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QUEST MEANS BUSINESS
Spain 2013 Budget Released; Looking at Spain's Budget; European Markets Up Slightly; Dow Higher; Nissan Stalls in China; Euro, Pound Up; Make, Create, Innovate: Light Bulb Moment
Aired September 27, 2012 - 14:15 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Good evening. As it teeters ever closer to the bailout cliff, Spain is trying to jettison its unbearably heavy debts. And we have the budget from the Spanish government, the 2013 budget, which was reported today.
QUEST: These are details. Spain aims to save $51 billion. And the balance mostly through spending cuts rather than higher taxes. There'll be a new agency to keep an eye on spending by regional governments.
And since Spain doesn't have much further to fall, treasury minister Cristobal Montoro said the country will see a light recession next year, expects growth to contract by a half of one percent. Unemployment, in their words, will finally bottom out.
And Spain's borrowing costs started to drop as soon as the budget was revealed. The yield on the 10-year bond is back below 6 percent. The stock market traders barely got a chance to react. The announcement was delayed by two hours, by which the trading session was over.
Already we are hearing reaction. In fact, it came while the budget was being announced. The European Commission vice president for economics, Olli Rehn, he welcomed it, saying it was a further important step towards addressing Spain's challenges.
CNN's Madrid Bureau Chief Al Goodman is with me this evening. Good evening, Al. All right. Look. The budget, that's a detail we don't really have. We've just got a big picture. But the question first of all, will it be sufficient to appease those on the streets, or is this going to pour oil on the flames?
AL GOODMAN, CNN MADRID BUREAU CHIEF: It may well pour more oil on the flames because there are extensive cuts in this budget, and yet analysis -- instant analysis showing that the payments, the extra payments because of the rising borrowing costs, is going to basically eat up all of those cuts.
So, that will get us to a situation where, where do they go next? And where they've already gone, what they've already announced is that just to pay pensions, they're going to have to dip into a reserve fund and use almost 5 percent of a reserve fund to pay off some pensions, first time they're doing that.
So, there are a variety of troubling signs here, and we've seen violent protests this week and we may see more protests here on the weekend and into the next week.
Now, one of those key issues that has people out is the high rate of unemployment. Here's what the treasury minister, Mr. Cristobal Montoro, had to say about that at the news conference after -- as the budget was announced.
(BEGIN VIDEO CLIP)
CRISTOBAL MONTORO, SPANISH TREASURY MINISTER (through translator): The unemployment rate, it is also hoped, will be similar to 2012, but will continue dropping. Spain doesn't need to take measures against the rest of the world, but hopes to be an exporter.
(END VIDEO CLIP)
GOODMAN: Similar unemployment in 2013 to 2012. Well, the rate now is almost 25 percent overall --
GOODMAN: -- and about 50 percent for the youngest Spaniards, Richard.
QUEST: Another busy day tomorrow as well, Al, with the banking test and the amount of money that the banks will need, all being announced. We will be -- I will be with Al tomorrow night in Madrid. Al, see you then. Looking forward to that, as our program coming from Spain tomorrow night.
The market there bucked the general trend in Europe today.
QUEST: Look at the numbers. And Bankia was one of the day's worst performers. It was down 2.7 percent. Banking and mining shares gained, as elsewhere in Europe. Agricole at 3.8, Rio Tinto at 1.5. As you can see, though, Madrid bucked -- down, not huge movements by any of the major markets. And on Wall Street --
QUEST: The stocks that spent most of the session -- it's a rather strong session in New York at the moment, up nearly three quarters of one percent, 100 points on the Dow. And this despite a downward revision for second quarter economic growth in the United States.
Incidentally, the UK had a smidgeon increase in its revision, its final revision, for third -- for its last quarters. And that's the numbers for the United States.
Nissan, the car company, has admitted it's worried about the wave of anti-Japanese sentiment currently underway in China. The carmaker's hoping it won't get any worse. And Nissan is cutting production in China because of waning demand for Japanese cars. The two nations are embroiled in a territorial dispute about a group of islands in the East China Sea.
Earlier, I was joined by the chief exec of Renault-Nissan, the Alliance, Carlos Ghosn. And I asked him, when you look at the world at the moment, we talked about Europe in a little while, but we started with China and what he made of it.
CARLOS GHOSN, CEO, RENAULT-NISSAN ALLIANCE: These kinds of incidents can create a lot of worry for car manufacturers and companies because unfortunately, there is nothing we can do about it. This is the kind of thing which happens which is a relationship between governments, which is highly political, highly emotional.
So, we hope that reason is going to reason is going to prevail and that at the end of the day, within a few weeks, the consequence of these unfortunate tensions and conflicts will disappear.
We are being very cautious, obviously. We are reducing a little bit the level of production in order to adjust our inventory and hoping that after the holiday season that is taking place now in China, things will be coming back to normal.
GHOSN: So, in a certain way, we -- yes, we are worried, but we don't think that is going to become a big issue. We may be wrong, but we don't think it's going to become a big issue. But we're taking our cautions.
QUEST: If we look in Europe, where you'd -- again, recession in many of your major markets on the Renault side. Cutbacks and job losses. And still, the crisis goes on. By now, you must be just about wondering what is left for you to do in Europe?
GHOSN: Yes. Well, I think Europe is going to be a -- a struggle for all car manufacturers this year, without any doubt, with the forecast of 8 percent decline for the year 2012. I think at best, 2013 is going to see the stabilization of the European market, but most likely, we're going to see another decline. Maybe not of the same magnitude.
And frankly, we don't see any rebound of the European market within the three years -- three to four years timeframe. So, we're very bearish on Europe, so we -- the only thing you can do in a situation like this, is making sure that you're talking all the necessary measures to maintain your business shored up, I would say, in Europe.
And in the meantime, going for all the growth opportunities outside Europe, which is the case of Renault, by the way, which is growing fast in Russia, growing fast in Brazil, growing fast in India. Preparing to go into the Chinese market. That's the only thing you can do for the moment.
QUEST: And if we look at job losses, do you expect further retrenchment, further job losses in Europe beyond those that you've announced?
GHOSN: Yes, I think the industry is going to have to lose more jobs. Every car manufacturer is going to have to take his own measure. The situation of carmakers are the same, so some of them are going to have to shut down plants, others are going to maintain their plant, but they're going to reduce headcount. Others are going to do other measures.
But in a -- there is no doubt in my mind that within the next three to four years there are going to be less people working for the car industry in Europe than before.
QUEST: I need to end this interview on a happier note than we've been talking about, so tell me something cheerful about what's happening in your industry.
GHOSN: Well, something cheerful? The industry is growing. Even though Europe is terrible and we have a crisis here and there, the overall market is doing fine, plus 5 percent for the year 2012. We think next year's going to be another plus 4, plus 5 percent, another record year.
So, I say overall, globally, the industry's fine. It's growing. Demand is here. Emerging markets are now a very solid engine for our industry.
Now, this being said, this is -- this is most important, because this is the overall picture. Now, within this overall picture, there are some pockets of decline and difficulties, and that's it.
QUEST: Carlos Ghosn of Renault-Nissan talking to me earlier from the Paris -- the Paris Air Show -- the Paris Motor Show. Now, a Currency Conundrum.
QUEST: Spain, which waved good-bye to the peseta in 2002, part of EMU, European Monetary Union. According to a recent survey, how many Spaniards do you think want the peseta back? One in three? One in five? One in ten? We'll have the number for you later in the program.
The euro is up a third of a percent against The dollar. The pound is up even more, bound to those slightly better GDP numbers. And the yen is flat. Those are the rates, this is the break.
QUEST: Tonight, we celebrate Make, Create, and Innovate. The title says it all. It is a celebration of the world of industry, entrepreneurialism and innovation. Those brilliant ideas --
QUEST: -- intricate inventions --
QUEST: -- and the strange and wonderful workings of everyday items. The things that we use in our everyday life. But we are going to show you how they started, with a simple -- maybe complex -- bright idea.
Now, with more than 700 million people using wifi worldwide, radio bandwidth, you'll know, is getting crowded. So, a professor in Edinburgh has looked to the light for a solution. Nick Glass with Make, Create, Innovate.
NICK GLASS, CNN INTERNATIONAL CORRESPONDENT: Someone once said, "Let there be light." Is this how we will access the internet in the future? At the speed of light?
GLASS (voice-over): German-born professor Harald Haas has patented an illuminating answer to the problem of congested bandwidth.
HARALD HAAS, PROFESSOR, EDINBURGH UNIVERSITY: My big idea is to turn light bulbs into broadband communication devices.
GLASS: You've heard of wifi. Here in this Edinburgh laboratory, the future is li-fi.
HAAS: The demand for wireless connectivity is increasing tremendously. So, we've just taken the view of moving from the radio spectrum into the visible light spectrum, which is 10,000 times larger than the radio frequency spectrum.
We are not running in competition to wifi. We still need wifi. What I'm saying is, use the existing lighting infrastructure, cooperating with the radio frequency domain, and that's why I don't see that this is a -- in confrontation to the current industry.
GLASS: And LED is not just a light source, it's a sophisticated electronic device. Crucially, it can be made to oscillate at phenomenal speeds millions of times per second. We can't see it, but it's this capability which allows it to transmit data.
HAAS: Take the light bulb, and we have a binary stream that fits -- that represents an image, for example. Then, there is a one. We turn on the light bulb. And then there is a zero, we turn it off. And the receiver at the other end would recognize these changes of intensity and would then decode that binary stream and stack it in an image.
GLASS: Interrupt any single beam, and the data stream is disrupted.
Well, I've seen li-fi working in a lab, but what about in the real world? We head up the hill to Edinburgh castle for a wee experiment. And then, we descend down to the dungeons, hundreds of feet underground, to the deepest, dankest part of this ancient royal fortress. Without even so much as a cell signal down here, we can still communicate. Even send a large video file.
HAAS: So, what we have here is a little server here in that cabinet. It streams high-definition video to that LED lamp, which is an ordinary LED light bulb you can buy off the shelf.
What we have here is a little hole and here's a receiver. The receiver picks up the signals that come from that light. Let me just interrupt that light beam. Block the receiver, and then the video and the sound would stop. If I would release it again --
GLASS (on camera): It starts.
HAAS: It starts again. The light carries the video, so I can touch the video now. I have the video in my hand, if you want. And now, the video is back on the screen.
GLASS (voice-over): After eight years in development, Professor Haas first demonstrated li-fi to an audience in 2011.
HAAS: I saw into the eyes of the many people, the utter surprise, disbelief. This was a moment of internal joy.
GLASS (on camera): If I come back in 10 years, where will this technology have gone?
HAAS: Imagine where you have light sources in shopping windows, traffic lights, street lights, in airplanes, in trains, at home, under water. Everywhere where you have light, you have a means of communicating.
GLASS: A prototype light bulb is only about six months away, and if it's anything like wifi, li-fi could turn out to be a very lucrative part of our smarter future.
HAAS: A lot of attention, a lot of interest, to shape a technology that could change the way we communicate in 10 years from now. And it's in our hands to turn that into future success.
QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in a moment. This is CNN and here, on this network, the news always comes first.
(BEGIN VIDEO CLIP)
QUEST (voice-over): The Israeli prime minister Benjamin Netanyahu has told the U.N. a clear red line is the only way to stop Iran's atomic program. He was addressing the general assembly in New York and said nothing could imperil the world more than a nuclear armed Iran.
Earlier president of Palestine, Mahmoud Abbas, told delegates he wants his country's U.N. status to be upgraded to that of a sovereign country.
Spain has announced plans to save $51 billion from its budget. The 2013 budget focuses on severe spending cuts rather than raising taxes. The country's deputy prime minister says it will help pull Spain out of the debt crisis.
These pictures show a town in Syria's Daraa province coming in under intense fire. The regime opposition says attacks across the country killed at least 71 people today. Wednesday saw the highest one-day death toll of the entire conflict, 343 Syrians were reported killed.
There's applause and a handshake between presidents that marked the signing of a deal in Sudan and South Sudan. It enabled South Sudan to resume oil production and exports and created a demilitarized zone to prevent future fighting. It does address a key dispute over the status of a small but oil-rich border region.
Chelsea captain John Terry is now facing a four-game suspension for racially abusing a fellow player during a match last year. The English Football Association is fining him $356,000. (Inaudible) says he's disappointed with the ruling and is considering (inaudible).
QUEST: Moody's downgraded South Africa's credit rating today, citing concerns over the government's ability to tackle risks to growth. It comes as the Africa's largest economy continues to face wildcat mining strikes. Production stopped at the mine's of the world third largest gold producer, AngloGold Ashanti.
(Inaudible) 35,000 strong workforce are on strike. Wednesday's workers delivered a memorandum of demands to AngloGold, calling for a wage increase. And (inaudible) nearly 1 percent in Johannesburg. It's down at least 6 percent for the week so far.
More broadly, gold is up $20 today at 1,775 cents an ounce. Mark Cutifani is the chief executive of AngloGold-Ashanti and joins me now from Johannesburg.
You've been to get court orders and interdictions against this strike. You've -- the strikers say they've set the memorandum for what it's about. Is it your -- do you know why they are striking?
MARK CUTIFANI, CEO, ANGLOGOLD-ASHANTI: Well, Richard, the early conversations we've had so far with representatives and it is a loose alliance of representatives at the moment is that they'd like more money. That's all that's really been articulated so far in our conversations with the groups.
QUEST: I know that there's an existing agreement in place. If they want more money, will you give them more money? (Inaudible) as basic a question as I can put it to you.
CUTIFANI: Richard, we've just been through a collective bargaining process across all of our operations. We agreed (inaudible) structures in payroll so they've just had an 8.5 percent increase in wages across the board. So, no, we don't intend to give another payroll, given we're in a process and they made a commitment.
QUEST: How damaging -- obviously, you know, 32 percent of your -- it's damaging to your company, seriously damaging to AngloGold. How damaging and how worried are you about the long-term effect on South Africa's economy of these mining strikes?
CUTIFANI: Richard, I think there are so many positive things that are happening here in South Africa it's unfortunate that this is really the front-page news. It is an important issue. It's damaging for the country. It's damaging for the individuals concerned and for us as a company. It obviously doesn't help the message that we've been putting out.
Our operations here are doing very effective. We've made great strides in improving the operations. It's unfortunate that this sort of information damages the reputation and for the country, it obviously is not helpful and given the news today, it's bad news, literally.
QUEST: So, there's a classic standoff here. They're striking for more money; you're not going to give them more money. We've got the Lonmin incident as well. The president has said it's seriously damaging to the South African economy.
Mr. Cutifani, what needs to happen here to break this deadlock and either get them back to work or to make progress?
CUTIFANI: I think the important thing is that we make sure we're understood in terms of where coming from. We're trying to create the most successful gold mining company in the world, and we've gone a long way in doing that over the last three to four years. And South Africa remains a very important part of our business.
What we need to be successful is competitive. We need to manage our cost structures together. That means we need to be productive and we need to continue to improve our salaries as we've been doing, well above inflation rates. But really, it's a dialogue where we've got to come together, look after each other and create a future. So it's a dialogue amongst all the key parties.
QUEST: Mark Cutifani in Johannesburg tonight, thank you for joining us and we'll talk more about this one as it plays out. Thank you for joining us tonight. When we come back in just a moment, there's some weather out there. We'll update you on where it is. (Inaudible).
(BEGIN VIDEO CLIP)
QUEST (voice-over): The "Currency Conundrum," the answer, how many people wanted to see the reinduction of the peseta? According to a recent poll, the answer (inaudible) surprise, one in five, 21 percent of Spaniards want to see the currency returned.
(END VIDEO CLIP)
QUEST: Jenny Harrison now at the World Weather Center for us this evening, the rain in Spain -- or perhaps not tomorrow.
JENNY HARRISON, CNN METEOROLOGIST: Well, as you say, that hoping there will be no rain. I will get to that. (Inaudible) pop in, Richard, it's nice to see you for 45 minutes this week. We have missed you.
Going to talk about that rain that's been coming into the south and the southwest of Spain. Remember I've been showing you how severe and widespread the drought is across the southwest of Europe. Of course many areas also suffering, but really we've seen some fairly unpleasant conditions over the last couple of days.
The very heavy rain and strong winds really easing across the northwest right now. But still that rain is on its way through the low countries across into Germany. And we've got another thunder course slightly across northern sections of Europe. But this is the system coming through the southwest over the next couple of days.
Now what that means is that there's some pretty heavy rain, in fact, maybe 15 to 16 millimeters in some areas. It really is needed. The heaviest rain that the thunderstorms, they're going to come through Madrid on Friday. Saturday still some rain in your forecast and in fact, Friday should be a mostly dry day in Barcelona, for example, further to the north and the east.
By Saturday that is when this rain is going to reach you. Also you can see here, pushing through the western Med and also into southern areas of Spain. Still warm across the southeast of Europe. And once again becoming fairly blustery across northern Europe, too, with that next system.
So be prepared for some delays at the airport, not that lengthy until you see Scotland, Glasgow, the afternoon on Friday. Elsewhere, mostly it'll be sort of green boxes, so not long delays, half an hour.
Where, however, we could see some long delays, that is Madrid in the overnight hours, maybe up to 90 minutes because of those systems or that rain system really coming through with the low clouds that reduce visibility, could well be the cause.
You can see the area of low pressure quite clearly there on the map over the next couple of days, a few more showers across the north, so generally quite an unsettled picture. Doubt very much the unsettled weather will spoil anybody's fun at the Oktoberfest.
So your powder should be dry for your day in Munich for the next few days. And then temperatures as a whole on Friday 18 in London, the same in Paris and look at that, about the same in Madrid as well, Richard.
QUEST: We thank you, Ms. Harrison, whose little (inaudible) is probably more like sherry than a pint of beer. We do thank you for that.
Now that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Join me tomorrow in Madrid, when the program comes from the Spanish capital. All right. Whatever you're up to in the hours ahead, I hope it's profitable.
NINA DOS SANTOS, CNN HOST: Hello and welcome to MARKETPLACE EUROPE. I'm Nina dos Santos in London. The economic crisis has weighed heavily on the construction sector with building output down 5.4 percent in July year- on-year across the E.U.
Meanwhile, civil engineering output is down 8 percent over the same period. But here's a question: could increased spending on infrastructure actually provide for building blocks for economic recovery?
DOS SANTOS (voice-over): Coming up, the CEO of French constitution firm Vinci tells Juliet Mann that Europe must build to stimulate growth.
And the pig industry is squealing in the face of rising feed costs and new E.U. legislation.
DOS SANTOS: New restrictions for pig breeders across Europe come into force in January, but already there's concerns that not all member states will comply. (Inaudible) the new E.U. legislation bans the use of so- called gestation sow (inaudible).
Here in the U.K., farmers implemented these changes about a decade ago, which means that many of them have already borne the cost of rehoming their herds.
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ISA SOARES, CNN CORRESPONDENT (voice-over): Rooting, foraging, exploring. It's the natural environment for these pigs in Nottingham, England.
RICHARD BLANT, PIG FARMER: Oh, ho, ho, come on. Come on, fella. Oh.
SOARES (voice-over): Their owner, Rich Blant, this well being has come at a very high cost. Back in 1999, the U.K. changed the rules for breeding pigs to include food quality and the treatment of the animals.
BLANT: (Inaudible) 300,000 pounds at a time. We've managed to survive, but in a much reduced capacity and now we're probably a quarter of the size that we were at those times.
SOARES (voice-over): Under the new rules, sow stalls were banned. These are metal enclosures used in intensive pig farming, where a female pig may be kept during pregnancy. And sometimes for the rest of her adult life.
ANDREW KNOWLES, BRITISH PIG EXECUTIVE: (Inaudible) took a cold look at their prospects and said, well, that probably an investment we can't afford, and so they chose to leave the industry. And so over a period of two or three years, what you saw is the U.K. herd decline by about 40 percent.
SOARES (voice-over): Starting next year, farmers in Europe will be faced with the same problem, as a ban on sow stalls comes into law across the continent.
BLANT: These are called self-feeders and they serve to stop bullying so that one sow doesn't have more than the other sow. So we use them here to make sure that the animals all get the amount of feed which they need. But in Europe, and the rest of the world, the animals will spend their lives in these, what they call sow stalls.
SOARES (voice-over): For farmers like Richard Blant, the new E.U.- wide ban will create a level playing field. But already there are concerns over how well the ban will be placed across Europe.
According to the European Commission, only three E.U. member states say they comply with the new legislation. Nine say they will be compliant by the end of this year. Twelve can't assure the commission and three haven't even replied.
ZOE DAVIES, GENERAL MANAGER, NATIONAL PIG ASSOCIATION: In Denmark, they're using the police to enforce the ban, so we expect that they will be fully compliant. In other countries, such as France, Spain and Italy, it's going to be a lot harder for them. The enforcement strategies they've put forward as far as we can see are not sufficient.
SOARES : The ban comes at a critical time for the industry. Soaring feed prices made worse by the droughts in the U.S. and supermarkets' reluctance to charge more for pork, all this has meant some farmers have been unable to turn a profit. Others have been forced to dramatically reduce their herd. And some to call it quits altogether.
BLANT: The soybean we used to pay 150 pound a ton for now due to the American drought we're paying 450 pound a ton for, which the cereals, which is the main part of the ration, have doubled in price in one year.
Boy, go on. Back you go. Hey!
SOARES (voice-over): (Inaudible), which represents British pig farmers, says the ban together with the cost of feed will most likely trigger a fall in European pork production.
KNOWLES: So we think we'll see a decline in the northern European herd. We're around about 5 percent. And in the southern European herd, that could be up to 10 percent, depending on how closely it is placed.
SOARES (voice-over): The ban will also mean some very tough choices.
DAVIES: The people that will stay in are the people that have good business plans, they have deep pockets and you know, they've got the will to stay in.
BLANT: It is unsustainable. We cannot feed the animals any longer at these prices. So you know, something's going to have to go.
SOARES (voice-over): The E.U.-wide ban, the competition and soaring feed prices may just prove too much.
(END VIDEO CLIP)
DOS SANTOS: Isa Soares reporting there from Nottinghamshire.
Coming up after the break, the CEO of the French construction firm Vinci on why he believes Europe can build its way back to health.
DOS SANTOS: Hello and welcome back to MARKETPLACE EUROPE. The bridges spanning the Thames here in London are a vital link for commuters across the city.
The Golden Jubilee foot bridges here behind me run alongside the Hungerford rail bridge, and they were something of an engineering feat, not least because they were constructed directly on the underground system running deep underneath the River Thames. This is just one of the many international projects that the French construction firm Vinci has been involved in.
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JULIET MANN, CNN HOST (voice-over): Vinci has been building, designing and managing construction projects since 1899. It was involved in the creation of the Channel Tunnel, and it's Europe's leading motorway operator. Vinci employs more than 183,000 people in 100 countries with annual revenues of around $48 billion.
XAVIER HUILLARD, CHAIRMAN AND CEO, VINCI: In France, our new government has a big challenge, which is to bring the debt and the public deficit within E.U. guidelines without impacting too much the economic activity.
MANN: Well, Hollande has been meeting and having lunches with a lot of business leaders. But is the government really listening to business?
HUILLARD: There are in front of a very big challenge, which is to stick to that target of 3 percent of public deficit by the end of 2013. So they have to take measures that to make it happen . And it is really important so that to give confidence to the market and so that to give confidence to Germany.
So they have a big challenge, but they are fully aware about situation of the different companies in France and companies working outside France.
MANN: Do you not worry that there's quite a lot of talking, a lot of intellectualizing and not really enough action? And how much time are you going to give them?
HUILLARD: Mr. Hollande is probably fully aware about the necessity to develop PPPs, so that to bridge the gap between the need for new infrastructure and the lack of public money. Of course, they have to take into account the new reality of the toughness of the situation.
But I'm confident that, yes, they will take the good measures that, yes, a country will stick to that target of adding 3 percent deficit only (inaudible) 2013, but without impacting too much the global economic activity.
MANN: And what could governments across Europe be doing to stimulate growth?
HUILLARD: It is precisely because we have an economic slowdown in most of our European countries. That we should accelerate investment in transport infrastructures. Why? Simply because transport infrastructure are an accelerator of economic growth.
We have to find ways so that to continue to invest in our transport infrastructure and the way to do it and to make it happen is to use this new PPB concept, PPP meaning public-private partnership. So that to bridge the gap between the need and the lack of public money.
And this is, of course, good news for us since we are -- we are the world leader in this field of concession and contracting. Five years ago, the market was not really convinced that it was making sense to be both in the concession business and the contracting business.
We explained a lot and I think now that the market is fully understanding the sense it makes, particularly since we have been able to win big PPP and concession contract, for example, like the huge contract which is high-speed train line.
We are currently building southwest of France, which is 8 billion euro contract. It would have been impossible to sign such a contract if we had not this fully integrated business model, putting together concession and contracting.
MANN: Let's talk a little bit about your international (inaudible). So now it's been step by step. Are you hinting that you might now have to push more aggressively now?
HUILLARD: Yes, but you have to keep mind that in our kind of business, time is a friend. What I mean is that it's necessary to have the know-how, but you also need to have a deep understanding of the culture of the codes of the countries in which you intend to build. In our case, we decided to focus mainly on North and South America and India.
Why we are continuing to develop our business in the continent or in the countries where we are currently, which is -- which are mainly Europe, including Russia, Africa, Middle East and Asia. It is important to focus so that to take your time to have a deep understanding of the local culture so that to be able to grow without taking too many risks.
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DOS SANTOS: Xavier Huillard, the CEO of Vinci bringing this week's MARKETPLACE EUROPE to a close. Join me next week when I'll be at the Paris Motor Show. But in the meantime, it's goodbye and thanks for watching.