20/10/2011 World Business Report

greeted by a large crowd. Now it is time for the latest financial news,

World Business Report. Warm welcome. The headlines: Emergency talks in

Frankfurt and still, no agreement on plans to save the euro. Share

prices fall around the world as the optimism about the deal to be

reached this weekend evaporates. Australia's Prime Minister is

urging an end to a dispute between Qantas and its unions. The optimism

about a solution to Euro -- Europe's debt crisis appears to be

evaporating as details emerge of a rift between France and Germany are

they had to boost the bail-out fund. The birth of Nicolas Sarkozy's. I

was forced to take second place as the French President found himself

dragged away for crisis talks to reach a compromise before a vital

summit on Sunday. It was a nervous sort of a day for Nicolas Sarkozy.

With crisis talks over the eurozone's debt looming, the French

President did manage to make a fire -- flying visit to his heavily

pregnant wife in hospital. She later gave birth to their baby girl.

But the proud new father or not, the problems in the eurozone wait

for no-one. With the clashes over the Greek or austerity measures top

in their minds, Europe's top leaders gathered to try and find a

solution to the crippling debt problems. There are major sticking

points, especially between his desire cosy and German Chancellor

Angela Merkel. Not least is a disagreement over the eurozone

bail-out fund, to be raised to 440 billion euros, and the role of the

ECB. Greece continues to cause a serious rift. Specifically about

how to write off as much as 50% of Greek bonds. The stakes are high.

The IMF and global policy makers, not to mention the markets, are

demanding that a comprehensive rescue strategy promised by France

and Germany is finalised by Sunday. Judging from their body language as

they left, the stalemate continues. Now Nicolas Sarkozy has two things

to keep him up at night. For more analysis, I am joined by the global

head of research at H Seaby. There is so much at stake, and which is

why it is difficult to come to a solution. Talk us through the key

issue regarding the bail-out fund and the role of the ECB that is

causing so much tension. What they are trying to do is work out a way

of leveraging the bail-out fund, making it as effective and pre-

emptive as possible. There were temporary bond purchases in early

August which were agreed by the ECB but that was all temporary. What

they want is a permanent solution. One of the problems is that you

have 17 governments, all trying to agree a way forward. But the

markets are always ahead of them. So you must come up with something

this weekend that says, we are going to move quickly, with the

rescue fund, with the ECB. They have their own things to agree, the

private sector involvement, the insuring of bonds, so there is an

awful lot of things, not just this. He is they are going to move

quickly, they have to come up with something which means that all of

the parliaments have to Ryo -- vote in favour. It is the European than

will stability fund, presumably that must be voted yes within all

of the parliaments. Whether it does or not, what we saw last time when

we had the meeting in July was that they agreed and then it gradually

went through the parliament and there was some nervousness that

somebody would not do that. But if we get some agreement, I think

everybody knows that the stakes are very high for this meeting. I see

this as just, the sort of backwards and forwards between the government

ahead of that meeting. What I think is going to go on is that they will

come to some agreement. It may just not be as much as the market hoped

because they do not read that they will get something that really

worked. This story is in the papers so we will talk more men. In Greece,

the latest general strike continues. The street protests have not

deflected politicians from voting on their the public sector parts,

all of the latest promised Budget measures are up for final approval

today. But there are now deeper concerns about the health of the

financial system itself. On the march for a second day. Protesters

say the austerity measures are squeezing people dry, Mosley the

government would agree that Greece's party would agree that it

has no choice but to push through the final vote today on tax riots,

wage hikes and lay-offs. Otherwise Athens will not get its next

injection from the emergency cash of the UN the IMF. But the UN today,

there are wider worries. They are angry. The public concern and that

is about the government's debt. In many ways, there is as much worry

about the financial health of the banks and what strain they can take.

This European Bank is about to mate with this one over here. Banks like

this are trying to head off a larger enforced haircut on their

loans. This senior figures says that their 10 billion euros is in

readiness to stave off a run on the banks. 13 billion. I think that the

financial system will survive. But there is a lingering question about

the involvement of the state and this is something that definitely

we want to avoid. And the proposed measures of the Uribe Inc, --

European Bank, with that money, that creates conditions for being

able to withstand even this kind of revenge well it in terms of the

Greek government bonds that we have. Whatever the size of the next

haircut, Greece remains at the Air Messi of the markets. His European

paymasters and also its popular protests. A failure to get the

austerity budgets through would please the crowds but it could

leave the country unable to pay its bills. Let's move on to other

business stories. Qantas is being told by Australia's Prime Minister

to sort out its dispute with unions. The pressure is on. We cross to

Singapore. You have been speaking about these today. What has been

going on? The Prime Minister Julia Gillard has weighed in and said

that there strikes, they could cost jobs. A union representing

engineers of the airline, that his meeting with Qantas management for

mediation. This is still happening in the city of Melbourne. I earlier

spoke with Peter Somerville of the engineers Association, the union,

and he gave me their position. Let's not forget what is to speed

is all about - squanders axing 1,000 Australian jobs and ascending

air operations offshore. It is about Qantas seeking the chief

Peres and not best maintenance. -- cheapest. The background to all of

this is that Qantas wants to expand in Asia. Including right here in

Singapore. As we have just read, 1,000 jobs in Australia could be

affected according to the union. They are very unhappy about this.

Industrial action has started. Qantas has decided to run less

flights and this could affect hundreds of flights. We will keep

an eye on that story, we have had to leave it Air Force. Jenny is

expected to slash its economic growth forecast the next year when

it publishes updated figures. Berlin has been predicting growth

of just under 2% but the country's leading think tank cut their own

forecast to just less than 1% as the debt crisis increasingly takes

its toll on the region's largest economy. Format UBS trader Quade

re- Adoboli appears as any of London magistrates' courts today.

Fuego. He was charged over an alleged road trade which cost the

Swiss bank and alleged to on a $0.5 million which may into the

resignation of several figures. The markets in Asia, they had a testing

these latest news from EU leaders out of Frankfurt. -- digesting. The