29/09/2011 World Business Report

investigation. Those are the latest headlines from BBC World news. Now

for the latest financial news, we Hello and a warm welcome.

The headlines: Fear returns to global financial markets as doubts

persist about Europe's rescue plans. I'm Rico in Singapore and Asian

stocks are mixed as investors weigh up the plans to solve the debt

crisis. Plus no cause for optimism on the US economy despite healthier

data for the second quarter expected today.

Good to have you with us. The German parliament will face a

crucial vote later today that could decide the next step in the battle

to turn around Europe's debt crisis. It is being asked to approve an

expansion of the euro bail-out fund approved in July to EUR440 billion,

the equivalent of $600 billion. Finland became the latest member on

Wednesday to approve powers for the European stability facility

designed to help contain the two- year-old crisis. We have been in

Berlin and we have outlined the challenges facing Angela Merkel.

All eyes are on the Grand building behind me, where the German

parliament will decide whether or not to block those measures to

rescue the Greek public finances already agreed on by eurozone

leaders. All the indications are that Chancellor Merkel will get the

majority she needs. But the question will be whether it will be

plain sailing. Will she need the votes of the opposition? If she

gets an untidy majority with a lot of dissent in her own party, that

may indicate a weakness and that will not bode well for further

rescue measures already in the pipeline.

It is that concern that has been causing another turbulent session

for the markets in Asia. Rico is in Singapore, nice to see you. It was

a bad session on Wall Street, it started pretty badly for Asia but

now things are quite mixed? Currently volatile, Sally, and next

at the moment but a lot of investor anxiety and things are still

swirling. People are jittery about whether Europe can come up with

this aggressive plan and if it is enough to contain a massive debt

crisis. All eyes on Germany's parliament and the vogue today and

markets are hoping that politicians will give the thumbs up for this

Markets here, like in South Korea, Malaysia, Taiwan, bucking the

downward trend at this hour with investors basically buying back

oversold stocks. As for Hong Kong, no reaction today. Trading has been

suspended due to a major typhoon hitting the territory. In Asian

emerging currencies, stocks are limited, some banks have been

spotted selling dollars. But looking at the end, it is very

steady despite a contraction of the economy -- the yen. Investors

remain alert for intervention by a Tokyo authorities. The yen has so

far gained about 6% this year. As for the oil markets, a crisis

declining Asian trade, weak data in the United States and persistent

concerns over the eurozone debt crisis are causing them trouble.

All eyes for Asian investors on what is going to happen in Germany.

Thank you for joining us. Let's get more of a perspective. Not much to

be cheerful about today. We are all hoping that vote will come through

in Germany. But also today, Ernst in

accountancy, coming out with their latest report saying that we are

heading for recession next year unless there is urgent action in

the eurozone. They are talking about a 30% chance. Not shocking

revelations, the IMF was saying the same thing in Washington. But let's

peel it apart, it is getting slower, but as you peel off up the eurozone

you can find the eurozone core areas, yes they are slow but they

are still doing quite well. Reasonable levels of growth in the

next two years but the peripheral as well be so weak. The report is

calling for making sure people do more than just rescue the banks and

organising the bail-out, they will forget about growth. They are

talking about stimulation to get things going. But there are

positive signs, positive figures coming out of Ireland last week and

that was more encouraging. The others are going to struggle for

some time, though. Talking about the German parliament's votes, that

was about expanding the European financial stability funds to 4.2

EUR5 billion. We will get his vote today but perhaps it will be

extended to a maybe two trillion euros. We have got the President of

the European parliament speaking about a new tax. We have got the

Greeks trying to push through various things. So much is going on.

It is a combination of issues, if you put them together, they can be

horrific. But pick your way through this you can see what needs to be

done. Today's vote is yesterday's news, we hope it goes through, but

a bigger package will be necessary. But as well you need the proposals

to cause higher ionisation of taxation -- harmonisation.

don't you think they are too late on that, that is what they should

have done in the first place? the Maastricht treaty was written

over by all the members apart from Luxembourg. The rules are there but

they decided to break them. It is too late but now we must do

something if they want to save the euro. It is worth saving because

the structure they have got in place shows it can work but you

can't operate it based on 17 different finance minister with

different egos. Angela Merkel says we have to take it step by step and

the really measured, she is trying to calm the storm. You need to get

the bank's strong and then focus on growth and get that harmonisation

working. We will talk more in about ten minutes when we look at the

newspapers. Thank you for joining us. Looking at some other stories

making headlines: Spain's economy ministry is saying its shelving

plans for a flotation of the National Lottery because of

turbulence from the markets. The initial public offering, which

would have been Spain's biggest ever, could have raised it to EUR9

billion and could have raised confidence in the public finances.

They could resume the plan is conditions improved. Australia's

competition regulators have approved a tie-up of Qantas and

American Airlines that would see them co-operate on Pacific routes.

It will benefit passengers 4,000. Ground staff are going to walk out

for the second time in two weeks over restructuring plans, though.

On the global and financial agenda the US economy may have fed a bit

better between a than previously feared -- may have fared. Growth

will be about 1.2% in the second quarter up from last month's at

Some of the reason for the expected improvement according to economists

is that Americans were able to sell more of their products overseas. At

home retailers also did better. But before breaking out the bubbly, it

is worth pointing out that many of the same economists think that

growth in the world's largest economy will remain a dangerously

low thing for the rest of the Year. And with US growth below average,

the fear is that it is vulnerable to any nasty shocks that could put

it back into recession. It is a fear certainly at play on the stock

markets where investors are nervously watching as Europe

struggles. And it is increasingly worrying the IMF, which just last

week downgraded its outlook for the US and said at the global economy

had entered a dangerous phase. -- said that. Let show you the

That's all from the for now, I will see you soon for a look at the

For some more news from the UK. Former soldiers are being sent to

the classroom to help teenagers and act as role models. Instructors

work alongside teachers to encourage pupils and help improve

their behaviour. Chris Buckler has been given exclusive access to one

of the military mentor schemes in East Yorkshire.

From combat to the classroom. This marks a very different challenge

for former soldiers. My name is Andy butcher, I was in the Army for

22 years. Andy will be in charge one day a week for the year trying

to help students. The task you have been given is to move an egg ten

metres without touching it. Most get involved but this is different

to many of their mainstream classes. Keeping the attention of some in

the classroom is a tough job. your head off the desk and go and

wait outside for me please. After being told off, this pupil doesn't

wait outside... he simply leaves. This isn't just about discipline.

Some of the former troops identify with children and their problems.

have been where these children are. I started off with this type of

environment. Over the next year the Coalition government is sponsoring

training for 100 former members of the armed services. And they will

attempt to make breakthroughs with teenagers who don't normally enjoy

being taught. Successfully building something to move an egg, might be

a small step, but it is an important one. Feels like a bit of

an achievement because I did not think I was going to be able to do

it. And the future of this scheme depends on making these pupils

You are watching BBC World News, the headlines: The German

parliament votes today on whether to back new bail-out plans for

European economies. Germany is already the largest

contributor, committing EUR120 billion. If the plans are approved,

German liability would increase to more than EUR200 billion.

On the second day of the manslaughter trial of Michael

Jackson's personal doctor, Conrad Murray, the court has been told how

the pop star's children watched attempts to resuscitate him. China

is set to launch a space and station in a few hours' time. The

move is seen as the first step in an ambitious plan to develop a

Chinese space programme. China wants to establish a space station

by the end of this decade but in order to do that it has to master

the procedures in order to put Modules and capsules in space, so

that is what it will be practising with this capsule which hopefully

will go up in the next few hours. An American citizen has been

arrested on charges of planning to fly remote-controlled airplanes

into the Pentagon and the Capitol in Washington.

It is time for the newspaper Most newspapers are assessing that

crucial vote to take place in the German parliament today. The