:00:04. > :00:12.place nearly three -- She said the attempts took place nearly three
:00:12. > :00:17.years ago. Now for the latest financial news.
:00:17. > :00:23.Hello and welcome to World Business Report.
:00:23. > :00:29.Back from the brink - EU leaders agree a larger bailout fund and
:00:29. > :00:34.banks accept a 50% write-off of Greek debt. Much of the detail
:00:34. > :00:40.still needs to be sorted. Asian stock currency and commodity
:00:40. > :00:48.markets rise after European leaders raise hopes for the eurodebt crisis
:00:48. > :00:58.will be contained. -- eurozone debt crisis will be contained. GDP is
:00:58. > :01:02.
:01:02. > :01:06.expected to show growth picking up After ten hours of talks, European
:01:06. > :01:13.leaders have unveiled a plan which they hope will stabilise the
:01:13. > :01:20.eurozone. The key to the deal - a break in the deadlock between banks
:01:20. > :01:25.and governments. Banks holding Greek debt will accept a loss of
:01:25. > :01:33.50%. Leaders also agreed a mechanism for the eurozone's main
:01:33. > :01:38.bailout fund to boost its fire power to $1 trill -- 1 trillion
:01:38. > :01:42.euro. The framework should be in place in November. Banks will be
:01:42. > :01:50.forced to raise more capital to shield them from any losses. How
:01:50. > :01:55.will all of this work in practice? Let's talk to Andrew Walker who is
:01:55. > :02:01.in Brussels. Hello, Andrew. How is it going to work in practice? And
:02:01. > :02:05.where is the money going to come from? Part of the idea of it is to
:02:05. > :02:10.make more effective use of the money that's already been committed.
:02:10. > :02:14.The financial guarantees made by the eurozone governments themselves
:02:14. > :02:17.and it is politically enormously important to those countries that
:02:17. > :02:23.they did not end up having to commit more money to it. That's
:02:23. > :02:28.going to be used to fund the system of financial guarantees, a kind of
:02:28. > :02:34.insurance against losses on new bonds issued by some eurozone
:02:34. > :02:38.governments. The idea is that you, is that you underwrite more lending
:02:38. > :02:42.by, let's say for example, Italy, by doing it through the system of
:02:42. > :02:46.guarantees than you can do by directly lending from the European
:02:46. > :02:51.bailout agency itself. The other elwant is that they're going to
:02:51. > :02:56.establish some sort of, what they call a special-purpose vehicle to
:02:56. > :02:59.put money, to encourage money from outside Europe to go in to the
:02:59. > :03:04.European bailout system. So the obvious source of help there is
:03:04. > :03:08.going to be some of the big emerging economies. China is the
:03:08. > :03:13.most obvious target. And we do know the head of the European Bailout
:03:13. > :03:23.Agency is planning to go to China later in the week to see if he can
:03:23. > :03:23.
:03:23. > :03:29.persuade them to contribute. What about this 50% write-down? Doesn't
:03:29. > :03:37.mean to say that the Greek debt mounten won't be reduced by 50%,
:03:37. > :03:44.does it? A lot of that debt is privately owned? Absolutely. I mean,
:03:44. > :03:48.this deal applies only to, it's a voluntary one. So I suppose many
:03:48. > :03:54.private holders of the debt won't take part in it. It only applies to
:03:54. > :03:59.the private sector. So the debt owed to the Merl Monetary Fund --
:03:59. > :04:03.International Monetary Fund, the eurozone countries, debt is held
:04:03. > :04:10.there. Those won't be written down by this 50% figure, which is why
:04:10. > :04:14.you do come to a much smaller overall figure for the amount of
:04:14. > :04:18.debt relief Greece will get. It's a relatively large figure. More than
:04:18. > :04:22.double the headline figure they agreed only in July. A figure
:04:22. > :04:27.that's never been implemented. So, clearly, it does make a difference.
:04:27. > :04:31.Again, on this one, there is still a lot of detailed negotiation to be
:04:31. > :04:34.done. However, the key point is that the leaders of the
:04:34. > :04:39.negotiations on behalf of the international banks have agreed at
:04:39. > :04:45.least to this headline figure. Absolutely. Thank you very much.
:04:45. > :04:52.How have the markets been reacting so far? Over in Asia, Rico is in
:04:52. > :04:57.the BBC Singapore office. What's been happening? A good reaction?
:04:57. > :05:00.Very popular reaction. Agents sparked, the currency and
:05:00. > :05:04.commodities all in positive territory after European leaders
:05:04. > :05:10.agreed to boost the region's rescue funds. Basically, it's giving a lot
:05:10. > :05:17.of investors here hope that the eurozone debts crisis will be
:05:17. > :05:22.contained. Most of the regional markets have been down by 15% to
:05:23. > :05:28.20%. The likes of Japan, South Korea, Singapore, Australia, Hong
:05:28. > :05:34.Kong all trading higher. Investors having the feeling they'd want to
:05:34. > :05:44.get back in to risky assets. The euro is extending its gains in
:05:44. > :05:48.
:05:48. > :05:57.Asian trade. And you have Asian currencies from the -- from the
:05:57. > :06:02.different currencies. Oil price is going up. US crude nearing $91. As
:06:02. > :06:11.for the price of gold, also soaring to its highest level in more than a
:06:11. > :06:14.month. Now trading add $1,721. -- at $1,721. Thank you very much.
:06:14. > :06:24.Also weighing down the summit is deep concern about Italy which has
:06:24. > :06:26.
:06:26. > :06:32.a public debts 1.8 trill -- public debt of 1.8 trillion. Berlusconi
:06:32. > :06:41.has delivered a plan of action. Hello. It's really vital, isn't it,
:06:41. > :06:45.that this plan of action is enacted? Silvio Berlusconi is
:06:45. > :06:50.pretty beleaguered? It is fundamental that these good
:06:50. > :06:54.intentions will be transformed in actions. And the government is
:06:54. > :06:57.ready to do it but the coalition is not very strong and there are
:06:57. > :07:02.important differences within the coalition and between the coalition
:07:02. > :07:06.and the opposition. So we will see. As far as the public are concerned,
:07:06. > :07:14.raising the retirement age, they'd be very opposed to it. But reforms
:07:14. > :07:22.like that are key to make it more competitive? Yeah. There is a lot
:07:22. > :07:27.of new approach, I would say, in the sense of opening hours for
:07:27. > :07:32.shops will be increased or the intention is they should be
:07:32. > :07:37.increased. And in many occupations, self-employed occupations, there
:07:37. > :07:41.will be a more liberal approach. So this is important. More
:07:41. > :07:45.privatisation, so the public debt will be reused. Thank you very much.
:07:45. > :07:50.That's all we have time for. Thank you very much for joining us from
:07:50. > :07:53.Rome. To reduce the debt mountain, growth in Europe is key. It's an
:07:53. > :07:58.issue the US is struggling with too. After a volatile few months,
:07:58. > :08:02.including the downgrade of America's credit rating, economists
:08:02. > :08:07.are slightly more optimistic about the US GDP. They're predicting an
:08:07. > :08:13.expansion of as much as 2.5% for the third quarter. The housing
:08:13. > :08:17.market remains a major blackspot. Even the beach doesn't provide an
:08:17. > :08:24.escape from the chill winds blowing through the economy. This is all
:08:24. > :08:28.that remains of plans to build a luxury apartment building here in
:08:28. > :08:32.New Jersey. The project stalled during the recession. A blow to the
:08:32. > :08:36.city. It would have been a major spike in the economy. More
:08:36. > :08:41.importantly, the fact that piece of property was developed. If the
:08:41. > :08:48.economy had remained the same, it would have spurred additional
:08:48. > :08:53.development down. This professor agrees. He said housing is holding
:08:53. > :08:57.back growth. In a normal economic cycle, housing and construction are
:08:57. > :09:01.usually post recession economic locomotives. This time around,
:09:01. > :09:06.they've held back the recovery train. We've never had a strong
:09:06. > :09:11.recovery without a housing recovery. The unfinished apartment block, a
:09:11. > :09:17.short stroll from here, is in some ways a symbol of the broader
:09:17. > :09:22.economy which itself is struggling to grow. And then in here, we have
:09:22. > :09:26.a project my husband and I did. That's making its toll on
:09:26. > :09:32.businesses here on the boardwalk. The worst thing for me in all of
:09:32. > :09:36.this is putting people out of work. We employ right now about 100
:09:36. > :09:40.people. In the summer, over 200. And the lay-offs have been more
:09:40. > :09:44.drastic this year because I've learned to be more diligent with
:09:44. > :09:48.the payroll, which in our industry is the biggest problem. Parts of
:09:48. > :09:52.the economy are starting to improve but with unfinished projects like
:09:52. > :10:01.this one dotted across the countries, dreams of a robust
:10:01. > :10:05.recovery may turn out to be built on sand.
:10:05. > :10:09.So just to recap - it's so far so good in terms of the reaction to
:10:09. > :10:15.the debt crisis deal on the markets. There was a bit of a lacklustre