05/04/2012 World Business Report

will unveil his presidential election manifesto later today. Now

it is time to get the latest Pillow and a warm welcome. -- hello.

Back on red alert: Market's drop sharply after a Spanish bond

auction flops. And Japan's market is that before

we coal. Investors are counting the losses. -- 4-week low. Can it

really restore growth and jobs? Labour reforms are dividing the

country. Good to have you with us. Investors have been far more

willing to lend to the eurozone over the last three months. That is

largely thanks to one trillion Euros in cheap loans from the

European Central Bank. Confidence is already fading. Spain is

struggling to borrow money on financial markets. An auction of 5-

year bonds did not find enough buyers. The stock markets in Europe

sank. Let's remind ourselves of the significant falls in the share

markets. There are predictions that the markets will open flat. These

are the markets in Asia. Rico Hizon will talk us through them in a few

moments. You can see some of the false here. The US has been sued by

the News of the lacklustre Spanish bond auction. The crisis is back on

our doorstep. Rico Hizon is watching the markets in Asia. This

is having a big impact were you are as well, isn't it? Yes indeed.

Share prices are weak for a second day. Europe's debt problems have

surfaced yet again. Japan, South Korea, Australia, and they are all

struggling. Take a look at the numbers. Markets are being

supported by better than expected economic data coming from China.

That was earlier today that was released. The services sector is

expanding in the month of March. 11 month highs. Financial reforms are

being announced by Beijing on Wednesday. That is pushing Shanghai

she has into positive territory after a 3-day holiday. -- Shanghai

shares. There is a renewed risk of a version for Asian equity.

Diminishing hopes of more monetary easing from the US. The potential

fading effect of the European Central Bank's huge liquidity

investments. Investors are concerned about the inflation

picture and the mixed results with economic and monetary policy out

looks. Asian central bankers are continuing to support growth. They

are still concerned about price hikes. Christian Schulz is here.

Than you for being on the program. Give us your perspective on what

happened yesterday. -- thank you. It was not just Spanish debt, it

was Italian, Greek, Portuguese... It was the return of contagion.

There has been a lot of bad month - - bad news over the last month. We

have had these Spanish problems. Beyond Spain, problems in Italy,

for there was no major news apart from reform in the labour market.

In Greece, also, little news. Contagion is spreading

indiscriminately. For the first time this year, amass sell off.

That is a shift in mood. We had pumped all of that money into the

markets. We thought the market would discriminate between

different countries. Small countries with acute problems like

Greece and large problems -- large countries with relatively small

problems like Italy. Italy in particular is too big to be rescued

with the existing rescue facilities. 800 billion euros. It would be a

huge problem. This is what we would need to watch. The Prime Minister

of Spain has raised the question of an international bail-out again

this week. He said that Spain was in an extremely difficult position.

As always with politicians there is a domestic and an international

message to what they say. He is going through a tough phase. He has

unveiled a budget which is very tough. He used to get domestic

support. Briefly, another set of cheap loans from the European

Central Bank is necessary? They are not planning another injection of

liquidity. They have set up conditions in which they would.

Given the renewed panic, we need something to stop it if need be.

That would be very helpful. very much, Christian Schulz. -- I

thank you very much. Let's turn to another part of the drama. After

weeks of wrangling with unions, Mario Monti has finalised his plans

for reform of the labour market in Italy. The reforms would make it

easier to fire workers. It is supposed to help businesses create

a vital jobs. The package will go before Parliament. The response

will be decided today. An efficient Italian workforce,

that is the goal of Mario Monti's latest political reforms. They

include the listening of rigid employment law. -- the include

softening employment laws. This woman says it will help it to take

on new people. She is head of a business confederation. She is the

CEO of a company that employs 7,000 people worldwide. You want to train

your employees and keep them with you. If you had bad employees, this

happens every where, you should have the right to get rid of them.

The unions are at the heart of workers' writes. They say the

reforms do not address the fundamental problems. This will not

create new jobs. It will make it easier to dismiss people. We do not

agree with this. For the students, the world of work is already

changing. There is little stability, like that enjoyed by their parents.

It is difficult to find a job. There is no chance for us. They

only want people with 10 years' experience. I don't want to end up

like my father. He has been working in the mind since he was 15 years

old. He will probably do that until he is 78. It is all about changing

the Italian view. The Italian search for a job for life could be

abandoned. We have opportunities in Italy. If

you can do it, you can do it. Italians, this debate is as much

about change as reform. For the Prime Minister, it will be his

Banks are expected to keep their rate low until well into next year.

The big debate as to whether to inject more money into the economy.

There are signs that the UK may be returning to recession.

The New York has opened to the press ahead of its opening

tomorrow.... The economy improves, with some seeing sales jump by as