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CONNECT THE WORLD

Moody's Warns Of Credit Downgrade Of Germany; Mitt Romney Gets Tough On Foreign Policy

Aired July 24, 2012 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


BECKY ANDERSON, HOST: Closing bell on Wall Street July 24, Tuesday, bringing to an end the global trading day. So what's the picture? Well, the Dow down about four-fifths of one percent. Let me tell you, it could have been worse when you consider the state of the European markets today.

And tonight, it is Germany feeling the heat. Look at those markets. Germany down a half of one percent, Spain off more than three. And Milan off 2.75 percent.

Also this hour.

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

ANDERSON: Charged with phone hacking, two of the most prominent figures stand accused in a scandal that has rocked News Corp and its top man Rupert Murdoch.

And overwhelmed by a hero Olympic team GB fans get a surprise visit.

Well, Germany is tonight promising to defend its status as Europe's economic flag bearer after finding its finances directly in the line of fire, threatening to losing its prize AAA credit rating, proof tonight that no country is safe from a EuroZone crisis spiraling out of control.

Richard Quest is with me this evening to explain just what is going on.

We think of Germany, we think of stable, safe economy. And yet tonight we hear some what could be potentially pretty bad news.

RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: Now if your definition is whether Germany will be able to pay back any of its debts, the answer is clearly yes. It will pay back all its debts. But if your definition of what's going on is slightly wider, then you come to look and see the EuroZone crisis and you see classic contagion.

Let's start down here at Greece, the worst of them all in many ways. I'm working my way up towards Germany, mind you. And the Troika is reviewing reforms. No decision on September. Nobody to a person will tell you that this Greek plan is on track. It is off the rails. And there are some serious questions of how they're going to get it back on.

But then you go to Spain. And look at this, the 10-year bond -- remember 7 percent is generally thought of as being a critical number. We're at 7.6 percent. That is absolutely unsustainable. Catalonia is looking for aid. It's going to need aid, part of the $18 billion put aside.

So working up from Greece to Spain and then you get to Germany: stable to negative. And there's about a 30 percent -- all right...

ANDERSON: (inaudible) shall we?

QUEST: If they say there's about a 30 percent to 40 percent chance that when you have that statement that's what ends up happening. Fears over Spain and the Greek exit, but Germany is playing hardball now. And they're fighting back. So that's the scenario.

Factor it into this and the overall EuroZone, what you have now are these countries here -- this is by Moody's remember. France already lost its AAA from S&P.

ANDERSON: And the threat is that Germany could lose its AAA rating.

QUEST: Yes. Most people don't think it's going to happen. Everyone I've spoken to says...

ANDERSON: OK, go on.

QUEST: ...it's a taunt.

Then you've got those that are below A. You've got the three that are in programs at the moment: Greece, Portugal, and Ireland. And this is interesting, in the whole EuroZone guess which country is AAA and stayed there?

ANDERSON: Belgium.

QUEST: No, no, no.

ANDERSON: Holland. No, go on.

QUEST: Finland. It is the one -- and this is the final bit, just shows you how grim the situation is. That's the GDP. That is a debt to GDP of over 50 percent, somewhere up towards 80 and 90 percent. This is the sorry state of affairs that Europe faces tonight. And that is why coming back to this one, these -- this is contagion. It is literally moving its way right the way across the continent.

ANDERSON: That's remarkable.

QUEST: And seems to be powerless to do anything to stop it.

ANDERSON: I'm thinking you and I have been doing this for what, for probably 50 years between the two of us. And I'm thinking in the old days saying Belgium or even Holland would have been pretty sort of spot on. The idea that Finland is the only stable AAA rated country is remarkable.

QUEST: It's serious, because it tells us that contagion -- not negative contagion. Germany ain't going to be bailed out, but if god forbid Italy needs a bailout, and Spain, there's not the money in the coffers.

ANDERSON: Richard Quest with us this evening. Richard, thank you for that. Markets once again ending the day in a sea of red, stocks particularly in Italy and Spain bearing the brunt tonight. While in Germany, you can see the market there down about a fifth -- about a half of one percent.

The news of Moody's downgrade met with a fairly muted response, at least by those investing in stocks. Christian Schultz, a senior economist at Barenberg Bank in London, a former European central bank official, is now with us to discuss this.

The very notion that Germany's debt could be downgraded from AAA status for me seems almost inconceivable. The idea that this EuroZone crisis could be infecting German assets, Christian, begs the question what are the Germans going to do about this?

CHRISTIAN SCHULTZ, FORMER EUROPEAN CENTRAL BANK OFFICIAL: Well, this is not the first time the unthinkable happened. Last year we had the downgrade of the U.S. We've had a French downgrade earlier this year, that was unthinkable as well. What was the consequence in each time for the borrowing costs of these countries, probably none at all. Actually borrowing costs went down. And I think that's why we've seen a rather muted response from Germany as well.

But Germany itself actually this potential downgrade is not even that bad.

ANDERSON: I put it to you, though, that Germans themselves, didn't they wake up to this story tomorrow, will look to the very notion that their debt is now being questioned, at least. And will say why are we paying for this European mess? And Angela Merkel will have to field a whole load of pretty painful questions won't she?

SCHULTZ: This will be water on the mills of those euro skeptics, which is a very small group in Germany still, but they will feel vindicated. They will -- they said all along that this crisis rescue strategy is not working and that Germany will eventually pay with its good name.

ANDERSON: You say the euro skeptics are a small group, there are many, many people, though, in Germany who say why are we bailing everybody out?

SCHULTZ: Yes. In the wider population you have a growing sense that this is not leading anywhere. Germany is putting up more and more money. It's not solving the crisis. It's still there. What shall we do? And now with the greater downgrade, it really shows the limits of Germany as well.

ANDERSON: How big a day is this for Germany?

SCHULTZ: Well, it's a big day. People will notice this. This is something that is really part of the national pride, the credit rating. But really the key question is what to do now, stop the EuroZone rescue? Then countries like Greece or Italy or Spain might default. And Moody's has said that would be negative for the German credit rating. Or continue to rescue these countries? That would also be negative for the credit rating. So what do you do?

ANDERSON: Good questions tonight.

Let's get to Greece, one of the countries you alluded to there. It's a crisis that, well it seems can't be contained. If one country falls, others could soon follow, which is why the spotlight is of course back on Greece. Meanwhile, its economy may be smaller, much smaller than Germany's, and smaller than Spain's or Italy's. Indeed it could collapse. And that could have devastating consequences not just for Europe, but across the globe.

Elinda Labropoulou is in Athens tonight where Greece's lenders are pouring over its books deciding whether or not to give it any more money. What's the news out of Athens this evening?

ELINDA LABROPOULOU, CNN INTERNATIONAL CORRESPONDENT: Well, the Troika representatives have arrived in Athens to assess the progress, if you like, that the country has been making towards reducing debt and meeting its lenders requirements. Now they will then decide whether Greece will receive the last tranche of 130 billion euro aid package that was agreed in March, but without which the country would not be able to meet its payment required -- requirements in the short space of time.

Well, figures so far have shown that Greece have missed a large number of targets. And it's behind in plans to cut spending and debt. The overall reason for this is that the country's economy is shrinking faster than forecast, so all predictions so far have repeatedly been proven wrong.

Greece's prime minister earlier today, Antonis Samaras, warned that the economy could shrink more than 7 percent this year. Originally it was forecast at an already very high 5 percent. Samaras told his M.P.s today that the first aim must be to halt the recession, but that doing so is very, very far from easy.

And this really is a problem, the economy is shrinking faster and as a result Greece keeps missing its targets, taking more austerity measures which will only lead to more recession. And it just doesn't have the money to jump start the economy. So it only goes to this deeper recession cycle.

So what we expect from the Troika visit at this point at this point is eventually an assessment of the situation and then a decision on how they plan on handling Greece from then on.

ANDERSON: Elinda setting the scene in Greece.

Christian, there have been rumors that the IMF is pretty much fed up with what's going on in Greece. You've heard Elinda eluding to the fact that it's -- Greece could be down as much as 7 percent.

We look at Germany and we see that Germany is on sort of a downgrade notice from Moody's. And we've talked about how that's going to go down amongst the sort of German population. Where are we in this EuroZone crisis?

SCHULTZ: Well, we might be very close to a watershed. This is another big wave of the EuroZone crisis. It seems a bit like last November when the leaders of Europe were also trying to put together rescue packages, rescue funds, trying to calm down the markets, none of it was working, but finally the European Central Bank stepped in in December, and that bought us at least a few months of calm. And these few months actually were enough for a confidence rebound for Europe to avoid recession different from some countries, but also in the European continent like this one, the UK.

So the European Central Bank was the key. The leaders could do whatever. They just don't have the resources.

And it feels the same again. The European leaders try the banking union, they've tried a permanent rescue fund. They try the Spanish bailout. They try the bank bailout. None of this works, because the European Central Bank is not doing its share.

ANDERSON: They don't work. And there are no answers as of yet.

Tonight, we thank you very much for joining us.

More to here on Connect the World. While Syrian officials back peddle on comments about their weapons stockpile, fighting intensifies in major cities around the country. The latest from Syria is just ahead.

Dramatic scenes of a rescue in China as heavy rains cause a bridge there to collapse. Cars plunged 10 meters into the river below.

And Mitt Romney takes on the U.S. president's foreign policy. Here what the Republican challenger has to say about all things international ahead on Connect the World.

(COMMERCIAL BREAK)

ANDERSON: You're watching CNN. This is Connect the World with me Becky Anderson. Welcome back.

Now it's the latest chapter in what is an ever widening phone hacking scandal. Eight former staffers from the now defunct tabloid News of the World in Britain are now facing charges. They include Rebekah Brooks, the former chief executive of News International, and Andy Coulson a former aid to the British prime minister.

The charges were announced earlier today.

(BEGIN VIDEO CLIP)

ALISON LEVITT, UK PROSECUTION SERVICE: All, with the exception of Glenn Mulcaire will be charged with conspiring to intercept communications without the authority from the 3rd of October 2000 to the 9th of August 2006.

The communications in question are the voice-mail messages of well known people and/or those associated with them.

(END VIDEO CLIP)

ANDERSON: Well, prosecutors say more than 600 people were targeted, including the family of missing teenager Millie Dowler who was later found murdered. We're going to have a lot more on this story coming up here in about 15 minutes' time.

Meanwhile, heavy fighting across Syria today. Shelling has been reported in and around the Syrian capital Damascus with Syrian troops moving into the Na'esher (ph) neighborhood. Now rebels, meanwhile, say they are pushing ahead to their advance on Aleppo, the country's largest commercial hub. This from Mohammed Jamjoom.

(BEGIN VIDEO CLIP)

MOHAMMED JAMJOOM, CNN INTERNATIONAL CORRESPONDENT: The government claims it is sweeping out pockets of opposition fighters from Damascus. Different reports also emerged on Tuesday about rebel advances in Syria's most populated city and commercial hub Aleppo. In Aleppo, opposition activists claim that rebels gained more ground there and pushed into the center of the city.

In one amateur video, armed rebels claimed to have taken control of the Bab el-Hadid (ph) neighborhood in that city. More video from later in the day purported to show fighting going on in the streets of that neighborhood as well.

One member of the Free Syrian Army told CNN that the Bab el-Hadid (ph) neighborhood was getting shelled by tanks, helicopters and a fighter jet could be heard flying over in the sky.

And in Damascus, opposition activists reported shelling by Syrian forces in suburbs of the capital on Tuesday. Earlier in the day, Syrian state television broadcast scenes of the Syrian army cracking down on the Nahar Isha (ph) neighborhood in Damascus.

And one dramatic amateur video emerged purporting to show a helicopter firing on the city of Hura (ph), a suburb of Damascus. At one point in the video you see what appears to be rockets striking the ground.

Meanwhile, Syria's chemical weapons program was still making headlines on Tuesday. Just one day after Syria's foreign ministry spokesperson stated that the country's chemical weapons would only be used in the event of external aggression, it started to backtrack from what had previously been said.

On Tuesday, a statement issued on Syria's news agency said that the goal of the press conference on Monday wasn't to declare, but rather to respond to a methodical media campaign targeting Syria to prepare world public opinion for the possibility of military intervention under the false premise of weapons of mass destruction.

And even more concerns about Syria's chemical weapons stockpiles were being expressed on Tuesday, this time by the rebel Free Syrian Army. Colonel Moustafa Sheikh (ph) told CNN that the FSA had received intelligence that the Syrian regime had moved chemical and biological weapons stockpiles 15 days ago.

Then one portion of the stockpile was transferred to the coast, and another was transferred to airports along the southern border.

Mohammed Jamjoom, CNN, Abu Dhabi.

(END VIDEOTAPE)

ANDERSON: A look for you now at some of the other stories that are connecting our world tonight. The vice president of Ghana is the country's new leader after Ghana's president died unexpectedly. The chief of staff for John Atta Mills said that the 68 year old became ill only a few hours before his death. Atta Mills became president of Ghana three years ago and was running for reelection later this year. Well, Vice President John Jermani Mahama was sworn in just moments ago.

Well, a massive clean-up is underway after a powerful storm battered Hong Kong. Typhoon Vicente struck the city just before dawn. Heavy rain, 180 kilometer winds, more than 100 people injured. No fatalities have been reported, but flights were grounded, shops and schools closed, and the opening of the stock markets delayed earlier. The storm was the most powerful typhoon to hit Hong Kong in more than a decade.

Well, torrential rains in China lead to a dramatic rescue operation after a bridge collapsed in Shandong Province. Guests were making their way to a wedding when this bridge gave way, causing two cars to plunge 10 meters into the river below. Two people crawled out of one car to safety, but the driver of this car was stuck and rescuers sliding down the bridge by rope while managing to get him out through the sunroof. He suffered a head wound, but he is expected to make a full recovery.

We'll take a very short break here on CNN. You're watching Connect the World with me Becky Anderson. When we come back, Mitt Romney says he would never, quote, surrender America's leadership on the world stage if elected president. Barack Obama's Republican challenger talks tough. That's ahead.

(COMMERCIAL BREAK)

ANDERSON: You're watching Connect the World live from London. Welcome back. It's 22 minutes past 9:00 here. I'm Becky Anderson for you.

U.S. Republican presidential hopeful Mitt Romney gearing up for an overseas tour by taking fulsome swings at Barack Obama's foreign policy.

Mr. Romney addressed a war veterans group in the state of Nevada. He suggested that President Obama has hurt America's standing in the world. Romney says if he's elected, the United States will, quote, fulfill its duty and its destiny.

(BEGIN VIDEO CLIP)

MITT ROMNEY, REPUBLICAN PRESIDENTIAL NOMINEE: It's a mistake, sometimes a tragic one, to think that firmness in American foreign policy can only bring tension or conflict. The surest path to danger is always weakness and indecision. In the end, it's resolve that moves events in our direction and strength that keeps the peace.

I will not surrender America's leadership in the world. We must have confidence in our cause, clarity in our purpose, and resolve in our might. This is very simple, if you don't want America to be the strongest nation on earth, I'm not your president. But with his cuts to the military, you have that president today.

(END VIDEO CLIP)

ANDERSON: All right. Well, our next guest says historically, at least, Republicans are viewed as stronger on foreign policy than Democrats if only because Americans see Republicans as protectors of U.S. interests abroad.

So is Romney setting himself up as a big player on the international stage? Well, let's dissect what he said tonight with our senior political analyst David Gergen. He's been an adviser to four U.S. president. And listening in on what Mitt Romney said tonight.

Given what is going on around the world, and David it is a pretty busy place, did we hear anything specific from the presumptive candidate this evening?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: We heard far fewer specifics than we did an important tone about his approach to foreign policy, and that is it was the early (inaudible) make it clear it was a hardline speech, that's where he's been for most of his campaign. He is going to run to the right of President Obama, accusing him of weakness and vacillation in foreign policy, that he will be a staunch ally, a reliable ally.

And, you know, I must tell you that President Obama gets higher marks on foreign policy than many Republicans would have acknowledged a few months ago as being pretty hardline himself. After all, he got bin Laden. He's been using the drones a lot. He's been -- you know, he's been willing to use force in ways Democrats sometimes don't.

So at the moment, Mitt Romney is looking uphill at President Obama who is well regarded in foreign policy by the public. And he hasn't yet won their confidence, but he's trying to do it through this trip overseas. He's on the eve of this trip to Europe and Israel.

ANDERSON: All right. Well, let's -- you alluded to those polls. Let's take a look at two national polls from just last week, which as you rightly said, found that Obama was actually leading Romney on the question of who would do a better job of handling foreign policy. A CBS/New York Times poll found 47 percent of Americans believe the president is better on foreign policy, while 40 percent believe Romney is better.

And the other poll for you to look at tonight, where is this one, OK, OK, that's the poll we're going to bring to our viewers. The other pretty much in line with what we were suggesting.

So, I guess this begs the question, what does Mitt Romney need to do on this trip to Britain, Poland interestingly enough, and Israel, his foreign trip, in order to convince Americans that he is indeed a foreign policy wonk as it were, protecting their international interests?

GERGEN: Well, I'm not sure he can accomplish all that much in a single trip. What I think he needs to do is to show that he can go overseas, sit with the leaders of other developed nations, have a very substantive, thorough talks, come out as someone who can work with these other people in a positive way. And frankly I think be careful not to rattle the cages too much.

He has -- there have been moments when he has actually caused concern among some Republican foreign policy authorities who think he's been too hardline.

You know, the question in America is would his foreign policy look like that of President George H.W. Bush, or that of his son President George W. Bush? And there have been a lot of moments when he sounds like George W. than he does like the father. And that has caused some, as I say some concern.

ANDERSON: Sure.

David, for our viewers watching around the world who will increasingly be intent on watching what goes on in the campaign and then obviously the election in November, can you clearly delineate for us this evening whether international relations and foreign policy actually mean anything, or -- not perhaps anything is too strong a term, but how much does foreign policy really mean to these two candidates whose focus surely is U.S. economy and a domestic mess that they've got to deal with.

GERGEN: Well, you're absolutely right. I mean, if there was any election that qualifies for a rerun it's the economy stupid, as you remember that phrase that James Carville came up with for the '92 Clinton campaign. In that, foreign policy was very, very secondary.

Foreign policy will be secondary in this election very likely, unless two things. There are two possibilities of things that could put foreign policy right back in the center, and that is if the EuroZone does unravel, of course we've got all this nervousness now over Spain and over Italy and so forth and Greece, if that were to happen this -- it's going to be very, very important, and frankly it could be very damaging for President Obama.

The other is Iran. It's a wild card. We don't know if something might happen, go down before the elections. I think Mitt Romney has to be extremely careful as he goes to Israel not to be in a situation where he seems to be encouraging Netanyahu to take hostile action. You know, the United States has been trying to restrain Netanyahu. They want to work this out through sanctions, see if they can get the Iranians to agree to some programs. So far that has not worked, but you know there's a real reluctance right now to use force any time in the near future. Let this thing play out a little longer.

ANDERSON: Let's see what we hear and what we see from Mitt Romney on his trip here overseas. Always a pleasure. David Gergen in the house for you this evening.

Still to come on this show, Connect the World out of London 29 minutes past 9:00. Their alleged crime did more than 600 victims, the British newspaper phone hacking scandal comes to a head as eight journalists and media executives are charged. That and your headlines coming up.

(COMMERCIAL BREAK)

ANDERSON: A very warm welcome to our viewers across Europe and around the world. I'm Becky Anderson, these are the latest world news headlines from CNN.

Video posted online appears to show Syrian troops moving into the Nahr Eshe neighborhood of Damascus. An opposition group says heavy shelling has been erupting in and around the Syrian capital. We're told more than 130 people have been killed nationwide Tuesday. CNN, though, cannot confirm the authenticity of that information or, indeed, of the images.

Eight journalists have been charged in connection with phone-hacking in the United Kingdom. They include ex News International chief Rebekah Brooks and the British prime minister's former communications aid.

The African nation of Ghana has a new leader this evening after the country's president died unexpectedly. Chief of Staff for John Atta Mills said the 68-year-old became ill only a few hours before his death. Ghana's vice president, John Dramani Mahama was sworn in about 20 minutes ago.

A law enforcement official tells CNN that if the trip wires in the apartment of the suspected Colorado theater shooter James Holmes had been sprung, the entire building may have gone up in flames just like this. Police blew up some of the explosives they say Holmes used to booby-trap his home before going to a local theater and opening fire.

Well, they were arguably two of Britain's most influential members of the media. Today, the former head of News International, Rebekah Brooks, and Andy Coulson, the man who had the ear of the prime minister at one stage, were charged with, I quote, "conspiring to intercept communications without lawful authority." Otherwise known as hacking. Dan Rivers reports.

(BEGIN VIDEOTAPE)

DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): It was the allegation Milly Dowler, a 13-year-old murder victim, had her phone hacked by journalists in 2002 that propelled phone-hacking into an international scandal.

Now, a decade later, six suspects have been charged with that invasion of privacy as part of a raft of charges involving eight suspects and dozens of well-known victims.

ALISON LEVITT, CROWM PROSECUTION SERVICE: There is sufficient evidence for there to be a realistic prospect of conviction in relation to one or more offenses.

RIVERS: Among them, former News International CEO Rebekah Brooks, who faces three charges of phone-hacking while she was the tabloid's editor.

Her then-deputy, Andy Coulson, faces five charges. He went on to be Downing Street communications director, but resigned amid the hacking scandal. And Glenn Mulcaire faces four charges. He was the private detective whose assiduous notes left a trail of evidence for the police to follow.

Together with royal correspondent Clive Goodman, Mulcaire had already been found guilty of hacking phones related to the British royal family and sentenced to six months in prison. Now, Mulcaire could be facing more jail time, but so far, he's made no comment.

The new charges include alleged victims from all walks of life. Figures from show biz, like Sir Paul McCartney, actor Angelina Jolie and husband Brad Pitt, actor Jude Law and girlfriend Sienna Miller.

From the world of sport, Manchester United striker Wayne Rooney and former England soccer manager Sven-Goran Eriksson.

And numerous politicians, including former deputy prime minister John Prescott and former Home Secretaries Charles Clarke and David Blunkett.

Rebekah Brooks is the most high-profile suspect charged, and she immediately issued a statement denying the accusations. It read, "I am distressed and angry that the CPS have reached this decision. The charge concerning Milly Dowler is particularly upsetting."

And former "News of the World" editor and ex-Downing Street communications director Andy Coulson also broke his silence to deny wrongdoing.

ANDY COULSON, FORMER EDITOR, "NEWS OF THE WORLD": And I didn't do anything to damage the Milly Dowler investigation. At the "News of the World," we worked on behalf of the victims of crime, particularly violent crime, and the idea that I would then sit in my office dreaming up schemes to undermine investigations is simply untrue.

RIVERS (on camera): but despite these charges, the police still have a lot of work left to do. They've identified 4,775 potential victims of phone-hacking, but then there are parallel inquiries into the illegal bribing of public officials and the hacking of e-mails. This whole scandal still has a long way left to run.

Dan Rivers, CNN, London.

(END VIDEOTAPE)

ANDERSON: Earlier, I spoke to John Whittingdale. He chaired the parliamentary committee that looked into the "News of the World" hacking scandal last year, and I asked him how significant he thought these charges were. Have a listen to this.

(BEGIN VIDEOTAPE)

JOHN WHITTINGDALE, BRITISH MEMBER OF PARLIAMENT: Well, today is an important day, but it isn't entirely unexpected. We've known, obviously, that some very senior individuals in News International in Britain have been facing criminal charges. They were arrested quite a number of months ago. So, the fact that charges have now been brought is not a surprise.

ANDERSON: Is this the end of the inquiry and the whole episode, do you think, or not?

WHITTINGDALE: No. I think this is going to go on for some time. Obviously, the people who have been charged, it's going to be some time before their cases come before the court, and obviously they could go to appeal after that. So, that is likely to go on for probably a year or more.

At the same time, we're awaiting the report of the judge who's been leading an inquiry into the whole future of press regulation in Britain, and that's likely to come out probably towards the end of this year.

ANDERSON: Are we going to see people going to jail for this?

WHITTINGDALE: Well, the charges that have been brought are serious ones, and they do potentially carry custodial sentences as a result. So, it is certainly possible. But if convictions are obtained, that would lead to jail sentences.

ANDERSON: In the big scheme of things, and for our viewers, who may be watching outside of the UK and thinking why does this really matter? So what? Why should I care? Just how significant has the whole episode been? Let's start with the Murdochs, shall we?

WHITTINGDALE: Well, it does appear that there was one newspaper in which phone-hacking had become commonplace and was widespread, and the charges that have been brought against a number of individuals, they're all associated with that newspaper. And obviously, it is part of the News Corp empire in Britain. So ultimately, Rupert Murdoch was in charge.

ANDERSON: This inquiry has cost the UK taxpayer millions of dollars. Again, if I'm watching from outside of the UK and thinking, why does this matter to me? Can you answer that question? Can you -- is there any sense on the back of all of this that anything has really been established? Anything of consequence achieved?

WHITTINGDALE: Well, obviously, we have to await the outcome of the trials. You can't prejudge. The people who've been charged today are pleading innocent, and therefore we need to allow the court process to go through the trial, and we'll see what the outcome is.

However, there is no question but one thing that has already changed is that the future of press regulation in Britain will never be the same again, and I hope that we will never see a repeat of the kind of abuses that clearly did take place in the past.

ANDERSON: And John, are the Murdochs still welcome in the UK?

WITTINGDALE: Well, yes, I -- Rupert Murdoch and his organization still have a big role in the UK. Not only are they the publishers of several leading newspapers, they still have a significant stake in our subscription television channel. So, News Corp still has a big -- a big role to play in the UK's media.

(END VIDEOTAPE)

ANDERSON: A big UK story with resonance around the world.

All right, this just coming into CNN. Apple moments ago reported quarterly profits of $8.8 billion. Now, let me tell you, that is below estimates. Sales and earnings guidance also missing forecasts.

We're going to have a lot more on this in about a half -- or an hour and a half time on "World Report." But the headline, Apple's quarterly profit, $8.8 billion, below estimates. Sales and earnings guidance also missing forecasts. I can promise you, that will be a big story come Wednesday.

Coming up after the break, we hear some real life advice on how to reach the top and how to stay there. Two of CNN's Leading Women share their secrets to success.

(COMMERCIAL BREAK)

ANDERSON: All right, time for our weekly Leading Women series. This month, we are following the CEO of the Tel Aviv Stock Exchange and the founder of Vosges Haut-Chocolat. While these two women lead vastly different careers in different countries, they do share a philosophy for success. Take a look at this.

(BEGIN VIDEOTAPE)

FELICIA TAYLOR, CNN INTERNATIONAL CORRESPONDENT (voice-over): Ester Levanon had been a groundbreaker almost her whole life. Aside from being the first female CEO of TASE, the Tel Aviv Stock Exchange, she was one of few women to major in mathematics at Hebrew University.

And she helped convince the largely skeptical Israeli Security Service that it needed to adopt new technology in the 1970s. She went on to lead the Services' IT department.

ESTER LEVANON, CEO, TEL AVIV STOCK EXCHANGE: The Israeli Security Service was managed only by men. I was the first woman manager in their history. Whenever I walked into a room to have a meeting, it usually was only men and me.

TAYLOR: At the Security Service, she had to make her first difficult management decision, telling someone they weren't right for her department. It's a memory that sticks with her 35 years later.

LEVANON: It was so difficult to know that I made a decisions, it's right for the organization, but I'm influencing someone's life and actually pushing someone to go and look for another job. So, that was really a very difficult moment.

TAYLOR: Another difficult moment: when she finally accomplished her goal of becoming CEO of TASE, her mother was too ill with Alzheimer's to share her news.

LEVANON: My mother encouraged me all my life. She told me I could do whatever I liked. And at the moment that I wanted to show here that's what happened, I wasn't able to do it, and that was a pity for me. It was a very sad moment for me, in a way.

TAYLOR: For all of her firsts, Levanon is resistant to the concept of being a role model. Instead, she offers this advice.

LEVANON: It's very simple. Be yourself, do what you want to do, don't do what you think others expect from you or what the society expects for you. Just go and do what you believe in. That's true for men, it's true for women, it's true for everyone.

ANDERSON (voice-over): I'm Becky Anderson. That sentiment of doing what you believe in continues with chocolatier Katrina Markoff, who decided to go to cooking school right after she graduated college with a double major in psychology and chemistry.

KATRINA MARKOFF, FOUNDER/CEO, VOSGES HAUT-CHOCOLAT: I think it's so important to find your own individual voice. I think people respect it so much. People are very attracted to people that are passionate in their own way, that speak their mind.

I just think it's important to remember that you have the sort of guiding light within yourself and to always go to that as your sounding board and as your voice of truth.

ANDERSON: Markoff wasn't always clear on her voice, though. Luckily, her mother let her jump from passion to passion.

MARKOFF: I wanted to be a mechanic, I wanted to be a ballerina, I wanted to be a doctor, I wanted to be a truck driver. I had all these wants, and I would go home, and I would say, "Mom, I really want to be a mechanic. I love working on the bike's in my dad's garage."

She'd be like, "Great. What is the best school for you to go to?" And so, she would never be like, "You can't -- you don't want to be a mechanic. You don't want to be a truck driver." She would never say that.

ANDERSON: What Markoff finally came around to was making chocolate. She founded the gourmet Vosges Haut-Chocolat in 1998, and just this year began a more mass-produced line called Wild Ophelia. Her success is a testimony to pursuing what you love, and she uses her experience as advice for budding entrepreneurs.

MARKOFF: Really following that gut instinct is so critical, and it has to be passionate, and it has to be smart. You have to know that there is a niche in what you're doing. You can't copycat. That never works. You have to have your little niche and carve it out, and then follow it with all your heart. And success will come to you.

ANDERSON: Markoff's niche is chocolates that are whimsical, with unexpected flavor combinations that, as she puts it, tell a story. And she's taken inspiration from another company founder with a distinct vision: Steve Jobs.

MARKOFF: I think it's really cool how he focused so much on beauty in his product. They're just beautiful and sleek and why wouldn't you want to have it? That's right! I want it!

ANDERSON: With a company netting $30 million last year, that's a lesson she's taken straight to the bank.

(END VIDEOTAPE)

ANDERSON: And up next, our Amanda Davies is here to talk about her lucky assignment today. We're going to hear a part of her conversation with one of the world's sporting icons, next on CONNECT THE WORLD. Do not go away.

(COMMERCIAL BREAK)

ANDERSON: All right. Well, David Beckham is one of the world's most famous sportsmen, but his fame wasn't enough to secure him a place on Great Britain's Olympic football team. Despite missing out, though, Beckham still very much involved with the Olympics in what is not just his hometown but his home neighborhood, effectively.

Amanda's here with me. She's just raced back from the Olympic Bureau. She's been working all day. You sat down with Mr. Beckham earlier today. He's very -- he's very nice.

AMANDA DAVIES, CNN SPORTS CORRESPONDENT: Yes, tough job. But somebody's got to do it.

ANDERSON: I know. I know. I think I did it seven years ago, and I think I'm still living off that. What was on his mind today?

DAVIES: Frankly, anything could have been on his mind and I'd have sat and listened, Becky.

(LAUGHTER)

DAVIES: But no. What is on his mind this week is the Olympics, and the big question is that, given he was left out of that team, will he have some role in the Olympics, which he was so integral in bringing to London.

And the good news is that he confirmed to me he will have a role. Sadly, he wasn't able to go into too much detail. I did press him a little bit, and he gave me a couple of clues. But have a listen to what he said.

(BEGIN VIDEO CLIP)

DAVID BECKHAM, LONDON 2012 AMBASSADOR: No, I'm not allowed to. But it's exciting. I'm excited to be part of obviously such a huge occasion for our country and for everybody involved in this Games. It's exciting to have Olympic Games in the East End of London and for myself to be part of that is -- I'm very honored.

DAVIES: Will your role involve children?

BECKHAM: No, I don't think it does, actually. I don't think it does.

DAVIES: Animals?

BECKHAM: No.

DAVIES: Footballs?

BECKHAM: No.

DAVIES: Flames.

BECKHAM: I think I might have one --

(END VIDEO CLIP)

DAVIES: So, he might have an involvement with a flame.

ANDERSON: Right.

DAVIES: That's as much as we could learn in that.

ANDERSON: The big question is, will he actually light that Olympic flame? Because in the past, there's sort of -- the story is it has to be an Olympian. Now, he is by no means an Olympian. He's a fantastic athlete, we know, but he's not an Olympian. So, is there still this big sort of debate as to whether he might actually light the flame?

DAVIES: Well, he said in the last week or so that he doesn't think he should be the one to light the flame. I think it's in everybody else --

ANDERSON: What is David Beckham going to do, Amanda?

DAVIES: Well, we don't know. We genuinely don't know, but he's going to do something. And let's face it, it's a three and a half hour ceremony, so there's a fair window for him to do something.

ANDERSON: Listen, he's made a few surprise appearances this week, hasn't he? While he's been back in town.

DAVIES: Yes. This is -- you say back in town. It's the most incredible week for him. And he said, even for him, this is a ridiculous week. He flew in two days ago. He's had two days doing these Olympic things. He then flies out of London first thing Wednesday morning back to the States, because he's taking part in an MLS all-star game.

ANDERSON: Right.

DAVIES: And then flies back to London to have this involvement in the Ceremony.

ANDERSON: Are you tracking him?

(LAUGHTER)

DAVIES: It's a little bit worrying, isn't it?

ANDERSON: Stalking him?

DAVIES: Yes. OK. We'll move on. But so, he spared me a little bit of time, but he's also spared some shoppers in London a little bit of time. People were encouraged to go into a photo booth in London and -- I think we should see pictures of them. And basically show their support for team GB.

I was quite overwhelmed meeting David Beckham, but just have a look at this little boy. It kind of brought tears to my eyes. Watch -- he is just --

ANDERSON: Oh!

DAVIES: -- completely overwhelmed by it.

ANDERSON: Oh, and then he puts those glasses on. What is he thinking?

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Oh! Oh, my God! Look at him!

(END VIDEO CLIP)

ANDERSON: Oh, that is fan -- did you get your picture taken with him?

DAVIES: No.

ANDERSON: Oh, Amanda!

(LAUGHTER)

ANDERSON: This is a chance of a lifetime!

DAVIES: I know.

ANDERSON: You and David Beckham in a booth, and you didn't take --

DAVIES: Sadly, we weren't in the booth.

ANDERSON: Amanda tells me she's far too professional for that sort of thing.

DAVIES: So, David Beckham's health and safety wouldn't allow us in a booth together, I don't think.

(LAUGHTER)

ANDERSON: Good for you. Amanda and I will be a part of the team, of course, at the Olympic Stadium -- or the Olympic Bureau, at least, over the next three weeks. Do join us for that. Thank you very much, indeed.

It's been a gorgeous day here in London. Amanda tells me she burnt the back of her neck in doing most of her live shots today. Is it going to last, though?

DAVIES: Oh!

ANDERSON: Three days to go until that Opening Ceremony. Jen's with us at CNN's Weather Center in Atlanta.

JENNIFER DELGADO, CNN METEOROLOGIST: You know, Becky, that's the thing.

ANDERSON: All we want to hear is "yes," Jen.

DELGADO: Yes. Weather is going to be nice.

ANDERSON: One word and we'll move on.

DELGADO: You know what? When you come out of a story about David Beckham, you cannot go gloomy with that? What a great assignment Amanda just had there. And the weather is actually looking pretty great right now as well, as I can show you.

As we talked about this yesterday, the pattern is holding up. A lot of sunshine out there. Amanda and Becky said when they were outside that the sun was beating down the neck, getting a little extra color, there.

Temperature right now at this hour, 23 degrees, 25 degrees in London. Temperatures running about 5 to 7 degrees above average. So, how long will this last? Do you need to break out that sunblock? Do you even sell it over there? Because you just always have so many clouds around as well as rain over the last couple days.

But for Wednesday, Thursday, and Friday, weather's not looking so bad. But as we head into Friday, Becky, we do have a chance for a few showers out there, and the chance increases as we get closer to the Opening Ceremony. As she said, three hours long, so hey, you've got a chance to get some stuff in there.

ANDERSON: Jen, I want to remind you, we had a heat wave for three days in May --

DELGADO: You did.

ANDERSON: And we may have an Indian summer in September --

DELGADO: Hopefully.

ANDERSON: So, you know what? Don't dis our weather.

DELGADO: Yes. I did. And I still do.

ANDERSON: You're more than invited to bring your sunblock anytime you want to come and stay. Jen Delgado with her forecast, looking -- ish to iffy by Friday, I guess is the line.

I'm Becky Anderson, that was CONNECT THE WORLD, thanks for watching. The world news headlines up after this.

END