US Senators Slam JPMorgan; European Bailouts; Ireland's Progress; European Markets; Dow Winning Streak in Jeopardy; Diageo-Guinness Ready for St. Patrick's Day
FOSTER: Well, Cypress could soon be the fifth eurozone state to receive a bailout. Tonight, European officials are working in Brussels to finalize a rescue plan that's likely to include strings such as tax rises and privatizations. The size of the plan won't be anything like what we've seen in Europe's four other bailouts. Cypress accounts for just a fifth of one percent of Europe's GDP. Now, Portugal has been given an extra year to meet the conditions attached to its rescue package. The European Central Bank, European Union, IMF say the prospects for growth are now weaker and Portugal can't keep to the path it set out for it. Portugal now has until 2015 to cut its budget deficit to 3 percent of GDP. And Ireland returned to the ten-year bond markets this week, two and a half years after receiving its bailout. It raised $6.5 billion and turned away almost the same amount. IMF head Christine Lagarde says Ireland is setting standards in terms of success in reforming its public finances. As deputy prime minister, Eamon Gilmore joins us now from CNN Center in Atlanta. Thank you so much for joining us. You've been through a hell of a ride, haven't you, over the last few years? Where would you define where you are right now in terms of the economic recovery?</s>EAMON GILMORE, DEPUTY PRIME MINISTER OF IRELAND: Well, we have been through a very difficult period over the last number of years, and Irish people have certainly endured a lot of hardship. We've seen reductions in income, we've seen new taxes increase. But there's been a determination, both by the government and by the people of Ireland, that we are going to emerge from this crisis, that we are going to emerge from the bailout that we were put in almost three years ago now, and that we were going to succeed. We've done a number of things. We've got down our budget deficit. We're now on target to get that down to 3 percent by 2015. We very quickly decided to recapitalize our banks and to get to the bottom of the problem that there was with our banks and to restructure them. We have dealt with the legacy of the bad bank that we inherited. We've recently liquidated that, and we've secured agreement from the ECB for a longer-term arrangement. And this week, we're back in the bond market for ten-year money. So, we're making progress. We've still a lot to do. We still have a very high level of unemployment, particularly among young people, and that is why we're putting a very big focus at the moment on attracting investment to Ireland to create the jobs that are necessary to make our recovery sustainable. But whereas two years ago people were talking about Ireland needing a second bailout, now we're looking at emerging from the bailout that we were in. We will be out of the EU-IMF program this year.</s>FOSTER: Yes, you were talking about the bond sales. The bond sale this week, I think 12 billion euros worth of bids. An extraordinary auction, wasn't it, in the end? Where are you in terms of what you need?</s>GILMORE: Well, in terms of money to run the state, we are now in a situation where we will be able to raise that in the normal way in the markets. There is clearly a lot of interest. We're very encouraged by this week's auction. It's showing that there is renewed confidence internationally in Ireland. And that is, we believe, is going to continue. We've met all of the targets in the bailout that was provided for us, and we have taken some very difficult decisions. This has been a difficult two years for us. We've taken difficult decisions in reducing public expenditure and getting our public finances under control and introducing a range of structural reforms. We have a much more competitive economy now. We are a good place in which to do business. We have sorted out the bank problem. We have sorted out the problems in our public finances. Now what we have to do is to press ahead, to get more growth in our economy. We do have growth. This is the third year that we're going to see growth in the Irish economy. It is small growth. I was very encouraged, I must say, by the figures that were published a couple of weeks ago. We show that for the first time since 2008, we've seen an increase in the number of people at work in our country. But we have a lot more to do on that front. We have to increase the number of jobs that are being created and we have to increase the amount of investment in our country.</s>FOSTER: You took 85 billion euros worth of loans, didn't you? There was a criticism at the time that the conditions attached to that were draconian and that you wouldn't manage it. You clearly have managed it, because you've actually stuck to those draconian terms to the -- to the very letter. What do we think -- the other countries going through the bailout process can learn from that? Because again, there's an accusation that these terms coming out from Brussels are just too strict.</s>GILMORE: Well, I think the first thing is that we showed a determination that we were going to get out of the program, that we were going to implement the program. By showing that determination and by meeting the targets that were set for us, we were able to renegotiate a lot of the terms of that original bailout. We did succeed in getting a very significant reduction in the original interest rate, which had additional interest piled onto us. We succeeded also in getting agreement about issues like the sale of state assets. And of course, recently we succeeded in getting agreement about the repayment of what were called the promissory notes. This was a payment of over $3 billion a year that was required to be put into what was essentially a dead bank. We were able to get agreement from our partners on that because they saw that we were serious about making recovery, that we were serious about implementing the terms of the program, and of getting out to it. We set ourselves determinately as a country to recover from the -- what had happened in our economy, to get back on our feet, to get back into the market, to recover our economic sovereignty. And we are now doing that. It has been a difficult task. It has been a difficult journey for us. It's been a particularly difficult journey for our people, who stuck with this and who understood that it is necessary to make difficult decisions in order to bring about the stability. And the basis on which investors will have confidence to put their money in a country and to invest in a country where they can make a return and where jobs will be created. And that's our -- we're now entering a new phase of this, and the phase of this now is to press on with the investment --</s>FOSTER: OK.</s>GILMORE: -- with the job creation that will make our recovery sustainable.</s>FOSTER: Eamon Gilmore, thank you very much, indeed, for joining us. Much of Europe's main stock indices ended Friday's session in the red in the end. Energy shares dropped. Shares in Total and Shell each fell more than 1 percent. Car makers also fell. Volkswagen was the worst performer on the DAX, down by around two and two thirds of one percent. Renault closed 2.4 percent lower. Zurich SMI the only one up. If we look at the figures over the course of the week, it's not as gloomy. The SMI managed gains of more than 1.5 percent. Stocks on Wall Street are heading lower after a record-breaking run for the Dow. So, it's not too bad, Alison Kosik.</s>ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Hi, Max. It looks like with 45 minutes left to go before the closing bell, the Dow's winning streak is coming to an end. A weaker than expected report on consumer sentiment from March weighing on stocks a bit, but what a run it's been for the Dow, ten winning sessions in a row. But we are still on S&P; 500 record watch. It is still within striking distance of its record high. So, you know what day it is? It's only a couple days before St. Patrick's Day, and what better way to celebrate than be with Diageo, the world's biggest spirits maker. And with me right now, joining me, are Greg Kryder, he's the CFO of Diageo North America, thanks for joining us, and Sheila Stanziale.</s>SHEILA STANZIALE, PRESIDENT, DIAGEO-GUINNESS USA: Yes.</s>KOSIK: Thank you. It's -- she's Diageo-Guinness USA president. I want to talk about St. Patrick's Day and Diageo. It's an important day, isn't it?</s>STANZIALE: Big day, and big weekend, really, Alison. And we've really started celebrating the holiday already. We promote great brands, like Guinness, Bailey's, and Bushmills this weekend like never before. And for all the consumers out there who will enjoy our big brand, Guinness, they really have a chance to do it two ways. First with a pint of Guinness. We'll serve probably 33 million pints this weekend, or even with a Guinness black lager, a light, crisp, refreshing beer. And we know we're going to sell a lot of those this weekend, too.</s>KOSIK: Yes, Guinness is sort of expanding into lager. Why now?</s>STANZIALE: Why now? Well, it's -- the Guinness brand is doing very well. There are a lot of lager drinkers, more lager drinkers in the US, actually, than stout drinkers. And we -- so our strategy really is to bring the Guinness brand into this gigantic pool of lager drinkers and bring some of those drinkers into the Guinness franchise.</s>KOSIK: OK, so Greg, I know the share price has certainly been on quite a run, up -- what? -- 30 percent over the past 12 months. Up 60 percent over the past two years. Can this kind of growth continue?</s>GREG KRYDER, CHIEF FINANCIAL OFFICER, DIAGEO NORTH AMERICA: Our business at Diageo is thriving right now, and it's really the result of our -- the strength of our global brands, our leadership in the US spirits market, as well as an increasing presence in the fast-growing emerging markets. So, we have a proven strategy of investing behind our iconic brands, whether that's Johnnie Walker, or Smirnoff, or Crown Royal, or Captain Morgan, or Guinness, or many others. And we're also in vesting behind new products. Sheila talked about Guinness black lager. We also have for St. Patrick's Day, we have Bushmills Irish Honey, which is a great new variant from Bushmills. And Baileys hazelnut, which is a new flavor that tastes great, like Baileys.</s>KOSIK: What kind of pressure has been on the company because of the recession in Europe, especially Southern Europe? I understand that sales have a hit as much as 19 percent in Southern Europe. How are you sort of making up for that?</s>KRYDER: Our business here in North America is very robust, and we represent about 30 percent of Diageo's sales, and almost 40 percent of the group's profits. So, the success that we're driving here in North America is having a big impact on our group results.</s>KOSIK: And with the economy just globally not really operating on all cylinders, do you see any kind of slack in sales for premium brands and more of a run toward the non-premium brands?</s>KRYDER: We actually see quite the opposite. Over the last couple of years, we've seen a move from consumers that more premium-priced products. And I think it's around affordable luxury and people treating themselves to a Tanqueray and tonic or a Johnnie Walker Blue Label. But we see that robustness right now. And fortunately for us, our portfolio is premium-based. It's at the higher end of the price point, so we're taking real advantage of that.</s>KOSIK: OK, well thanks so much for joining us. With St. Paddy's day just a couple days away, I'm sure lots of people are going to be dabbling in a little Diageo brands. Max, back to you.</s>FOSTER: Alison, thank you very much, indeed. Just ahead on QUEST MEANS BUSINESS, sailing into troubled waters again. A third Carnival cruise runs into problems in just this week alone, actually. We'll cross live to Miami for the very latest.