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QUEST MEANS BUSINESS
Cyprus Bailout Plan; Banking Crisis; Outrage in Cyprus; Market, Currency Fallout; "Disastrous" Deal; EU on Cyprus; Dollar Flat; Russian Exposure
Aired March 18, 2013 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: The bailout that's become a bank run. Lenders in Cyrus shut their doors and customers rush for savings.
The markets are reacting with horror at the EU rescue that's gone horribly wrong.
(BEGIN VIDEO CLIP)
LARS SEIER CHRISTENSEN, CEO, SAXO BANK: I'm pretty sure that it's going to be something that they will regret for a long time to come.
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QUEST: Also tonight, a woman's place, it's in the board room. Facebook's Sheryl Sandberg on her modern feminist philosophy.
It's a new week, it's Monday, I'm Richard Quest and, of course, I mean business.
Good evening. The rules in Europe seem to have changed. Savers in Cyprus are shocked that they are being are asked to help pay for their country's bailout from their own bank accounts. It is unexpected, unprecedented, and for ordinary Cypriots, it's unforgivable.
In the course of the next hour, we will be in Nicosia, live, where our correspondent Jim Boulden is waiting for us. We will also hear from the country's head of the opposition on why he rejects this bailout plan. We'll have market reaction from London, from Paul Donovan at UBS, and the head of Saxo Bank will join us.
We'll be in Moscow, where President Vladimir Putin has criticized the deal. And we'll be in Berlin, where the German chancellor, Angela Merkel, has vowed to defend the European project, and many believe that Angela Merkel may be responsible for what took place.
Jim Boulden is in Nicosia for us tonight. Jim, we'll be with you in just a moment to find out exactly the situation of how deep the anger is in the Cypriot capital. But first, let me give you the details.
Savers are being told they must pay or lose everything. The government deal to take at least 6.75 percent of cash to get their hands on a billion-dollar lifeline from the EU. Now, that levy rises to nearly 10 percent for those with savings of 130,000. The Cypriot parliament is to vote on Tuesday, a day later than planned, to restructure the deal.
Since it was first announced, Cypriots have been dragging, pulling, whatever they could, cash out of the bank, cleaning out some of the island's cash machine. This is a classic --
QUEST: -- bank run. And today, hundreds demonstrated outside parliament in Nicosia, angry at the proposals, urging lawmakers to reject the plan.
Also, investors outside Nicosia very shaken. Almost every major stock index down in the red. Look at that, the FTSE, the Xetra DAX, the Zurich, the Paris CAC, with the banking shares bearing the brunt. Milan, incidentally, and Madrid were off nearly 2.5 percent.
Jim's with me from the -- from Nicosia. Jim, you've just arrived in the last couple of hours. The mood as people realized what this means?
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: I think, Richard, the mood here is very dour no doubt. As you said, there were demonstrations earlier today. Saw a few people trying to get money out of ATMs, some working, some not.
I think most people thought if they wanted to get their money out, they'd be queuing up tomorrow morning, Tuesday morning, but now we know they cannot go to the bank and withdraw money outside of going to an ATM, because as you say, the banks will be closed Tuesday and Wednesday.
So, people will be very worried about how they get money out even just for day-to-day operations. Will those ATMs be refilled? Is there a capacity for those ATMs to be refilled so people can go about their normal business.
We've also just heard, Richard -- this is very interesting -- the Greek Finance Ministry has confirmed that branches of Cypriot banks in Greece will also be closed on Tuesday and Wednesday. What that means is that people from here won't be able to take that short flight to Athens, say, get their money out of the bank there, and come back.
Of course, the two countries very close relationship, but I guess authorities felt in the last few hours, what happens if people decide they want to go get their money in Greece? So, they won't be able to do that either.
So then we have to wait to see, does parliament vote this through on Tuesday? Will it change? Certainly people here, Richard, are looking for the eurozone to back down, to blink. Does this mean they will change the percentage of how much money comes out of each bank account?
It's unlikely they're going to scrap it all, but will the people who have, say, under 100,000 euros in the bank, will they pay a lower duty -- will they pay a lower rate? That's what people here in Nicosia want to know, Richard.
QUEST: The argument is that this tax, this levy was put in place -- or one of the arguments -- because there's a large amount of Russian and other foreign investment income in Cyprus. If that is the case, surely they could have struck the deal better so that they didn't hurt the ordinary depositors.
I guess the core question is, why is Cyprus being treated like this when Ireland, Portugal, and Greece were not?
BOULDEN: Exactly. Every single country's bailout has been different. Some of the countries, it's because of the banks. So here you have two scenarios. One, of course, that the banks are so much larger than the economy they allowed the banks here to become massive compared to the tiny economy. It reminds me of Ireland.
The difference, as you say, a lot of money from outside the eurozone. A lot of money from Russia, a lot of money from the UK. In bank accounts in this country, the very thing, I guess, originally was was that people in this country should have to pay some part of this bailout.
Because Germany, the Netherlands, Finland, you know name it, they said we're not going to do a complete bailout. You've got to pay your bit. And it comes about, I think, because of bailout fatigue in countries in the north, Richard.
QUEST: I guess that's a -- Jim, we're out of -- that's, I suppose, a rather harsh version of if you're first to the bailout trough, you get the full amount, if you're one of the latecomers, you get worse terms. Jim Boulden is in Cyprus for us tonight.
And in just about 20 minutes from now, you're going to hear from one of the local businesses in Cyprus, a restaurateur who will make it clear how he will have to handle this crisis.
Join me at the CNN super screen, and I will show you, I hope, why Cyprus. What was it about this small economy, barely two-tenths of a percentage point of eurozone, EU GDP, that's caused this problem.
Well, this is the number. This is the percentage of GDP of bank credit. In other words, the domestic credit lent by the banks. Germany, 124 percent of GDP has been lent out. France, 133 percent. Greece, now, down at 153. It was clearly much, much higher.
Ireland peaked at 440 and is now down at 225. And Cyprus -- 330 percent of GDP is the percentage of domestic credit. In other words, their banks there have been churning and blending and churning and lending. The only thing that comes higher than that was Iceland back in the height of the Iceland crisis, which peaked at 980 percent.
But even so, that gives you an idea of why this is so important. On the map you will see exactly the bailouts that we've seen so far. Down at Cyprus, you can see, the assets of the banking sector, 8 percent GDP.
This is an -- this is an island where banking become rampant and out of control. Thirty percent of deposits are in non-euros. In other words, that's Russian money. But look at the other bailouts. This is the interesting bit.
You have Greece down here, you have Ireland here, you've got Portugal, and we've added in Spain because Spain, of course, had a bank recapitalization bailout, and in not one of these other bailouts has there been any question, not one, of depositors' money being touched except -- for Cyprus.
And that is why it's been so significant. I spoke to the leader of the opposition, George, Lillikas. He told me he's not sure that the proposal will actually get past the parliament.
GEORGE LILLIKAS, CYPRIOT OPPOSITION LEADER (through translator): The reaction of Cypriot citizens would influence the decision of the parliament during tomorrow's debate. I'm not sure if the political parties of Cyprus will vote and accept the agreement of the president and the authorities with the euro group.
I believe there's a serious possibility for the parliament to reject such an agreement, which would lead with mathematical accuracy to a greater economic deflation, but at the same time would destroy Cyprus's role as the financial center in the Eastern Mediterranean.
It will not have anything but negative consequences in Cyprus, as well as the rest of Europe's economies, because this upsets the fundamental basis on which the European model of the European Union has been built.
QUEST: In terms of the deposit tax, the tax on depositors, who do you think is responsible for coming up with that idea? Was it the other countries, like Germany and Finland, or was it the Cypriot's own government? Do you blame them for going along with it.
LILLIKAS (through translator): I put the responsibility on both parties. The main responsibility I put on the euro group and mainly the German government, who started this situation with publications and announcements by the Ministry of Finance and the German chancellor.
I also put the responsibility on the president of Cyprus, who submitted to the pressure put on him by the euro group and mainly Germany.
QUEST: How angry are you about this, and what are you going to do?
LILLIKAS (through translator): What I've proposed is the rejection of this agreement by the Cypriot parliament and the Cypriot Republic has different options that has to look into. One of these options is to pre- sell part of our natural grass. Another option will be to borrow money from another country or investment financiers who will be interested in financing the Cypriot government.
QUEST: That's the leader of the Cyprus opposition talking to me earlier. This is a special program in many ways. Most of QUEST MEANS BUSINESS tonight is on the Cyprus bailout disaster and catastrophe and the problems that it now faces.
When we come back after the break, we've looked at the country, now let's look at the economy and the markets. The word "disastrous" springs to mind, that from Paul Donovan of UBS. Global markets seem to agree, after the break.
QUEST: The market numbers tell their own stories today. Start with the European markets, where you have the FTSE was down half a percent, Frankfurt DAX, Paris CAC 40, Spain was off 1.25 percent.
The banking sector was very badly hit. Barclays down 4.5 percent, UniCredit was off 3.5, SocGen in the Paris market down 3.5. All of the same reason, because the fear is how this will affect the banks and the contagion that it could move into other markets, like in Spain.
What happens, for example, if one of these -- the next country that may require a bailout? Will the Cyprus formula of deposit tax levy confiscation be used for that?
Look at the markets in New York, down just 18 points, but as this graph shows, we were very sharply down at the beginning, off nearly 100 points. Those losses have trimmed right the way through the session, even going positive just a short while ago. So, that is the Cyprus effect, but it's obviously eliminated as the session's moved on.
Spain and Italy not only saw their stock markets hit hard, but they saw bond yields rise four basis points to 4.96 and 4.63, just a fraction up there. So again, we're starting to see the transmission of the worries.
And if you've done equities and you've done bonds, then next, obviously, it has to be currencies. And whoops, there she goes. Euro down against the dollar, a slight recovery midday, but overall, you can see exactly the reason.
If you think this is all just a storm in a teacup, to quote one banker on another occasion, you'd be seriously wrong. Paul Donovan says Cyprus's package is only -- is the only one that a politician could dream up when economists would do something completely different.
PAUL DONOVAN, MANAGING DIRECTOR OF GLOBAL ECONOMICS, UBS: The word "disastrous" springs readily to mind. Someone forgot to mention to the euro group that monetary unions, when they die, die because of bank runs. And bank runs happen when people have no confidence that they're going to get their money back.
And today, we have a situation in Cyprus where people have no confidence they're going to get the full value of their bank deposits back. This is not a good situation to be in.
QUEST: And this is exactly what they avoided successfully in 2008 and 2009 with Lehman Brothers, Bear Stearns, and with Northern Rock.
DONOVAN: Well, indeed. And the issue here is that people who thought their deposits were guaranteed are now finding they're paying a tax on those deposits. Now, calling it a tax is a polite fiction. Part of the deposit has, of course, been seized.
And what that means, of course, Richard, is that the value of a euro in the Cypriot banking system is worth less than the value of a euro elsewhere in the monetary union. This is not supposed to happen in a monetary union.
QUEST: Why would they take the risk?
DONOVAN: Because they're politicians, not economists. And it's a sad fact of life that whilst politicians rather than economists run things, we will get economic errors being made with alarming frequency.
QUEST: How far back does this take us into the crisis?
DONOVAN: What this has done, I think, is raise the cost of any future crises that come out, because now if there is a wobble of insecurity in a banking system anywhere in the eurozone in the coming months and years, people are going to be worried that they will be treated the same way that the Cypriots are being treated.
And if I say to you that there's a ten percent chance that you might lose ten percent of your bank deposits, how happy are you going to be to keep your money on deposit in a bank? It increases the risk of panic in the event of future crises. And that's where the real damage from this deal, I think, is coming.
QUEST: Particularly since we still have the potential for some form of deal, even though Spain's banks have been recapitalized, there is still the potential in, say, Spain, for needing EU central -- ESM money.
DONOVAN: In November last year, the European Union made an enormous step forward in the eyes of economists in admitting that they needed to have a banking union alongside their monetary union. Now, economists have been saying this right since 1992, so of course, we're pleased that it's only taken 20 years for politicians to listen to us.
Now, we seem to be moving away from that. This is nothing like a banking union. This is penalizing one part of the eurozone. It's certainly not providing deposit guarantees, because those are being negated by this tax or levy or whatever it's going to be called, this raid on bank deposits. That, I think, is a really fundamental problem.
QUEST: Paul Donovan of UBS with the blunt language that gives you a good indication of why this is such a major development that's taken place in the eurozone crisis.
At a joint press conference between Angela Merkel of Germany and Francois Hollande of France, along with Jose Manuel Barroso, Fred Pleitgen is in Berlin for us tonight. Interestingly, the three of them were talking about competitiveness, and none of them wanted to really grasp the nettle of why they'd done this on Cyprus.
FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: Yes, you're absolutely right, Richard, that was exactly the case. And the other interesting thing about this whole Cyprus bailout is that it is very different than many other bailouts.
And one thing that's very different is that with all the other bailouts, you always had a German handwriting on them, and you always had the German government making very clear that they were, maybe not dictating the terms, but certainly influencing them and writing them, to a large extent, in those other bailouts.
This time, the German government is saying seizing people's bank accounts or parts of their bank accounts, we have nothing to do with that. The German government is saying they would've hoped that it could have been done without the Cypriot government seizing part of those bank accounts.
In fact, Angela Merkel was very, very vague at that press conference that she had with Francois Hollande and Jose Manuel Barroso. Let's listen in to what she had to say.
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ANGELA MERKEL, CHANCELLOR OF GERMANY (through translator): Usually in our political functions, we see to it that the euro as a whole is rendered stable. We've done that in the past, we're going to do that in the next years to come.
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PLEITGEN: The German government, of course, Richard, in the past has taken a lot of heat for the austerity measures that were imposed on Greece, also the ones that were in play with Spain, as well. So, in this case, the Germans are saying we have nothing to do with the tough conditions that are there now.
But they're also saying they believe that all of this could have a calming effect on the market if, in fact, that law is passed, Richard.
QUEST: Fred, you answered the question. So, if it wasn't the Germans, who was it?
PLEITGEN: That's a very good question. The Germans were actually asked that today, and they were saying they believe that a lot of it came from the European Central Bank. They also said that they believe that some of it actually did come from the Cypriot government itself. Certainly, some of those terms were negotiated.
But there's a lot of political discussion about that as well, about that haircut that private people are supposed to have to take, and there's a lot of discussion within Angela Merkel's coalition government, because it is something that, of course, also is highly detrimental to the confidence of savers here in Germany.
But it goes to the point where Angela Merkel came out today through her spokesperson and made absolutely clear that German savings accounts are safe, that the German government stands by those. The last time she did that was in 2008 after the Lehman collapse.
And certainly now, she's been compelled to do that again, so that shows how worried the Germans are about all of this and how a big a discussion all of this is within the German government, Richard.
QUEST: Fred Pleitgen with the German side of this story tonight, and you and I are now starting to see exactly why this small country on the southern periphery of Europe is having such an enormous effect on the eurozone crisis tonight.
A Currency Conundrum: apart from Cyprus, which other country adopted the euro on the first of January 2008? Was it Malta, Slovenia, or Greece? The answer later in the program.
The dollar is flat against the pound. Look at the euro, up against the yen. Those are the rates --
QUEST: -- this is the break.
QUEST: We've looked at the Cyprus situation, we've looked at the global economic side of it, and now, of course, the Russia connection. The president of Russia has labeled the Cyprus bailout package unfair, unprofessional, and dangerous. Vladimir Putin says the proposed levy sets a dangerous precedent. Now, of course, Cyprus is widely regarded as a haven for wealthy Russians to put their money.
QUEST: Moody's estimate loans from Russian banks to Cyprus-based companies, it's about $40 billion, sizable amount of money in such a small economy.
The banks themselves have around $12 billion in Cypriot banks, so not only are Russians lending to Cyprus, they're depositing in there as well, on top of a round of a billion dollars invested in capital.
Ivan Tchakarov is the chief economist for Russia at the Renaissance Capital. He joined me from Moscow and he said the bailout plan had been designed very much with foreign investors in mind.
IVAN TCHAKAROV, CHIEF ECONOMIST, RENAISSANCE CAPITAL RUSSIA: I think the feeling is that the European governments, and in particular, those in the Netherlands and Germany, did not want to use European tax money to bail out what they thought is rich Russians that have deposited probably laundered money into Cyprus. So, I think that was what the Europeans were thinking about.
On the other side here in Moscow, the reaction was loud and clear. As you correctly pointed out, the Russian finance minister said we were not contacted, we didn't have a clue about it. Putin has been on the wires this morning, suggested that this decision is dangerous, it's unfair, and it's unprofessional.
QUEST: It's a very strange state of affairs, isn't it, sir? That the Russians have invested so much money in Cypriot banks. It doesn't smell very good.
TCHAKAROV: Given the kind of rhetoric that we've been hearing recently from Putin and from Medvedev which relation today desire to crack down on corruption, to squeeze inefficiencies in the Russian economy.
The present situation in Cyprus, in my view, can present a fantastic opportunity for Putin to say, you know what? We're going to be losing about $3 billion in terms of this haircut, we're going to bail you out, we're going to bail out the Russian depositors, only on the conditions that if these Russian depositors basically open their faces. They show who they are and where they got their money from.
So, both sides could be happy, the depositors -- the Russian depositors who will not be losing money because they'll be fully bailed out by the Russian government, but the Russian government could demonstrate that they are ready to initiate the process of fighting corruption.
QUEST: The Europeans have managed to annoy and enrage the Cypriots, they have frustrated the Russians, they have ruined the idea of depositors losing out. It is difficult -- and I want to hear an economist's point of view -- but from a layman's point of view, it's difficult to see how they could have got it much worse.
TCHAKAROV: Unfortunately, I think you are making a very good point. Unfortunately, I have to fully agree with you. The respect for what the rationale was that was driving the Europeans to arrive at this particular scenario for a bailout, the truth of the matter is that the European governments are creating a very bad precedent.
They're saying that from now on, any country that finds itself in financial and economic problem could lead to a situation where you're penalizing the depositors in this country. This could extend to Spain, this could extend to Greece.
Then we're not talking about a small economy like Cyprus that accounts for 0.2 percent of European GDP. Spain, if we get a bank run there, Greece, and Portugal, if we get a bank run there because of the decision, this could be dangerous, and this is exactly why the market is reacting the way it is.
QUEST: The view from Moscow on the situation. So, Cyprus may be a small economy with widespread crisis and huge repercussions. In a moment, the effects of a Cyprus bank run. Forget the macro, the big picture, this is a story about individuals and their savings.
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. This is CNN and, on this network, the news always comes first.
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QUEST (voice-over): The Cypriot parliament has delayed its vote on a controversial E.U. bailout until Tuesday. The banks have remained closed on Tuesday and Wednesday. The government's facing a furious backlash over the unprecedented levy on private bank accounts that's designed to help foot the bill for the bailout.
A source says Syrian warplanes took aim at targets on the Lebanese side of the border on Monday. An airstrike, the U.S. calls a serious escalation on the Syrian conflict. The source says the Syrian planes hit three abandoned buildings. No one was hurt.
Turkish police are holding a male suspect at the murder of an American woman who went missing nearly two months ago. They refer to the man as Z.T. -- Z.T. and say he was picked up at a border crossing. The victim was found dead in Istanbul from a blow to the head. Sarai Sierra (ph) was an amateur photographer from New York.
U.S. military says B-52 bombers are taking part in the joint military exercises it's holding with South Korea. The Pentagon says the bombers took part in the war games earlier this month and will fly over the Korean Peninsula again on Tuesday.
World leaders are arriving in Rome for the inauguration of the pope on Tuesday. The leaders include Robert Mugabe, the controversial president of Zimbabwe, who's been accused of brutal human rights abuses. Even though he is under an E.U. travel ban, it doesn't apply to Vatican City.
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QUEST: Forget the economics and the bailouts and the banks. If you're living tonight on the tiny island of Cyprus you are facing a new reality of financial security.
Take, for example, ah, it's dinnertime in Paphos. It is just after half past 9:00 at night. And Cyprus and customers are going to Tommy Tucker's restaurant. Now here's the menu that they might enjoy, "the best doner kebabs, fish and chips and curries."
Cash bingo -- look at this. Tommy Tucker's winter special for just 10 euros, 3 coralses (ph). It's all traditional British fare with a good dose of local food as well and some excellent reviews, I might add.
On TripAdvisor. The business was built by the Scottish expat Neil Hart (ph), and a little earlier from Tommy Tucker's restaurant, Neil Hart joined me because he is one of those people who's about to have his bank account pinched.
NEIL HART, CYPRUS RESTAURANT OWNER: (Inaudible) at every ATM and across the city, when the money runs out on them, the money runs out (inaudible) actually working at the moment. But (inaudible) the situation is the amount you can actually take out the ATM is frugal compared to what -- you know, I mean, you couldn't get out of the bank over the weekend anyway --
QUEST: How much have you tried to take out of the bank?
HART: Well, actually, I first panicked. And then I didn't -- I took about 2,000 out. And then I thought, OK, if I get 2,000 a day on Saturday, Sunday and Monday, I'll get 6,000 out of the bank. It's not really, you know, it's not really going to make much difference.
QUEST: So the -- you've been to the ATMs. You've tried to take out the maximum. And you say there are lines at various ATMs until they finally empty themselves?
HART: Yes. There will be lines at ATMs. There will be unrest and then squabbling and fighting with people who've taken so much time and, you know, people are getting uneasy about it.
QUEST: So who are they blaming? Are they also blaming the Germans, the Europeans, Brussels, the ECB? Where's the blame going for this?
HART: I think the blame will go with the Cypriot government. I don't think it'll go to the -- to the European banks. A little -- they have sort of sanctioned it. So they should kind of (inaudible) the way.
QUEST: Now you run businesses, don't you? You've run -- you've got a couple of restaurants, I believe. How -- you're going to be hit several ways, aren't you? How difficult is this going to be for you?
HART: It's very difficult. It's very difficult. When you -- you know, when you've lost 10 percent of your life savings overnight, it's very, very hard to swallow, you know. When you've been -- when you've abided by the law for all this time, you've paid your taxes, you've paid your social insurance, you've paid your bills. Then we have to pay the government for their mismanagement.
QUEST: And of course there will also be the various cutbacks and government cutbacks and slowdown in the economy that will take place in Cyprus. So your restaurants will not be as full with customers anyway.
HART: No, no. We'll definitely -- we'll definitely see a downturn in business. But you know, it's one of them things where the -- you have to (inaudible) and you get through it or you close up.
(END VIDEO CLIP)
QUEST: Two choices.
Now from the heat of the kitchen to the cold light of the boardroom, the chief exec of Denmark's Saxo Bank says the Cyprus deal could mark the beginning of the end of the Eurozone. Lars Seier Christensen joined me earlier from Moscow and said the E.U. will live to regret this decision.
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LARS SEIER CHRISTENSEN, CEO, SAXO BANK: It's probably a dangerous game to play at the moment when already, you know, the trust in the Eurozone is fairly low. And I think it's a dangerous signal that's being sent here that may worry a lot of people around the Eurozone.
So while there might be arguments for it, I think it's probably not a very wise thing to do. And perhaps that also why it's being debated as we speak.
QUEST: Why do you think they did it? Bearing in mind that just about anybody and everybody this morning thinks it was a horrible decision?
CHRISTENSEN: I don't know is the answer. It probably has something to do with signals inside the Eurozone that not least Angela Merkel wants to prove to her electorate that people are being made to pay for their mistakes.
QUEST: And I suppose what we both are saying here is how on Earth did they think they were going to get away with it?
CHRISTENSEN: I can't answer you what the thinking behind it is. But I'm pretty sure that it's going to be something that they will regret for a long time to come. And I don't think we will see the full fallout of it any time soon, because it's not just what happens now.
It's also next time there has to be a bailout in a weak economy, will this pop up again as a -- as a threat and will that trigger very aggressive reactions to the investment flows in such a country? So I think they will live to regret this one.
QUEST: They wanted to make sure that Russian money, particularly Russian oligarch money that might be deposited in Cypriot banks, that they did not benefit from the bailout. That's a reasonable policy to wish to achieve, isn't it?
CHRISTENSEN: (Inaudible) objective, you know, then I think what about all the people that have absolutely nothing to do with that and just were prudent and saving up from their salaries in a -- in a -- in a relatively low-paid country.
This is kind of a tax on prudence here, right? With regard to foreign money, I think, again, the Eurozone is very, very dependent on all sorts of foreign monies from areas and countries outside of the E.U.
So if this is a signal, that's what happens to it if you put money inside the Eurozone. You know, again, you wouldn't -- there would be not - - you couldn't really blame these investors for then saying, well, you know, if that's the way you're going to treat our money, maybe we'll put them somewhere else.
QUEST: But if we, sir, look at the underlying Eurozone crisis, are -- the things do not seem to be getting much better on the overall crisis, or are they, from your view?
CHRISTENSEN: I think this is just another in a long series of crises that will continue to appear, because every time you try to fix the problem, well, you come up with a new problem, right? And the bottom line is that the euro is not a good construction and that's what needs addressing.
You need to start to give people a chance to get out of the euro if they're so weak that they can't compete inside the euro. And you need to spend the money to help that kind of solution instead of these ever- repeating, you know, bailouts. It's just not going to work.
(END VIDEO CLIP)
QUEST: You've heard all the views and the different ways.
We'll turn our attention elsewhere from Cyprus. In a moment, the making of a modern feminist: Facebook's chief operating officer, one of the most famous women in corporate America, Sheryl Sandberg, takes on a new role and it involves helping more women find success, after the break.
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QUEST (voice-over): We asked you, apart from Cyprus, which country adopted the euro on the 1st of January 2008, and the answer was Malta, joined the single currency just over five years ago.
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QUEST: Sheryl Sandberg is one of the world's most powerful women and says she's found out what's stopping others from reaching the top. Ms. Sandberg is Facebook's chief operating officer and has a new mission. And it's taking up the mantle of the modern feminist. She tell CNN's Soledad O'Brien success is all about smashing stereotypes.
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SHERYL SANDBERG, COO, FACEBOOK: "Lean In" is not about fixing women and it's certainly not about, you know, anyone can do this all on their own. "Lean In" is about all of us coming together to understand the stereotypes that are holding women back and fix them.
O'BRIEN (voice-over): Sheryl Sandberg is on a mission. The 43-year- old COO of Facebook is going media door to media door selling her new book and her message about a modern feminist movement.
O'BRIEN: You say the revolution, the feminist revolution, has stalled. And Gloria Steinem says it's not stalled, it's sort of in the middle and it still needs another 50 years.
Are you picking up the mantle of feminism? Many people bristle against that word.
SANDBERG: So I wrote in the book that I never used the word feminism to describe myself till a number of years ago. I mean, when I was in college or even recently, you don't want to be a feminist.
O'BRIEN: Why not?
SANDBERG: Well, feminists don't get dates. Feminists were angry or done, because everything was going to be equal.
When I was in college, and I know we're roughly the same age, we believed everything would be equal. No one talked about work-life balance that I remember. No one worried about these things. We thought it would be equal, but it hasn't worked out that way. And I now proudly call myself a feminist.
Hi, guys, how are you?
O'BRIEN (voice-over): And Sandberg may just be the right version of the modern feminist to make it work. Harvard-educated, her professor, Larry Summers, tapped her to be his chief of staff while he was at the U.S. Treasury. She later jumped to Silicon Valley when Eric Schmidt of Google offered her a job.
When Mark Zuckerberg and Facebook came calling, she saw another rocket ship about to launch and made the move. In between all that, she got married and had two children, a boy, now 7 and a girl, 5.
As COO, Sandberg is one of only 21 female executives in the Fortune 500. She says it's time to change that.
SANDBERG: When I got on a, you know, a stage 21/2 years ago and said the blunt truth is men ran the world, the audience gasped, as if that was news. I sat down at a very exclusive conference next to a man who looked at me and said, "Remember us."
I was like, "What do you mean?"
"Remember us. There is a place for white men in the world."
And I looked at him and said, "Are you looking around this conference? There has never been a company in your industry not run by a white man."
He said, "Oh, no, no, change is coming."
Well, it's been 10 years for no progress at the top of corporate America and that's stagnation. And "Lean In" has stirred up an active debate, a heated debate. I'm grateful for that debate, because I think that's our only chance of waking up to this problem.
O'BRIEN (voice-over): The book is chapter after chapter of advice, examples and studies. Chapter titles like "Sit at the Table," "Seek and Speak Your Truth" and "Success and Likeability" lay out the problems women face and how they can fix them.
This has led to strong criticism from women like "New York Times" columnist Maureen Dowd and Joanne Bamberger, in "USA Today," who say Sandberg's book is unrealistic for the woman who isn't in the C-suite and can't afford private planes and a staff of household help.
O'BRIEN: Joanne Bamberger in "USA Today": "Mayer and Sandberg, even if they have good intentions, are setting back the cause of working mothers. Sandberg's argument that equality in the workplace just requires women to pull themselves up by the Louboutin straps," and goes on and on, basically saying that you're out of touch with the average working woman.
SANDBERG: So if you read the book, I'm very clear the institutional policies and changes we need. But more importantly, the research shows something very conclusively, which is that when more women are in senior management roles, those companies have better work-life policies for women.
O'BRIEN: When you talk about your mentors in the book, it's mostly men.
SANDBERG: I've never worked for a woman. I have been really lucky and I've had great mentors and great sponsors and part of "Lean In" is trying to help people find the right way to develop those mentors and sponsors, and saying to every man out there, "It should be a badge of honor to mentor a young woman."
Not something you're ashamed to do, not something you're afraid someone will assume something bad, but a badge of honor that you're willing to spend your time, giving benefit of your experience to young women in the workforce. They need it.
O'BRIEN: Most of your critics are women.
SANDBERG: Most of the debate about "Lean In" has been women, especially for the first couple weeks before the book was out. One thing I -- someone asked me what was the most surprising thing. The most surprising thing was that no man said a word. I couldn't find a man writing a line, saying a word.
O'BRIEN: What do you -- so what do you think that means? That they're just going to keep their head down so -- ?
SANDBERG: I think it's too hard for men to talk about gender. A friend of mine who runs a large institution said it's easier to talk about your sex life in public as a man than talk about gender.
We have to let men talk about this. I hope men enter the conversation and the controversy around my book, because -- and every issue, not just mine, every issue -- because we need men to talk about this, too, if it's ever going to change.
O'BRIEN: What's the up side for men?
SANDBERG: If you are the men, who wants -- more people want to work for, if you're the one who can use 50 percent of the population, you'll do better.
I was just talking with Ken Chenault about this at American Express, and he said when we evaluate senior leaders who we're going to promote, we're looking not just at their results, but we're looking at how many followers do they have? How many people want to work for that person? This will give you more people that want to work for you, and you're going to outperform your peers.
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QUEST: Fascinating. Absolutely fascinating, Sheryl Sandberg there. As you can see part two of Soledad's interview with Ms. Sandberg tomorrow, QUEST MEANS BUSINESS (inaudible) about the same time so you'll know exactly when it's going to be, right about this time tomorrow on QUEST MEANS BUSINESS.
Coming up, Sheryl Sandberg says she's never had a woman as a boss. I don't -- I think every boss I've ever has been a woman, just about, pretty much in the 20-odd to 35 years (ph). We'll be back. QUEST MEANS BUSINESS. We've got the weather forecast and the "Profitable Moment" still to come. Good evening.
QUEST: Not only the economic storm clouds that have gathered once again across Europe, the real storm clouds are there, too, and they -- one will play havoc will your wealth and the other with your travel plans. Tom Sater has the more immediate crisis at the World Weather Center.
TOM SATER, AMS METEOROLOGIST: Yes, it's starting to play with our minds, too, Richard. Spring begins on Wednesday in the Northern Hemisphere.
Yes, come on, Spring. Someone's got to talk to Mother Nature, send her a text. I think she has to get with it here. Another storm system moving across -- you can see it, and it's just been one wave after another as it moves eastward.
This is the storm that dropped 19 centimeters on Moscow, 11 centimeters in Minsk and Belarus, stranding hundreds of passengers on the highways. We had an area of low pressure on St. Patrick's Day right over the Irish Sea. And with that, damp conditions and more snowfall as it spreads in areas of Germany.
Here's our area of low pressure. It's a broad precipitation shield and with this we're going to find warm air start to ride up into the midsection of the atmosphere, and that means icing, some higher elevations and also some valleys as well. It's going to be widespread.
We'll start in parts of the U.K. where they had a little bit of snow in Dublin just before their parade, changing over to mist. You see the snow as the moisture moves in to parts of Scotland. It's raining and will continue just to hang out for a little while longer in parts of London.
On a grander scale, a larger scale, we can see there's a little spin in Paris. Look at that; a little bit of a mix just off to the northwest. You'll see a spin on the radar here, it's trying to ignite some thunderstorms as they move into parts of Belgium.
Now we start to see spotty mixture of the ice, some freezing drizzle and also the snow. Berlin, you can't catch a break. You've had it over and over again, and you're going to see a little bit more. And more than just two or three centimeters as possibly 18 to 19 more. So again, you had your Mars winter, so to speak, as you warmed up a little bit.
And now you've hit by wave after wave of some snowfall. Moscow winds, 18 kph, but look at Copenhagen at 44. With that, the possibility of maybe an hour and a half, two hour-plus delays elsewhere in Berlin, you're going to have your snowfall. This could cause headaches for another 24 hours. Wind and some low clouds in other areas.
In the U.S., problems continue as we await spring over here as well. And we're watching yet again another massive storm system with springlike storms to the south.
Thunderstorms will be moving into parts of Atlanta, so possible delays there, as the two storm systems -- actually two of them -- join hands, we're going to find the watches and warnings continue and that means for larger metropolitan areas, such as Philadelphia, to New York, to Boston, possible icing and then some snowfall.
Heavier interior snows stay off the coast, but just like the last few systems we've had here, winds could play a role here. Rainfall changing to snow may be ending as rain. But Boston 9.5 centimeters and with that we'll find thunderstorms in the southern parts of the U.S., maybe some rainfall with stronger winds causing some delays.
And we'll watch delays possible, Richard, from Atlanta to Boston. More snowfall. Come on, spring; we're not that far away. Just Wednesday.
QUEST: Ah, but don't forget, Tom Sater, don't forget those April showers. My recollection is we just about get there and April is just a wet month.
SATER: Yes, and you've had your fair share of rainfall as well the last year.
QUEST: We -- thank you very much, Tom Sater at the World Weather Center.
After the break, a "Profitable Moment" of bank runs and (inaudible).
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QUEST: Bank runs are a horrible thing. They are rare, corrosive, vicious. And as you saw from Disney's "Mary Poppins," once they start, they are difficult to stop. We can all empathize. Imagine tonight you are told that 6 percent of your savings have been confiscated. You can call it a tax; you can call it a levy. It doesn't matter. Your wealth is literally going to disappear before your very eyes.
The decision to make ordinary people pay for the mistakes of banks is extraordinary. Nothing like this was done in Greece, Portugal or Ireland in such a direct and brutal manner. Why it should be up to the Cypriots to test-drive this maverick policy is unknown. The head of the opposition told this program tonight he does not even know if the measures will pass.
To be sure, the presence of Russian and offshore funds is, of course, made the Cypriot bank different. You could not have German housewives bailing out Russian oligarchs. But that doesn't excuse it. In "Mary Poppins," the bank run began with tuppence. Here, a country responsible for a fraction of the economy has once again reignited the crisis.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable.
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QUEST (voice-over): The news headlines: The Cypriot parliament has delayed the vote on a controversial E.U. bailout until Tuesday. The banks will remain closed on Tuesday and Wednesday. The leader of the opposition party, speaking on QUEST MEANS BUSINESS, said he wasn't sure that the bank levy legislation would pass parliament.
A source says Syrian warplanes took aim at targets on the Lebanese side of the border on Monday. An airstrike, the U.S. calls a serious escalation on the Syrian conflict. A source says the Syrian planes hit three abandoned buildings. No one was hurt.
The U.S. military says B-52 bombers are taking part in the joint military exercises that it's holding with South Korea. The Pentagon says the bombers took part in the war games earlier this month and will fly over the Korean Peninsula again on Tuesday.
World leaders are now arriving in Rome for the new pope's inauguration en masse (inaudible) on Tuesday. Also there, Robert Mugabe, the controversial president of Zimbabwe, who's accused of brutal human rights abuses. While he is under an E.U. travel ban, that does not apply to Vatican City.
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QUEST: You're up to date with the news headlines. Now to New York, Hala Gorani has "AMANPOUR," which is live.