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QUEST MEANS BUSINESS
Italian Election Early Results; Italy's Economy; European Markets Up; Nokia at Mobile World Congress; Back to Basics; Euro, Yen Rising; UK Finance Minister Under Fire Over Credit Rating Downgrade; Sterling Slide; Risks of Stimulus
Aired February 25, 2013 - 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: In Italy, early exit polls leave the outcome uncertain.
Nokia's chief executive tells us about their new $20 SmartPhone.
And Yahoo puts a stop to working from home, saying staff that are remote are just too remote for the company.
Hello, I'm Nina Dos Santos and this is QUEST MEANS BUSINESS.
Good evening. Well, early results in Italy's election show that the country's center-left coalition is leading in the parliamentary poll. Votes are still being counted at present, but preliminary figures show the bloc led by this man, Pier Luigi Bersani, is currently ahead in both the lower house and the Senate.
If these initial numbers do hold, it means that Bersani is on track to defeat the controversial three-times prime minister Silvio Berlusconi. However, it's unclear at the moment if he'll win an outright majority needed to govern without the help of any other party.
Voter turnout was much lower than expected, with local media blaming the poor showing, perhaps, on the bad weather. Let's bring in Becky Anderson, who's been braving that bad weather in Rome for the best part of today for the latest.
So, Becky, it seems as though Bersani may take both houses, but the big question is, will he manage to govern on his own and will whatever he can govern with last?
BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: There is a reason why Italy has had 60-odd governments since the second World War and it's this: at best, Italian politics are complicated. At worst, quite frankly, so far as I'm concerned, they are dysfunctional.
You're absolutely right to say you've got to take the lower house and, indeed, the Senate, both of which are important. You can't govern without a majority in both of those.
And even the Democratic party, a member of the Democratic party has said today despite the fact that Bersani has got a lead in both, he doesn't think that the Democratic party and its coalition going forward will be able to run a stable government. So watch for the president, Napolitano, to call possibly another election.
There are three or four key players in this election. Bersani, for the Democratic party, Berlusconi, of course, who hasn't done too badly given that he only sort of reemerged over the last three or four months. Not likely you'd see a coalition between the center-left and Berlusconi's center right.
Then you've got a man called Beppe Grillo, who people have effectively voted for at around 20 percent because they quite frankly want a change in the status quo and they want to blow the whole system up. That's a protest vote.
And then you've got Monti, Nina. Monti has polled really badly, and the reason for that is despite the fact that he's got Italy sort of back on track and following a sort of austerity plan that the Europeans wanted Italy to follow, people here don't like it.
So, it's a very muddied situation. You've got exit polls suggesting the Democratic party doing all right, but can they -- can they form a stable government going forward? That is the really big question.
Why do we care? Well, quite frankly, we care because this is in Italy the third-biggest economy in the eurozone and the eight biggest economy in the world, despite the fact -- and get this -- the GDP per capita this year is exactly almost what it was back in 1999. We're sitting in recession in Italy and things look really bad.
But the question is, do you follow an austerity plan going forward or an anti-austerity plan? Do you go with Bersani on the left for austerity or do you go with Berlusconi on the right for anti-austerity? He calls what Monti's been doing sort of German-centric policies. He says it's no good for Italy. It is very, very unclear this hour today as the election is over what will happen going forward.
DOS SANTOS: OK, Becky Anderson, there, live in Rome for us this evening. Thanks ever so much, bringing us the latest numbers and, of course, analysis from the scene.
Well Italy, as Becky was just saying before, is struggling with its longest recession in around about 20 years. Take a look at this: just last month, the country's own central bank said that the economy was likely to shrink around about 1 percent this year. That's actually five times worse than its previous forecast.
Italy's high public debt remains a ball and chain for this country, holding back its path towards recovery. It's currently at around about 120 percent of debt to GDP. That's the third-highest level we've seen anywhere in the developed world, and it seems to be peaking at 127 percent from here on.
The severe spending cuts needed to bring that level of debt as well haven't been popular. They've led to protests and strikes right across the country.
So, whoever wins this election will face the inevitable and unenviable task of trying to turn Italy's ailing economy around. Industry leaders in this country are currently watching that result very very closely, as you'd imagine, and one of them joining us live from Milan is Marco Tronchetti Provera, who's the chairman and CEO of the Italian tire company, Pirelli.
Marco Tronchetti Provera, thank you very much for coming on QUEST MEANS BUSINESS. What would be the best outcome from your point of view from these elections?
MARCO TRONCHETTI PROVERA, CHAIRMAN AND CEO, PIRELLI: Out of these elections, there is uncertainty as far as we can know. The best would be to have a government, a majority, even at the Senate in order to govern the country. If not, it's difficult to forecast what is going to happen.
DOS SANTOS: But from your point of view, would there be a party that would be best to govern Italy at the moment?
PROVERA: I think that the best in these difficult times would be to have a large coalition, even if today it seems impossible. I think that the country needs to be governed, and the majority of the country, the large majority, is for Europe.
The problem in the country is that we cannot go ahead with such a fiscal burden without having any visibility on future investments. So, this is a European issue, it's not only an Italian issue. So the reaction of the Italians is a reaction that we could have everywhere around Europe if we don't change European policy.
DOS SANTOS: But the difference, with respect, Mr. Marco Tronchetti Provera, is that other countries manage to hold down governments for full terms, and that has been traditionally the problem over there in Italy, is that it's very difficult to push through these measures because governments don't last a term.
There is a risk that whoever manages to form a government this evening won't manage to see it through maybe even two years from now.
PROVERA: I think that it's difficult to form a government that will last long. I think that we cannot stay months without having a government. So, it'd be a difficult decision for the politicians, but it's too early, as I was saying before, to say if there would be a majority. It could even be that at the very last minute, we will have a majority in the Senate.
In any case, the country has to be part of the process that has to be built in Europe to provide investments in Europe. Because the entire Europe is under stress.
DOS SANTOS: If we take a look at, for instance, Pier Luigi Bersani's policies here, he said that he's going to be sticking broadly to the Monti plan that'll involve an awful lot of unpalatable austerity measures at a time when, of course, unemployment is now at 11 percent across Italy. How are they going to be balancing those competing issues?
PROVERA: I think that the first action will be in Brussels. I think that any prime minister we will have in the next weeks or months will have to negotiate with Brussels together with the other partners in order to see how to reduce unemployment, because the real issue in Europe is unemployment.
And without investments, we cannot continue this way, otherwise the reaction of people will be worse and worse. We see that the votes that Mr. Grillo got could also increase if we do not prefer the future of Europe having investments and having hopes.
DOS SANTOS: Obviously, the EU will play a significant role in whatever happens in Italy from an economic point of view in the next couple of years, but as the head of a big company employing a lot of people in Italy, what would you like to see a future government do to help you employ more people, especially young people in that country?
PROVERA: I think in our country we have to liberalize the -- for the young people the way to enter into a job. It's too difficult today. There are too many links. There are ways that are already exploited in some other European countries where for the young people, it's much easier to enter and for companies to -- the fiscal burden is lower employing young people.
DOS SANTOS: Let me ask you about the role of Silvio Berlusconi in this. You know Silvio Berlusconi personally rather well. He's another significant figure on the Italian business scene as well. Do you think that his political career is over tonight?
PROVERA: I think that he has been able to survive. Two months ago, was out of politics. I think that also it's come to pass with a number of mistakes. And now, I think that Silvio Berlusconi should have a step back and leave his party, making agreements with the other parties in order to run the country.
So, I really think that they're not -- the last majority of the PDL, of the voters of Berlusconi are for Europe. But it's difficult to have a coalition between Berlusconi and other parties.
DOS SANTOS: How worried are you about the rise of Beppe Grillo's Five Star Movement. This is s sort of anti-establishment movement, if you like, and they come from all different sides of the political spectrum.
What many Italians will tell anybody who's not an Italian voting in these elections currently is that it would be very, very difficult to have such a disparate bunch of people in a significant political position going forward. How worried are you about the Five Star movement?
PROVERA: I think that this movement is a movement that shows a reaction of people towards the traditional politics. I think there is something good, also, in this movement. The problem is how to channel all this into a project.
The country needs a project, Europe needs a project. I don't think that we can solve the issue with minor moves. We have to revise the way to grow in Europe. It's the decline of Europe that is affecting Italy.
The consumer balance sheet of our country is not worse than the other countries. Families are much richer than the average European families. So, we are a country that is not in real danger unless we continue only on the fiscal side, only on the taxation side, without involving Europe with the other regions of the world into a project. Outside Europe, the world is still growing, so the issue is Europe.
DOS SANTOS: Marco Tronchetti Provera, there, the chairman and CEO of the Italian tire company Pirelli. Thank you so much for coming on CNN this evening and sharing your views.
Well, Pirelli was actually one of the top performers on Italy's main stock index this Monday, gaining more than 2 percent. And after a wobble tours the end of the trading day, well, as you can see there, the Milan FTSE may have actually closed the day in the black, gaining nearly three quarters of one percent.
Europe's other main indices also didn't do all that badly. This is largely thanks to word of more stimulus coming from the Bank of Japan, with a new pro-stimulus man at the helm coming from the Asian Development Bank.
And as you can see, in Frankfurt, we saw the Extra DAX up by the most, 1.5 percent. That was after Deutsche Boerse had jumped by more than 5.5 percent on the day after rumors of a potential merger with the CME Group, that is the Chicago Mercantile Exchange. For its part, Deutsche Boerse, though, denies that those talks are taking place.
Well, forget the flagships. Nokia is going towards the middle of the road at the Mobile World Congress. Up next, the CEO, Stephen Elop, explains why this year the big reveal is cheap but also cheerful.
DOS SANTOS: The next generation of mobile phone technology is currently being shown off at the Mobile World Congress, which is underway in Barcelona, Spain. Now, we've already had an iPad Mini rival coming from Samsung, the Galaxy Note 8, and also an alternative to the Android operating system, this time from Mozilla. That's the company behind Firefox.
Well, Nokia's actually unveiled a new range of phones that aren't trying to leapfrog the competition, for once, in terms of size and also speed. The CEO, Stephen Elop, told our very own Kristie Lu Stout that he's looking to make waves at the lower end of the market.
STEPHEN ELOP, CEO, NOKIA: The Lumia 520, which is our lowest-priced Lumia product, has a number of the capabilities that you see in the high- end products. And it's on that basis that we're competing.
Because there's may other low-priced SmartPhones out there. But what we've focused on is the hard engineering necessary to differentiate and stand on our own, and that's been our focus.
KRISTIE LU STOUT, CNN INTERNATIONAL CORRESPONDENT: Let's talk more about the location-based industry, because you are big -- you're a dominant player in the mapping business. Just how big is Nokia?
ELOP: So, in an automobile, if you think about the navigation system, of all the cars in the world, four out of five cars in the world, if they have a navigation system, have something from Nokia inside that car, the data, the platform, something. So, we play a very strong role there.
And what we're doing is taking that platform, which is known as the Here platform, and making it more and more broadly available so that others can participate while at the same time we take some of the best experiences and deliver them on our Lumia products to help us differentiate our SmartPhone models.
STOUT: OK, we've talked to you about your SmartPhones, we've talked about your location business. Let's talk about plain and simple mobile phones. I know you have right there, the Nokia 105, super cheap. How much, 15 euros? It's --
ELOP: Fifteen euros.
STOUT: Tell me more about this phone.
ELOP: So, 15 euros, you get a very beautiful color display. You get a device that if you turn it on, 30 days later and you come back, it will still be able to be used. The battery life on these devices is phenomenal.
STOUT: That's incredible.
ELOP: So, for some people, it's their very first mobile phone, in an emerging economy, for example. But for others, it might be the device that they toss into the glove box of their cars, the backup device, or maybe something retro chic that they carry with them to a party where they just want to slip that into a clutch instead of a larger SmartPhone. Perfect device for that.
STOUT: So you're targeting multiple markets with this --
STOUT: -- very simple handset. What is your ultimate goal for Nokia? Do you want to finish with the gold or the silver, or do you want to have a third place finish?
ELOP: No one competes unless they're going for the gold, so we're going for everything we can, but most importantly, if we focus on delighting consumers every day, whether that's someone buying their very first 15 euro SmartPhone or someone buying our flagship Lumia 920, we want to delight every one of those people. The rest will take care of itself.
STOUT: I heard through the grapevine that, yes, we have a prop table over here, but usually you carry up to 15 phones on you at a given time. Is that true?
ELOP: No, not on me. But I carry a bag that has a bunch of phones. Normally in my pockets only four or five.
STOUT: OK, but still, a total 15 phones you carry with you?
ELOP: Certainly, yes.
STOUT: Why so many phones?
ELOP: First of all, I have to experience the Nokia products. I'm a major contributor to the design and the quality of the devices. I have a lot of feedback to provide the teams on that.
But also, I have to carry competitive devices. You have to understand the competition. So, I'm always interested in experiencing firsthand what the competition is doing and understanding what we need to do to effectively compete.
STOUT: All right, Stephen Elop, open up your jacket, show me your phones.
STOUT: Not happening? What do you have on you? Come on.
ELOP: It could always be the next generation of products. Thanks for asking.
DOS SANTOS: Well, the $20 phone that we just saw there with Stephen Elop replaces the hugely popular Nokia 1280 here. Nokia actually sold more than 100 million of these kind of phones. Low-end phones aren't just for customers looking to save a bit of cash.
In fact, I should point out you might find them in the pockets of some real high-fliers. Becky Anderson discovered that firsthand when she met Arcadia's CEO at the London Fashion Week recently.
(BEGIN VIDEO CILP)
ANDERSON: Can we just see your phone?
PHILIP GREEN, CEO, ARCADIA GROUP: No.
ANDERSON: Come on, bring the phones in. There you go.
GREEN: I wouldn't know how to --
ANDERSON: That's not his.
GREEN: Not the best one, you see? Old-fashioned.
ANDERSON: You rung?
GREEN: But I promise you this. I bet these answer more than anybody else in my company. I was on the phone at 5:00 AM to LA this morning to find out how the store numbers were.
(END VIDEO CLIP)
DOS SANTOS: Well, at least he remembered to turn it off for the interview, I might point out. We want to know if you still have one of those old-fashioned phones in your pocket or your handbag. E-mail us at Quest@cnn.com, or you can tweet us @QuestCNN or @RichardQuest is the Twitter handle.
Time now for a Currency Conundrum for you out there. Newly minted pound sterling coins have to go through an ancient annual ritual called the Trial of the Pyx. Our question tonight is, what is this curious ceremony?
Is it A, a blessing by a bishop? Could it be B, approval from the current monarch? Or C, a standards test? We'll have the answer to that intriguing Currency Conundrum for you later on in the program.
Well, speaking of currencies, the euro is currently gaining ground against the US dollar, and the yen is rising quite sharply, which is a complete about turn. The pound is coming back off a two-and-a-half-year low against the US dollar after we saw the credit rating of this country, the UK, being downgraded by Moody's.
Jim Rogers says that the pound's got further to fall from here on, and we're hear from the billionaire investor after this short break.
DOS SANTOS: Britain's finance minister says that he'll stick to his plans despite the loss of the UK's Triple-A credit rating. Moody's downgraded that rating for Britain on Friday, saying that it expects growth to remain weak for this country.
MPs called on George Osborne to defend his austerity program today in the House of Commons. The opposition says that he's focusing too much on cutting the deficit and not doing enough to stimulate growth. Osborne told them his strategy was the only thing saving the UK from further downgrades, and Moody's agreed.
(BEGIN VIDEO CLIP)
GEORGE OSBORNE, UK CHANCELLOR OF THE EXCHEQUER: Their message to this government and this parliament is explicit: the UK's rating could be downgraded further if there is a reduced political commitment to fiscal consolidation. You will not get that reduced commitment from this government.
We will go on delivering on the economic plan that has brought the deficit down by a quarter, helped secure a million private sector jobs, and that continues to secure very low interest rates, not just for the government, but for families and businesses in the country.
(END VIDEO CLIP)
DOS SANTOS: George Osborne once said that losing Britain's Triple-A rating would be, quote, "humiliating," as his political opponent was keen to remind him.
(BEGIN VIDEO CLIP)
ED BALLS, UK SHADOW CHANCELLOR: The first economic test he set himself now failed by this downgraded chancellor, Mr. Speaker. And yet, as we saw today, he remains in complete denial, offering more of the same failing medicine, even while Moody's now agree, sluggish growth is the main problem.
(END VIDEO CLIP)
DOS SANTOS: Well, the British pound is pausing over a slide that took place this weekend. Sterling came under further pressure in the aftermath of Friday's rating downgrade. Let's have a look at exactly where it is at the moment.
This is the trading pattern over the course of last week, and as you can see, on this point in the chart, that was when Moody's decided to downgrade it.
So, it's currently at a two-and-a-half-year low against the US dollar, and the British pound is also trading, I might point out, at a 16-month low against the euro, that we should point out that the euro has actually been strengthening of late on the other side, as well.
So, let's have a look at how UK shares are impacted by the loss of that Triple-A crown. The FTSE 100, as you can see, shrugging things off a little bit because it closed the day up around about a third of one percent.
Although I might point out, despite the fact that we saw gains, the banking stocks and mining stocks propping this index up, it was actually the laggard among the European indices, with ones on the continent gaining far, far more than a third of one percent.
Well, the billionaire investor Jim Rogers says that sterling's got quite a way to fall from here on. I spoke to the co-founder of the Quantum Fund earlier today and began by asking whether, given the pound's recent weakness, the Moody's downgrade was already, to a certain extent, priced in.
JIM ROGERS, CHAIRMAN, ROGERS HOLDINGS: Of course it was, Nina. I'm not the only person who knew that the UK should be downgraded. I know you have to report this kind of thing, but the market's known it for a long time. That's why sterling has been under pressure. And that's why the UK has various and sundry problems.
DOS SANTOS: So, what about Standard & Poor's following suit. Presumably, once we see Standard & Poor's and then Fitch following suit here, really, the UK government's going to have to start worrying about the total level of borrowings it's got, because servicing that debt will be just a little bit more expensive.
ROGERS: Nina, the UK government has said for the past 40 years it's been worried about it. Every administration that's been running the UK for the past several decades says they worry about the debt, and the debt keeps going up. Please, Nina, these guys are politicians. They don't want to do anything unless they have to.
DOS SANTOS: And you specifically have also been saying that you're worried about the total level of debt here. Isn't it true that it doesn't matter what you do on the deficit side if your borrowings just keep going up and are unsustainable, that does eventually lead to the risk of you being caught short later on?
ROGERS: Aha, yes! Eventually, the market says, I don't care what you say anymore Mr. British politician, we don't believe you. We're not going to play anymore.
DOS SANTOS: Do you think that there's a risk that that's going to happen, then, Jim?
ROGERS: I know it will. It's just a question of -- and by the way, not just the UK, Nina. There's several places where they're going to continue to get worse. You've seen what happened in Greece and some other places. It's going to happen in the US eventually.
DOS SANTOS: Sterling's currently at a 16, 17-month low on the back of this. It's rebounded a little bit even in today's session. Where do you think we're going to go from here when it comes to the pound versus the dollar trade?
ROGERS: Well, Nina, the question is against what? Because the dollar's a very flawed currency, too. At the same time, you have the Japanese printing money, the euro has problem. Politicians all over the world now are printing money. They've made it a stated policy that they will print money, so they're all sinking together.
DOS SANTOS: Is it the right strategy in the longterm to underpin growth by monetary stimulus, printing money, and then eventually, when you have to pay that back, inflation means net, net it's cheaper to pay it back in the long run? Or do you think that in the long run, the problem we'll have is, as you said, the markets pull the rug from under these governments' feet?
ROGERS: Nina, many countries have tried debasing currencies since before the Romans. Everybody's tried this before. It has never worked in the longterm, it has never worked in the medium-term. Sometimes it works in the short-term.
But Nina, the people who always suffer are you and me and everybody watching this show. Politicians just want to get reelected, but the rest of us have to go buy groceries. The rest of us have to buy fuel. We're the ones who suffer.
(END VIDEO CLIP)
DOS SANTOS: So, that's the better-invested Jimmy Beeland Rogers, there, telling me about his view when it comes to a number of these currencies that are being brought down and weakened.
Let's bring in Frederic Neumann now. He's the co-head of Asian Economics at HSBC and he joins me now live in our London studio. The first thing I want to talk about, given what Jim was saying debasing currencies, bringing currencies down to try and stimulate economies, is Japan. They've got a new head at the Bank of Japan, and he seems to be very pro-stimulus and very Abenomics.
FREDERIC NEUMANN, CO-HEAD OF ASIAN ECONOMICS, HSBC: Yes, the announcements that we had now about the Bank of Japan, the new leadership, likely means more easing by the Bank of Japan. And just as other central banks are pulling back a little bit on stimulus, Japan is coming in, printing more money, and trying to push the value of the currency lower.
DOS SANTOS: Now, opinion is divided on whether or not we should be printing this kind of amount of money, stimulating inflation, storing up problems for the longterm to create growth, whether we'll end up with a huge economic hangover come six years from now. Which side of the fence do you stand on?
NEUMANN: It's a risky strategy. You have to probably do something after global financial crisis, you had to do something. But in the Western world, it's probably time to take that stimulus away.
DOS SANTOS: Yes, we're three years on. Is it wise?
NEUMANN: Three years on, I think we should start to think about an exit strategy because growth is coming back, inflation pressures are emerging again. But Japan is in a different situation. There we had for 20 years almost deflationary pressures, the economy's very weak. So, Japan really needs to do something much more radical.
DOS SANTOS: Two hundred and eighty-six percent debt to GDP for Japan. Is that really sustainable? Where can we go from here on?
NEUMANN: Well, it's not sustainable, and therefore you need growth. And in order to deliver growth, something has to be done. The currency has to weaken, we need more of a monetary stimulus. But it's not enough. You need structural reforms as well, and that's something where Abe still has to deliver.
DOS SANTOS: Now, I'm glad you mentioned growth, because we had some really interesting figures coming out of China. You published a manufacturing figure, the Flash PMI, as measured by HSBC, which is hugely influential on the markets, showed quite a bit of weakening. It's still growing, but nowhere near at the same pace as before.
NEUMANN: It's a bit of pull-back, and we had a multiyear high in January, so February numbers a bit weaker. There's some technical factors, such as the Lunar New Year, which is a big holiday in China, people take time off. That has caused it, possibly.
But we think that the gradual acceleration that's in place in China will remain in place throughout the year.
DOS SANTOS: So, heading towards a recovery towards the end of this year, that's always been your prediction Frederic.
NEUMANN: The Chinese recovery is on track. We expect 8.6 percent growth there, so it's all good news, I think.
DOS SANTOS: OK, Frederic Neumann from HSBC, thanks so much for that here on QUEST MEANS BUSINESS.
Well, coming up next on the show, vote counting is still underway and there's still no clear winner in Italy. We'll discuss a potential political deadlock for the former Italian prime minister after the break.
DOS SANTOS: Hello and welcome back, I'm Nina dos Santos. These are the headlines on CNN this half hour.
(BEGIN VIDEO CLIP)
DOS SANTOS (voice-over): Votes are being counted in Italy and early results show Pier Luigi Bersani and his center left allies are currently in the lead when it comes to races for the lower and upper houses of Parliament.
The latest tallies show just how much tighter the race for control of the Senate, though, the upper house is. That's where Silvio Berlusconi and his center right coalition are currently faring better but still trailing the center left party, albeit ever so slightly.
Well, just three days before Pope Benedict XVI's departure, a cardinal is stepping down as well. The Scottish archbishop Keith O'Brien announced today that he's quitting. It comes amid reports that four current and former priests are accusing him of inappropriate acts. He disputes those allegations.
The Afghan government wants all U.S. Special Forces out of Wardak province within two weeks. This comes after allegations that troops killed and tortured Afghans there. NATO says there's no such evidence of any misconduct. But an investigation is still underway.
Cuba's national assembly has reelected President Raul Castro for a second term in office. Castro says that when his term ends in 2018, he will eventually be stepping down. He took over from his ailing older brother, Fidel Castro, back in 2006.
Oscar Pistorius met court officials on Monday to go over some of the terms of his release. The athlete, who's accused of murder, will be visited by a correctional officer at least four times a month. Pistorius will also be subjected to random testing to make sure that he's not using drugs or alcohol.
(END VIDEO CLIP)
DOS SANTOS: Well, early results in Italy's Italian election at the moment show that the country's center left coalition party is currently leading in the polls.
And if those figures do manage to hold, well, it seems as those Pier Luigi Bersani is likely to beat his right-leaning rival, Silvio Berlusconi. Let's discuss all this with the former Italian prime minister himself, Lamberto Dini, who joins us now live from Brussels this evening.
Lamberto Dini, first of all, how do you read the situation? Where do you think it's going to go? It's rather close to call.
LAMBERTO DINI, FORMER ITALIAN PM: Yes, it is difficult to call, indeed, on the basis of about 50 percent of the votes counted. There will be a split vote. Neither the center left nor the center right appear to gain a majority in both houses, which is necessary to form a government.
DOS SANTOS: So where will that (inaudible)?
DINI: (Inaudible). Well, in addition, there is a new political movement, a protest movement, a anti-system, anti-establishment movement that is apparently gaining -- is a new movement; nearly 15-25 percent of the votes.
Now, as you said, where does this result leads to? There is no -- very difficult to form a government by a single coalition. So the most likely thing before going to a new elections will be to form a government between the two major parties of the center left, the center right --
DOS SANTOS: Will that work?
DINI: -- which after all -- well, it may be, yes. These are (inaudible) parties that supported this technocratic government of Mr. Monti who, by the way, comes out of the elections with a very poor result. So his policies of austerity and no growth clearly have brought him to defeat.
DOS SANTOS: OK. That's the really interesting point, because even if we do see some kind of relationship between center left, center right and then plausible at it seems, obviously, some of those Monti measures will have to go.
DINI: Yes. Indeed. But what certainly a majority may be created by the two main parties. The third protest movement is against the system as a whole. So he will not want to make an alliance with any of the existing parties, you see.
And as a result, I think that the most likely solution will be a temporary government, a government to carry out necessary institutional reforms, a new electoral law, reducing the number of MPs and so on, and probably direct election over president of the republic and so on.
So a government program or specific government agreed between the two main parties that might last about a year or 18 months before going into new elections.
DOS SANTOS: Mr. Dini --
DINI: That's what I predict.
DOS SANTOS: -- I do want to ask you something, because you were prime minister in Italy during the times in the '90s, when Italy had the lira. Now the problem with Italy's finances is that Italy is very used to borrowing heavily, high levels of debt. But it's used to being able to devalue its currency. It can't do that now because it's part of the euro.
Will Italy learn that that is a new reality?
DINI: Not at all. I think we cannot go back. Italy is part of the European Union, of the euro system and the euro is here to stay in Europe as well as in Italy. Let us forget a moment the statements that have been made during the electoral campaign, also the Berlusconi party is not anti- euro; it's not anti-Europe.
And therefore once the elections and the -- really the dust has settled down, the real attitudes towards Europe will prevail. Italy will remain in the euro system and taking the necessary measures. (Inaudible) come in a measure that's unnecessary, indeed, with the technocratic government of Mr. Monti, the public finances have been straightened out.
And the spread between Italian securities and those of the -- of Germany has narrowed down considerably. So Italy has the possibility of emerging. However, what is needed in Italy is in Spain and in most of the euro countries is growth. And growth at this point can be created and stimulated only by European measures. We cannot do it domestically in the short term.
DOS SANTOS: Lamberto Dini, prime minister of Italy between 1995 and 1996, thanks so much for coming on QUEST MEANS BUSINESS this evening from Brussels. We appreciate your time.
Up next, Yahoo! staff are getting physical. There will be no more spending the day in your dressing gown, because working from home is being stamped out. We'll tell you why after this.
DOS SANTOS: Hello and welcome to the CNN Kitchen. This is apparently where some of the best decisions and insights come from, according to elite memo from Yahoo!. It also drops this bombshell: come June, staff are no longer going to be allowed to work from home.
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DOS SANTOS (voice-over): Well, the memo I have in my hand here reads, "Speed and quality are often sacrificed when we work from home. We need to be," quote, it says, "one Yahoo! and that starts with actually physically being together," and having conversations around the water cooler.
Maggie Lake joins us now live from New York with the latest.
This is something of a bombshell, Maggie, because especially coming from Marissa Meyer, who seemed to be painting a completely different strategy by recently having a baby and taking on the helm of Yahoo! when she was expecting.
MAGGIE LAKE, CNN CORRESPONDENT: Yes, that's right, Nina ,and a lot of people look to her to be a leader in this role. But this is a big change. Those Yahoo! employees better check -- get the cars tuned up and check the public transport schedules.
Effective June, they're going to have to start reporting to the office. It's generating a huge amount of buzz and frankly a lot of backlash, not only because some of those Yahoo! employees theoretically took the jobs because of the flexibility, but also we're hearing a great deal of pushback on the idea that speed and quality are sacrificed, as Marissa Meyer said.
In particular, the "Huffington Post" pulled together three different research reports which seemed to say the exact opposite. We want to cycle through them really quickly.
Stanford's study did one of them, Stanford University, showing that performance actually increased 13 percent when people worked at home.
Another one for the University of Texas/Austin showed that people who worked at home averaged 5-7 week hours longer per work week. So they actually worked more. And finally from the BLS, the government's own research, working at home actually decreased absenteeism.
Now to be fair, those really tend to focus on productivity; whereas Marissa Meyer seems to be talking about that sort of collaboration, the energy, clearly taking a page from when she worked at Google with a very sort of free workflow.
But really important is the fact that this is coming against the backdrop here in the U.S., Nina, where there's a debate raging about the role of women and, in particular, mothers in the workforce. Can you do both well? A lot of people weighing in on that. So this decision feeding right into that debate, Nina.
DOS SANTOS: Yes, it's creating almost as much buzz as the CNN fridge in the kitchen here and the water cooler, I must say. Maggie Lake, thanks ever so much for laying that out and also the really interesting statistics that she was quoting there, coming from the "Huffington Post" and also various other sources of news and information like various universities as well.
Let's bring in Jeff Gardere, who's a clinical psychologist and assistant professor at the Touro College of Osteopathic Medicine. He joins us now live from New York.
So, Jeff, is it a good idea to be working from home? Or does it foster sort of casual approach to work?
JEFF GARDERE, CLINICAL PSYCHOLOGIST: Well, I think Chris (ph) is absolutely right. Almost every study has shown that people who work at home, if they have the maturity factor, the maturity level, actually work harder. They get up earlier in the morning; a Melbourne University study showed that. They work three hours more per day. So I think it's a great idea.
The problem becomes, however, if you're not in control of your employees, if you don't know exactly how many employees are working from home, which seems to be the problem with Google right now -- and they are struggling a bit finally, then you have to bring the chickens back home to roost, if you will. You have to bring them back into the workplace so you can get control over that situation.
And I predict that at some point that they will allow certain workers to be able to work at home. But they want this idea of communication, collaboration, being able to get people to be catalysts for one another in order to have inspiring ideas.
DOS SANTOS: Well, you know, Jeff, just from a personal and anecdotal point of view, working in the news industry, I would say it would be very, very difficult to do the kind of job that many of us do from home, from a remote location because you have to have conversations with your colleagues, et cetera.
When it comes to, as you were saying before, the maturity of people working from home, being able to have a flexible worklife has been key for those I.T. companies. This is going to alienate a lot of Yahoo! staff.
GARDERE: Oh, absolutely. And as we know, in the I.T. field, in the tech field, that it is fierce as far as the competition to get great workers. And some people, especially in I.T., are not exactly people persons. They like to create on their own. But at the same time, I understand what Marissa Meyer wants to do.
I know, as a psychologist, that too often we alienate one another; we don't talk to each other enough. And one of the major complaints we see is that we are being swallowed up by the Net. We just are too much communicating through electronic means and not talking to one another, the human touch, face to face. And that's important for our continued emotional growth.
DOS SANTOS: But also it's important from a work balance as well as a work personal life balance, because if you bring one of your work home, or indeed, work at home, it's quite difficult to separate the two, isn't it?
GARDERE: Oh, absolutely. And we find that there are many partners at home who complain that they're -- you know, the person that they're married to or they're attached to is constantly working, if they're spending a few hours at the office and then spending the majority of time working from home. Then they're not able to separate a social life from a work life.
So I personally, as a psychologist professionally, think that it is important that we spend more time at the office, that we have a separation, if you will, of church and state, of home and the office, spend the time working at the office and spend the quality time interacting with our partners, our children and getting the time we need in order to heal and be more productive when we finally get back into the workplace.
DOS SANTOS: Clinical psychologist there of Touro College of Osteopathic Medicine, Jeff Gardere, thank you very much for your time this evening --
GARDERE: My pleasure.
DOS SANTOS: -- and also for your interesting insights.
Let's turn attention towards the weather. Somebody who doesn't work from home and is firmly fixed at the CNN International Weather Center, is Tom Sater and he's going to tell us all about how it's looking.
Hi there, Tom.
TOM SATER, AMS METEOROLOGIST: Hi, Nina. We're going to focus on Europe and then the U.S. And mainly for business travelers, if you have a departure or an arriving flight somewhere, less you know in Europe it seems like maybe the delays will be light, not much of a disruption; different story in the U.S. Several airports could shut down. In fact, already some of the smaller ones are.
Broad circulation in Europe right now. In fact, you can see it down to the south. We're not going to have the flooding rains we had in Greece. But it is quite heavy when you get a little bit further north in Greece and Albania right now. The snowfall is light in its intensity; we did have reports as much as 3 centimeters that had fallen in Paris.
Orly was about 5 centimeters, but their snow depth only at 2. But what we're going to find is this storm system's going to weaken. Croatia had heavy amounts of snow on Saturday. And we even had snow into Spain, I mean, beautiful pictures like this. Yes, some disruption maybe on the roadways. Travel right now by air seems to be OK. But you're going to want to call ahead.
You can see where the band of snowfall, light in intensity, nothing heavy; but it's still coming down in Paris. (Inaudible) absolutely beautiful. The back edge is only about 21/2 hours away. A high of 3. That's warm enough to get a little slush. So be careful driving around. London's 6 for a high on Tuesday, Kiev 1, Bucharest 6.
Some travel delays, if there are going to be any, call ahead if you're flying out of these airports, Frankfurt some low clouds, fog; some light snow in Munich. Elsewhere I doubt we're going to have much in the way of problems.
But the U.S. is a different story. This is a heavy winter storm system. In fact, the second major superstorm in only five days, but the severe weather is in the Deep South too, with tornado watches for the states of Louisiana and northern Florida.
This is a big-time problem we're going to be watching because already we have airports shut down around Amarillo, which has picked up 30 centimeters, winds blowing around 90-100 kph. Wichita, Kansas, could have the snowiest month on record; the records go back to the 1880s. And they didn't have any snow up to the 20th of the month.
Look for possibilities of Kansas City shutting down their airport. Last storm system on Thursday dropped 28 centimeters. They were shut down. They're looking at about 26. Chicago is looking at about 7 to 2. There could be some delays there.
But for the most part, the warnings are in place; we'll watch the severe weather to the south as well, Nina. So busy day in the U.S., light amounts of snow in Europe. We'll keep you posted on more.
DOS SANTOS: All right. Tom Sater, we'll look forward to that. Thanks ever so much.
Well, after the break on QUEST MEANS BUSINESS, a night of thrills and spills as Hollywood elites hit brightest stars at the Oscar awards.
DOS SANTOS: Well, viewers from right around the world tuned in to see Hollywood's biggest and brightest stars honored at the 85th Academy Awards. In addition to the winners, losers and off-color jokes, there were plenty of memorable moments that were not scripted, as Paul Vercammen now reports.
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PAUL VERCAMMEN, CNN CORRESPONDENT (voice-over): On Hollywood's biggest night, even first-time Oscar host Seth MacFarlane seemed a bit starstruck.
SETH MACFARLANE, COMEDIAN AND OSCARS HOST: You guys have made some beautiful, some inspiring movies, I made "Ted".
To present the biggest award of the night, first lady Michelle Obama made a live appearance from the White House.
MICHELLE OBAMA, FIRST LADY: And the Oscar goes to "Argo".
The film, set during the Iranian hostage crisis was also recognized for editing and adapted screenplay.
BEN AFFLECK, ACTOR AND DIRECTOR: I thank everyone in the movie, on the movie, who worked the movie, did anything with this movie gets thanked, I want to thank Canada, I want to thank our friends in Iran.
VERCAMMEN (voice-over): "Les Miserables" also won three Oscars, including Best Supporting Actress, Anne Hathaway...
ANNE HATHAWAY, ACTRESS: It came true!
VERCAMMEN (voice-over): Adele performed "Skyfall," which won for Best Song.
"Life of Pi" took home four Oscars, the most of any film, including Best Director for Ang Lee.
ANG LEE, DIRECTOR: Thank you, movie god!
VERCAMMEN (voice-over): Daniel Day-Lewis became the first person to win three times in the leading actor category, this year for "Lincoln."
DANIEL DAY-LEWIS, ACTOR: Since we got married 16 years ago, my wife, Rebecca, has lived with some very strange men.
VERCAMMEN (voice-over): Twitter lit up after Jennifer Lawrence tripped over her dress on her way to accept the award for Best Actress in "Silver Linings Playbook."
JENNIFER LAWRENCE, ACTRESS: You guys are just standing up because you feel bad that I fell and that's really embarrassing, but thank you
VERCAMMEN (voice-over): Quentin Tarantino's "Django Unchained" took home two Oscars -- for original screenplay and Supporting Actor, Christoph Waltz.
VERCAMMEN: This year's batch of best picture nominees sort of unusual; not really any art house films that few people saw, seven of them made more than $100 million at the worldwide box office.
I'm Paul Vercammen, reporting from Hollywood.
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DOS SANTOS: When you come back, we'll have news of major job cuts in Spain.
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DOS SANTOS (voice-over): Time now for the answer to today's "Currency Conundrum," earlier in the show we asked you what is the Trial of the Pyx? Well, the answer is C. The Trial of the Pyx is a two-month test that checks whether pound coins are within the statutory limits for metallic composition, weight and size.
The ceremony actually dates back to the 12th century. The name "Pyx" refers to the chest in which the coins are transported. It arrives from the Pyx Chamber in Westminster Abbey, where the chest was historically kept.
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DOS SANTOS: Well, Spain is a country where unemployment stands at 26 percent, one of this nation's biggest banks is set to add to that tally by cutting around about 3,000 jobs as part of a restructuring plan.
CaixaBank says that these cuts are needed to adapt to the current environment and to improve efficiency. The bank says it's talking to labor unions. CaixaBank took over smaller rivals such as Banca Civica and also Banco de Valencia.
Later on -- sorry; earlier on last year. And net profits at this company as it reported, those jobs cuts plunged 78 percent to in 2012, as you can see there, obviously weighing on the IBEX in Madrid as well as the other indices.
And that's it for this edition of QUEST MEANS BUSINESS. Thanks for watching us. I'm Nina dos Santos. Whatever you're up to in the hours ahead, we do hope here on QUEST MEANS BUSINESS that it is profitable.
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DOS SANTOS (voice-over): You're watching CNN. These are the main headlines this hour.
Votes are being counted in Italy and early results show that Pier Luigi Bersani and his center left allies are currently leading in the race for the lower house of Parliament. The latest tallies show a much tighter race for control of the Senate; the upper house where Silvio Berlusconi and his center right coalition are faring slightly better but still trailing the center left, albeit ever so slightly.
Just three days before Pope Benedict XVI's departure, a cardinal is stepping down as well. Scottish archbishop Keith O'Brien announced today that he's quitting. It comes amid reports that four current and former priests are accusing him of inappropriate acts. Well, he disputes those allegations.
The Afghan government wants all U.S. Special Forces out of Wardak province within two weeks. This comes after allegations that the troops killed and tortured Afghans there. NATO says that there's no such evidence of misconduct. But an investigation is underway.
Oscar Pistorius met court officials on Monday to go over some of the terms of his release. The athlete, who's accused of murder, will be visited by a correctional officer at least four times a month. Pistorius will also be subjected to random testing to make sure he's not using drugs or alcohol.
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DOS SANTOS: That's a look at some of the top stories. ""AMANPOUR" is next.