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QUEST MEANS BUSINESS
Greece Warns of Default; Greek Debt Concerns; Anti-Bailout Syriza Party Leads Greek Opinion Polls; Software Pioneer McAfee Wanted for Questioning in Belize; No Movement for European Currencies; The Millennials; Massive European Strike Planned
Aired November 13, 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: Greece warns there's a high risk of accidental default if they don't get the money.
The leader of Greece's far-left Syriza Party tells me that Europe needs the Marshall Plan.
And emission impossible, for now, at least. The EU commissioner on where the carbon trading scheme has been delayed.
Hello, I'm Nina Dos Santos, and this is QUEST MEANS BUSINESS.
Good evening. The troika isn't agreeing, the bailout funds aren't flowing. Tonight, Greece warns it cannot afford to play these games much longer. The Greek prime minister, Antonis Samaras, met with European Commission president Jose Manuel Barroso in Brussels.
Greece's own finance minister, sitting down there on the left, also warned that there's, quote, "a very high risk of an accidental Greek default" if Europe doesn't release the next round of bailout money. Yiannis Stournaras said that the Greek austerity push deserved more respect.
(BEGIN VIDEO CLIP)
YIANNIS STOURNARAS, GREEK FINANCE MINISTER: If one takes into account the adjustment already been achieved in -- since 2010, I can say that in peace time, no other democracy has achieved so much in such a small period of time.
We plan to complete the adjustment with remaining one-third of the distance towards the end of the road. So, our message to the Greek people is that sacrifices have not been lost. We are now close to the end.
(END VIDEO CLIP)
DOS SANTOS: Meanwhile, officials in Brussels are busy trying to paper over a disagreement with the troika. Euro group head Jean-Claude Juncker says that, quote, "there's no real dispute with the IMF" over his plans to give Greece more time on its debt targets. That's against the funds own wishes.
Well, things got pretty frosty between Juncker, and the IMF chief, Christine Lagarde, during Monday night news conference.
Greece maybe working hard to win over the rest of Europe, but it's still hard to see where the happy ending could be coming from these days, and that is the opinion of Sweden's own finance minister, Anders Borg.
He's concerned about Greece's high debts and its uncompetitive economy. I spoke to him earlier from Brussels.
ANDERS BORG, SWEDISH FINANCE MINISTER (via telephone): The Greek government has presented a courageous and ambitious budget, but there are some very fundamental uncertainties that remain to be resolved. So, I think we are in the situation that will be difficult also for some months to come.
DOS SANTOS: We seem to have a bit of a split, here, between the International Monetary Fund and those members of the euro group. Which side would you say would make sense?
BORG: Well, I think that the fundamental problem is that the indebtedness of the Greek government is very high and their context in this is -- the economy is quite weak. So any kind of fundamental assessment of debt sustainability is very uncertain and very difficult.
So the combination of these problems, even though the Greek government is both ambitious and courageous, it makes a lot of uncertainty remaining.
DOS SANTOS: Let me read you a comment by the chief economist of Saxo Bank, saying that they remain of the opinion that Greece will eventually break away from the euro, but in an orderly fashion, meaning that it will have the consent from both the EU and Greece to do so, and that Greece could perhaps be the sacrifice that is needed here to mend the ills for other peripheral eurozone countries.
BORG: I think we should stick to the focus that the Greek government now is trying to deal with some of their problems. But as I said, even though these plans are ambitious, it is extremely difficult to see how uncertainty could calm down in the short-term perspective. So, the situation remains very difficult for them.
DOS SANTOS: A new political order is emerging in Greece these days and it threatens to tear up the bailout agreement altogether even as lawmakers still battle to keep it alive with those painful austerity measures that have been passed recently.
The far-left coalition Syriza is leading the opinion polls these days, and its leader, Alexis Tsipras, has vowed to scrap the whole plan altogether. I asked him earlier today why he feels that austerity just isn't working.
ALEXIS TSIPRAS, LEADER, SYRIZA (through translator): The problem is not just clear -- just Greek, it's a European problem. Greece is a part of the eurozone and the problem of debt of Greece is a part of a bigger European problem, which relates to all European South.
What we are claiming, we're demanding, is a comprehensive European solution, regulation with the write-off of a big part of the debt of all the countries who have the public debt, particularly high.
We demand a solution opposite to which one was given to -- the similar solution which was given to Germany at the international conference of London, when the 50 percent of the debt of Germany was written off, was given suspension to the payments of the interest rates. And there was a close of development concerning the repayment of the rest of the debt.
DOS SANTOS: Where is the money going to come from? If we're not just talking, according to what you've just said, now, we're not just talking about a huge reprieve for Greek debt, you seem to be advocating other countries that are finding themselves in this situation also getting a reprieve on their debt, as well, and that include Spain. Where's the money going to come from.
TSIPRAS (through translator): If you have somebody bankrupt, the solution is not to give more loans to him, which he won't be able to return. The solution is to help him to work, to produce, so that he has the opportunity to start to repay.
What has happened to Greece is completely destructive, because we put this load upon us, on a country which is bankrupt, and we're deprived of the opportunity to produce so that to be able to repay. That's a problem.
And for this reason today, we don't have a solution. Yes, the euro group, they couldn't decide something essential because the Greek debt is not viable.
The program has failed in all its goals, and therefore there couldn't be an added solution, except one new cut, which should be accompanied by policies of development and of public investment, which will create a stable environment for the private investors.
DOS SANTOS: You said that, quote, "everybody knows that apart from Angela Merkel, the German chancellor, that some parts of the European Union would like to turn countries like Greece and other troubled peripheral eurozone countries into low-cost labor zones.
Now, that would automatically, perhaps some might say, create jobs, and that is the problem that Greece is facing today. It's just not competitive.
TSIPRAS: We won't agree with the idea that if they are reductive, the wages of Greece are reducing to the level of Pakistan or India or Bangladesh, then the Greek economy would become more comparative because it was always like this.
These countries which I have mentioned would have a more comparative economy. To compare the competitiveness of Greek economy, they should start with the -- the corruptions should stop. There should be a stable taxation regime that should be a regime of safety, security, for the investors to sort out this scaremongering stops with the possibility of exit from euro.
And at the same time, there should be -- the economic environment should stabilize so that Greece is helped through European investment from the European fund. It's not the plan of Mrs. Merkel.
DOS SANTOS: Do you have a credible plan for Greece if it were outside of the eurozone?
TSIPRAS: We strongly support the united Europe and European idea, and that's why we demand to stop the policy of austerity and to be led to some viable solutions, both for the debt and also concerning the development.
DOS SANTOS: That's Alexis Tsipras there, the leader of the far-left Syriza coalition in Greece speaking to me earlier today.
Just ahead here on QUEST MEANS BUSINESS, the hunt for the software tycoon John McAfee. Police say they want to question him in connection with a murder.
DOS SANTOS: Cyber security pioneer John McAfee is wanted for questioning in connection with a murder in Belize. Police there say that they want to talk to McAfee about the fatal shooting of his neighbor.
Well, McAfee is no longer associated with the anti-virus software company which bears his name, and many of us know that name from that firm. CNN's Maggie Lake is following the story and she joins us now, live, with more on this. Maggie, run us through the salient points, because many people reading this story -- and the more you read about it, frankly, it's slightly bizarre.
MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: It is. It's one of the stranger ones we've covered, Nina, and I have to be honest with you, it's a story that still has a lot more questions than answers at this point.
But you are right, authorities in Believe -- Belize, rather -- would like to question John McAfee related to the murder of his neighbor. They say he is not formally a suspect, but rather that they would just like to talk to him.
However, McAfee has gone into hiding. He's been in contact with a reporter from "Wired" today and says he's afraid for his life. Have a listen.
(BEGIN VIDEO CLIP)
JOSHUA DAVIS, CONTRIBUTING EDITOR, "WIRED" MAGAZINE: They are actively looking for him. Indeed, they want to question him. He is actively avoiding them. He says that he's convinced that if he is captured by the police that they will kill him, that he will die in custody, and he will do everything he can to evade custody.
(END VIDEO CLIP)
LAKE: Now, for some background here, McAfee, who's been living in Belize for four years, has had strange relationships with the authorities there for some time. Back in April, he was arrested on charged related to drugs and gun ownership. Those charges were later dropped, but that sort of gives you an idea and sets the backdrop.
But interestingly, McAfee's also had some strange relations with some of his neighbors in the expatriate community there, who've questioned his own behavior. Have a listen to what a science and technology reporter told CNN this morning.
(BEGIN VIDEO CLIP)
JEFF WISE, SCIENCE, TECHNOLOGY, AND PSYCHOLOGY COLUMNIST: I'll put it this way: we're all innocent until proven guilty. But the people in his community were frightened of him. I was frightened by -- the last time I visited him, he welcomed me warmly into his home, he invited me to spend the night at his house, stay for dinner, whatever. Yet the hairs on the back of my neck were up.
(END VIDEO CLIP)
LAKE: So, we're sort of going to sort all of this out, or at least authorities in Belize do. Nina, there's been numerous reports from different outlets that perhaps there were issues with his dogs, they're very noisy, maybe some of the neighbors had filed complaints about that. Whether that has anything to do -- or is any way connected to the murder, we have absolutely no idea.
McAfee himself has said that he believes that the government poisoned his dogs. They were found dead on Friday. CNN has not independently confirmed any of those details. But it's just a strange, strange story, but certainly one that we're going to continue to watch.
CNN does not know the whereabouts, right now, and it appears the authorities in Belize are still searching for McAfee as well. Nina?
DOS SANTOS: Yes, Maggie. Aside from these kind of questions that still remain unanswered, the other question that remains unanswered is who exactly is this character? Because for many of us, every time we log onto our computer, we usually get a little McAfee icon that comes up about our anti-virus software, but he's no longer associated with that company anymore.
LAKE: That's right, but it still bears his name, of course. But he was the pioneer behind this, and he is a sort of well-known figure in the technology world. He's been a pioneer of several different things, created several different successful companies, voice recognition also after the anti-virus security software that's so widely used right now.
But you're right, he created it back in 87, 88, separated from the company in 94. That company was sold to Intel for billions of dollars, I think between $8 billion and $10 billion. So, McAfee moved to Belize, it was thought because of tax reasons. He was quite wealthy, although later on told some publications that a lot of that wealth had disappeared during the financial crisis.
But he is a man with means living in Central America. Whether he is still in that country, we don't know. He is considered to be eccentric, but lately there are a lot of questions swirling around -- concerning his behavior, maybe some paranoia he had. Again, these are anecdotal.
He is somebody who's a bit reclusive there. He doesn't appear publicly very often. He was in an interview that was co-hosted by Reuters some time ago where, again, he talked about his concerns about the government, so he seems like he's been at odds with them there for a while.
But Nina, very hard to separate fact from fiction and anecdote in this particular story, but I imagine that we will get a bit more detail in the coming days.
DOS SANTOS: We'll look forward to it. Maggie Lake joining us with the latest on that story. Thanks ever so much for that.
A Currency Conundrum for you out there now. Currency printer De La Rue issued a profit warning today. It says that the postponement to a number of significant orders would mean that its full-year earnings will actually be about 23 percent lower than had been originally forecast.
Now, De La Rue prints 150 different national currencies, and our question today is which country's notes did it actually print first? Was it A, Mauritius? B, Monaco? Or could it have been C, Montserrat? We'll have the answer to you later on in this show.
Speaking of currencies, it's been a kind of quiet day for European currencies. Almost no movement for the euro or the British pound against the US dollar. When it comes to the Japanese yen, though, that is yet again gaining ground. It's up by around about a third of one percent.
DOS SANTOS: Giving back to their communities, cherishing their friends. It's not all about the drive to succeed for the generation that's transforming the workforce. For nearly a year here on QUEST MEANS BUSINESS, we've been showing you the human stories behind The Millennials.
Tonight, we catch up with our young entrepreneurs in New York and Johannesburg to see what makes this unique generation so unique.
UNIDENTIFIED CORRESPONDENT (voice-over): They are young and confident, educated and ambitious. Born in the 1980s, they are the new generation entering the workforce, and their thirst for success knows no bounds. They are The Millennials.
Previously on The Millennials: Broadway hopeful Michael Burbach goes online to get ahead.
MICHAEL BURBACH, ASPIRING ACTOR: I'm definitely going to do a website for myself.
UNIDENTIFIED CORRESPONDENT: And in London, Milli Bongela explains to Richard Quest what makes her a Millennial.
MILISUTHANDO BONGELA, FASHION BLOGGER: I'm trying to go against the grain that we've been taught, that my parents and everybody else is going.
UNIDENTIFIED CORRESPONDENT: From the catwalks to the classroom, fashion blogger Milli Bongela is going back to school. She's part of a mentoring program for students in Soweto, one of Johannesburg's poorest neighborhoods.
BONEGELA: Well basically, I wanted to be a fashionist.
They are still very young. They are only 17 years old. And they live in Soweto, so a lot of the things that we do is go to the -- into different areas --
UNIDENTIFIED CORRESPONDENT: Together with other volunteers from the Core Fix (ph) Foundation, Milli hopes to share some of her 27-year-old Millennial wisdom.
BONGELA: As much as I'm still learning from my elders, I believe that I do have something to offer as somebody who's older and who has experienced a career in fashion for some of these girls who want to be in fashion. So, that's what I believe I can teach them.
UNIDENTIFIED CORRESPONDENT: Before she can do that, there's the small matter of introductions.
BONGELA: My name is Milli. My blog's quite confusing. As I said in the beginning, when I was young, I wanted to be a politician, but unfortunately, it would involve me looking like this, which is very plain.
UNIDENTIFIED CORRESPONDENT: This may be another project for a busy Millennial.
BONGELA: Now, what I do is this. I juggle a lot of careers.
UNIDENTIFIED CORRESPONDENT: But for Milli, it's one of her most important tasks.
BONGELA: Of course it's taking -- this is taking time away from my productivity. But at the same time, my productivity relies on my sanity. And if that helps me sleep better at night, then at least I'm not just doing things to make money, make money, make money. This is my way of giving back.
UNIDENTIFIED CORRESPONDENT: Michael Burbach is going up in the world.
BURBACH: So, I actually have a hallway now. And here's my new room.
UNIDENTIFIED CORRESPONDENT: He's moved into a brand-new apartment with more space and an iconic view.
BURBACH: It's amazing, because you can see the very top of the Empire State Building.
UNIDENTIFIED CORRESPONDENT: It's a far cry from his first Manhattan apartment.
BURBACH: This is my little kitchenette, and my stove, and my fridge and everything. This is my bed, but it also doubles as my kitchen table.
UNIDENTIFIED CORRESPONDENT: But for Michael, the best part about his new home is his roommate.
Michael and Hannah have known each other since high school in the midwest.
HANNAH, MICHAEL'S FRIEND: We had an art class together.
BURBACH: We had art class, and we hit it off right away.
HANNAH: Shelia's way better than me.
UNIDENTIFIED CORRESPONDENT: Now, they're closer than ever.
BURBACH: When I would wake up in my old apartment, one of the first things I would do is text Hannah. Now it's like I wake up, and I'm like, "Hannah!"
UNIDENTIFIED CORRESPONDENT: For Michael, New York life would be unbearable without a strong circle of friends.
BURBACH: My social life is very important to me. My friends really keep me sane. It took me awhile to build that family in New York.
UNIDENTIFIED CORRESPONDENT: But in an expensive city with plenty of distractions, choosing where to spend your money is a constant dilemma.
BURBACH: A lot of my friends like to drink, but see, my thing is like, if I'm spending money on alcohol, I'm constantly saying, that's two CDs I can't buy. That's another theater ticket that I can't buy. So it's hard for me just to enjoy myself, because I work hard for my money, so I want to spend it on things that I care about.
UNIDENTIFIED CORRESPONDENT: That doesn't mean Michael won't let his hair down when a good opportunity arises. Last year, he met his idol, Lady Gaga, at a New York City event. They even shared the dance floor. But Michael is still looking for more meaningful connections.
Next week on The Millennials: from London to New York, Johannesburg to Santiago, we've followed their stories. Now it's time to say farewell to our Millennials.
DOS SANTOS: Just aired here on QUEST MEANS BUSINESS, Europe braces for what could be one of its biggest anti-austerity strikes. And we'll hear why one expert says Greece will write the course, not more cuts.
DOS SANTOS: Welcome back, I'm Nina Dos Santos, these are the headlines this hour.
The White House press secretary says that US president Barack Obama has confidence in the military and in the acting CIA director even as the scandal surrounding the former CIA chief, David Petraeus widens. Petraeus stepped down after admitting to an extra-marital affair, and now the US commander in Afghanistan is also under investigation because apparently he was one of the people involved in the original scandal.
Radical cleric Abu Qatada is back in his northwest London home after he was released on bail. Britain has been trying for years to deport Qatada to Jordan to face terrorism charges, but a special immigration court has now blocked his extradition saying it would be unlikely that he would get a fair trial in Jordan.
Police in Belize are searching for John McAfee, the creator of the online security firm that bears his name. McAfee is wanted in questioning -- for a murder of another American who is his neighbor in the country of Belize. Gregory Faull was found shot dead in his home last weekend.
A Palestinian team has started to remove the marble tombstone of Yasser Arafat's grave. It could be two weeks before workers reach the late Palestinian leader's remains. France opened a murder probe into Arafat's 2004 death after a radioactive substance was discovered in his belongings.
Greece has warned it could inadvertently fail to pay its debts on time without more bailout money. Europe has still not agreed to release the latest bailout installment, and without it, the Greek finance minister said that the risk of accidental default for his country was very high.
Growing desperation and destitution is behind a massive general strike planned for tomorrow. Workers across Europe are expected to take to the streets to voice their growing anger over austerity. Europe could wake up to the sound of angry chants and possible disruption to transportation and other services. CNN's Isa Soares takes a look at what we can expect.
(BEGIN VIDEO CLIP)
ISA SOARES, CNN CORRESPONDENT (voice-over): It's set to be an unprecedented day of action across the European continent. In Athens, they will protest against measures they say compromise their livelihood. While CMS and the European Union debate whether and when Greece can receive its next bailout payment, protesters remind them they are the ones paying.
On Tuesday, 2,000 civil servants took to the streets. In the last two years alone, they have seen their wages shrink by as much as 40 percent.
THIMIOS MARVITSAS, PENSIONER (through translator): All these measures, they are pushing us back 50, 60 years. They are cutting our pensions in half. There is a million unemployed, more taxes; in other words, our lives are just getting worse and worse.
SOARES (voice-over): In Lisbon, months of quiet resignation have turned to anger and discontent. A new (inaudible) severe tax increases and rising unemployment have made social unrest the norm.
PEDRO BARROSO, UNEMPLOYED (through translator): You see people participating in demonstrations more and more. The social awareness is noticeable. This year, we had more demonstrations than the last 20 years.
SOARES (voice-over): On Monday, several hundreds took to the streets as Chancellor Merkel visited the capital.
Their cries will get louder Wednesday as they strike against rising poverty in Portugal.
For Spain, this will be their second general strike in a year. The unemployment up more than 25 percent and cuts from health to education. The country's two largest unions have plenty to protest about.
NURIA MANZANO, UGT UNION (through translator): Cuts aren't limited to Spain. They're happening in the whole European Union. That's why it is important that all Europe protests against these cuts and against this way to do politics.
SOARES (voice-over): But despite the recent violence, social unrest and the rise of suicides in Spain, the government is sticking to its fiscal plan.
MARIANO RAJOY, SPANISH PRIME MINISTER (through translator): I said I would lower taxes, but I am raising them. I haven't changed my criteria nor will I decline to put them down when possible. But circumstances have changed and I must adapt to them.
SOARES (voice-over): Even Italy must come face-to-face with fiscal responsibility, which has so far been on the sidelines of Europe's austerity protests.
FELICE NARDI, ITALIAN DEMONSTRATOR (through translator): We believe that the voice of the workers should finally be heard, because they are the ones suffering.
SOARES (voice-over): On Monday, 3,000 students vented their anger at Chancellor Merkel's visit and at their premier, Mario Monti. The youth unemployment is near 35 percent here.
CHIARA, STUDENT (through translator): We are students and our future is at stake, and we need to do something. If we don't do something, who will?
SOARES (voice-over): Many languages, one common enemy: austerity -- Isa Soares, CNN, London.
(END VIDEO CLIP)
DOS SANTOS: Valentijn van Nieuwenhuijzen is the chief economist of ING Investment Management. He told me the impetus to burden Greece with tougher austerity measures is starting to fade. He says that's because leaders are starting to realize (inaudible) that the country can only survive while they're providing financial life support.
(BEGIN VIDEO CLIP)
VALENTIJN VAN NIEUWENHUIJZEN, CHIEF ECONOMIST, ING INVESTMENT MANAGEMENT: What you see is that, in the end, Greece can only survive if the rest of Europe is willing to provide greater capital, if the rest of Europe is willing to provide a lifeline for Greece. And that's where you see some increased support, if you look at the Dutch elections, you see a move toward (inaudible) Europe.
If you look at the pulse (ph) in Germany, you see the move towards more pro-Europe. In Finland, you see that actually the true Finns are losing support. So in that sense, there seem to be a willingness to continue with the European project. Nevertheless, in Greece, the tension is amazingly high and it's also (inaudible) falling apart.
DOS SANTOS: Let me ask you about this. Alexis Tsipras, who (inaudible) a huge portion of the vote, although isn't necessarily in part of the new democracy coalition then in power, but he's been saying Greece and not just Greece, the rest of the peripheral Eurozone countries that need financing should be given a Marshall Plan, if you like, a significant reprieve on their debt to reset the balance and try and foster growth rather than just austerity measures, which we've had for so many years.
Is that the answer?
VAN NIEUWENHUIJZEN: Well, I do think actually that he has a fair point there. In the end, just we see -- just as we have seen in Latin America when they had their debt crisis there, the option for Greece really only is to take a big haircut on its debt. It's difficult --
DOS SANTOS: (Inaudible).
VAN NIEUWENHUIJZEN: -- another one is -- it's, in the end, the only - -
DOS SANTOS: (Inaudible) would solve the problem because we're obviously in this position where even the IMF can't get the math right on the debt reduction target.
VAN NIEUWENHUIJZEN: Well, nowadays, they're in public disputes with each other, within the troika, about the dates and the numbers, about the debt. So at least half of the debt needs to be haircutted (sic), if not more, to bring Greece towards some kind of a path towards positive growth again.
DOS SANTOS: When should it come?
VAN NIEUWENHUIJZEN: Well, I mean, any and probably they will find some temporary solution for the near term, for the next couple of weeks.
I think the real pain comes in March, when you have the next troika review and it becomes increasingly unlikely that Greece will be living up to the promises that we're making or the willingness in Europe is there to provide additional bridge functions for further loans. So I think that is the real risk (inaudible) next couple of weeks.
DOS SANTOS: How damaging is this public spat between (inaudible) to the IMF and the rest of the (inaudible)?
VAN NIEUWENHUIJZEN: I mean, that is a very fair point. I mean, that has been one of the key problems in this overall Europe crisis, that these policymakers are not speaking with one voice. They are not aligned in their thinking.
They're not thinking in the common good rather than their own personal political interests. And that is painful, but it's a reality that it's here with us. And you see it coming back again and again.
(END VIDEO CLIP)
DOS SANTOS: Hong Kong is trying to cool its white-hot property market. Up next, why some of its international fans think that they're the ones to be paying the price.
(BEGIN VIDEO CLIP)
DOS SANTOS: Time now for the answer to today's "Currency Conundrum," now De La Rue prints 150 different national currencies. Now earlier in the show, we asked you which of these was the first to be printed by them. And the answer is A, Mauritius. De La Rue started printing one, five and then 10 Mauritius shilling notes all the way back in (inaudible).
(END VIDEO CLIP)
DOS SANTOS: Hong Kong is penalizing foreign buyers in a bid to keep property prices under control.
The government is imposing a 15 percent tax on property purchases made by foreign residents. In an attempt to try and stop speculators driving prices out of the reach of ordinary citizens there. As Ramy Inocencio now reports, the tax has shattered the dreams of some people who just want a place to live.
(BEGIN VIDEO CLIP)
RAMY INOCENCIO, CNN CORRESPONDENT (voice-over): Jason Liang has backed off from buying a home in Hong Kong. Over the past half year, the PR professional from mainland China has scoured the city with realtors, looking at flats like this for him and his wife. But his dream has been dashed. Hong Kong has introduced a 15 percent tax on foreign homebuyers.
JASON LIANG, HOME BUYER: It is unfair. Emotionally, it is unfair for me, but I have to accept it. I have to accept it.
Except that he simply can't afford this 400 square foot $400,000 flat. The tax is Hong Kong's latest tool to prick its ballooning property bubble. Since just the start of 2010, Hong Kong's average home price has doubled.
INOCENCIO: Hong Kong is the world's most expensive place to buy property. One reason is because of a huge lack of supply. There aren't enough new housing complexes set to come online in the next 2-3 years, like the ones right behind me.
Another issue is because of interest rates, very low interest rates here in Hong Kong. That's because of the Hong Kong currency's peg to the U.S. dollar. And also there's the issue of mainland Chinese buyers coming into Hong Kong and pushing up prices.
INOCENCIO (voice-over): Some of the buyers are believed to be speculators. The new tax measures are aimed in part at curbing speculation. Liang says he feels he's being wrongly targeted.
LIANG: Most of the speculators are from mainland China. And for me, I'm also from mainland China, but I'm the people who works here, has a stable salary, and I just want to buy affordable houses.
INOCENCIO (voice-over): Australian realtor Brock Little has called Hong Kong home the past six years. His Western clients are upset.
BROCK LITTLE, REALTOR: Some of them who've been here for three to five years, now they basically see Hong Kong as not very welcoming, not really accommodating to setting up permanently.
INOCENCIO (voice-over): Little adds the tax doesn't match this Asian hub, marketing itself as a world city. Regardless, property experts say it may have limited results. Property analyst Buggle Lau says fewer mainland Chinese will buy in the next six months, but.
BUGGLE LAU, CHIEF ANALYST, MIDLAND REALTY: But the price will probably remain flat or maybe soften a little bit. But in terms of big crash, I think we have to wait until either the interest rate increase significantly or the policy become more dramatic.
INOCENCIO (voice-over): Lau adds the policy may end in a few years, when new housing comes online. In the meantime, buyers will likely wait to purchase that new home -- Ramy Inocencio, CNN, Hong Kong.
(END VIDEO CLIP)
DOS SANTOS: Well, Hong Kong has long been home to some of the world's priciest properties. But an apartment in this building designed by the renowned architect Frank Gary (ph) has set a new record. It's located on The Peak. That's one of Hong Kong's most exclusive neighborhoods, and it boasts views of the city and also Victoria Harbor.
But wait for the sale price tag. Take a look at this. It sold for an eye-popping price of nearly $60 million U.S. That's more that 81/2 thousand dollars per square foot. Or if you want to look at it this way, it's just over $96,000 per square meter. Eye-popping stuff.
Let's go over to Jenny Harrison now for a check-in on the world's weather forecast and she's (inaudible) at the CNN International Weather Center.
Hi there, Jenny.
JENNY HARRISON, CNN METEOROLOGIST: Hey, Nina, some not really good news, really, of course, across the central Med in particular, northern central areas of Italy, because the last few days we've seen nothing but rain across the region. And the system that brought these torrential rains is continuing just to fizzle out and move away towards the east.
But we are now watching this system developing just off the north of those northern coasts of Africa. But look at some of the rain that actually came down, as I say, just torrential amounts. Two fifty-seven millimeters, most of this rain, by the way, was at its heaviest in Tuscany and also across into Umbria, 248 millimeters.
And to give you an idea how these totals compare to what we normally see across this region this time of year, 145 millimeters in 24 hours. The monthly average is 48 millimeters. This is what this amount of rain did.
Have a look at this, because the flooding really was widespread. It still is. It is going to take a while before these floodwaters really recede. But as usual, when you look at the (inaudible) fairly filthy waters to have to deal with.
And as many as four people now have been reported to have died in two separate incidents, both involving cars that actually got swept away in the force of the floodwaters. The banks of the rivers, the main rivers, circling through Rome, the Tiber, very, very swollen. And the same sort of story across into Florence, too, with the river Arno.
The rivers really are fit to burst in many areas, of course, although the rain has come to an end. We're looking at some very mountainous areas. So I'm going to just show you another image because as I say, it's not just here, but in some of the main cities as well.
The river may not have burst its banks and actually flooded the surrounding areas, but you can see just how close it is getting. Although the rain has come to an end, it will continue of course to feed down from the mountains. But we've got high pressure in control for a couple of days. It'll be squeezed further eastwards over the next couple of days.
There's actually another front coming into the west, but it should stay pretty much up towards the northwest. But this is the next system we're going to watch very closely. It's hopefully going to take a bit more of a southerly route throughout the Mediterranean, so that means it should hopefully keep the heavy rain away from those areas of Italy.
But at the same time, there are some warnings in place across northern Africa because we could be seeing some very large hail and of course some heavy amounts of rain, which could come down and lead to those flash floods, which are extremely dangerous and also some pretty strong winds with those storms.
Now despite all that, because of high pressure, we've got some pretty good temperatures. This shows you the temperature trends over the next couple of days, and when you see a color line, this, it means temperatures actually a little bit above the average. So generally across Europe, not feeling too bad, just the far east of Europe is perhaps a little bit chilly.
We have got some snow (inaudible) that'll head across to the north, mostly to the mountains of Scandinavia. And then a little bit of cloud, but generally much of central Europe will be fine and dry. Eighteen in Paris, 6 in Berlin, so a little bit cooler.
But it should warm up as we get into Thursday. Meanwhile, in the Middle East, again, we've seen some very heavy amounts of rain here. And there's another system, another area of low pressure heading further eastwards.
And you can see 214 millimeters of rain in Iran and it's not done just yet. This system will continue to work its way eastwards. Snow, of course, as well to the higher elevations.
But as the system goes eastwards, it'll also -- the trending front will actually just go across central regions of Saudi Arabia and likely we will see any rain, but we could, of course, have some sand and dust kicked up in the process. We'll keep an eye on that one, too, Nina.
DOS SANTOS: OK. Jenny Harrison there from the CNN International Weather Center, thanks so much for that update there.
Do stay with us, because QUEST MEANS BUSINESS will be back after this break.
DOS SANTOS: Europe's climate commissioner's warning that a controversial airline carbon tax will be restarted if the global agreement isn't reached. (Inaudible) that should stop the clock on the (inaudible) under certain circumstances. Let me just show you exactly how this pans out on our flight map.
Now the map here to my right, as you can see here, shows us how the skies looked earlier today. And this is exactly how things work. So if the flight begins and ends in Europe -- say you're going from Reykjavik instead towards Rome, well, airlines will still have to pay for carbon emissions.
But the clock has managed to stop for flights that say use European airports but that start and actually end outside the block. So say, for instance, you're going from the United States to Paris and then onwards towards somewhere like Kazakhstan, that would be exempt.
And of course, I also want to remind you that flights that completely avoided European airspace were also exempt. Say you're going from Brazil, for instance, to South Africa. That would have been exempt anyway.
Now the European Union's emissions scheme, trading scheme, was actually designed to cut carbon emissions target. And it's targeting a 21 percent reduction, as you can see here, in emissions by 2020, compared to the year 2005.
When the E.U. actually included the aviation industry into this scheme, from January of this year, well, you can imagine there was international outrage.
And that was particularly led by this country here, China. Chinese airlines said that they would just flat-out refuse to pay for these charges and, in fact, the Chinese government then subsequently formally outlawed them from doing so anyway.
And then there's been a lot of ruction (ph) in the United States, because over there, Congress will resume this debate this week on legislation yet again designed to try and counteract these European rules.
Europe's climate commissioner says that the scheme's unpopularity has piled on the pressure to reach an international agreement. In fact, she told our very own Jim Boulden earlier today that she'd seen a new determination at the International Civil Aviation Organization meeting that took place in Montreal, Canada, last week.
(BEGIN VIDEO CLIP)
CONNIE HEDEGAARD, E.U. CLIMATE COMMISSIONER: Many people did not like our scheme. Many people said come with a signal. Do something. Suspend your legislation. And they were not willing to move anywhere.
And we always said, please take the first steps in Nicao (ph). Make it likely that we can actually make the international deal that we always wanted in Nicao (ph). Then, of course, a certain flexibility can come.
And that is why we did it and that is what we have done. But as you have, of course, noted, it's very much time limited because the whole purpose is to put the pressure on everybody now, actually, to deliver in Nicao (ph) next year.
JIM BOULDEN, CNN CORRESPONDENT: So there's every chance that the European Union could put ETS back into play?
HEDEGAARD: Yes, of course. That is very much what we are communicating now. And I'm pretty sure from conversations with our different member states that they will very much back this, that we are proposing, namely that, yes, we will stop the clock until after the general assembly of Nicao (ph) year.
They only have such a meeting every third year. So next year is very, very crucial. But if nothing comes out of that, then we are back to exactly where we are now. And we are back automatically.
BOULDEN: But surely your own airlines were asking you to delay this. Airbus was told that they wouldn't get orders from, say, China. I mean, you were getting pressure from Europe as well. I mean, you needed to delay this no matter what.
HEDEGAARD: No, that's actually not true. We have been very, very clear that we needed to see some kind of progress in Nicao (ph) last Friday.
And one of the good things that happened was that, for the first time now, they are sitting as putting down a high-level political group that will have to sort of decide on some of the technical issues and the difficult issues that have been analyzed and everything. All the materials are there. Now we need to decide on a global market based mechanism.
On regional market based schemes. In short, on how also aviation effects of whose emissions are increasing actually dramatically these years, how they can also contribute to solve the climate change challenge.
(END VIDEO CLIP)
DOS SANTOS: Let's move on from planes to automobiles. "Motor Trend" magazine has revealed its pick for Car of the Year, and it's the first time that this honor has ever been awarded to an electric car. The Tesla Model S beat out some pretty big names for this prize. And those included the likes of the Honda Accord, the Porsche 9-1-1 and also the Lexus GS.
"Motor Trend" (inaudible) calls the Tesla, quote, "a game-changer and the fastest American sedan ever tested. It's priced at between a cool $50,000 and $100,000 based on battery options and upgrades."
Do stay with us here on QUEST MEANS BUSINESS, because we'll be back with a full update of the stock markets after this.
DOS SANTOS: European stocks recovered from early losses to finish Tuesday's session higher. Worries about the region's ongoing debt crisis seemed to ease a little bit after finance ministers gave Greece two more years to make budget cuts. The debt-stricken country expects to receive another round of emergency money at some point. But for the moment, that check hasn't been written.
Well, the U.S. is mostly higher on the back of that news coming out of Europe. That kind of sentiment has helped to take investors' minds off of the looming fiscal cliff. On a corporate note, we saw Home Depot shares soaring, America's biggest home improvement retailer actually raised its four-year outlook.
Now tomorrow on QUEST MEANS BUSINESS, Poppy Harlow joins us with her exclusive interview with Warren Buffett. We'll get his perspective on a whole range of important issues, including Washington's fiscal cliff.
We'll also speak to him about the continuing crisis in Europe and the prospects of global economic recovery. That's tomorrow right here on QUEST MEANS BUSINESS. Do join us then if you can. But for the moment, that's it for today's show. Thanks for joining us. I'm Nina dos Santos in London.
DOS SANTOS (voice-over): You're watching CNN. This is a roundup of the main news headlines we're watching this hour.
The White House press secretary says the U.S. President Barack Obama has (inaudible) military and to the acting CIA director (inaudible) as a scandal surrounding the former CIA chief David Petraeus widens.
Petraeus stepped down after admitting to an extramarital affair. And now the U.S. (inaudible) in Afghanistan is also under investigation because of apparent links to one of the people involved in the original scandal.
(Inaudible) cleric Abu Qatada is back in his northwest London home after he was released on bail. (Inaudible) has been trying for years to deport Qatada to Jordan to face terrorism charges. But a special immigration court has blocked his extradition, saying it's unlikely that he will get a fair trial (inaudible).
Police in Belize are searching for John McAfee, the creator of the online security firm that bears his name. Well, McAfee is wanted for questioning in the murder of another American. Gregory Faull was found shot dead in his home last weekend.
A Palestinian team has started to remove the marble tombstone of Yasser Arafat's grave. It could be two weeks before workers reach the late Palestinian leader's remains. France opened a murder probe into Arafat's 2004 death after radioactive substance was discovered in his (inaudible).
That's a look at some of the stories that we're watching for you here on CNN. "AMANPOUR" is next.