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QUEST MEANS BUSINESS
Italian Political Turmoil; Italian Market Fallout; Economic Struggles in Italy; European Market Reaction; Trouble in Italy; Fiscal Cliff Countdown; Global Concerns About US Fiscal Cliff; Dollar Down; Greece: The Human Cost
Aired December 10, 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: Uncertainty in Italy. Prime Minister Mario Monti says he could be gone within weeks.
EU leaders pledge to stand by the euro as they collect the Nobel Peace Prize.
And the human cost of the crisis in Greece. We meet the people whose losses can't be measured in the numbers.
Hello, I'm Nina Dos Santos and this is QUEST MEANS BUSINESS.
Good evening. As Europe collects its Nobel Peace Prize, a political battle has been taking place in Italy. The prime minister, Marion Monti is to resign before the end of this very year and, as such, investors could be facing literally weeks of uncertainty.
Let's take a look at the time scale here. Monti says that he will be stepping down as soon as Italy's budget has been passed. That could, in fact, take place later on this month, so by the end of the year, after which an election must be called, according to Italian law, within about 70 days. That means we could be talking about elections in February.
Mr. Monti is credited with bringing Italy back from the brink. He replaced scandal-hit Silvio Berlusconi. That was at a time when Italian borrowing costs were spiking to unmanageable levels above 7 percent. And now, Berlusconi has said he wants to make something of a comeback.
Investors gave Italian stocks something of a pummeling in the markets today. At one point, we saw, almost all of the FTSE MIB gains so far this year being erased in just today's session alone.
As you can see, the market ended the day down 2.25 percent with baking stocks baring the brunt of the kind of market pressure. We saw Banca Popolare di Milano, also UniCredit, some of the highest -- some of the biggest lenders there, finishing the session more than 5 percent lower each.
So, the latest reading on GDP as well for Italy also confirms the underlying problems that this country is facing for its economy. Year-on- year, as you can see, the economy shrank by around about 2.5 percent in the third quarter.
Industrial production has also managed to decrease for the month of October. And what we know is that Italy is contending with an unemployment rate of around about 11 percent.
So, banks across the continent suffered quite heavily in Monday's trading session in reaction to that kind of news from Italy. Let's have a look at how the major indices managed to shrug off those kind of concerns. As you can see, largely a flat day on the markets. These markets ending the session in the green, but still, as I was saying before, the uncertainty coming to the fore.
What we saw was in France, Credit Agricole sinking by more than 2.5 percent. That dragged down the broader CAC 40, which finished more or less flat on the day.
It was a similar story for the Frankfurt DAX over there, where Commerzbank was actually down by more than 1.5 percent. We also saw Deutsche Bank, another huge lender on that market, not performing much better in the session, either. Our senior international correspondent, Ben Wedeman, joins us now, live from Rome with the political implications of everything that's going on in Italy.
So, Ben, obviously Mario Monti, some might say, is doing exactly what he said he was going to do on the ten. He's technocratic person, he's not elected, so he's going to be stepping down. But he could be coming back as a politician, couldn't he?
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, he certainly could be, Nina. In Italian politics, you never say never. He has said today that he is not yet considering running in the election that would be scheduled for sometime in February, but that doesn't necessarily mean it's not going to happen.
As a technocrat, he really doesn't have any political affiliation, and therefore, he really has to get, in a sense, his ducks in order before he decides to actually run for office. And certainly he has no political affiliation, so he's really got to find a party to latch himself to.
Now, obviously, the markets were quite spooked by the news that Silvio Berlusconi, Italy's former prime minister, would be running for office again, but in fact, his party, Popolo della Liberta, the People of Liberty, has been polling at about 15 percent, which puts it behind the center left Democratic Party.
And therefore, there's no guarantee that Berlusconi is coming back. But the fact that Monti might not be prime minister for much longer did spook the markets here in Italy. Nina?
DOS SANTOS: But still, Berlusconi could, to a certain extent, scuttle some of Monti's plans, reduce the appetite for austerity in Italy. And even if we do see a center-left government coming through that's largely pro-Monti, there could be less appetite for pushing through what Monti wanted to push through.
WEDEMAN: Certainly, Prime Minister Monti is really known for two things: raising taxes quite dramatically in some cases, and cutting social spending. Both of them very unpopular. And we've seen in Italy over the last few months some fairly large demonstrations against his policies.
So, he's not really popular with ordinary Italians. He's popular with the banks, and certainly, if for instance, in the United States, you're popular with Wall Street, you're probably not very popular with Main Street.
Berlusconi is a much more populist politician who has promised to cut taxes, to put an end to the austerity policies that Monti is so well-known for, but also, in many respects, among ordinary Italians, very unpopular for. Nina?
DOS SANTOS: Just briefly, Ben, I can see that you're contending with the elements over there in Rome, it seems to be pouring. Berlusconi, raining on the parade, some might say. Italy could, realistically, face a downgrade on the back of a really messy election before February. How high is the prospect of that, and how is it being digested over where you are?
WEDEMAN: It's interesting, when you speak to Italians, they'll tell you that they either hate or love Berlusconi, and every time Silvio Berlusconi over the last few months has expressed an intention, whether to go back into politics, the fallout of politics, it has really shaken the market.
Now, if we see that he really is posing a challenge, is a major contender in these elections, which could take place as early as February, but probably more likely in March, they really will shake markets that, for the last year, during Marion Monti's rule, have been relatively -- and I stress "relatively" -- stable. Nina?
DOS SANTOS: Yes, it is a game of relatives, you're absolutely right. Four or five percent is high for other countries, but it's still way down from the 7.5 percent when Mario Monti took over. Thank you so much. That's Ben Wedeman, there, our senior international correspondent at our Rome bureau live.
Well, later on this hour, we'll hear from Francesco Giavazzi. He's a professor of economics at Milan's Bocconi University. He's also a key economic advisor to Mario Monti's spending review, which hasn't yet finished and will soon be published.
He's believed to be -- he believes that the political upheaval in Italy may not necessarily be such a bad thing, especially, he says, if it kills off Silvio Berlusconi's career in politics for good. So, certainly one to listen out for later on in this hour.
Vittorio Colao, the CEO of Vodafone, says that Europe needs new thinking to get itself growing, especially in the euro zone. And he's also confident that the US can eventually escape the fiscal cliff. He spoke to our very own Jim Boulden at the Mobile for Good Summit, currently in place in London.
VITTORIO COLAO, CEO, VODAFONE: I had to say, I am optimistic about the US. It's a great society with a great ability to restart, and I don't think that the US long-term are going to be a big problem.
I am a little bit more concerned about Europe. I think Europe needs to really tackle reform, until we really get into a new thinking on how to ignite growth into the economies.
But overall, again, very good intellectual capital, very good infrastructure, nice place to live with. Take a long-term view and be optimistic.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: So, you're a long-term viewer of Europe?
COLAO: Listen, we have to be long-term view. I have a long-term view. I have to have to have a long-term view. I have an infrastructure which is --
COLAO: -- a huge investment. I need to take long-term views. I cannot be too much focused on six months.
BOULDEN: 2013, probably recession in -- all over Europe.
COLAO: We will have to work hard in 2013 --
COLAO: -- especially in the first half. I think it will be challenging. But again, we work for the next ten years, not for the next six months.
DOS SANTOS: Well, Vodafone may have the luxury of long-term horizons, but Washington has a more pressing deadline. That's thanks to, of course, America's looming fiscal cliff. And the two men who must come up with a deal are hearing a warning shot coming from Europe's most powerful figures. We'll have more of that. Plus --
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DOS SANTOS: The big hand in an even bigger honor for the European Union. What the Nobel Peace Prize means to the crisis-plagued EU. That's all ahead.
DOS SANTOS: President Barack Obama is in the US state of Michigan at this hour, pushing to extend Bush-era tax cuts for the middle classes. His visit comes just 22 days before the so-called fiscal cliff could become a harsh reality.
Now, without a deal, on January the 1st, millions of Americans could face tax hikes, and the government will be forced into implementing automatic spending cuts, as well. On Sunday, President Obama and the House -- Republican House speaker, John Boehner, had their first face-to-face meeting in three weeks.
Our chief White House correspondent, Jessica Yellin, joins us now, live from Washington with the latest on the fiscal cliff countdown. So, first meeting, Jessica, in three weeks. How did it go?
JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, they're not providing any details or any leaks, and no matter how you probe it -- or how I probe it, I should say, Nina, I'm not getting anywhere on getting any details, which is actually a positive sign.
The fact that nobody on either side wants to reveal anything is an indication that the two men are actually now on the same page and trying to work forward towards some sort of an agreement. When they are leaking a bit, it means that they are frustrated with one another.
So, the bottom line is, both sides have released statements indicating that the position -- the public position -- is unchanged. The White House still is insisting that the GOP is not moving on taxes and rates, which is what the White House insists the Republicans must do for there to be a deal.
The Republicans are insisting that the White House has not been specific enough about spending cuts. That's the status quo ante. And so, they have to make progress on both those points.
But the fact that these two men are working hand-in-glove on their public statements, again, is a sign -- incremental though it may be -- that there is some coordination, now, as these final hours are counting down, Nina.
DOS SANTOS: So, sometimes silence is a good thing. That's an interesting theory. It honestly makes a very different change of situation from the kind o political theater that we've been hearing over the last ten days or so, which seems to be rising up to some kind of climax.
Do we get the feeling, Jessica, that the positions have actually already been agreed on, but they just haven't necessarily communicated that to people?
YELLIN: In a sense, that it -- yes, in the sense that it's quite obvious what deal -- what a compromise would be. The president has put out a number, $1.6 trillion in revenue. Speaker Boehner has said $800 billion in revenue.
The midpoint between the two would be $1.2 trillion in revenue, and some Democrats have indicated they would be fine with that, and so have business leaders. So, $1.2 trillion in revenue seems a reasonable compromise position.
While the president's offer, the administrations offer to Capitol Hill was that these top tax rates should rise to the level they were at in the Bill Clinton presidency, the president himself has never insisted publicly that they must go there.
So, it would seem that the White House might be amenable to raising the tax rates for the wealthiest, but not to those Bill Clinton levels. So, that could be a compromise position.
And then, on these other components where spending and entitlement reforms would go, there are some also other obvious compromises, because this was all discussed during those debt negotiations during that 2011 debt debacle.
So, again, it seems quite evident where those markers would be, and the White House has even said if they agree, if the Republicans agree to raise the top tax rate for the top 2 percent, the rest of it would be very easy to negotiate, Nina.
DOS SANTOS: So, that's what a compromise could look like and, of course, the pressure's on, coming from every single CEO, even outside the United States. Inside the United States, it seems that not a day goes by without people mentioning the fiscal cliff and its implications. Jessica Yellin, thanks so much for that, outside the White House this hour.
Let's just remind you that President Obama is poised to make a speech in Michigan at this hour so, of course, when we get anything he says, you can see, those are live pictures of people gathering in the room. The podium so far still empty, but it seems as though we're awaiting the arrival of the president of the United States, Barack Obama, any moment now there in Detroit, Michigan to make a statement.
This isn't just about the United States, as I was saying before. The whole world is counting down to the fiscal cliff with America and especially here in Europe, because there's an awful lot at stake. In fact, the head of the International Monetary Fund, Christine Lagarde, told CNN that the ripple effect would be global if US lawmakers just can't agree to a deal.
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CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: The best way out of this would be a balanced solution. Because you will always find a school of thought that will say, it's much better to cut spending. You will find another school of thought that will say, no, no, it's much better to increase the revenue and therefore to raise taxes.
And in the middle of it, you will have people that will say, in any event, we have to reduce debt, therefore cut deficits now and in the long run.
We have seen studies of all sorts, and they will not demonstrate the absolute truth. My view, personally, is that the best way to go forward is to have a balanced approach that takes into account both increasing the revenue, which means either raising tax or creating new sources of revenue, and cutting spending as well.
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DOS SANTOS: James Baker, US secretary of state during the first Bush administration told CNN's Fareed Zakaria that getting rid of those tax loopholes would, to a certain extent, help.
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JAMES BAKER, US SECRETARY OF STATE TO PRESIDENT GEORGE H.W. BUSH: What has to happen, in my view, you've got to have everything on the table. You have to have revenue increases.
Now, how you get to those revenue increases was an item of discussion during the campaign. It will be an item of discussion during the negotiation. I for one think you could get there in a way that would promote economic growth by eliminating -- by broadening the base -- the tax base by eliminating loopholes and deductions.
The truth of the matter, Fareed, is we're not under-taxed as Americans. We overspend. I think everybody would agree we overspend. That's why we have this debt-to-GDP of 100 percent as far, now, as the eye can say, absent policy changes.
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DOS SANTOS: Time now for tonight's Currency Conundrum for you out there. Coast to coast, how wide is the United States in pennies? Is the answer A, $10 million? Could it be B, $7 million? Or C, $2.5 million? We'll have the answer for you a little later on in the show.
Well, speaking of the dollar, it's currently down against all three of its major trading currencies, the euro, the British pound, and the Japanese yen. A lot of that has to do with the fact that we've got 22 days to go before the fiscal cliff.
DOS SANTOS: Welcome back. All this week, we're looking at the human cost of the Greek financial crisis, how the lives of people like these have been affected by their country's own economic meltdown. They include the immigrant threatened by the rise of extremism and the widowed father struggling to support his own children.
Today, we meet a talented, well-educated woman whose career once offered a world of opportunity. Instead, she told Diana Magnay that today, she's struggling to survive.
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT (voice-over): Eugenia Arsenis is a 35-year-old opera director. She is among the best and brightest in Greece, with a PhD in opera philosophical aesthetics and Greek tragedy. She won a Fulbright Scholarship to the United States and directed the Proms at London's Royal Albert Hall when she was just 25.
MAGNAY: Now, she struggles to get by on around $700 a month as a teacher for hire.
EUGENIA ARSENIS, OPERA DIRECTOR: The last two years, things have drastically changed. The first thing is that the salaries got much lower, to the extent that daily life and daily expenses became an issue, not to mention for many people, survival, too.
Sometimes, this is, I would say, recent. The politicians used the crisis as a pretext to low payments, which is really serious.
MAGNAY: The musical scores she needs to work, the cost to tune her pianos, these are forgotten luxuries.
MAGNAY: She has no energy, she says, to teach her students. And like thousands of young, talented Greeks, she's planning a better life outside of Greece.
ARSENIS: I do not connect money with value of someone's personality or work. But if at some point we say that all your efforts and studies and work in the past allow you to have a decent life, then this is not the case at all.
DOS SANTOS: Tomorrow, we'll bring you the story of Antakis Antonios, he lost his wife to Tuberculosis, and after losing his job two years ago, he says he's now struggling to support his three children.
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ANTONIOS ANTAKIS, PART-TIME CONSTRUCTION WORKER (through translator): The crisis is very difficult right now. There are no jobs at all. I get around six, seven days of work a month. Maximum ten. With that, up to around 300, 250 euros a month or nothing at all.
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DOS SANTOS: This leads up to our special program coming at the end of the week entitled, "Greece: The Human Cost." That shows at Friday, 4:30 PM if you're watching from London.
Now, when we come back, why three Nobel Laureates say the EU doesn't deserve its Peace Prize. And Standard Chartered learns how much it's being fined for doing business with Iran.
DOS SANTOS: Hello and welcome back, I'm Nina Dos Santos, these are the headlines this hour.
Egyptian president Mohamed Morsi has given the army the power to arrest civilians ahead of Saturday's controversial referendum. His opponents are urging a boycott on the vote on a draft constitution and both sides have now called for mass protests to take place on Tuesday.
Documents show the US is on the verge of labeling a radical Syrian rebel group a terrorist organization. The al-Nusra Front have claimed responsibility for some high-profile suicide attack in Syria, such as this blast near a military officers' club in Aleppo. That happened back in October. It's believed the jihadist group have ties to al-Qaeda in Iraq.
Nelson Mandela is undergoing more tests in hospital, according to the South African government. The statement from President Jacob Zuma's office didn't give any more details on his condition, but the 94-year-old former South African leader is said to be comfortable and in no immediate danger.
Floral tributes have been left outside the King Edward VII Hospital in London. They're for the nurse who committed suicide after being tricked by a radio prank. Jacintha Saldanha took a call from two Australian DJs who managed to obtain confidential information about the Duchess of Cambridge's condition. The two DJs say that they're devastated by what happened.
Lionel Messi has broken the record for the most goals scored in a calendar year. The Barcelona striker scored twice against Real Betis to make it 86 goals in 2012. That beats the record that has previously been set by Gerd Muller all the way back in 1972. Messi has already scored 23 times for Barcelona this season alone.
The European Union has accepted the Nobel Peace Prize for the ceremony in a Norwegian capital of Oslo. The three presidents of the E.U.'s main governing bodies were on hand to collect their gold.
Three Nobel laureates, though, have objected. They say that the E.U. doesn't qualify for the award because it isn't (inaudible). The Nobel committee said that the E.U. deserved the award for contributions for reconciliation and democracy. The president of the European Council, Herman Van Rompuy, said those things aren't to be taken for granted.
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HERMAN VAN ROMPUY, PRESIDENT, EUROPEAN COUNCIL: We remain fully responsible for what is yet to come. Ladies and gentlemen, this couldn't be more clear than it is today when we are hit by the worst economic crisis in two generations, causing great hardship among our people and putting the political bonds of our union to the test.
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DOS SANTOS: Mr. Van Rompuy and the European Commission president, Jose Manuel Barroso, spoke to CNN's Jonathan Mann about the future of the European Union. Mr. Barroso told him that despite everything, the euro is here to stay as the common currency.
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JUAN MANUEL BARROSO, PRESIDENT, EUROPEAN COMMISSION: The euro as a currency is very stable and very strong. It's one of the two most important currencies in the world and if you look at the euro, its value remains strong and stable. What we had and we still have is a crisis of stability in the Eurozone that let's put it frankly not only in the Eurozone.
Lehman Brothers was not in the Eurozone. Countries outside of the euro had big problems, like Iceland, that is not even a member of the European Union. It is true that in the euro, it raises specific challenges.
But I insist the euro is not the crisis of the problems; the origin of the crisis, euro is more a victim, a victim of excessive spending by governments are completely unacceptable financial behavior in some parts of the financial system.
JONATHAN MANN, CNN CORRESPONDENT: Well, then, let me ask you, with exactly that in mind -- and I invite you gentlemen to jump in. Overspending by governments of a currency introduced by European Union leaders, was it the eagerness of the European Union to introduce this currency? And was it lax oversight of what governments and banks were actually doing to it that are to blame, and ultimately the responsibility is the leadership of the European Union?
BARROSO: It's true that we did not have the instruments. Only now we are trying to have a common supervisory system. So what was going on in terms of financial system was responsibility of national supervisors, not of the European institutions.
And only now, in the middle of the crisis, as we have been saying, we are building lifeboats in the middle of the storm. It's, of course, difficult. But we are doing that. And so Europe and the European Union are part of the solution; they are not the cause of the problem.
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DOS SANTOS: Mr. Van Rompuy believes that the European Union is now on the way to overcoming its ongoing structural problems.
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VAN ROMPUY: (Inaudible) we know is correcting the original flaws in the monetary union. And we are working at two levels, at the level of the member states; they're correcting their imbalances. And in any case, they had to do so because if for instance a country as Greece had a deficit of 15 percent of GDP, you have to correct this. Euro or no euro, you have to correct this.
They had -- there were flaws in terms of competitiveness in some of the countries. They are working very hard. Their labor costs are now increasing slower than in Germany and many other countries. Portugal, Greece, Spain -- it's winning in terms of competitiveness. So we are correcting at the level of the member states and correcting the architecture of the Eurozone at the level of the union.
And so we are -- we are working very hard to underpin now this monetary union by an economic union. And we have the first fruits; we see the first fruits now of our efforts. The financial markets are much calmer now than -- sorry -- a few months ago. And in the summer, the discussion was not if there would be a collapse of the Eurozone. That was for sure. That was for sure.
The only discussion was about the date. Now I am reading nothing about all this. So we will succeed. I can assure you.
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DOS SANTOS: Mr. Barroso and Mr. Van Rompuy made a confidence about the future of the Eurozone but investors, it seems, aren't quite so sure.
Earlier today, I spoke to David Bloom, the head of FX Strategy of HSBC. And I asked him for his thoughts on the latest news coming from Italy.
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DAVID BLOOM, HEAD OF FX STRATEGY, HSBC: Yes, well, I mean ,Europe's been peppered with uncertainty the whole year. And Monti was always a technocratic government that came in with a specific mandate. Then of course, Italy's a democracy, said you will step aside and there's an election. Could come back as a politician. Maybe not.
I think the fear is who could replace him. But I think he's done an excellent job and he's steadied the ship. But he did say he would step aside after a year, done certain measures.
DOS SANTOS: Now here's the question. Is it the issue of Monti stepping aside when he was sort of the steady hand on Italy's unsteady finances, if you like? Or is it respective Berlusconi coming back that really has people worried? Because the bond markets, we see the yield rising on the 10-year Italian bonds (inaudible) stock markets plummet in Milan.
BLOOM: Yes, but it's a one-day wonder that you saw the euro come off this morning, bounced right back. These markets are incredibly volatile and there's not much to do. So people are obviously sell the story.
Yes, of course, there's a few of them may replace him. Technocratic government did what the markets liked, gave us certainty but as I said, this is a democracy and democracies create uncertainty. And so who'll replace him? We don't know. But I think this big story moves on to Spain, the ESM and whether the ECB's going to start printing or not.
DOS SANTOS: OK. Now that's an interesting one. 2013 looming as I was saying before. Does that mean we're going to have a full-on Spanish bailout in the early months of next year?
BLOOM: I think could come even late this year. I think if it wasn't for the fiscal cliff and the market changing its focus over tension onto the U.S., we would have pressurized already Spain into coming to the ESM, which as you know, ESM stands for Extra Spanish Money. So it shouldn't be a surprise when they --
DOS SANTOS: Rather the European stability (inaudible).
BLOOM: Yes, absolutely.
DOS SANTOS: Might even have gotten lost in the alphabet soup already that E.U. has created to try and solve the Eurozone crisis.
Well, what about credit rating cuts for some of these countries, notably just going back to the issue of Italy and the face of so much uncertainty? This is going to make it very difficult for these countries to try and cut their enormous amounts of debt of debt-to-GDP, cut their budgets. And if they do get downgraded, will their debt becomes more expensive.
BLOOM: Well, not in the case we've seen of France. They got downgraded with, again, a one-day wonder. They sold off their French yields are straight back down again.
The problem is if your debt-to-GDP starts rising but you think austerity's the answer, and you do austerity but growth starts to plummet, then you need more austerity and then growth goes down. And that's the Greek situation we got ourselves in for.
So I'd say just ignore the rating agencies and try and do the right thing. Get growth going and don't overdo the austerity.
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DOS SANTOS: Let's bring in some breaking news. This has come into us in the last couple of minutes here at CNN.
Dominique Strauss-Kahn has reached a settlement with the New York hotel maid who accused him of sexual assault.
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DOS SANTOS (voice-over): This relates to a civil lawsuit that was brought against the former head of the IMF. The judge confirms that these two parties have managed to agree on a settlement. So far no details have been released as of yet, as to the terms of that agreement.
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DOS SANTOS: Now a major global bank shells out more millions of dollars to (inaudible) go away. We'll have that story and plenty more as QUEST MEANS BUSINESS continues.
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DOS SANTOS (voice-over): (Inaudible) the answer to today's "Currency Conundrum." Earlier in the show, we asked you how wide is the United States if you stretched pennies from one end to the other?
Well, the answer is C, a mile of pennies laid out equals around about $844.80. So if you do the math, it takes about 21/2 million dollars in pennies to go from the East Coast to the West. Sounds like a bargain to me.
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DOS SANTOS: Standard Chartered is settling charges that they'd allegedly violated international sanctions on transactions it undertook with Iran, Burma, among others. As such, the global bank is giving U.S. authorities $327 million to make the case go away.
The violations allegedly happened between 2001 and 2007. Standard Chartered stresses that it's changed its procedures since then. Felicia Taylor's been monitoring the story and joins us now live from CNN in New York.
So, Felicia, I suppose some might say it makes a bit of a mockery of the system if a bank can pay to make the problem go away.
FELICIA TAYLOR, CNN CORRESPONDENT: Well, it's not like they had much choice. I mean, this is -- this is good for the U.S. government because they raised the money. And it's -- you know, it's kind of a hefty sum. It's not huge, even though it's Britain's second largest bank by value.
Standard Chartered's going to pay out that $327 million in two parts, $227 million to the U.S. attorney's office and the Justice Department and the other $100 million to the U.S. Federal Reserve on those charges that it provided inadequate and incomplete responses about its compliance program.
Those false records that you talked about alleged by the U.S. Treasury included things such as, I don't know changing names and replacing them with characters while handling those wire transfers or for Iranian clients amongst to others.
Standard Chartered says it has now done a complete review and is going to comply with the sanctions ,not that they had any choice. But this isn't the first case. The U.S. Justice Department and the New York district attorney are taking a closer look when it comes to overall transparency and international banking.
Obviously, in an effort to crack down on money laundering and possible terrorist financing. The Treasury Department has imposed more than $2 billion in fines since 2005 on a number of foreign banks, including ING, Lloyd's, Credit Suisse and Barclays.
HSBC may be next on the list. Last month, the bank said it, too, may face money laundering probes and a settlement may be even more than the $11/2 billion that it has set aside. Shares of Standard Chartered were little changed, though, only slightly lower in New York trades.
So I think this is a story that we're going to be hearing quite a bit about as, you know, the U.S. government starts to crack down on transparency when it comes to sanctioned countries such as Libya, Iran, et cetera.
DOS SANTOS: Just briefly, Felicia, what's this going to mean for trade relations between some of the European banks, particularly U.K. banks and also the U.S. government?
TAYLOR: Well, that's a good point because obviously these banks have affiliates here in the United States. So when it comes to trade it's probably going to hamper that fairly significantly. I mean, this changes the game, frankly. You know, they don't necessarily want to be pointed or highlighted in this way as doing things that were, you know, not legal in the eyes of the United States.
So I think it will change things. Absolutely.
DOS SANTOS: OK. Felicia Taylor there in New York, thanks so much for joining us with the latest and bringing us up to date with that.
As for Wall Street, the Dow is hovering around about the flat line. (Inaudible) now is trading left to go in this first day of the week. What we're seeing is a pretty decent rally, particularly in the technology sector with Hewlett-Packard rebounding after its trials and travails over the last couple of months. And as you can see that stock helping to lift the (inaudible) markets, although it is listed on the Nasdaq, isn't it?
It's around about 21/2 percent higher. There are reports that Carl Icahn, the legendary investor's about to take a stake in the company so far (inaudible) reports are unconfirmed for now.
But it is enough to push the stock higher so you can see the Dow Jones industrial average, basically flat at the moment, luring the picture that we saw in Europe when those markets closed a couple of hours ago (inaudible) up about 11 points or about a tenth of 1 percent.
Now several snowstorms have been moving through Europe right now. Let's get an update on their progress and on the winter mess that some could expect weeks before the Christmas holidays. We turn it over to Jennifer Delgado standing by at the CNN International Weather Center.
Take it away, Jen.
JENNIFER DELGADO, AMS METEOROLOGIST: Hi, Nina. You know, a lot of people dream about a white Christmas. But the snow's a little bit early for some parts. And we're talking very heavy snowfall. In fact, let's go to video coming to us out of Serbia.
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DELGADO (voice-over): And look at this mass. We're talking some locations 30-45 centimeters of snowfall, an estimated 600 people had to be rescued from the big snowfall. Well, (inaudible) snowstorm also backed up the main highway towards the Hungarian border and this was a 17-hour jam, snarling traffic as well as passengers trying to get back and forth.
Back over to our graphic.
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DELGADO: As I said to you, 30-45 centimeters of snowfall. That snow is still coming down this hour and really good for areas through parts of Germany as well as right along the Alps. The snow will continue and we're talking the snow is going to stick around, really through midweek, even Thursday for some locations.
We're really watching two areas. That's going to be moving through central Europe, dripping -- or I should say diving down towards areas east of the Adriatic Sea, and then another low is going to be setting up toward the north.
Now all this is of course going to be bringing some very cold air. And that is what's going to be helping along with this moisture shores to fuel all this heavy snowfall. Look for areas, including Ukraine as well as into Romania . We're talking some of these locations could pick up roughly about 25 centimeters of snowfall, Sarajevo as well as into Bucharest as well as into Sofia.
You're looking at potentially up to 25-19 centimeters. And that cold air is not going anywhere anytime soon. It's going to be sticking around it looks like through the end of the week. Look at the forecast for you, for Budapest as well as for Belgrade. We're talking temperatures normally should be above freezing for the high and the overnight low should be right at zero.
But look at these lows for Belgrade. We're going to see a low of -12 for Bucharest, -13. So make sure you are bundling up and protecting yourself from the very cold environment indeed. And for areas including Paris as well as into Berlin and Warsaw, western Europe, northwest Europe, you're also going to be below average as well.
But it's not just Europe that's dealing with the snow out there. We're also talking about parts of the U.S. Let's go to some video coming in out of Minnesota.
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DELGADO (voice-over): Now Nina, Minnesota is no stranger to snowfall. We're talking in some of these locations about a foot of snow; we're talking 30 centimeters. People trying to get around by bike, by car.
Luckily, people up there usually pretty very well prepared. They have the chains on the tires. But the good news is some of the kids are enjoying that and enjoying this day off from school. Of course we'll be following that (inaudible) travel delays through parts of the U.S. today. Back over to you, Nina.
DOS SANTOS: Great stuff, Jennifer Delgado, thanks so much. I do note the missing snowmen on that video. (Inaudible)
DOS SANTOS: (Inaudible).
DOS SANTOS: Thanks so much, Jennifer Delgado at the CNN Weather Center.
We're going to take a quick break. QUEST MEANS BUSINESS will continue after this.
DOS SANTOS: Hello and welcome back to the show.
Well, if your children have been asking for the latest smartphone or computer for Christmas, maybe, just maybe you should consider buying them what's called a Raspberry Pi instead.
No, it's not a dessert. But instead of credit card-sized computer designed to teach children computer programming. It's (inaudible) created by a group of British computer engineers who were worried that today's technology was becoming so user-friendly that, well, people are missing out on learning (inaudible) skills. Take a look.
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EBEN UPTON, The RASPBERRY PI FOUNDATION: The Raspberry Pie Foundation is -- it's an organization founded by several of us from the university here in Cambridge and a group of local business men to try and put some of the fun back into programming, to try to get children involved in programming in the same way they were in the 1980s.
UPTON: OK. So we're going to put it together and boot up. First of all, display connector, goes in the back there. Then we'll have master keyboard into the USB. Now we need to put a -- have the SD card. This draws the operating system image and all the programs for the device. It's just a regular SD card.
We finally power. This is just run off our charger. That just goes into the outlet. You see a red light comes on. You can see that the machine is about to boot; things appear on the display.
I grew up in the 1980s. Many of my friends, even people who didn't go on into engineering careers, could at least write that two-line program, you know, 10, "Print I am great;" 20, "Go to 10."
UPTON: I guess what happened towards the end of the 1980s and the beginning of the 1990s was that that games market was taken over by the games consoles, which obviously by their nature are not programmable hardware. But what that led to was a massive reduction in the number of children who got involved in simple programming.
A lot of computer companies named after fruits, so that's -- and not many fruits are left. So that's where Raspberry came from. Pi is from -- there's a program language called Python that originally we indeed to make a machine which could only be used to program in Python.
How many of you know the game Snake? You play Snake on the old Nokia phone? Right. All we're going to do today, we're going to show you an implementation of Snake written in Python.
The Raspberry Pi is a -- is designed to be cheap enough that a child can buy it themselves, is designed to plug into common peripherals, so it'll plug into your television.
Now the command prompt is how computers used to be.
Although we're primarily focused on the education market, we've spent -- a lot of people are going to find interesting industrial and commercial applications for this platform. We expect to see a lot of innovation enabled by the fact that we've reduced the cost of computing.
What we're going to do is we're going to just (inaudible) --
One of the nice realizations for us is when we take it into schools and we put it in front of children, they actually like the fact it's not in a box. They all like the fact that they can see what it does.
One of the advantages children today have with some of these programming languages like Scratch is that a lot of that framework is already provided for them. So they can concentrate on the interesting stuff.
We've always felt that there's a 5- to 10-minute period at the start of any child's engagement with programming where it all seems baffling and complicated.
Once they've made their first couple of modifications to a program (inaudible) that's what gets -- that's what gets (inaudible). That's what gets the significant (inaudible). But, yes, when you see that kind of level of enthusiasm from kids, it really encourages us to believe that we're doing a worthwhile thing.
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DOS SANTOS: The name sounds great, doesn't it? Although I must confess, probably a few (inaudible) adults or anybody over the age of let's say even 12 for that matter of fact, you might find a Raspberry Pi somewhat intimidating because of course it involves computer programming.
Now just ahead to come on the show, we'll get the latest stock market action in Europe and in the United States. Do stay with us as QUEST MEANS BUSINESS continues after this.
DOS SANTOS: Hello and welcome back. Next week (inaudible) Monday's trading session because European stock markets basically finished the day on something of a flat note. In Europe, it was a rough day in particular for Italian stocks, as you can see there. That was after Mario Monti announced plans to resign later this month.
At one point, almost all of the FTSE mids gains for the entire year had been erased in today's session. Banking stocks bought the most of the brunt with some of the companies like UniCredit finishing the day more than 5 percent low. We also saw other stocks being dragged down by the news coming one of Rome. But some of the other stock markets, as I said, managed to recover on the session.
As for Wall Street, the Dow is largely flat at the moment. As you can see there, with an hour's trading to go, we're only up around about 24 points, so 0.2 of 1 percent. So you're pretty decent rally in the technology sector with the likes of Hewlett-Packard being up around about 31/2 of 1 percent. There are reports that Carl Icahn is about to take a stake in that company.
So far those kind of reports are unconfirmed. But it has been enough to push up the stock even if it is traded on the Nasdaq as you can see it has been lifting the market on the other side in the Dow Jones industrial average.
And that's it for this edition of QUEST MEANS BUSINESS. Thanks for joining me. I'm Nina dos Santos. "AMANPOUR" will be next after a news update.
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DOS SANTOS (voice-over): I'm Nina dos Santos. These are the main news headlines this hour.
Egyptian President Mohammed Morsi has given the army the power to arrest civilians ahead of Saturday's controversial referendum. His opponents are urging a boycott on the vote on the draft constitution and both sides so far have called for mass protests to take place on Tuesday.
(Inaudible) the U.S. is on the verge of labeling a radical Syrian rebel group a terrorist organization. The Al-Nusra Front has claimed responsibilities for some high-profile suicide attacks in Syria such as this blast that took place in Aleppo back in October. It's believed the jihadist group has ties to Al Qaeda in Iraq.
Nelson Mandela was undergoing more testing at hospital according to the (inaudible) government. The statement coming from the president, Jacob Zuma's office, didn't give any more details on his condition. But the 94- year-old former South African leader is said to be comfortable at the moment and in no immediate danger.
Flowers have been left outside the hospital in London as a tribute to the nurse who committed suicide after being tricked by a radio prank. Jacintha Saldanha took a call from two Australian deejays who managed to obtain controversial information about the (inaudible) Duchess of Cambridge. The two deejays say that they (inaudible).
That's a look at the main stories that we're watching for you here on CNN. "AMANPOUR" is next.