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QUEST MEANS BUSINESS
Global Markets Rally; Fed Minutes E-Mailed Early; March Fed Minutes; Obama's 2014 Budget; EU Danger Zones; Good Bank, Bad Bank; Exclusive: Slovenia's Prime Minister on Stabilizing Slovenia; Dollar Rising; WTO Warning
Aired April 10, 2013 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: It's a record on the Dow, a record on the S&P, and a rapid rise in Europe. In other words, stock markets are soaring worldwide.
Talk about fat fingers at the Fed. The central bank's minutes are released by mistake.
And tonight in an exclusive interview, Slovenia's prime minister tells me her country is not a bailout waiting to happen.
(BEGIN VIDEO CLIP)
ALENKA BRATUSEK, PRIME MINISTER OF SLOVENIA: We know what we have to do, we can, and we will, Mr. Quest.
(END VIDEO CLIP)
QUEST: I am Richard Quest, and I mean business.
Good evening. From coast to coast, continent to continent, stock markets are soaring. The Dow is up --
QUEST: -- more than 100 points, streaming ahead, 142 points, to a fresh all-time high, 14,816, a gain of nearly 1 percent. The S&P 500 also breaking records.
On a blockbuster day for economic news, the Fed released its minutes by accident -- well, early. The president of the United States released his budget plans, and it doesn't end there. European markets also very sharply higher. China posted a surprise trade deficit for March.
But I want to show you these numbers. Let's look at the Xetra DAX, for example, and how that traded during the day. You see a general rise in the market, which of course really kicks in once New York's trading day begins. We could do the same for the FTSE, and you can see London's FTSE, again, sharply higher, and then slight little loss towards the end of the day.
So, overall, if you look at the economic numbers and you look at the stock market, you get a good idea where they all helped to drive stocks higher. Investors have been shrugging off warnings from Spain and Slovenia from the European Commission.
Alison Kosik is at the New York Stock Exchange and joins me now. Hundred and forty on the Dow, we saw the Fed minutes early, and a budget from the president that's going nowhere. So, why is the market so strong?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: That is really a very good question. Why is the market so strong? What was funny is this rally is surprising, Richard. Even some of the more pessimistic traders and analysts that I talk to on a regular basis, they had predicted this kind of rally would have hit in the summer. They didn't think it would happen this quickly.
But these levels are certainly stunning. They add up to big gains for the year. It's this sort of a train that keeps going.
A lot of this is really momentum, and that momentum is really being driven by the Fed. As you know, the Fed is buying up $85 billion of treasury bonds, mortgage-backed securities, every month. That's pushing down interest rates, moving investors to the best game in town, and that is stocks. A lot of this, some analysts say, is artificial, they believe, because it is being driven by the Fed. Richard?
QUEST: Alison Kosik at the New York Stock Exchange with a gain of 1 percent on the Dow Jones. Alison talked about the Fed, and it's launched an inquiry into how the minutes of its meeting in March came to be e-mailed a day early.
They were sent to about 100 people, mainly staffers in Congress and trade bodies. The Fed told us the mistake was a human error. But we got an insight into the committee's thinking and, indeed, when QE, that bond- buying that Alison talked about, should be wound up.
So, these are the sort of quotes that come about when you look. Some Fed members believes that QE should be withdrawn relatively soon. Others say it should be reduced or withdrawn before long. And at some point over the next several meetings --
QUEST: -- excuse me -- was a third view. Three views on when QE should be withdrawn: relatively soon, before long, next several meetings. CNN's contributing editor Todd Benjamin --
TODD BENJAMIN, CNN CONTRIBUTING EDITOR: Great to see you, Richard.
QUEST: -- joins me. Good to see you, Todd. This was part of their review on the efficacy and costs of asset purchases. But it's given us a very good window. They believe the moderate growth in the economy is giving second thoughts about how long QE should last.
BENJAMIN: That's true, but -- and it's interesting that the market's higher today, but I think perversely, if they're thinking in these terms, how much longer it should last, then they feel more confident than before that the economy's gaining some ground. I think that has to be some comfort to the market.
Look, they're not going to close the window on this QE2, I think, for several more months. That would be my bet. Bernanke hasn't put this much on the table for this long to risk taking it off the table too soon.
QUEST: Right. So, it's a question of gradually tapering it off, isn't it? And interesting that they do talk about in the Fed minutes the fiscal problems. They say that the fiscal drag -- not so much from sequester, interestingly, but they are worried about government not playing its part.
BENJAMIN: Well, absolutely. This has been a big battle for the Fed, and now we have, of course, Obama's budget that just came out today, that is dead on arrival --
QUEST: Hold that thought! Hold that thought. If you're talking about Obama's budget, let's pause there for a moment. We need to talk about the president's budget. It's two months late, it's under fire from both sides, as Todd's been just babbling about it already, and whilst it's not expected to go anywhere, it does set the tone for the debt talks with lawmakers.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The numbers work. There's not a lot of smoke and mirrors in here. And if we can come together, have a serious, reasoned debate not driven by politics and come together around common sense and compromise, then I'm confident we'll move this country forward and leave behind something better for our children.
(END VIDEO CLIP)
QUEST: President Obama. Dan Lothian is at the White House. Dan, I - - Todd's been very respectful, Todd Benjamin, using phrases like "DOA" to describe the president's budget, but Todd's right, isn't he? This is a very large document that's going to go nowhere fast.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. It's sort of the opening salvo for the White House, laying out, essentially, a framework for what the president wants to have in his budget.
But there are a couple of other budgets out there already. In the House, you have the Ryan budget, which Democrats dislike. And then in the Senate you have Patty Murray, who has put together a budget as well. And so, the effort here by the White House is to put something on the table, now, to help end those debt talks.
But I think on both sides, there is a lot there to find disagreement. You have Republicans who don't like the fact that the president wants to increase taxes on wealthy Americans. And for Democrats, they don't like the fact that the president wants to make changes to Medicare, some 400 and -- 400 or so billion dollars in cuts over the next decade.
LOTHIAN: Also, social security, some changes in how the cost of living is -- adjustment is figured out. And so, you have Republicans and Democrats not totally happy with everything in the president's budget.
QUEST: Which is just about how it usually is on --
LOTHIAN: That's right.
QUEST: -- on budget day. OK, many thanks, Dan Lothian at the White House. Todd is with me.
BENJAMIN: Yes, I think this will take on much more urgency as we get to the summer when you bump against, of course, the debt ceiling again. This did huge damage, of course, back in 2011. It's what caused the sequestering that we're now having.
And the further along we get without Congress acting in some way, there's a greater danger that it could really derail the economy in some ways. And at a time when unemployment seems to be --
QUEST: But moderate growth is what the Fed still sees in the United States.
BENJAMIN: Yes, but moderate growth. What sort of growth and employment are you getting at 88,000 jobs created last month? That's not the type of thing that's going --
QUEST: Which suggest that this stock market up 142 points is perverse!
BENJAMIN: It's not perverse because it's the only game in town, all right? And their heroine is low interest rates, and as long as interest rates remain low, there really isn't an alternative, and therefore you go to stocks.
QUEST: Storing up problems for the future. When that Fed accommodations start getting taken away, then the market could suffer.
BENJAMIN: But as you say, it will probably be gradual, and so it'll be a gradual withdraw. Withdrawal, whatever.
QUEST: Todd Benjamin, many thanks, indeed.
QUEST: Now, as the European Commission rings the alarm bells over Slovenia, its prime minister tells this show tonight the country does not need a bailout. It's an exclusive interview, and it's coming up next.
QUEST: Now, the European Commission is sounding the alarm on Slovenia and Spain's runaway debt. As part of their risk assessment procedures newly introduced, of course, since the crisis came along, the Commission says they risk the stability of the eurozone.
The Commission says both the economies, Spain and -- well, look at the size and the difference between the two. Both of them are wildly out of balance, with spiraling amounts owed by both citizens and state, and no serious prospect at the moment of getting it under control.
It is known in the language of the Commission as excessive macro- economic imbalances. Exactly the sort of imbalances that got everybody into trouble in the first place. The Commission warns Spanish debt is jeopardizing growth, and Slovenia's banks are likely to need outside help. Both countries have until May to make urgent reforms or face penalties.
(BEGIN VIDEO CLIP)
OLLI REHN, VICE PRESIDENT, EUROPEAN COMMISSION: Slovenia needs now to proceed swiftly and decisively. Spain should, therefore, maintain the reform momentum by including comprehensive and concrete policy measures in its forthcoming stability and reform program.
(END VIDEO CLIP)
QUEST: Slovenia's banking sector is mainly state-owned, and that blurs the lines in this case between banking and sovereign debt crises. Remember, one of the goals was -- in this whole crisis of the eurozone has been to break the link between the sovereign and the banks. And that has been crucial. We saw that in the fiscal compact.
As part of its reforms, Slovenia will privatize some viable banks and move the toxic assets into a bad bank. It's the old thing, we've seen it before, it's the good bank -- even Cyprus, of course, has done that with Laiki and Cyprus Bank, good bank and bad bank. And that, of course, is where you do it.
Bad banks have already been tried in other countries and have actually been seen to work. Now, of course, bad bank in the United Kingdom in -- that was Northern Rock. In Spain, in -- that was done, of course, with Bankia and others, where they've actually moved toxic assets into other accounts. In Ireland, AIB, the whole bad bank, and Cyprus, Laiki and the Bank of Cyprus.
So, the idea of taking the good assets and keeping them in a good bank and taking all the toxic nonsense and putting it in a bad bank, which we then resolve and get rid of, that's what they're looking at.
Economists on this show have told me that they believe Slovenia will probably be the next country to ask for a bailout. Now, speaking exclusively to us tonight, Slovenia's prime minister told me that what her country, relatively small in EU terms, what her country needs is not money, it's time.
BRATUSEK: I believe that we can and we will solve our problems ourselves. First of all, our economy is export-oriented, our debt is lower than the EU average, and we already made a few reforms last year. So, I really believe that we will solve our problems ourselves.
QUEST: I agree and understand that Slovenia is not Cyprus. I can see that. But there are issues with the banking sector which are causing concern. The markets are worried about your country's banks.
BRATUSEK: Slovenia is absolutely not Cyprus. Our banking system is smaller than Cypriot banking system. Our banking system is even smaller than EU average banking system. So, I believe and once again, we can and we will solve our problem ourselves. We know how and we will.
QUEST: This morning, you will have seen the European Commission's working document, the in-depth review of your country. It does say the banks will need recapitalizing, it does talk about further reform needing to be taken. So, what plans do you have, Prime Minister, for the further reform of your country's economy?
BRATUSEK: We are going on with the consolidation of public finance. We are going on with the privatization. And we are going on with the bad bank. This is our plan, and I know that the most important thing now in Slovenia is banking system.
QUEST: Let's talk about the recession that your country is facing at the moment and that it's likely to face into next year, 12 percent unemployment. How serious is the situation in Slovenia?
BRATUSEK: I'm well aware that we have some problems. Slovenia is not isolated island. Slovenia is in the middle of Europe. But once again, our debt -- public debt is quite lower than the EU average, and also unemployment rate.
QUEST: Right. Now, the economists -- the economists tell me Slovenia should think about asking for EU help or euro help now and not wait for a crisis, not wait like Greece, not wait like Cyprus. Why not seek help now?
BRATUSEK: Because we don't need help, we just need time.
QUEST: I hear what you say, but we heard these comments from Greece. I heard it myself from the prime minister there. We heard these comments from Portugal and from Ireland, and recently from Cyprus. And then they needed help. So, why should we believe Slovenia when you tell us that you're going to sort it out yourself?
BRATUSEK: Because we know what we have to do, we can and we will, Mr. Quest.
QUEST: The prime minister of Slovenia talking to me earlier today. And of course, as our debate and our discussion goes on about the eurozone crisis, you have some views and thoughts on it as well, and this is where you can -- we have a discussion. You, me, just the two of us, @RichardQuest, where we can talk about the issues away from being on the box.
Now, a Currency Conundrum for you. In Spain, 500 euro notes used to be referred to as bin Laden notes. Everyone knew they existed, but no one had ever seen them. So our question, why does this analyst, Bank of America's Athanasios Vamvakidis, say the 500 euro note should be ditched?
Is it A, because no one uses them? B, mainly criminals use them? And C, people collect them rather than use them? Why the 500 euro note in Spain should be ditched. The answer later in the program.
The dollar's rising sharply against the yen. Right now, a dollar buys just under 100 yen. Those are the rates --
QUEST: -- this is the break.
QUEST: So, as we talk about stock markets and economic growth, one worrying number came out today. The temptation to put up trade barriers could stunt global trade growth this year, according to the World Trade Organization.
The WTO now expects trade will grow just 3.3 percent. Now, this is worrying. It's a sharp revision on its earlier forecast. The director- general, Pascal Lamy, told me he's worried that as we get to these sort of numbers, that countries may turn to protecting their industries. In other words, beggar thy neighbor policies.
PASCAL LAMY, DIRECTOR-GENERAL, WORLD TRADE ORGANIZATION: The trade numbers we've made public today for last year and for this year are weak numbers, clearly below the sort of normal, medium-term of the past 10 or 20 years. And this means that the world economy is still in a painful situation.
And given the impact of this crisis on economic and social fabrics, given the high level of unemployment, I'm of the view that protectionist compulsions, temptations, are still there, although for the moment, quite broadly resisted thanks to the WTO discipline.
QUEST: You see, the problem, of course, is that those tendencies have been there, and some suggest that they are on the rise.
LAMY: What I would say is that the pressure for protectionist measures is on the rise in some countries from some quarters.
Now, overall, governments so far have resisted these pressures, and not least because of the existence of disciplines that constrain that capacity to cave into these pressures, but also because of transformations of the international economy, where I think it's pretty obvious today that shooting on your imports is damaging your exports, and these harms at the end of the day, your economy --
QUEST: Fundamentally --
LAMY: -- which is the last thing you need at this moment.
QUEST: Right, but fundamentally, the fact that world trade is growing at this slower rate is very worrying for emerging markets that are using trade, it is very worrying for developed countries. And if trade is to be an engine of recovery, you must be concerned about these numbers.
LAMY: Europe is terribly weak. The US is a bit better. Japan is somewhere in between. That's for half of the economy --
LAMY: -- of the developed country side. And the developing countries, for the moment, are doing much better thanks to trade and thanks to the growing bulk of international trade, which is south trade.
QUEST: A warning from the director-general of the WTO, Pascal Lamy.
After the break, Germany is heading for a recession of its own making, so says the billionaire George Soros, who believes the worst is yet to come for the eurozone. QUEST MEANS BUSINESS.
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.
US intelligence sources say North Korea might launch multiple missiles in the days ahead. US secretary of defense Chuck Hagel says North Korea has been, in his words, skating very close to a dangerous line with its recent rhetoric and actions.
A Syrian jihadist group is denying rumors that it is joining al Qaeda's terror network. Another group made that claim recently. A spokesman for the al-Nusra Front says though it isn't merging with al Qaeda, the group is pledging allegiance to it.
The government of the Netherlands is recalling about 50,000 tons of meat labeled as beef because it may contain horsemeat. The government says there's no evidence of a health risk. The problem stretches back to the beginning of 2011, so much of the suspect meat may already have been eaten.
These two US senators, a Republican and a Democrat, have reached a potentially significant bipartisan deal on gun control. If the compromise became law, it would expand background checks for firearms sold on the internet and at gun shows. It is by no means clear if the deal will make it past Republican opposition.
The life and the legacy of Baroness Margaret Thatcher was the focus of UK lawmakers today. They returned to parliament early from their Easter recess to pay tribute to the former prime minister. The country's current leader, David Cameron, described Margaret Thatcher as an extraordinary woman.
The billionaire businessman, George Soros, has told Germany in a very blunt way, "Commit or quit." Soros says Europe's richest economies must either take more responsibility for the debts of the currency block or get out altogether.
Now this is blunt stuff. It was a speech in Frankfurt where Mr. Soros summed up his arguments like this -- and this is the way he put it -- "I contend that Europe will be better off if Germany decided between accepting Eurobonds" -- in other words debt regionalization -- "and having the euro than if it is continued in its current course."
Now that, so far, so good. But his comments coincide with an ECB survey which questions whether countries like Germany should be bailing out the so-called periphery at all.
Just look at these numbers. Households in the periphery on average are better off than those at the core, say, for example, Germany. Interesting reading if you'd look at that number.
Medium household wealth in thousands, of course, Luxembourg, well, we all know Luxembourg is the wealthiest at half a million. Then you've got Cyprus, Malta, Belgium, Spain and Germany with just 67,000, languishing at the bottom of the table.
Now don't get too excited by this number, because there is one thing that it doesn't include, and that is home ownership rates or it does include it and home ownership rates in Germany are extremely low. It has a very strong rental property but it does make the point.
Fred Pleitgen's with me, our Berlin correspondent. It does make the point that when you're talking about wealth and the perception within Europe, Germany, of course, does have to make that decision, in or out. (Inaudible) Merkel wouldn't have any truck with that, what I'm saying.
FREDERIK PLEITGEN, CNN CORRESPONDENT: Well, I mean, there's no chance that Germany is going to leave the euro or even think about leaving the euro.
One thing that I think George Soros doesn't have in his whole equation is that obviously euro is not only a financial project of the European Union. It's a political project. And it's something that's about European integration, and it's something the Germans are never going to give up. And they're going to continue on this course, although the Eurobonds idea is quite an interesting one.
And I do think it's one that while not gaining more traction in Germany is certainly being considered a little bit more than it was --
QUEST: But is that anger against Ms. Muller of Hamburg? And is her anger still real at having to -- these transferences of wealth?
PLEITGEN: I'm not sure her anger is real right now. I think the Germans are still feeling the bailout too little to actually be angry at it. But I do think that the concern is growing. I think there's a lot of concern that's growing.
And one of the things that was really a lightning rod -- and you know this, because we were in Germany at the time -- was Cyprus. The Germans really felt that the Cypriots were trying to maintain their very big banking sector at the expense of German taxpayers.
And one thing that Germany always said is that if Cypriot favors don't come up for part of this bailout, it's going to be German taxpayers.
And one of the things that I always say, that we always have to keep in mind is that the reason why Germany is doing so well right now is because they instituted a lot of the painful reforms that these countries have to do a long time ago. They've gone through it and now they're having to bail out these other countries.
QUEST: Arguably (inaudible) reforms of the '80s --
PLEITGEN: Similar --
QUEST: -- which Germany didn't do and became the sick man of Europe.
PLEITGEN: The sick man of Europe, yes, exactly.
QUEST: But did do at the turn of the century under Gerhard Schroeder.
PLEITGEN: Yes, absolutely. And Gerhard Schroder (ph) lost his chancellorship because of it.
QUEST: Is Merkel going to lose her -- no, no, she's not.
PLEITGEN: She's not, she's not, because she's not -- she's not doing any of these very, very deep reforms. I mean, a lot of people say that there is sort of a lack of reforms in Germany right now, that there are still things that need to be done, liberalization of the markets, liberalization of even more of the labor market, if you will.
So there are still things that need to be done. People always say that Angela Merkel is still somewhat riding off of what Gerhard Schroder (ph) did 10 years ago. The agenda 2010 has just celebrated its 10th anniversary. It's been that long since all that was initiated.
So there are things that need to be done; Angela Merkel's not really doing them right now, but she's -- there's -- I don't see her losing in the next election.
QUEST: In fact, if -- I mean, we don't follow it that closely, but who would be there anyway? She is -- she is a -- I won't say Thatcher of stature, but she is a colossus on the global stage, political stage.
PLEITGEN: Oh, she is, absolutely. And I think Germans have warmed up to her, you know. I remember when Angela Merkel was elected, she wasn't very popular. I mean, even back then, Gerhard Schroeder's popularity ratings were much higher than hers.
But right now, Germans have warmed up to her. The economy is still somewhat rolling. There's going to be economic growth this year. There's at least --
QUEST: Just. Just.
PLEITGEN: -- just barely, just barely. But it's not -- it's not recession. It's not going as badly as it could be. So she will win the election; Germany's going to stay in the euro and Eurobonds. Not so sure - -
QUEST: We'll be back in Berlin before too long.
Now talking of people who are colossus in the world of economics, Christine Lagarde, the managing director of the IMF, has been speaking. We are in a three-speed global economy, which faces risks from currency and debt crisis around the world. That's her warning tonight, speaking at the Economic Club of New York.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, MANAGING DIRECTOR, IMF: We are seeing new risks on the horizon and the legacy of some old risks that have not been completely dealt with. In far too many countries, improvements in financial markets have not actually translated into improvements of the real economy and in the lives of the people.
(END VIDEO CLIP)
QUEST: Christine Lagarde speaking in New York.
Just how strong a session and this whole question of growth and stock markets, put it into perspective for you once more.
This is how the European markets closed tonight. If you've just joined us this evening, we are up nearly 2 percent in Paris, over 2 percent in Germany, Spain had a strong session and the FTSE as well. Look at the IBEX, up 31/3 percent.
One interesting number that everybody focused on, China posted a surprise trade deficit for the month. And while there's some skepticism, they helped to drive stocks higher, shrugging off warnings from Spain and Slovenia from the European Commission.
If you're in Germany, Cyprus, Slovenia or, indeed anywhere else in Europe, you can tell us how confident you're feeling about the state of the Eurozone. It's at CNN.com/euro.
Now you can play around with the confidence map and you can always, of course, keep in touch with us as well.
After the break, "Business Traveller," planes, trains and camels. Your best options for all occasions.
And here's a question for you: where do you like to sit on a plane? Are you an aisle, a window or do you dread the middle seat? After the break.
QUEST: I guarantee you that there will be no agreement and probably tears before bedtime in this next section.
Do you prefer the ease of the aisle or the peace of the window? British Airways has released its latest seating trends report. And if you join me in the galley, you'll see what it means -- fascinating reading.
Now this is one of BA's 747-400s. What they've discovered is the most -- the most popular economy seats -- perhaps not surprisingly -- the most popular economy seats are 51/52B, C, D -- why are these the most popular seats?
Because if you look at the map of the seats, they are the two at the back that gives you that little bit of extra leg room and you're not sort of as cramped as you might be here. Those are the economies.
Now if talking about economy has given you a bit of indigestion, well, you're probably wanting to be sitting up here. The most important seat on the plane, the seat that most people aspire to in first class is, of course, 1A and 1K, and that applies in the same as business class, those seats right at the front. Again, at the -- people prefer to be right at the back on those or right at the front in the big ones.
As for this core question, are you a window or an aisle person, here's interesting. This is what people say. Look at that: 53 percent of people prefer the window seat. So an aisle seat, you end up with 47 percent.
So when you put it all together in terms of the aircraft let's go back to the map. What the survey also shows is that aisle seats are more popular at the front and window seats are more popular at the back.
What are you, a window or an aisle person? Where would you fit onto our chart tonight, 47 percent or the 53 percent? I have to say I'm an aisle person. I much prefer that -- @RichardQuest for the way you can drop your preference.
Now when the scramble for seats gets too much, more and more travelers are turning to the train for short haul journeys at least. Eurostar has effectively killed off air travel between London, Paris and Brussels, has more than 80 percent. I took to the train to meet the chief executive of Eurostar, Nicolas Petrovic, who told me Eurostar has ambitious plans to expand across Europe.
(BEGIN VIDEO CLIP)
QUEST (voice-over): The Eurostar from Paris to London is everything today's trains are supposed to be, fast, frequent and efficient. Sixteen trains a day dart between the capitals at up to 300 kph.
For business travelers, the rule of thumb is when a journey is less than four hours, passengers prefer rail carriages to airplane cabins, and the reasons are obvious: less security, more space, the option to work throughout and most importantly city center to city center departure and arrival.
Rail growth remains handicapped by a hotpot of national networks and the huge cost of building high-speed lines. And yet high-speed is what the future of rail is all about. Driven by four key markets -- Germany, France, the U.K. and Switzerland -- Europe aims to triple its amount of high-speed track by 2030. No wonder the number of long distance journeys will grow 20 percent in a decade.
With railways taking advantage of Europe's increasingly open borders, long distance journeys are about to grow.
QUEST: From the Gare Du Nord to London St. Pancras in 21/2 hours, I'm here to meet the chief executive, Nicolas Petrovic, and find out about Eurostar's future plans.
QUEST (voice-over): Nicola Petrovic has been the chief executive since 2010. And in the time he's been in office has led major change.
QUEST: Now this is a business (inaudible).
NICOLAS PETROVIC, CEO, EUROSTAR: Yes, (inaudible). Let's go.
I don't know. It's been conservative for Eurostar. We need to take it to the next level. We're investing a lot of money. First of all, we're going to -- it's a bit like rebuilding yourself from the foundations to the roof. So we'll have a new fleet by 2015; we'll have new uniforms, new products. We've just launched a new website.
QUEST: Your biggest challenge is to find the next Brussels to Paris. And I don't think you can.
PETROVIC: Well, no, I think we can. As I said, there are two changes to get there. First one is (inaudible). We need the trains and that could be in the next couple of years. The biggest one is the economics because how do we make money of going to Holland, to the south of France, to anywhere? And there the point of amount of money we have to pay to access the tracks.
QUEST (voice-over): (Inaudible) Eurostar knows which markets it wants to develop. The Swiss Alps have already been opened up last year. And now it wants direct service from London to Provence and Lyons, which will launch in May.
QUEST: Is the goal to run your own trains all the way there or to connect to a partner service?
PETROVIC: Our goal is to make money. And so on some markets, it's better to connect with a partner because there is a good partner. And then we can make money. But we package it for the customers; they don't see the difference. It's to try to bring to the railway the thinking of the airlines when they started to do heaven spook (ph) and connections between different airlines.
(END VIDEO CLIP)
QUEST: That's the chief executive of Eurostar, Nicolas Petrovic, talking to me.
Now once President Francois Hollande steps off the Eurostar, the gad nor (ph), he may need a new form of transport. Authorities in Mali gave the French president a camel back in February. That's the president and that's the camel. It was to thank France for helping repel Islamist rebels. The president left the camel with a family in Timbuktu. Instead of looking after it, they killed it and ate it.
You couldn't make this up; you really couldn't. The authorities have apologized to the president and this time they've promised that a replacement camel won't just be kept in Mali; it will be sent to France.
(END VIDEO CLIP)
QUEST: Coming up next, ashes to cashes, dust to dust. We'll show you an unusual startup that will find you or your loved ones' resting places in the Holy Land, a fascinating way of new industries, in a moment, QUEST MEANS BUSINESS.
(BEGIN VIDEO CLIP)
QUEST (voice-over): The answer to our "Currency Conundrum," why does this analyst say the 500 euro note should be ditched? The answer, Bank of America's Athanasios Vamvakidis says they most likely end up as mattress money used by criminals and tax evaders. Mr. Vamvakidis says wiping out the note would also weaken the euro, providing an economic boost to the E.U.
(END VIDEO CLIP)
QUEST: Now nothing is certain in this world but death and taxes, as the old adage from Benjamin Franklin goes. But the baby boomers entering their golden years, the former is proving to be a solid foundation for business, one entrepreneur Larry Deverett is tapping into.
For a price he'll arrange to have your ashes scattered in Israel, high above the Sea of Galilee, where Jesus is said to have walked and prayed. It is proving profitable to have your ashes flown to the Holy Land and then scattered, as Sara Sidner reports.
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BENZION LEHRER, PRINCIPAL SCATTERER: We now offer Keith Pape (ph) back into your arms. Please comfort us in our loneliness.
SARA SIDNER, CNN CORRESPONDENT (voice-over): The final words before the ashes representing a life are spread on a small plot. These ashes have traveled thousands of miles, from the United States to their new home in the Holy Land. The ceremony is part of a brand new business targeted at Christian families looking to bury their loved ones in a special place.
LARRY DEVERETT, PRESIDENT, HOLY LAND ASH SCATTERING: There are literally tens if not hundreds of thousands of urns sitting in people's homes and people really don't know what to do with those ashes. You know, at some point in time, whether they're moving or, you know, after a few years, they want to do something proper with the ashes.
SIDNER (voice-over): Entrepreneur Larry Deverett came up with the idea to give people an unusual option for the ashes. He spent months trying to find just the right place to buy the land for his new venture, Holy Land Ash Scattering.
The plot he and his partners found sits atop a hill overlooking the Sea of Galilee, a place where the New Testament says Jesus began his ministry and performed many miracles.
The spiritual place was the most important aspect. But the company even took pains to make sure their principal scatterer fits the part as well.
LEHRER: Someone suggested to these people that are scattering the ashes, who are looking for someone with a spiritual look that I fit the bill.
SIDNER (voice-over): And the bill for the service?
DEVERETT: There's one cost for the service. It's $750 and it includes the shipping of the ashes for scattering and a beautiful memorial video.
LEHRER: Entrusting the ashes of Chris (ph) --
SIDNER (voice-over): After crunching the numbers, Deverett decided the United States was the place to market the service. Considering the percentage of people opting for cremation has doubled in the U.S. in the past 15 years, the U.S. Funeral Association says their latest numbers show 42 percent of the dead were cremated.
LEHRER: We now cast these earthly remains, now purified by fire.
SIDNER (voice-over): It is rare to have a sure thing in business. Morbid or not, death is inevitable. With the baby boomer generation heading into their golden years, Holy Land Ash Scattering sees a real business potential.
SIDNER: The Sea of Galilee and the surrounding hills now not just a place where thousands of Christian tourists come to visit every year, but a place where they can let their loved ones rest in peace for all eternity -- Sara Sidner, CNN, on the Sea of Galilee.
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QUEST: Never underestimate the capacity for somebody to discover a market and start a business.
Now Jenny Harrison is at the World Weather Center for us this evening.
I can tell you, Ms. Harrison -- whether you care or not, I shall -- that I was out doing some filming today for MARKETPLACE EUROPE. The sun was shining; it felt like spring had sprung.
JENNY HARRISON, CNN METEOROLOGIST: Well, good. I'm very glad to hear it. You know what they say, the sun shines on the righteous. So what it was doing shining on you I have no idea. But yes, it is on its way, that spring. You haven't quite got to the average temperature just yet, but it has certainly arrived in some parts of Europe.
Now the downside is you were lucky actually to avoid the rain showers, because they've been piling in across many parts of the U.K. In fact, look at that, in the last few hours, they've been heading their way to the southeast. But to the north as well, it's a little bit colder still.
So one or two snow flurries, some heavier spells of rain across central and western areas of France as well at the same time not just that when you actually factor in some rather heavy rain with the snow melt, this is what it's been looking like in parts of Europe, so Hungary, for example, in (inaudible) you can see here.
Now quite a serious situation. In fact, in the last three months in Hungary, there's been more rain in the last three months than they have in any sort of one period since 1901.
There are flood alerts in place for over 2.5 thousand kilometers along the river Tisza at -- that, as I say, is a snow melt and also the rain behind it. So you might expect, they're very behind on the spring planting. So again, concerns there.
As we go through the next couple of days of this week, we're going to see another system come through. It'll bring more showers. The temperature's still a little below par across the north. It's a very unsettled picture, still some snow through Scandinavia.
But for the most part, things are coming back up in terms of those temperatures, still a few more snow flurries across northern sections of the U.K. as well. But look at those temperatures, Thursday, 11 degrees in London, not quite the average. But 14 in Paris. So that certainly is. Look at this, a glorious day in Augusta.
There is Tiger Woods. Yes, it is glorious. It is the Masters; tomorrow is the first day. And then the temperature right now, a very nice 28 degrees Celsius, winds in from the southwest. As for the conditions for Thursday, well, let me tell you, there's some pretty rough weather on its way across the south.
We could well have some thunderstorms later in the day on Thursday. The hope is they will come through when play is actually finished and should actually clear out by Friday. This is all this messy system you can see these red boxes.
They've just appeared. So ahead of this storm system, the warnings in place for the threat of tornadoes as well as that there are winter warnings in place for the cold, -8 in Denver right now, 27, 8, 27 degrees in Atlanta.
This is the line of severe thunderstorms. That, as I say, is what could impact the Masters maybe probably later on in the day. That is the line of thunderstorms. That is the concern, of course, it's that typical for this time of year, the dividing line and the hot and the cold air that that is what we're watching over the next couple of days, Richard.
QUEST: Jenny Harrison at the World Weather Center with the pictures of the azaleas, which looks a lot more interesting than the golf, in my opinion.
A "Profitable Moment" after the break.
QUEST: Tonight's "Profitable Moment": we all have our favorite place on the plane where we like to sit; most of us, of course, want to turn left when we get on the plane rather than turning right. But it doesn't matter because for me the closer to the front, the better.
Now on the Eurostar -- and, indeed, on planes, I'm much more of an aisle man. I like to get up and walk around the aircraft. The privilege of choice does not always come cheap. Low-cost carriers now charge a fee if you wish to reserve a favorite position.
And the true value, perhaps, is not whether you get a better view or easy access to the facilities. It lies in having the freedom to choose. After all, the back gets there pretty much at the same time as the front. Of course, except for Francois Hollande's camel. But that's another story for another day.
When you put it all together, what I love best of all is the way we're so passionate about whether it's an aisle or a window. And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to and whatever you're doing in the hours ahead, I hope it's profitable.
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QUEST (voice-over): The news headlines at the top of the hour, this is CNN.
U.S. intelligence sources say North Korea might launch multiple missiles in the days ahead. U.S. Secretary of Defense Chuck Hagel says North Korea has been, in his words, "skating very close to a dangerous line" with its recent rhetoric and actions.
A Syrian jihadist group is denying rumors that it is joining Al Qaeda's terror networks. Another group made that claim recently. A spokesman for Al-Nusra Front says though it isn't merging with Al Qaeda, the group is pledging allegiance to it.
The government of the Netherlands is recalling about 50,000 tons of meat labeled as beef because it may contain horsemeat. The government says there's no evidence of a health risk. The problem stretches back to the beginning of 2011. So much may already have been eaten.
These two U.S. senators, a Republican and Democrat, have reached a potentially significant bipartisan deal on gun control. If the compromise became law, it would expand background checks for firearms sold on the Internet and at gun shows.
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QUEST: You're up to date with the news headlines. Now to New York, "AMANPOUR" is live.