is the African Union that has decided to withdraw the summit.
Now (inaudible) is that when he was going to attend the summit in South Africa, South Africa said if he comes here, he'll be arrested. And Uganda said the same. And the summits were not withdrawn.
(END VIDEO CLIP)
ROBYN CURNOW, CNN HOST: (Inaudible) link Twitter and Facebook pages at CNN.com/MarketplaceAfrica. But for me, Robyn Curnow, here in Johannesburg, thanks so much for watching.